If energy utilities want to change rates, build new facilities or change their corporate structure, 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.
Types of applications
In general, a utility applies to the OEB for a full review of its delivery rates every 5 years. In Cost of Service 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 it. We review these major rate requests carefully, and our review often results in a different amount than the original request. For the years in between, the utility's rates are adjusted using a formula.
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.
If energy companies 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 goal 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 impact of the project have been identified and a plan to minimize those impacts has been developed
- Landowners affected by the project will be offered an agreement that is fair and reasonable
- Any Indigenous Communities potentially affected by the project have been adequately consulted
- 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
When considering whether to approve an electricity transmission line, we look at:
- The cost of building the transmission line
- Whether the new line will affect electricity quality and reliability
- Whether the project promotes the use of renewable energy sources consistent with the Government of Ontario’s policies
- Whether landowners affected by the project will be offered an agreement that is fair and reasonable
Energy utilities that are planning to merge with another company or otherwise change their corporate structure also require our approval. These applications are called Mergers, Amalgamations, Acquisitions and Divestitures (MAADs).
For electricity utilities we will only approve their plan if we are satisfied that consumers will not be harmed. When we assess a proposed merger or other planned change in corporate structure of an electricity utility, 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 corporate structure change.
Regardless of any merger or corporate structure change, we continue to review and approve their applications for rate changes, monitor their performance and enforce compliance.
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 structure change applications from electricity utilities.
A licence provides energy companies with permission to operate in Ontario, and outlines the laws, rules and regulatory requirements they must follow.
In the electricity sector, most participants require a licence, including: distribution utilities, transmitters, generators, retailers (also known as energy retailers), wholesalers and smart sub-meterers. The OEB also licenses the Independent Electricity System Operator and the Smart Metering Entity.
In the natural gas sector, companies that market natural gas to low-volume consumers (also known as natural gas marketers or energy retailers) require a licence.
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. Specifically, 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. Depending on the type of application, hearings are either written or face-to-face (called oral hearings). Currently due to COVID-19, oral hearings are being conducted virtually. Check our online calendar to find out when oral hearings are held and you can listen to streaming audio of the live hearing. Also, you can read a transcript of the hearing afterwards – usually the next day.
- Review and consider input from public interest groups – called intervenors – during the hearing. Intervenors are individuals or groups who have our permission to actively participate in a public hearing about a utility’s application. 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 – on topics like economics, engineering, accounting, finance and a host of other subjects that often come up in our hearings.
We take all of this input into consideration before making a decision. View a list of major decisions issued by the OEB.