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Affordable Energy and Restorations Act

March 23, 2012

Tim Hudak, the Ontario PC leader, has introduced the Affordable Energy and Restoration Act into the legislative assembly. It has passed the first reading stage of the enactment process. This piece of legislation is the Ontario PC solution to the large, and growing, industrial power rates that are alleged to be among the highest in North America. According to Hudak, the expensive subsidies paid out to green energy developers are to blame for these high energy prices.

This piece of legislation will, essentially, end the FIT and Micro-FIT program that Hudak condemns as a “failure”. This bill would confer broad powers to the Minister of Energy to:

• Control connections to the grid and prohibit developers from connecting
• Restrict and place conditions on such connections
• Amend or revoke environment approvals

Furthermore, the Hudak-bill would require industrial wind and solar farms that have not yet been connected to the grid to engage in ministerial consultation for the purpose of determining whether connection will be granted. The new Act, if passed, will also allow for the revocation of contracts already signed by developers.

The legislation would also allow local and municipal governments to participate in approving large wind and solar projects within their jurisdiction by creating rules, zoning amendments and by-laws to create parameters by which these projects must comply.

Proponents of green energy production claim that the Hudak camp ignores the successes of the FIT and Micro-FIT programs. Hudak, according to FIT supporters, ignores the vast foreign investment into Ontario that has been a direct result of these programs. These programs have also helped to create jobs in many key, and economically depressed areas of Ontario.

As it stands, the allegation that the FIT program is to blame for the rising energy prices in Ontario is, indeed, dubious. According to the Environmental Commissioner of Ontario, renewable energies subsidies comprised 0.4 cents of the 13 cents paid per kWh for residential use. Other studies have further reported that there would be no realizable gain with respect to high energy prices if these programs were cancelled.

In fact, the Hudak bill may have some costly, albeit unintended, results. The possible revocation of previously confirmed contracts may cause significant legal ramifications as upset developers take their grievances to the courts. Such a bill, should it become law, would serve to create uncertainty and scare away possible investors.

It will be interesting to see how this bill is received as it is considered further by the legislative assembly. We will be monitoring the situation with interest.

Tags: Renewable Energy