Ontario’s ambitious renewable energy program is under attack from all sides. In December 2011, the Auditor General criticized the province’s Feed-in Tariff (FIT) rates for renewable energy as being too costly (see our post December 5, 2011) .
In February of this year, the report of the Commission on the Reform of Ontario’s Public Services (the Drummond Report) made a recommendation that, as part of its current review of the FIT program, the government take steps to mitigate impact of the FIT on electricity prices by:
- Lowering the initial prices offered in the FIT contract and introducing degression rates that reduce the tariff over time to encourage innovation and discourage any reliance on public subsidies; and
- Making better use of “off-ramps” built into existing contracts.
Building on this momentum, and citing concern for the adverse impact of the high cost of the FIT on jobs, Tim Hudak, the leader of the Progressive Conservatives, Ontario’s opposition party, will introduce a private members bill in parliament today. The bill is designed to scrap the FIT tariffs for new projects and to require the government to consider with local municipalities cancelling larger industrial renewable energy projects, already approved but not yet connected to the grid.
Some will see this as a piece of political opportunism by Mr. Hudak. The Minister of Energy, Chris Bentley, has recently indicated that he anticipates completing his review of the FIT by the end of this month. That review is widely anticipated to result in cuts to the FIT rates. The Premier, Dalton McGuinty, has also weighed in on the issue, confirming in a speech last week that the government will “do a better job incorporating the local perspective”.
Municipalities hope that this will mean a restoration of some, if not all, of their powers to regulate the development of renewable energy projects in their localities. Those powers were removed by the Green Energy and Green Economy Act in a largely successful attempt by the government to overcome NIMBY opposition to renewable energy projects However, that success carried with it a price of a political backlash, that resulted in the loss of several seats for the Liberal government in the last election.
Supporters of renewable energy will point to the cost of nuclear power as the main culprit responsible for increasing Ontario’s energy costs, but theirs is now an uphill battle given the momentum behind the move to reduce FIT tariff rates.
This post has now been published in EHS Journal and can be found at the following link Ontario: Storm Clouds Brew for Wind and Solar