Ontario needs to look at its regulatory policy stability
A utility regulation expert has mentioned that the new Green Energy Act in Ontario removes some of the uncertainty around municipal permitting and grid connection policies.
In their new Ontario wind power study, Guy Holburn, Associate Professor, and Charles Morand, researcher, Richard Ivey School of Business, also recommend the Ontario government to enact bold legislation on renewable energy, with long-term capacity targets, to attract wind developer investments.
In all, the experts surveyed 63 wind developers and studied past policies to determine why previous provincial initiatives to increase green energy - including a feed-in tariff that guarantees the Ontario Power Authority will purchase from renewable electricity suppliers at fixed prices - have failed to meet targets.
In their findings, Holburn and Morand referred to the policy-making that is conducted outside of the scope of formal legislative and regulatory processes.
Holburn said the Act does not establish long-term targets for renewable capacity. “Instead it leaves key decisions on targets and power pricing in the hands of the Minister, who can easily change policies if political priorities shift.”
“Developers rate regulatory policy stability as one of the weakest aspects of Ontario’s business environment,” said Holburn.
“Concerns over policy stability and regulatory risk have led developers to invest in other jurisdictions or to price in a risk premium here in Ontario - implying higher rates for consumers. The Green Energy Act should go further by delegating more policy-making authority to independent agencies and limiting the scope for Ministerial directives.”