Final Feed-In-Tariff (FIT) Rules Out

The final FIT Program Rules, Contract and other program documents have now been posted on the FIT Program website.  

The application window for small FIT projects is anticipated to open on October 1, 2012, and remain open until November 30, 2012. If your FIT project is a small FIT project (typically 500 kW or smaller), then you must submit your electronic application form during the application window to be considered under the FIT 2.0 Program. The OPA anticipates awarding 200 MW of small FIT contracts.

The OPA recommends that you review the final versions of the program documents carefully to ensure you understand how the FIT Program has changed. In addition, there have been several revisions made to the draft version of the Rules as a result of feedback received. 

In order to retain their original time stamp, those who had previously submitted a small FIT project application must submit a revised electronic application form during the small FIT application window, followed by a hard copy submission within five business days. 

New small FIT project applications will also be accepted during this same window. All applications received during the window will be reviewed according to the new FIT Program Rules for compliance and for the prioritization of applications. Where projects have the same number of priority points, the time stamp will be used to determine the order in which projects will be tested for available transmission and distribution capacity. As indicated above, the OPA expects to award 200 MW of small FIT contracts under the first application window for small FIT projects.

Once FIT contracts have been offered to successful applicants, any FIT applications that do not receive contracts will be terminated and their time stamp will be lost. Application Security will be returned.

Pre-existing small FIT applications that are not resubmitted during the first application window for small FIT projects will also be terminated. In this case, the time stamp will be lost and the Application Fee will be returned. These projects can reapply with a new application within the next small FIT application window.

The timing for the large FIT project application window will be communicated once details are finalized.

The OPA has posted a list of questions and answers about the revised program, which can be found here.

If you still have questions about this process after reading the OPA’s website, please contact the OPA’s customer service centre at 1-888-387-3403 or email FIT@powerauthority.on.ca.

    

City powers its treasury with big new solar project

1,400-panel plan will feed energy to grid

The city has given the go-ahead for solar panels to be installed on the central Hamilton building which houses its operations centre.

The city has signed an agreement with Horizon Energy Solutions to allow the company to install a 1,400-panel, 250-kilowatt solar power system on top of 330 Wentworth St. N., which is north of Barton Street East.

Horizon Energy is a local developer of renewable energy projects that is 79.9 per cent owned by the City of Hamilton. It will be a tenant of 330 Wentworth.

Horizon will pay rent to the city, which is expected to generate $250,000 over the course of 20 years. The city will also be paid dividends, but Horizon will not reveal its revenue projections for competitive reasons.

The project will use about 50,000 square feet on the building's 250,000-square-foot roof, said Tom Chessman, manager of energy initiatives for the City of Hamilton.

He said the panels will most likely be installed next spring.

The Wentworth site was chosen because of its location, structural stability, and how it is situated, said Horizon Energy vice-president Scott Knapman.

Horizon is responsible for the installation and operation of the panels.

“We install these systems and then the power we produce off them, we sell back to the Ontario Government under the Feed-in-Tariff program,” Knapman explained.

The Feed-in-Tariff program from Ontario Power Authority was introduced in 2009 by the Green Energy and Green Economy Act as a way to reduce coal-fired electricity and boost the renewable energy business.

According to Horizon Energy's annual report for 2012, last year the city reaped more than $8.9 million in dividends from the company, said Sheri Ojero, spokesperson for Horizon Utilities Corporation, sister company to Horizon Energy Solutions.

Revenue from the Wentworth project rent will go to the energy reserve fund, which pays for salaries for the city's office of energy initiatives.

The office pursues projects and initiatives that save the city money on its energy costs, Chessman explained.

The city's energy initiatives webpage says projects and initiatives in Hamilton's corporate facilities have saved taxpayers $23 million since 2006.

scrosier@thespec.com

905-526-3390 | @stephatthespec

Renewable Energy Co-Operatives - Open for Business?

On July 11th, 2012 the Minister of Energy directed the Ontario Power Authority to continue with and to make modifications to the Feed-in-Tariff ("FIT") Program.

Why is this directive so important for Renewable Energy Co-Operatives ("RE Co-Ops")?

RE Co-Ops are one of the primary beneficiaries of the directive.  The Minister directed that renewable energy projects that have a fifty percent (50%) ownership interest by a RE Co-Op where 50 or more members of the RE Co-Op are local property owners are first in line (with aboriginal groups) when allocating grid capacity.  With respect to remaining projects, a renewable energy project where fifteen (15) to fifty percent (50%) of the project is owned by a RE Co-Op and where 50 or more members of the RE Co-Op live in the municipality where the project is located get 3 priority points for grid access.  This is the most priority points for any category.  Amended FIT Rules incorporating the foregoing are expected to be issued any day. The 50 members referred to above becomes 35 for a Small FIT Project.

Why is Priority for Access to the Grid so important? 

Because it appears there is not enough capacity on the grid to connect all projects seeking connections.

What will be the result of this development?

It can be expected that many other project developers who are not RE Co-Ops will be seeking to join forces with RE Co-Ops to secure grid access. 

How will these developers be "joining forces" with RE Co-Ops?

They won't be forming a new corporation.  The RE Co-Op has to have a direct ownership interest in the project with the developer.  It can be expected that the RE Co-Op and developer will be entering into an agreement regarding how they will own and operate the project together.

Sounds great! Are there any issues?

There are several uncertainties that will have to be addressed, including: any issues arising out of the final FIT Rules and completing the projects within the time prescribed to validate FIT contracts

What's this about timing?

The FIT Rules provide that project proponents have a certain amount of time to build their projects to validate their contracts.  There are also key milestones that must be met at various points during project development.  In order for the project to proceed, the parties will have to:

enter into an agreement governing the terms and conditions of their relationship,

have the required equity and financing in place, and

have the prescribed 50 land owners from the local municipality as members of the RE Co-Op

This will take time.  The Financial Services Commission of Ontario ("FSCO") governs co-operatives.  These new FIT Rules will be new to FSCO as well.  It can be expected there will be a learning curve for them.

Where do we go from here?

Hopefully the new FIT Rules will provide further guidance.  The next several months will be both challenging and promising for the renewable energy sector.  Stay tuned for further developments.

Mr. Shewan is a partner with the law firm of Lerners LLP and the Practice Group Leader of their Business Law Group.  He may be reached at ishewan@lerners.ca or 519.640.6334.