Consultation to Develop a Regulatory Framework for Natural Gas Distributors’ Cap and Trade Compliance Plans

Case number

EB-2015-0363

Launched

March 10, 2016

Sector

Natural Gas

Status

Complete

Details

The OEB has completed its consultation to develop a natural gas regulatory framework to support the implementation of Ontario’s Cap and Trade program.

The OEB issued a Regulatory Framework for the Assessment of Costs of Natural Gas Utilities’ Cap and Trade Activities (the “Regulatory Framework”) on September 26, 2016 (posted below). The Regulatory Framework describes the OEB’s expectation for each utility to develop cap and trade Compliance Plans that include robust information regarding compliance strategies. The Regulatory Framework also outlines the OEB’s approach for assessing the cost consequences of proposed cap and trade activities.

The OEB indicated in the Regulatory Framework that it would provide a Long Term Carbon Price Forecast (LTCPF) Report, to be updated annually, and a Marginal Abatement Cost Curve (MACC), to be updated at the beginning of each three-year compliance period.

Reports

Report of the Board - Regulatory Framework for the Assessment of Costs of Natural Gas Utilities’ Cap and Trade Activities

Issued

September 26, 2016

ICF Report - Long-Term Carbon Price Forecast

Issued

May 31, 2017

ICF Report - Marginal Abatement Cost Curve

Issued

July 20, 2017

Updates

Date	Issue / Document
July 20, 2017	Under its Cap and Trade Regulatory Framework, the OEB committed to provide a province-wide Marginal Abatement Cost Curve (MACC), to be updated at the beginning of each three-year Compliance Plan term. The Marginal Abatement Cost Curve report prepared by ICF Consulting Canada Inc. is now available. Letter Marginal Abatement Cost Curve Report
May 31, 2017	Under its Cap and Trade Regulatory Framework, the OEB committed to provide a long-term (10-year) carbon price forecast, to be updated annually. The 2018-2028 Long Term Carbon Price Forecast report prepared by ICF Consulting Canada Inc. is now available. Letter Long Term Carbon Price Forecast Report
September 26, 2016	The OEB issued its Regulatory Framework for the Assessment of Costs of Natural Gas Utilities’ Cap and Trade Activities. The OEB has developed this Framework to facilitate the recovery of costs incurred by rate-regulated natural gas utilities (Enbridge Gas Distribution Inc., Natural Resource Gas Limited, and Union Gas Limited) in meeting the legislated requirements of Ontario’s Cap and Trade program which comes into effect as of January 1, 2017. Letter Report of the Board
July 28, 2016	The OEB has made a determination on billing and customer outreach in relation to the Cap and Trade framework to be implemented by Enbridge Gas Distribution Inc., Natural Resource Gas Limited and Union Gas Limited. Letter
June 24, 2016	The OEB has received the following selected comments on its Staff Discussion Paper. The complete list, including emails, can be found here. Ag Energy Co-operative Ltd. Arauco North America Association of Major Power Consumers in Ontario Association of Power Producers of Ontario Blackstone Energy Services Canadian Manufacturers & Exporters Coalition of Large Distributors Colleges Ontario Consumers Council of Canada CRH Canada Group Inc. ECNG Energy L.P. Enbridge Gas Distribution Inc. Energy Probe Energy Probe Research Foundation Environmental Defence Federation of Rental-housing Providers of Ontario Green Energy Coalition Independent Electricity System Operator Industrial Gas Users Association Invenergy LLC Just Energy Ontario L.P. Kitchener Utilities London Property Management Association Low-Income Energy Network Natural Resource Gas Limited Northeast Midstream LP Ontario Association of Physical Plant Adminstrators Ontario Energy Association Ontario Greenhouse Vegetable Growers School Energy Coalition Shell Energy North America (Canada) Inc. Sinopa Energy Inc Thames Valley District School Board The Ontario Sustainable Energy Association TransAlta Union Gas Veresen Energy Infrastructure Vulnerable Energy Consumers Coalition Wallenstein Feed & Supply Ltd Weyerhaeuser
May 25, 2016	In April 2016, OEB staff held a series of preliminary meetings with targeted stakeholders – natural gas utilities, large-volume natural gas industry groups, low-volume consumer ratepayer groups, and the environmental groups. Staff presented the material below to initiate discussion on a draft cap and trade framework for OEB rate-regulated natural gas utilities: Staff’s stakeholder presentation Staff’s summary notes from meetings
May 25, 2016	The OEB has received letters from Enbridge Gas Distribution and Union Gas requesting that the OEB consider issuing interim rate orders that address the rate and bill presentment for recovery of costs related to the cap and trade program. Letter from Enbridge Gas Letter from Union Gas Limited
May 25, 2016	The OEB released for comment a Staff Discussion Paper regarding the development of a cap and trade framework for OEB rate-regulated natural gas utilities. Comments are due on June 22, 2016. Letter Staff Discussion Paper
March 10, 2016	The OEB has issued a letter to announce a consultation to develop a natural gas regulatory framework to support the implementation of Ontario’s Cap and Trade program. The framework will guide the OEB’s assessment of natural gas distributors’ Cap and Trade Compliance Plans, including the cost consequences of these plans and the mechanism for recovery of costs in rates. Letter

Cost Award Matters

Date	Issue / Document
April 22, 2017	The OEB has issued its Decision on Cost Award Eligibility. Decision on Cost Award Eligibility
October 24, 2016	The OEB has issued a Notice of Hearing for Cost Awards. Notice of Hearing for Cost Awards Cost Claim Form (.xls)
April 29, 2016	The OEB has issued an updated Decision on Cost Award Eligibility. Decision on Cost Award Eligibility
April 21, 2016	The OEB received the following request for cost award eligibility: Low-Income Energy Network (LIEN)
March 31, 2016	The OEB received requests for cost award eligibility from the following participants: Association of Major Power Consumers in Ontario (AMPCO) Association of Power Producers of Ontario (APPrO) Building Owners and Managers Association (BOMA) Canadian Manufacturers & Exporters (CME) Consumers Council of Canada (CCC) Environmental Defence Federation of Rental-housing Providers of Ontario (FRPO) Green Energy Coalition (GEC) Industrial Gas Users Association (IGUA) London Property Management Association Ontario Association of Physical Plant Administrators (OAPPA) Ontario Federation of Agriculture Ontario Greenhouse Vegetable Growers (OGVG) Ontario Mining Association (OMA) Ontario Sustainable Energy Association School Energy Coalition (SEC) Vulnerable Energy Consumers Coalition (VECC)