EB-2010-0377 EB-2010-0378 EB-2010-0379 EB-2011-0004 E B-2011-0043 Renewed Regulatory Framework for Electricity BRIEF OF SCHEDULE "A" DOCUMENTS Documents Informing CME's Approach to Renewed Regulatory Framework Consultative Tab # Speech of Howard Wetston to Electricity Distributors Association, March 29, 2010 1 Excerpts from Decision with Reasons in EB-2009-0096, April 9, 2010 2 Speech of Cynthia Chaplin to 8th Ontario Power Summit, May 6, 2010 3 Evidence of Bruce Sharp of Aegent Energy Advisors Inc., August 26, 2010, and filed on behalf 4 of CME in EB-2010-0002 Speech of Howard Wetston to the Ontario Energy Association, September 21, 2010 5 Disclosure by Board Staff in Ontario Power Generation case of its preparation for internal 6 purposes of a 5-year electricity price increase forecast Ontario's Long-Term Energy Plan ("LTEP"), and in particular, Figures 14 and 15 containing 7 Industrial and Residential Price Projections (2010 to 2030) Excerpts from Decision with Reasons in EB-2010-0002, December 23, 2010 8 Ontario's Open for Business Report re: manufacturing, January 2011, and in particular, 9 Government response to CME's Priority 2: Total Bill Impact Assessment for Energy Excerpts from Decision with Reasons in EB-2010-0008, March 10, 2011 10 Speech of Rosemarie Leclair to the Ontario Energy Association, May 6, 2011 11 Study by Electricity Distributors Association, July 2011, entitled "The Case for Reform" 12 Study by Electricity Distributors Association, November 1, 2011, entitled "Electricity is the 13 Answer" Speech of Rosemarie Leclair to the Ontario Energy Network, November 21, 2011 14 Speech of Tom Mitchell, President and CEO of Ontario Power Generation, to the Toronto Board of Trade, November 30, 2011 15 Annual Report of the Auditor General of Ontario, December 5, 2011, Chapter 3, Section 3.02 16 "Electricity Sector — Regulatory Oversight" Annual Report of the Auditor General of Ontario, December 5, 2011, Chapter 3 Section 3.03 17 "Electricity Renewable Energy Initiatives" OTT01\4817985\v1 TAB 1 Howard I. Wetston, Q.C. Chair Ontario Energy Board SPEECH Electricity Distributors Association Annual General Meeting Toronto, Ontario March 29, 2010 Thank you, John (Loucks) for your kind introduction and I appreciate the invitation. John, whenever I feel that things have settled down in the sector, "I lie down until the feeling passes". Last year I opened my remarks by noting "What a difference a year makes". This year I would like to comment on how we are organizing ourselves for the future. My point is, any attempt at energy reform, must include the wires not just generation. We have worked through a lot of issues in very challenging times in the electricity sector and I would like to congratulate John personally for the work he has done as Chair of the Electricity Distributors Association. I am sure you have all noted John's expectation that 2010 will be a transformational year for distributors and that you are anticipating the issuance of regulations and directives that will provide you with a clearer path to engage in an array of new roles and responsibilities. He has written that you are keen to embrace new business opportunities, such that the local distribution company plays a vital role in building the robust and sustainable communities of tomorrow. Indeed, the Green Energy Act (GEA) ushered in a new paradigm for Ontario's energy sector and for its network utilities in particular. Green energy is a key component of a strategy designed to achieve the broader environmental, industrial and social policy objectives of a green economy. The GEA presents a clear statement of new objectives to guide the Board: conservation, renewable energy and technological innovation through the smart grid. Like you, the Board has had to roll up its sleeves and respond to the challenge created by the GEA of evolving how the Board regulates network utilities in the public interest. Even before the GEA was introduced, however, the Board recognized that our technical work of rate setting and service quality oversight was important but needed to be supplemented by innovative approaches to regulation. We recognized the need to be open to new ideas and new ways of doing our work, and that our approach had to be adaptive, developing new relationships and creating new opportunities for dialogue and facilitation. And while regulatory issues are increasingly complex and affect utilities in new and complex ways, we continue to recognize that regulation must establish a sense of order and stability and we believe that stability in the regulatory regime has won much for the public by fostering confidence. We have therefore advanced the implementation of policy in a manner that protects the public interest by remaining true to our core principles: a long-term approach to issues; a transparent, open and inclusive process; timely, clear and decisive outcomes; and a focus on practical, workable and implementable solutions. While the Green Energy Act added three new objectives to guide us when carrying out our responsibilities, our existing objectives relating to consumer 2 protection, economic efficiency and cost effectiveness, and a financially viable electricity industry are unchanged. As such, from a regulatory perspective we are facing an immense increase in issue complexity. Here is the challenge: we must pay greater attention to certain social and environmental factors that are intended by government policy, while at the same time facilitating the achievement of our economic goals. Those issues must be addressed in transparent and principled adjudicative and code development procedures that conform to the requirements of the law. The presence of socio- economic objectives does not mean we will not continue to encourage efficient outcomes in the distribution sector wherever possible. Since we last met, the Board has undertaken many key initiatives to ensure that our regulatory instruments reflect the changes in our governing legislation and are well-aligned with the goals in the GEA. Most of these initiatives are now complete and can be divided into five broad categories. In the first category, we have made the connection process for generators more rational and efficient. We have made it easier for generators up to 500 kilowatts to connect their local distribution system by exempting them from requiring a specific allocation of capacity. For larger generators, we have made a number of changes to ensure that those with capacity allocations have an incentive to move forward with their projects or risk having their allocation removed. And we have introduced a new simplified generation license for Feed-in Tariff (FIT) generators that will reduce the amount of time and paperwork required and avoids duplication with the Ontario Power Authority. In the second category, we implemented new rules to standardize the billing and settlement processes for FIT and microFlT generators. There is now a single way of setting up generator accounts and settling them, regardless of whether they are connected in front of or behind the meter. We have also implemented a $5.25 monthly service charge that will apply to all microFlT generator accounts across the Province. In the third category, we looked at the allocation of costs for renewable connections. The Board recognized that the FIT program was likely to lead to a large number of generators connecting to distribution systems and that substantial distribution system investment would be required. The Board decided that it would be best to shift much of the cost of this investment from individual generators to the utility's customers as a whole. The government also recognized this and the Board has been tasked to ensure that the cost burden of these additional investments is shared equitably among distribution connected ratepayers across the Province, less any benefits accruing to local ratepayers. We are in the midst of a consultation to determine the nature and quantification of those benefits. 3 The fourth category of work relates to the treatment of distributor-owned generation. The Board has issued guidelines that lay out the appropriate regulatory and accounting treatment of distributor owned generation as a non- regulated activity. We have also finalized code amendments that relax certain restrictions on how distributors can deal with generation affiliates, and create an obligation of equal treatment of a distributor's own facilities with that of third parties wishing to connect to the distributor's system. The Board's view is that a level playing field for all generators and generation proponents is consistent with the requirement to provide non-discriminatory access, will ensure the timely connection of all generation facilities, and will support the Board's new objective of promoting the connection of renewable generation. Finally, the fifth category of our work relates to encouraging rational planning and investment. Network expansion is critical to sustaining investment in the green economy, and this means that the utilities are going to have to plan their investments even more thoroughly and carefully. The distribution planning guidelines issued last year allowed distributors to start by setting up deferral accounts for booking expenditures and a rate adder for additional funding. We also set out some guidelines as to what we expected to see in a distribution system plan. Just last week, we completed this phase of our work on distribution planning by issuing filing requirements for distribution system plans. All this activity is occurring, yet we continue to have some transitional issues that have their origin in the pre-commercialization era of the sector, over 10 years ago. For example, we are continuing to delineate the demarcation point of the distribution system and to align it with the functional business lines that were established with restructuring. This was evident in the Board's recent Decision relating to Toronto Hydro's street lighting application.