If energy utilities want to change rates, build new facilities, change their corporate ownership or sell their assets, they must apply to – and receive approval from – the Ontario Energy Board. Some energy companies must be licensed in order to operate in Ontario, and must also apply to the OEB for a licence.
See the list of active applications before the OEB
Types of applications
Applications to change rates
In general, every five years a utility applies to the OEB to reset its rates through a full review of its costs to provide service. In these cost-based applications, utilities outline all of their costs — from trucks and buildings to proposed investments in infrastructure, like pipelines and wires – and their plans to maintain their system. We review these major rate requests carefully, and our review often results in rates that are lower than what the utility asked for. For the years in between, the utility's rates are adjusted using an OEB-approved formula that accounts for inflation and the OEB’s assessment of productivity in the sector and efficiency improvements expected of the utility.
In reviewing rate applications, we look for evidence of reasonable prices, good reliability and quality service so that we can be sure that the utility is meeting their customers’ needs, while also remaining financially viable.
Applications for construction of new facilities
If utilities want to build new infrastructure – such as constructing a new natural gas pipeline or building an electricity transmission line – they must file a Leave to Construct application with us. Our task is to determine whether the project is in the public interest.
When considering whether to approve a gas pipeline, we look at a number of things, including whether:
- The project is necessary and economically feasible
- Safety obligations set out by the Technical Standards Safety Act will be met
- Any environmental impacts of the project have been identified and a plan to minimize those impacts has been developed, in accordance with the OEB’s Environmental Guidelines for the Location, Construction and Operation of Hydrocarbon Pipelines and Facilities in Ontario
- Landowners affected by the project will be offered an agreement that is appropriate
- The duty to consult with Indigenous peoples potentially affected by the project has been adequately discharged with respect to the application.
The types of issues that the OEB will typically consider in these applications is set out in the OEB’s standard issues list.
When considering whether to approve an electricity transmission line, the scope of what can be considered by the OEB in deciding whether the project is in the public interest is set out in legislation. We look at:
- The cost of building the transmission line, to assess the impact on the interests of consumers with respect to prices
- Whether the new line will affect electricity quality and reliability
- Whether landowners affected by the project will be offered an agreement that is appropriate
The types of issues that the OEB will typically consider in these applications is set out in the OEB’s standard issues list.
The OEB’s hearing is not the only approval process required before an electricity transmission line is built.
Environmental issues, or issues related to the Crown’s duty to consult Indigenous peoples, are not part of the OEB’s review unless there is a direct impact on price or the reliability or quality of electricity service.
Applications for changes in corporate ownership or the sale of assets
Energy utilities that are planning to merge with another company or otherwise change their corporate ownership or control or sell their assets also require the OEB’s approval. These applications are called Mergers, Amalgamations, Acquisitions and Divestitures (MAADs).
For electricity utilities, we will only approve their proposal if we are satisfied that consumers will not be harmed. When we assess a proposed merger or other planned change in corporate or asset ownership or control, we assess whether there will be any adverse effects on price or quality of service to customers, or on the cost effectiveness, economic efficiency or financial viability of the utilities involved. We expect that the costs to serve customers will not be higher than they would have been without the merger or other change in ownership or control.
Regardless of any merger or corporate ownership or control change, we continue to set their rates, monitor their performance and enforce compliance with enforceable legal and regulatory requirements.
In 2016, we issued the Handbook to Electricity Distributor and Transmitter Consolidations in order to be transparent with applicants, shareholders and consumers about our criteria for evaluating merger applications and other corporate ownership or control change applications from electricity utilities.
Applications for Natural Gas Municipal Franchise Agreements & Certificates
A natural gas distributor that wishes to operate in Ontario must obtain, among other permits and approvals, two distinct authorizations from the OEB: approval of the municipal franchise agreement between the natural gas distributor and the municipality seeking gas service; and approval in the form of a certificate of public convenience and necessity (Certificate).
The municipal franchise agreement grants the natural gas distributor the right to deliver gas service and use road allowances or utility easements within the municipality's borders; outlines specific terms and conditions of the relationship between the distributor and the municipality; and is usually based on the Model Franchise Agreement, with a term of 20 years. The municipal franchise agreement, in and of itself, does not authorize the construction of natural gas facilities.
The Certificate defines the geographic area within the municipality that the distributor is authorized to construct, operate and add to the natural gas distribution system and to distribute, store and transmit natural gas. Certificates do not expire but may, from time to time, require amendment so that they remain aligned with changes to the distributor’s infrastructure or the municipality’s borders.
Where the OEB has previously issued a Certificate to a natural gas distributor and there remains an unserved area, another distributor can apply for a Certificate to construct works to supply that unserved area.
An application for approval of a municipal franchise agreement may be made at the same time as an application for a Certificate.
Applications for a licence
In Ontario, some energy companies require a licence from the OEB. A licence provides energy companies with permission to operate in Ontario, and outlines some of the key laws, rules and regulatory requirements they must follow.
In the electricity sector, most participants require a licence, including: distribution utilities, transmitters, generators, electricity retailers (also known as energy retailers), wholesalers, electricity storage companies and unit sub-meter providers. The OEB also licences the Independent Electricity System Operator and the Smart Metering Entity.
In the natural gas sector, companies that market natural gas to low-volume consumers (known as gas marketers and also as energy retailers ) require a licence.
Find out more about the licence application process and view a list of companies licensed by the OEB.
How the application process works
Once an application is filed, our job, as Ontario’s independent energy regulator, is to consider how well the utility’s interests align with consumers’ interests. Typically, we are looking for evidence of reasonable prices, good reliability and quality service so that we can be sure Ontario’s energy system is meeting your needs, while also remaining financially viable.
Before making a decision on an application we:
- Thoroughly review the utility’s application.
- Read and consider the questions and concerns expressed in letters of comment from consumers.
- Have a public hearing process for most major applications. There are three types of OEB hearings – oral, electronic, and written – and the chosen format depends on the type of application. Oral hearings are in-person, mainly held in the OEB’s hearing rooms located on the 25th floor at 2300 Yonge St. in Toronto, and often these are hybrid hearings, with some of the parties involved participating virtually. Check our online calendar to find out when oral hearings are held and you can listen to streaming audio of the live hearing, or when available, watch the hearing live on YouTube. Also, you can read a transcript of the hearing afterwards – usually the next day.
- Review and consider input from individuals or groups that have our permission to actively participate in a public hearing about an application. These interested parties are called intervenors. Intervenors represent various customer groups such as low-income consumers, school boards and commercial and industrial customers. They also sometimes represent special interests such as environmental and conservation groups. Find out who frequent intervenors are in OEB proceedings.
- Look at the questions, evidence and arguments of our staff – the Ontario Energy Board’s in-house experts. OEB staff actively participate in the public hearing process by, among other things, reviewing and testing the evidence by asking questions of the applicant and making submissions on the public record on what OEB staff believes the public interest requires the outcome of the hearing to be.
We take all of this input into consideration before making a decision. View a list of major decisions issued by the OEB and find out more about participating in an OEB hearing.
The OEB welcomes active participation by Indigenous peoples in OEB hearings to ensure that their voices are heard and their concerns are considered. This includes concerns about any adverse impacts on their Aboriginal or treaty rights when within the OEB’s mandate, as well as other issues as may be within the scope of the hearing. Find out more: Consultation with Indigenous Peoples
For information on the typical steps in deciding different types of applications and the typical timelines, see the OEB’s performance standards.
Who’s who at the OEB
If you are new to the hearing process, you may be assisted by having a better understanding of who does what at the OEB.
Commissioners are assigned to hear and decide most major applications. Applications are heard by one or more Commissioners; often as a panel of three. Commissioners are responsible for making the final decision in a hearing, and they also have final decision making-authority regarding the procedural steps in the hearing.
OEB staff also participate in hearings. OEB staff participate actively in the hearing by publicly asking questions and making submissions on the merits of the application. They also provide administrative and technical support to the panel of Commissioners that is hearing and deciding the application.
Read more about the roles and responsibilities of Commissioners and OEB staff in public hearings