Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

In response to the release of the Western Climate Initiative's ("WCI") Regional Program Design, the government of Ontario has proposed new guidelines and amendments to the Greenhouse Gas (GHG) Emissions Reporting Regulation (O. Reg. 452/09).

The proposed amendments are meant to align the regulations with the WCI program and also now include nitrogen trifluoride as a GHG.

The proposed amendments and guidelines have been posted on the Environmental Registry and will be open for comment for 45 days, ending October 25, 2010.

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The Western Climate Initiative ("WCI") recently released a proposal for how the Canadian provinces can harmonize their reporting requirements with the U.S. Environmental Protection Agency's rules for greenhouse gas reporting.

The proposal will be open for comment until October 12, 2010.

The WCI expects that Canadian provinces will adopt the new proposal by incorporating it into their reporting regulations.

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The Government of Alberta has scheduled its second round Stakeholder Review session on the Greenhouse Gas Quantification Protocol Development for the Alberta Offset System for November 4th, 2010, in Edmonton.

The purpose of the session is to review submitted proposed protocols for consideration as potential eligible project types for use in the Alberta Offset System and consider mechanisms of quantification for eligible projects under the system.

For further information see http://carbonoffsetsolutions.climatechangecentral.com/

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As we previously reported, on July 12, 2010, broad amendments to the Canadian Environmental Assessment Act (the “Act”) were passed as part of Bill C-9, also known as the Jobs and Economic Growth Act.

Included in the amendments were provisions for the Canadian Environmental Assessment Agency (“CEAA”) to assume responsibility for performing comprehensive studies of major projects, except where the projects are regulated by the National Energy Board (“NEB”) and Canadian Nuclear Safety Commission (“CNSC”).

For pipeline and power line projects within the jurisdiction of the NEB and nuclear facilities within the jurisdiction of the CNSC, the CEAA will use Section 43 of the Act to allow the environmental assessment (“EA”)review procedures of the NEB and CNSC to substitute for the EA review that would normally be conducted by a CEAA Panel.

The CEAA has released separate draft Memoranda of Understanding (“MOU”) between the CEAA and the NEB, and between the CEAA and the CNSC, to outline the processes whereby the NEB and CNSC can request the Minister of the Environment to allow the NEB and CNSC to perform their own public hearings and licensing reviews. 

The NEB and CNSC will create their own Panels to conduct the EA comprehensive studies. The Panels will be composed of persons who are unbiased and free from any conflict of interest relative to the major project, and who have knowledge or experience relevant to the anticipated environmental effects of the major project.

On completion of the assessment, the NEB and CNSC will submit reports to the Minister of Environment setting out the Panels’ conclusions and findings, including recommendations related to any mitigation measures and follow-up programs that should be implemented with respect to the major project, and a summary of the comments received from the public and Aboriginal peoples.

Public comments on the draft MOUs will be accepted by the CEAA until October 20, 2010. Visit the CEAA website for more information.

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On September 15th, 2010, the Ontario Power Authority released instructions on applying for Notice to Proceed ("NTP") under the Feed-In Tariff Program (the "FIT Program"). The NTP is used to provide confirmation to begin building a project under the FIT Program. The OPA  will issue an NTP when it is reasonably confident that a Project has (i) secured proper financing; (ii) completed all necessary Impact Assessments; (iii) received any applicable environmental and site plan approvals; and (iv) there is sufficient evidence that the Project will be capable of meeting any Domestic Content Level requirements.

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On September 20th, 2010, the Ontario government began the process of updating the Long-Term Energy Plan (the “LTEP”). The LTEP was first introduced in 2006 and directs the development of new generation and transmission capacity in the Province. The 2006 plan led to the development of approximately 8,000 megawatts of new generation in Ontario. The new LTEP will incorporate the Province’s commitment to shutdown all coal-powered generating stations by 2014. The general public is invited to comment by answering a series of questions regarding demand, price, generation, transmission and conservation,  on the Ministry of Energy website. The government will also conduct more formal consultations with key stakeholders such as utilities, environmental organizations, businesses, First Nations and Métis organizations, and consumer groups.

The end result of this consultation will be the issuance of a new Supply Mix Directive, which will be posted for comment on the Environmental Registry. Once the Minister of Energy finalizes and issues the Supply Mix Directive it will be used by the Ontario Power Authority to inform the development of the Long-Term Energy Plan which will be submitted to the Minister for approval and then submitted to the Ontario Energy Board for review. The Minister anticipates the LTEP will be finally approved in 2011.
 

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The Moosomin World-Spectator reports that the Saskatchewan Court of Queen's Bench has now lifted its injunction against construction of a windfarm near Moosomin.

The original injunction was issued ex parte on August 25th and was in place for six days.  After a hearing of the matter on September 1 with all parties represented, the injunction was lifted and construction of the windfarm resumed the following day.  

Costs have reportedly been awarded to the windfarm owner.  Counsel has estimated that the cost of construction delays is approximately $74,000 per day. 

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The Financial Post reports that Japan plans to file a complaint related to Ontario's program of providing subsidies tied to the manufacture of solar generating equipment in Ontario.

The Japanese complaint alleges that the Ontario FIT program, which guarantees long-term pricing for solar electricity generated from equipment containing a certain minimum domestic content, violates Canada's WTO obligations.

The FIT program guarantees pricing for ground-mounted solar installations, provided that installations have a minimum domestic content of 40% (if commercial operation is achieved in 2010) or 60% (if the commercial operation is achieved after 2010). 

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The state of New Jersey recently passed the Offshore Wind Economic Development Act (the “OWEDA”) that will require New Jersey’s electricity providers to purchase a certain minimum percentage of their total electricity supply from wind operations in the state’s coastal waters.

The New Jersey Board of Public Utilities (the “BPU“) will have the authority to determine the minimum percentage that utilities must purchase from offshore wind, and will issue offshore-wind renewable energy certificates (“OREC”s) to operators. The minimum percentage will be based on the projected total of the ORECs issued during the first twenty years of all the offshore wind projects’ commercial start dates.

If there are insufficient ORECs available in the market to meet the minimum percentage, the utilities will be required to make a “proportional offshore wind-alternative compliant payment.”

The minimum percentage determined by the BPU must support an offshore wind market of at least 1,100 megawatts, which is enough power for 300,000 homes in this state of 8.7 million people. The OWEDA also authorizes the New Jersey Economic Development Authority to provide tax credits of up to $100 million for offshore wind projects.

The BPU is developing the regulations to establish the OREC program, which will be unveiled in early 2011.

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Under B.C.’s Clean Energy Act, the feed-in tariff (“FIT”) program will involve BC Hydro and Power Authority (“BC Hydro”) entering into supply contracts with small-scale electricity providers producing power from clean sources such as biomass, biogas, geothermal heat, hydro, solar, ocean, wind and other prescribed resources.

The B.C. government will seek to pass FIT program regulations by early 2011, and is currently accepting comments regarding its Feed-In Tariff Regulation Consultation Paper released last month.

According to the Consultation Paper, FIT programs are intended to support investment in emerging clean technologies in the earlier stages of commercial deployment, as well as to spur growth in areas of the province that would benefit from greater grid integration and job creation. 

FIT programs will not finance clean power projects, but rather create a marketplace for clean power by offering rates of return of about five to ten per cent. Rates paid to FIT operators are expected to vary depending on the project's size, resource type, location and other factors.

The Consultation Paper states that the B.C. Ministry of Energy, Mines and Petroleum Resources has made the following proposals regarding FIT projects:

1. To cap the size of FIT projects at five megawatts, meaning that FIT projects will not function as general power procurement tools for BC Hydro;
    
2. To limit annual spending on all power acquired under FIT projects to $25 million above the cost of acquiring the same volume of electricity through BC Hydro’s Standing Offer Program, a similar BC Hydro initiative to support clean energy but with fixed rates paid to program participants; and
   
3. To limit the term of most FIT projects to five years, with the option of securing an Electricity Purchase Agreement with the project at the end of term at the rates under the Standing Offer Program.

The comment period for the Consultation Paper will close September 30, 2010. 

Nova Scotia is presently developing its own FIT program, and Ontario's FIT program (see here, here and here) is entering its second year.

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The Saskatchewan Leader-Post is reporting that a Saskatchewan court has issued an interim injunction temporarily stopping construction of a windfarm near Moosomin.

The $60 million, 25 MW Red Lily windfarm, owned by Algonquin Power and Gaia Energy, was to have come into service late in 2010 or early in 2011.

The project was to have been constructed with minimum setbacks of 550 metres from residences.  Landowners are seeking to have turbines at least 2000 metres from residences.

The interim injunction stops "all construction-related activity".  Further arguments on the injunction application will be heard on September 7. 

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Québec’s Cabinet has requested that the Bureau d’Audiences Publiques sur l’Environnement (“BAPE”) hold public hearings beginning September 14 regarding the creation of a new oil and gas regulatory regime for Québec. 

Québec currently does not produce oil and gas in significant commercial quantities, yet prospective areas for production, especially the shale gas in the Utica formation of the St. Lawrence Valley, are now fully leased.

Québec’s oil and gas resources are currently legislated under the province’s mining rules and regulations, where depending on the size of production, gas producers pay royalties of 10 to 12.5 percent. Producers must also conform to a patchwork of municipal, regional and provincial permitting laws. 

The creation of a single regulatory regime would “create a fiscal and legal framework that can make a company decide to invest in Québec rather than Pennsylvania” says Québec’s Natural Resources Minister, Nathalie Normandeau.

As part of the public hearings, BAPE will conduct a review of the environmental, health and safety issues surrounding the practice of hydraulic fracturing, or “fracking,” a procedure where high pressure fluids are injected into rock formations to release hydrocarbons.

BAPE’s review of fracking practices falls on the heels of the U.S. Environmental Protection Agency launching a similar study, as well as a temporary moratorium on fracking that was approved by the New York State Senate in August and will be reviewed by the New York State Assembly in September.

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