Minister of Energy requests IESO to develop Small Hydro Program Rules and Contract
October 5, 2022 – Peterborough – The Ontario Waterpower Association (OWA) is extremely pleased with the direction provided today by the Honourable Todd Smith, Minister of Energy to the Independent Electricity System Operator (IESO) on the development and implementation of a Program to recontract existing waterpower facilities. The Program will result in securing these perpetual assets until 2043, encouraging new investment and expansion.
“This government has clearly recognized the value that Made in Ontario waterpower brings to the electricity system and to communities across the province,” said Paul Norris, President of the Ontario Waterpower Association. “This Program will bolster confidence for new investment and ensure the more than one hundred (100) facilities included continue to provide affordable, reliable sustainable electricity.”
The Minister’s letter to the IESO, released earlier today, recognized the important role that waterpower facilities play, both in generating electricity and providing benefits such as recreational opportunities, flood control, irrigation, tourism and supporting local employment and economic development. Key policy parameters to be further developed in consultation with the industry include:
– the provision of possible price adders for facilities less than 1MW;
– the provision of incentives for facility upgrades and expansions;
– appropriate price escalation under both types of contracts and ownership; and
– ownership of environmental attributes consistent with the Clean Energy Credit market in the province.
The IESO has also been asked to develop two optional contract structures – a capacity style contract as proposed through the initial stakeholder engagement process and one which compensates facilities on a per MWh basis. The IESO has been asked to report back to the Minister by December 31, 2022, with Program implementation targeted for July 2023.
“I applaud the Minister’s leadership in establishing the framework and parameters for the Program,” added Stephen Somerville, Chair of the OWA Board of Directors. “We look forward to continuing to work with the IESO and the Ministry on detailed design and are confident that our work can be leveraged to apply to other facilities, regardless of size.”
More than two-thirds of Ontario’s 220+ waterpower facilities are non-rate regulated facilities, most of which would meet the proposed Program parameters. The vast majority of these facilities have been in continuous service for decades and many for more than a century.
For more information on the Ontario Waterpower Association, visit www.owa.ca.
Paul Norris, President
Ontario Waterpower Association