Ontario Ministry of Energy is Taking More Control Back from The Ontario Energy Board
Ontario's Fair Hydro Plan Act shifts control from independent regulator to the Ministry of Energy.
November 29, 2017
The Ontario Energy Board is the Province’s independent energy regulator and their role is to "make decisions and ensure that consumers are treated fairly and that the energy sector is reliable and sustainable". Part of their role was to set electricity rates to ensure that the rates being charged covered the cost of electricity generated. In the past this pricing was based on a competitive wholesale markets, and is now blended with the increase in provincially sponsored contracts for renewable energy. This role however is being limited further with the incoming Fair Hydro Plan Act, which gives the Ministry of Energy, and specifically the Minister, the ability to set electricity rates. This eliminates the independent and unbiased setting of electricity rates, and could potentially lead to politically motivated rates. It also allows for potentially shifting the costs from one group of consumers onto others, although there is no indication that this will happen.
The Federal Government of Canada has approved Ontario’s proposal to substitute the Federal Output Based Pricing System for the Ontario Emissions Performance Standards program. The Output Based Pricing System, or OBPS, has been the Federal backstop for provinces that did not have their own carbon pricing plans in place.
For years, the prices of oil and natural gas have been heavily correlated, as the production of natural gas in Canada comes as a by-product of oil extraction.
One of the largest factors playing into the voting decision of many professionals in the energy management industry, whether that be natural gas, electricity producers, or facility managers, is of course: ENERGY.
New research has emerged in the field of Absorbed Natural Gas (ANG). ANG is an alternative to Compressed or Liquified Natural Gas (CNG and LNG), which may include a process that is both more financially feasible and safer to handle than the two current options.
Over the past month, large moves have been made on the fate of the Federal carbon pricing backstop in Ontario. Companies will be seeing a new line item on their Enbridge bills beginning next month, with a $0.0391/m3 charge being added and back-billed to include all gas consumed from April 1st onward.
Natural gas is nearly universally accepted as the bridge resource between emissions-heavy fossil fuels and the green-tech movement. It is the ideal commodity to do the job, especially in North America, where the introduction of new drilling techniques in the mid 2000’s allowed access to enough natural gas to power the continent for decades to come.
As expected, the 2018/2019 winter season has been full of volatility in the natural gas markets, both in North America and globally. Prices rose dramatically in November with cold weather forecasts. In much the same way, prices dropped significantly near the end of December among mild weather forecasts for the beginning of January.
Since the start of November, the natural gas futures index on the NYMEX has shown incredible volatility. Now up 60% YTD, the natural gas futures are having a rocky relationship with weather forecasts across North America.
The Federal Government of Canada has approved Ontario’s proposal to substitute the Federal Output Based Pricing System for the Ontario Emissions Performance Standards program. The Output Based Pricing System, or OBPS, has been the Federal backstop for provinces that did not have their own carbon pricing plans in place.
