[37] Bill 210 Royal Assent (PDF)

Bill 210 2002

An Act to amend various Acts
in respect of the pricing, conservation
and supply of electricity and in respect
of other matters related to electricity

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Assessment Act

1. The Assessment Act is amended by adding the following section:

Electricity generating facilities that use alternative or
renewable energy
Definitions

3.1 (1) In this section,

"alternative or renewable source of energy" means a source of energy prescribed in the regulations; ("source d'énergie renouvelable ou de remplacement")

"eligible machinery" means machinery or equipment used in generating electricity that satisfies the conditions prescribed in the regulations. ("machines admissibles")

Exemption from taxation, new facility

(2) Subject to subsection (7), land that is an electricity generating facility that generates electricity from an alternative or renewable source of energy is exempt from taxation for the time period determined under subsection (6) if,

(a) the facility,

(i) commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008, or

(ii) is a facility designated by the Minister; and

(b) the facility satisfies the conditions prescribed in the regulations.

Exemption from taxation, addition to an existing facility

(3) Subject to subsection (7), land that is an addition to an existing electricity generating facility is exempt from taxation for the time period determined under subsection (6) if,

(a) the addition to the facility is the result of an expansion of the existing facility, as determined under the rules prescribed in the regulations;

(b) electricity is generated in the addition to the facility from an alternative or renewable source of energy;

(c) the addition to the facility,

(i) commences generating the electricity described in clause (b) after November 25, 2002 and before January 1, 2008, or

(ii) is an addition to a facility that is designated by the Minister; and

(d) the addition to the facility satisfies the conditions prescribed in the regulations.

Same

(4) If an electricity generating facility or an addition to an electricity generating facility is exempt from taxation under this section, the following real property is exempt from taxation for the same period of time as the facility or the addition to a facility:

1. Buildings and structures,

i. that are used in connection with the facility or the addition to a facility, and

ii. that satisfy the conditions prescribed in the regulations.

2. Land, not in excess of the area determined in the manner prescribed in the regulations, that is used in connection with the facility or the addition to a facility.

3. Eligible machinery used in generating electricity at the facility or the addition to a facility, to the extent that it is not exempt from taxation under paragraph 18 of subsection 3 (1).

Designation of facility or addition

(5) The Minister may, for the purposes of this section, designate,

(a) an electricity generating facility that satisfies the conditions for designation prescribed in the regulations; or

(b) an addition to an electricity generating facility that satisfies the conditions for designation prescribed in the regulations.

Exemption period

(6) The time period during which an electricity generating facility or an addition to an electricity generating facility is exempt from taxation under this section is,

(a) the first 120 months in which the facility or addition generates electricity from an alternative or renewable source of energy if the facility or addition commences generating electricity from an alternative or renewable source after November 25, 2002 and before January 1, 2008 and is not designated by the Minister; or

(b) the time period determined under the rules prescribed in the regulations if the facility or addition is designated by the Minister.

Exception

(7) Despite subsection (6), if an amount of electricity generated and sold by an electricity generating facility or an addition to an electricity generating facility is in excess of the amount determined for the facility or the addition under the rules prescribed in the regulations, but that amount is not supplied to the IMO-controlled grid, as defined in the Electricity Act, 1998, or to a person or category of persons prescribed in the regulations in such circumstances as may be prescribed in the regulations, the exemption from taxation for the facility or addition,

(a) shall cease to apply for the time periods determined under the rules prescribed in the regulations; or

(b) shall be reduced in the manner and for the time periods determined under the rules prescribed in the regulations.

Regulations

(8) The Minister may make regulations,

(a) prescribing sources of energy for the purposes of the definition of "alternative or renewable source of energy" in subsection (1);

(b) prescribing conditions that an electricity generating facility or an addition to an electricity generating facility must satisfy for the purposes of this section;

(c) prescribing the conditions that machinery or equipment must satisfy to be eligible machinery for the purposes of this section;

(d) prescribing rules for determining if an addition to an electricity generating facility is the result of an expansion of the existing facility;

(e) prescribing the manner for determining the area of land used in connection with an electricity generating facility or an addition to an electricity generating facility;

(f) prescribing conditions that buildings or structures must satisfy for the purposes of subparagraph 1 ii of subsection (4);

(g) prescribing rules for determining, for the purposes of this section, when an electricity generating facility or an addition to an electricity generating facility commences generating electricity;

(h) prescribing conditions for designation that an electricity generating facility or an addition to an electricity generating facility must satisfy to be eligible to be designated by the Minister;

(i) prescribing rules for determining the time period under clause (6) (b) that applies to a facility or an addition to a facility that is designated by the Minister;

(j) prescribing persons, categories of persons, circumstances, amounts, time periods and rules for the purposes of subsection (7);

(k) providing for compensation to be paid to municipalities in respect of tax revenues foregone as a result of the application of this section.

Same

(9) A regulation under subsection (8) may be general or specific and may apply differently to different electricity generating facilities or types of facilities and different additions or types of additions to electricity generating facilities.

Corporations Tax Act

2. (1) Subdivision A of Division B of Part II of the Corporations Tax Act is amended by adding the following section:

Incentive for new electricity supply

13.6 (1) In computing its income from a business for a taxation year, a corporation may deduct an incentive equal to the amount by which the sum of all amounts, each of which is an amount determined under subsection (2) in respect of a qualifying electricity generating facility, exceeds the sum of all amounts, if any, each of which is an amount determined in accordance with the rules prescribed by the Minister.

Amount in respect of a facility

(2) For the purposes of subsection (1), an amount in respect of a qualifying electricity generating facility is the amount determined in accordance with the rules prescribed by the Minister in respect of the corporation's income earned in the taxation year, but after November 25, 2002, from the sale of electricity,

(a) that is generated by the facility from an alternative or renewable source of energy;

(b) that is generated after November 25, 2002 and on or before the ninth anniversary of the last day of the first taxation year of the corporation in which the corporation first deducted an amount under this section in respect of the facility;

(c) that qualifies as a new electricity supply generated by the facility under the rules prescribed by the Minister; and

(d) that is supplied,

(i) to the IMO-controlled grid, as defined in the Electricity Act, 1998, or

(ii) to a person or class of persons prescribed by the Minister, in such circumstances as may be prescribed by the Minister.

Qualifying electricity generating facility

(3) An electricity generating facility is a qualifying electricity generating facility if,

(a) the facility,

(i) commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008, or

(ii) is a facility designated by the Minister; and

(b) the facility satisfies the conditions prescribed by the Minister.

Designation of facility

(4) The Minister may, for the purposes of this section, designate an electricity generating facility that,

(a) generates electricity from an alternative or renewable source of energy; and

(b) satisfies the conditions for designation prescribed by the Minister.

Definition

(5) In this section,

"alternative or renewable source of energy" means a source of energy prescribed by the Minister.

Regulations

(6) The Minister may make regulations,

(a) prescribing alternative or renewable sources of energy;

(b) prescribing rules for determining amounts referred to in subsection (1) that are deducted in determining the amount of a corporation's incentive for new electricity supply for a taxation year;

(c) prescribing rules for determining the amount of electricity generated by a qualifying electricity generating facility from an alternative or renewable source of energy;

(d) prescribing rules for determining whether any electricity generated by a qualifying electricity generating facility qualifies as a new electricity supply;

(e) prescribing rules for determining the amount of new electricity supply generated by a qualifying electricity generating facility;

(f) prescribing rules for calculating the amount in respect of a qualifying electricity generating facility for the purposes of subsection (2);

(g) prescribing persons or classes of persons and circumstances for the purposes of subclause (2) (d) (ii);

(h) prescribing rules for determining if a qualifying electricity generating facility commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008;

(i) prescribing the conditions that must be satisfied for the purposes of clause (3) (b);

(j) prescribing conditions for designation that an electricity generating facility must satisfy to be eligible to be designated by the Minister;

(k) prescribing any other matter that the Minister considers necessary or advisable for the purposes of this section.

Same

(7) A regulation under subsection (6) may be general or specific and may prescribe different persons, classes of persons, rules, conditions, circumstances or other things in respect of different electricity generating facilities or classes of facilities.

(2) Subsection 62 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 26, 1997, chapter 19, section 4, 1997, chapter 43, Schedule A, section 32, 1998, chapter 5, section 19, 1998, chapter 34, section 48 and 2001, chapter 23, section 41, is amended by adding the following clause:

Electricity generating assets

(i) all amounts, except to the extent that they have been deducted by the corporation in computing its income under Part II for the taxation year or any prior taxation year, that are deductible by the corporation under clause 11 (10) (a) on account of property,

(i) that is used in generating electricity from a renewable or alternative energy source, and

(ii) that is qualifying property for the purposes of this clause under the rules prescribed by the regulations.

(3) Subsection 112 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 52, 1996, chapter 18, section 23, 1996, chapter 24, section 31, 1997, chapter 43, Schedule A, section 51, 1998, chapter 15, Schedule E, section 5 and 2001, chapter 23, section 63, is amended by adding the following clause:

(d.2) governing the carry-forward of non-capital losses incurred by corporations in operating qualifying electricity generating facilities to which section 13.6 applies, including permitting the carry-forward of the losses to a taxation year that is later than the last taxation year for which the losses would otherwise be deductible under section 111 of the Income Tax Act (Canada), as it applies for the purposes of this Act;

(4) Section 112 of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 52, 1996, chapter 18, section 23, 1996, chapter 24, section 31, 1997, chapter 43, Schedule A, section 51, 1998, chapter 15, Schedule E, section 5 and 2001, chapter 23, section 63, is amended by adding the following subsection:

Determination for purposes of capital cost allowance

(4) A regulation that provides for the determination of all or a part of the amount of a deduction under clause 11 (10) (a) for a taxation year may authorize the Minister of Energy or his or her delegate to determine if property belongs to a class of property in respect of which part or all of the deduction may be claimed.

Electricity Act, 1998

3. (1) Clause 1 (g) of the Electricity Act, 1998 is repealed and the following substituted:

(g) to promote energy conservation, energy efficiency, load management and the use of cleaner energy sources, including alternative and renewable energy sources, in a manner consistent with the policies of the Government of Ontario.

(2) The definition of "Minister" in subsection 2 (1) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 1, Schedule A, section 2, is amended by striking out "Minister of Environment and Energy" and substituting "Minister of Energy".

(3) Section 19 of the Act is amended by adding the following subsections:

Minister's approval

(1.1) The IMO shall not submit anything to the Board under subsection (1) without the approval of the Minister.

Interests of consumers

(1.2) In deciding whether to give an approval under subsection (1.1), the Minister shall consider the interests of consumers with respect to prices and the reliability and quality of electricity service.

(4) Subsections 19 (1.1) and (1.2) of the Act, as enacted by subsection (3), are repealed.

(5) Section 19 of the Act is amended by adding the following subsections:

Refusal by Minister

(3.1) If the Minister refuses to give the approval required by subsection (1.1), the expenditure and revenue requirements and fees applicable to the current fiscal year continue to apply to the next fiscal year.

Current submission

(3.2) After this subsection comes into force, the Board shall take no further action with respect to the submission made by the IMO under subsection (1) for the 2003 fiscal year.

Same

(3.3) The expenditure and revenue requirements and fees that applied to the 2002 fiscal year shall be deemed to apply to the 2003 fiscal year.

(6) Subsections 19 (3.1), (3.2) and (3.3) of the Act, as enacted by subsection (5), are repealed.

(7) Section 31 of the Act is amended by adding the following subsections:

Exception

(4) A distributor shall not shut off the distribution of electricity to a property under subsection (1) during the period that begins on the day this subsection comes into force and ends on March 31, 2003 or during any other period prescribed by the regulations.

Restoration of electricity

(5) If a distributor shuts off the distribution of electricity to a property under subsection (1) after November 11, 2002 and before April 1, 2003, or during a period prescribed by the regulations, the distributor shall, as soon as possible,

(a) restore, without charge, the distribution of electricity to the property; and

(b) compensate any person who suffered a loss as a result of the shut off of electricity.

(8) Section 32 of the Act is amended by adding the following subsection:

Notice to Minister

(9) The IMO shall not make a rule under this section unless it first gives the Minister an assessment of the impact of the rule on the interests of consumers with respect to prices and the reliability and quality of electricity service.

(9) Subsection 32 (9) of the Act, as enacted by subsection (8), is repealed.

(10) Section 33 of the Act is amended by adding the following subsections:

Notice to Minister

(1.1) The IMO shall give the Minister a copy of the amendment and such other information as is prescribed by the regulations on or before the date the IMO publishes the amendment under subsection (1).

Minister's power to revoke

(1.2) If the Minister is of the opinion that the amendment will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service, the Minister may, not later than 15 days after the amendment is published under subsection (1), revoke the amendment on a date specified by the Minister and refer the amendment back to the IMO for further consideration.

(11) Subsections 33 (1.1) and (1.2) of the Act, as enacted by subsection (10), are repealed.

(12) Section 33 of the Act is amended by adding the following subsection:

Effect of revocation by Minister

(3.1) If the Minister revokes the amendment under subsection (1.2),

(a) subsection (2) ceases to apply to the amendment; and

(b) the Board shall not proceed with any review that arises from an application that was made under subsection (2) before the Minister revoked the amendment.

(13) Subsection 33 (3.1) of the Act, as enacted by subsection (12), is repealed.

(14) Subsection 34 (1) of the Act is amended by adding the following paragraph:

5. A reason prescribed by the regulations.

(15) Section 34 of the Act is amended by adding the following subsections:

Notice to Minister

(2.1) The IMO shall give the Minister a copy of the amendment and such other information as is prescribed by the regulations on or before the date the IMO publishes the amendment under subsection (2).

Minister's power to revoke

(2.2) If the Minister is of the opinion that the amendment will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service, the Minister may, not later than 15 days after the amendment is published under subsection (2), revoke the amendment on a date specified by the Minister and refer the amendment back to the IMO for further consideration.

(16) Subsections 34 (2.1) and (2.2) of the Act, as enacted by subsection (15), are repealed.

(17) Subsection 34 (3) of the Act is amended by striking out "any person" and substituting "a person who is directly affected by the amendment".

(18) Section 34 of the Act is amended by adding the following subsection:

Effect of revocation by Minister

(4.1) If the Minister revokes the amendment under subsection (2.2),

(a) subsection (3) ceases to apply to the amendment; and

(b) the Board shall not proceed with any review that arises from an application that was made under subsection (3) before the Minister revoked the amendment.

(19) Subsection 34 (4.1) of the Act, as enacted by subsection (18), is repealed.

(20) Subsection 35 (1) of the Act is repealed and the following substituted:

Other reviews of market rules

(1) On application by a person who is directly affected by a provision of the market rules, the Board may review the provision.

(21) The Act is amended by adding the following section:

Toronto land used by Ontario Hydro

46.2 (1) Despite section 46.1, if, before March 31, 1999, Ontario Hydro occupied and used land in the City of Toronto in connection with the generation of electricity using fossil fuels and for any ancillary use, any occupier of the land may,

(a) use the land in connection with any one or more of the generation of electricity using a type of fuel prescribed by the regulations, the transmission of electricity and the distribution of electricity and for any ancillary uses; and

(b) use or erect on the land any building or structure in connection with a use of the land that is authorized by clause (a).

Conflict

(2) This section applies despite any provision of the Planning Act or any other Act and despite any by-law, regulation or order made under the Planning Act or any other Act.

(22) Subsection 92.1 (6) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 25, section 46, is repealed and the following substituted:

Exception

(6) There may be deducted, in determining the amount of gross revenue referred to in subsections (4) and (5), the amount of gross revenue resulting from the generation of electricity from eligible capacity, as determined by regulation, for the time period that is the longer of,

(a) the first 120 months after the eligible capacity is put in service, as determined by regulation; and

(b) such length of time, after the eligible capacity is first put in service, as the Minister of Finance may prescribe in the regulations.

(23) Subsection 92.1 (21) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 25, section 46 and amended by 2001, chapter 23, section 68, is amended by adding the following clause:

(e.1) prescribing a length of time longer than 120 months that applies to one or more hydro-electric generating stations for the purposes of subsection (6);

(24) Subsection 114 (1) of the Act, as amended by the Statutes of Ontario, 2001, chapter 23, section 69, is amended by adding the following clauses:

(f.1) prescribing periods for the purpose of subsections 31 (4) and (5);

. . . . .

(g.1) prescribing information for the purposes of subsections 33 (1.1) and 34 (2.1);

(g.2) prescribing reasons for the purpose of paragraph 5 of subsection 34 (1);

. . . . .

(h.2) for the purpose of clause 46.2 (1) (a), prescribing types of fuel;

. . . . .

(l.1) requiring persons to offer, install or use electricity meters or other devices of a type specified by the regulations for the purpose of promoting energy conservation, energy efficiency or load management;

(25) Clause 114 (1) (g.1) of the Act, as enacted by subsection (24), is repealed.

(26) The Act is amended by adding the following sections:

Resolution

159.1 (1) A municipality which has an interest described in subsection (3) in respect of a corporation that was incorporated as provided in subsection 142 (1) and that is licensed under the Ontario Energy Board Act, 1998 to distribute electricity may, within 90 days after this section comes into force, pass a resolution providing that the municipality affirms that the corporation should continue to be incorporated as provided in subsection 142 (1).

Where more than one municipality

(2) Where an interest described in paragraphs 1 or 2 of subsection (3) is held by more than one municipality, or where two or more municipalities together have the rights described in paragraph 3 of subsection (3), each of those municipalities may pass the resolution described in subsection (1).

Interests in corporation

(3) The following are the interests in a corporation for the purposes of subsection (1):

1. Direct or indirect beneficial ownership or voting control of all or a majority of the voting shares of the corporation.

2. Direct or indirect beneficial ownership of all or a majority of the voting shares of a corporation that owns all or a majority of the voting shares of the corporation.

3. Any other form of corporate organization that gives the municipality rights or entitlements similar to those of a person who owns all or a majority of the voting securities in a corporation incorporated under the Business Corporations Act.

When subs. (5) and (7) apply

(4) Subsections (5) and (7) apply if, within 90 days after this section comes into force, the Minister does not receive a certificate or certificates certifying the passing of the resolution in the form provided for in the regulations from the clerk or other appropriate official of the municipality or municipalities that alone or together,

(a) directly or indirectly beneficially own a majority of the voting shares of a corporation described in subsection (1);

(b) directly or indirectly beneficially own a majority of the voting shares of a corporation that owns all or a majority of the voting shares of a corporation described in subsection (1); or

(c) with respect to a corporation mentioned in subsection (1), have the rights or entitlements similar to those of a person who owns all or a majority of the voting securities of a corporation incorporated under the Business Corporations Act.

Consequences of failure to pass resolution

(5) If the Minister does not receive the certificate or certificates within the time set out in subsection (4), the following apply:

1. The board of directors of the corporation described in subsection (1) shall not declare, and the corporation shall not pay, dividends for the benefit of any person.

2. The corporation described in subsection (1) shall not sell, lease or otherwise dispose of all or substantially all of its assets, liabilities, rights or obligations, and shall not dismiss all or substantially all of its employees.

3. A shareholder of the corporation described in subsection (1) shall not sell, convey, transfer, assign or otherwise dispose of any of its interest in the corporation except as provided in section 159.2.

4. The corporation described in subsection (1) shall not increase the amount of an obligation to a shareholder that is a municipality provided for in a debt obligation within the meaning of the Business Corporations Act, either by creating a new debt obligation or amending an existing debt obligation, and where such a debt obligation was created or amended after November 25, 2002, the increased amount of obligation shall be deemed not to exist.

5. If the corporation mentioned in subsection (1) increases the amount of an obligation to a shareholder other than a municipality that is provided for in a debt obligation within the meaning of the Business Corporations Act or in a contractual obligation, either by creating a new debt obligation or contractual obligation or amending an existing debt obligation or contractual obligation, that shareholder shall not increase the amount of its obligations to a municipality, and where such an obligation was created or amended after November 25, 2002, the increased amount of obligation shall be deemed not to exist.

6. A corporation described in subsection (1) shall not enter into an agreement for goods or services with an affiliate, a shareholder of the corporation or a municipality other than in the ordinary course of business for fair value of the goods or services provided under that agreement and where such an agreement was entered into after November 25, 2002, the agreement is void.

7. A corporation described in subsection (1) shall not amend or cause to be amended any existing agreement for goods or services with an affiliate, a shareholder of the corporation or a municipality that increases the financial obligations or liability of the corporation and where such an amendment was made after November 25, 2002, the amendment is void.

Non-application of articles, etc.

(6) Subsection (5) applies despite,

(a) the articles of incorporation of any corporation;

(b) the by-laws of any corporation;

(c) any shareholder agreement or resolution or direction of shareholders;

(d) any other instrument or agreement; and

(e) the Business Corporations Act and any other Act or law.

Additional consequences of failure to pass resolution

(7) If the Minister does not receive the appropriate certificate or certificates within the time set out in subsection (4), an application shall be deemed to have been made to the Board under section 78 of the Ontario Energy Board Act, 1998 to replace each order made by the Board under section 78 of that Act with respect to the corporation.

Authority for deemed application

(8) Section 79.6 of the Ontario Energy Board Act, 1998 does not apply to an application that is deemed to be made under subsection (7).

Contents of application

(9) An application described in subsection (7) shall be deemed to be based on a projected revenue requirement that incorporates a 0 per cent return on common equity.

Board must make order

(10) The Board shall, upon giving notice to the corporation, make an order that incorporates a 0 per cent return on common equity despite section 78 or 79 of the Ontario Energy Board Act, 1998 and in making the order shall not increase any of the other components of the revenue requirement or increase any rates set out in any order that is in effect at the time that the deemed application is made.

No hearing

(11) The Board shall make the order described in subsection (10) without holding a hearing.

Effectiveness of order

(12) An order described in subsection (10) shall be deemed to have come into force 90 days after this section came into force.

Regulations

(13) The Minister may make regulations governing the form and content of the certificate for the purposes of subsection (4).

Compensation for certain shareholders

159.2 (1) A shareholder of a corporation to which an order described in subsection 159.1 (10) applies or of a corporation that beneficially owns, directly or indirectly, all or a majority of the voting shares of a corporation to which an order described in subsection 159.1 (10) applies is entitled to be paid by the municipality or, if voting shares in the corporation are beneficially owned, directly or indirectly by more than one municipality, by the municipalities, the fair value of all or part of its voting securities in the corporation of which it is a shareholder, determined as of the close of business on November 8, 2002, if the shareholder is not,

(a) a municipality; or

(b) a corporation of which a municipality beneficially owns, directly or indirectly, all or a majority of the voting shares.

Demand for payment of fair value

(2) A shareholder who is entitled to be paid under subsection (1) and who wishes to exercise his or her entitlement shall deliver to the municipality or municipalities, within 30 days from the making of the order described in subsection 159.1 (10), a written notice containing,

(a) the shareholder's name and mailing address;

(b) the number and class of securities in respect of which the shareholder is claiming payment;

(c) a demand for payment of the fair value of the voting securities; and

(d) the name of a valuator designated by the shareholder from a list of valuators set by the Minister.

Valuation by mutual agreement

(3) The shareholder and the municipality or municipalities, as the case may be, may enter into any agreement or arrangement to determine the fair value of the shareholder's voting securities, the timing and method of the payment to the shareholder of the fair value, the transfer of the voting securities to the municipality or municipalities, as the case may be, or any other related matter.

Same

(4) Where the shareholder and the municipality or municipalities, as the case may be, enter into an agreement or arrangement described in subsection (3), subsections (5) to (13) do not apply or shall cease to apply, as the case may be.

Valuator chosen by municipality

(5) Where the shareholder and the municipality or municipalities, as the case may be, do not enter into a written agreement or arrangement described in subsection (3), the municipality or municipalities shall, within 45 days of receiving the notice under subsection (2), designate a valuator from a list of valuators set by the Minister that is not the valuator designated by the shareholder.

Designation of valuator

(6) The following rules apply to the designation of a valuator:

1. If the shareholder or the municipality or municipalities have not designated a valuator or if paragraph 2 applies, the Lieutenant Governor in Council shall designate a valuator for the shareholder or municipality or municipalities from the list of valuators set by the Minister.

2. A valuator is not eligible to be chosen by the shareholder or the municipality or municipalities, as the case may be, if the valuator has provided any service to either the shareholder or the municipality or municipalities in the prior 12-month period.

3. If more than one municipality beneficially owns, directly or indirectly, voting shares in the corporation, all the municipalities must agree on the valuator, and if they cannot agree on the valuator, the valuator shall be designated as under paragraph 1.

4. The reasonable remuneration and expenses of the valuator shall be paid by the party who designated the valuator, or for whom the valuator was designated.

Report

(7) Within 90 days from the day that the second valuator is designated, each valuator shall deliver to the municipality or municipalities and to the shareholder a report,

(a) determining the amount of the payment to which, in the opinion of the valuator, the shareholder is entitled under subsection (1); and

(b) setting out, in detail, the basis upon which the valuator determined the amount.

SPPA

(8) The Statutory Powers Procedure Act does not apply to the determination of an amount by a valuator under this section.

Criteria

(9) The Minister may establish criteria to be applied by valuators in determining amounts under subsection (7).

Not regulations

(10) Criteria established by the Minister under subsection (9) are not regulations for the purposes of the Regulations Act.

Payment of fair value

(11) The municipality or municipalities shall pay a shareholder who is entitled to be paid under subsection (1) the arithmetic mean of the two amounts determined by the valuators within six months after both reports of the valuators have been delivered.

Where more than one municipality

(12) If more than one municipality beneficially owns, directly or indirectly, voting securities in the corporation whose voting securities are being valued, the amounts that they are liable to pay shall be determined and the deemed transfer under subsection (13) shall be made on a proportional basis in accordance with the extent of their ownership in the corporation.

Claims nullified

(13) Where payment has been tendered under subsection (11),

(a) the voting securities shall be deemed to be transferred to the municipality or municipalities; and

(b) the shareholder shall be deemed to be fully compensated for its voting securities in the corporation, and shall have no claim or cause of action for any further compensation or payment in relation to anything done in accordance with this section or section 159.1.

Definition

159.3 In sections 159.1 and 159.2,

"municipality" includes a municipal corporation and a municipality acting through its council.

Ontario Energy Board
Act, 1998

4. (1) Paragraph 6 of section 1 of the Ontario Energy Board Act, 1998 is repealed and the following substituted:

6. To promote energy conservation, energy efficiency, load management and the use of cleaner energy sources, including alternative and renewable energy sources, in a manner consistent with the policies of the Government of Ontario.

(2) Paragraph 5 of section 2 of the Act is repealed and the following substituted:

5. To promote energy conservation and energy efficiency in a manner consistent with the policies of the Government of Ontario.

(3) The definition of "Minister" in section 3 of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 1, is amended by striking out "Minister of Environment and Energy" and substituting "Minister of Energy".

(4) The Act is amended by adding the following section:

Conservation directives

27.1 (1) The Minister may issue, and the Board shall implement, directives that have been approved by the Lieutenant Governor in Council that require the Board to take steps specified in the directives to promote energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

Publication

(2) A directive issued under this section shall be published in The Ontario Gazette.

(5) The Act is amended by adding the following section:

Licence condition directives

28.1 (1) The Minister may issue, and the Board shall implement, directives that have been approved by the Lieutenant Governor in Council that require the Board, in the manner specified in the directives, to amend conditions in licences issued by the Board that relate to the directive issued to the Board pursuant to an order of the Lieutenant Governor in Council that was dated March 24, 1999 and is available on request from the Minister.

No hearing

(2) The Board shall amend the conditions as required by a directive without holding a hearing.

(6) Section 56 of the Act is amended by adding the following definitions:

"designated consumer" means a consumer, other than a low-volume consumer, that,

(a) is a municipality as defined in the Municipal Act, including a regional and district municipality and the County of Oxford,

(b) is a university or college of applied arts and technology or other post-secondary education institution that receives regular and ongoing operating funds from Ontario for the purpose of providing post-secondary education,

(c) is a board or private school, both as defined in the Education Act,

(d) is a hospital as defined in the Public Hospitals Act, a private hospital operated under the authority of a licence issued under the Private Hospitals Act, an institution as defined in the Mental Hospitals Act, a nursing home within the meaning of the Nursing Homes Act or a home within the meaning of the Homes for the Aged and Rest Homes Act,

(e) is a registered charity as defined in subsection 248 (1) of the Income Tax Act (Canada) that has a registration number issued by the Canada Customs and Revenue Agency, or

(f) is a consumer prescribed by the regulations or a member of a class of consumers prescribed by the regulations; ("consommateur désigné")

"low-volume consumer" means a consumer who annually uses less than 150,000 kilowatt hours of electricity or such other amount of electricity as is prescribed by the regulations; ("petit consommateur")

"market participant" means a person who is authorized by the market rules to participate in the IMO-administered markets or to cause or permit electricity to be conveyed into, through or out of the IMO-controlled grid; ("intervenant du marché")

"Retail Settlement Code" means the Retail Settlement Code issued by the Board, as amended from time to time; ("code appelé Retail Settlement Code")

(7) Clause (a) of the definition of "designated consumer" in section 56 of the Act, as enacted by subsection (6), is repealed and the following substituted:

(a) a municipality as defined in the Municipal Act, 2001,

(8) Section 70 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 7, is amended by adding the following subsection:

Distributors: connection of generation facilities

(6.1) The licence issued to a distributor shall contain conditions governing the connection of generation facilities to the distribution system, including the maximum cumulative generating capacity from generators to whom the regulations made under clause 88 (1) (g.1) apply that the distributor must allow to be connected to the distribution system.

(9) Paragraph 9 of subsection 73 (1) of the Act is repealed and the following substituted:

9. Providing services related to the promotion of energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

(10) Clause 74 (1) (a) of the Act is amended by striking out "under section 27 or 28" and substituting "under section 27, 27.1 or 28".

(11) The Act is amended by adding the following sections:

Payments to consumers

79.1 (1) A distributor that was licensed under this Part on November 11, 2002 to own or operate a distribution system shall make a payment of $75 in accordance with this section to each low-volume consumer who had an account with the distributor on November 25, 2002 with respect to the distribution of electricity to a property.

Same

(2) If a retailer that was licensed under this Part on November 11, 2002 to retail electricity had a contract with a low-volume consumer on November 25, 2002 with respect to the retailing of electricity to a property and the retailer bills the consumer under retailer-consolidated billing,

(a) subsection (1) does not apply to the consumer; and

(b) the retailer shall make a payment of $75 in accordance with this section to the consumer.

More than one account

(3) A low-volume consumer who is entitled to a payment under subsection (1) is entitled to a payment in respect of each account that the consumer had with the distributor on November 25, 2002 with respect to the distribution of electricity.

More than one contract

(4) A low-volume consumer who is entitled to a payment under subsection (2) is entitled to a payment in respect of each contract that the consumer had with the retailer on November 25, 2002 with respect to the retailing of electricity.

Time for payment

(5) The payment required by subsection (1) or (2) shall be made not later than December 31, 2002.

Same

(6) If it is not possible for a distributor or retailer to comply with subsection (5), the payment shall be made as soon as possible.

Method of payment

(7) The payment required by subsection (1) or (2) shall be made by mailing or hand-delivering a cheque to the low-volume consumer.

Consumers with PPVA accounts greater than zero

(8) If a distributor maintains a PPVA account in respect of a low-volume consumer and, on the day this section comes into force, the balance of the PPVA account is greater than zero and is to the credit of the distributor,

(a) subsections (1) and (2) do not apply to the consumer; and

(b) the distributor shall reduce the balance of the consumer's PPVA account to zero.

Equal billing

(9) If a distributor maintains an equal billing plan account in respect of a low-volume consumer and, on the day this section comes into force, the balance of the consumer's equal billing plan account shows that the consumer owes an amount of money to the distributor,

(a) subsections (1) and (2) do not apply to the consumer; and

(b) the distributor shall determine the portion of the account that relates to the commodity price for electricity and reduce that portion by,

(i) the amount of interest that was added to the account in respect of that portion, and

(ii) the lesser of,

(A) $75, and

(B) the amount, after the reduction required by subclause (i) is made, of the portion of the account that relates to the commodity price for electricity.

Time for reduction

(10) A reduction required by subsection (8) or (9) shall be made not later than December 31, 2002.

Same

(11) If it is not possible for a distributor to comply with subsection (10), the reduction shall be made as soon as possible.

Further payments

(12) Every distributor or retailer that has made a payment to a low-volume consumer under subsection (1) or (2) shall make the calculations prescribed by the regulations and, if required by the regulations, shall make a further payment to the consumer.

Further reductions

(13) Every distributor that has made a reduction to a low-volume consumer's equal billing plan account under subsection (9) shall make the calculations prescribed by the regulations and, if required by the regulations, shall make a further reduction to the account.

Designated consumers

(14) A distributor that was licensed under this Part on November 11, 2002 to own or operate a distribution system shall make a payment in accordance with the regulations to each designated consumer who had an account with the distributor on November 25, 2002 with respect to the distribution of electricity to a property.

Same

(15) If a retailer that was licensed under this Part on November 11, 2002 to retail electricity had a contract with a designated consumer on November 25, 2002 with respect to the retailing of electricity to a property and the retailer bills the consumer under retailer-consolidated billing,

(a) subsection (14) does not apply to the consumer; and

(b) the retailer shall make a payment in accordance with the regulations to the consumer.

Payments to other consumers

(16) If required by the regulations, a distributor or retailer shall make a payment in accordance with the regulations to a consumer who is not a low-volume consumer or designated consumer.

Information to be provided

(17) If required by the Minister, a distributor or retailer who makes a payment to a consumer under this section or who makes a reduction to an account under subsection (8), (9) or (13) shall, at the same time or within such other time as may be specified by the Minister, provide the consumer with such information as the Minister specifies.

Same

(18) The Minister may require that the information referred to in subsection (17) be provided in a form approved by the Minister.

Exception: no order under s. 78

(19) This section does not apply to a distributor if there is no order under section 78 that approves or fixes the rates that may be charged by the distributor on the day this section comes into force.

Exception: no connection to IMO-controlled grid

(20) This section does not apply to a distributor if the distributor's distribution system is not connected to the IMO-controlled grid.

No assignment

(21) An assignment by a consumer to a retailer of the entitlement to any payment does not apply to a payment under this section, whether the assignment was made before or after this section came into force.

Purpose of payments

(22) The payments by distributors and retailers that are required under this section are for the purpose of reimbursing consumers for part of the commodity price they paid for electricity.

Definitions

(23) In this section,

"equal billing plan" has the same meaning as an equal billing plan or equivalent form of levelized or budget billing referred to in the Standard Supply Service Code issued by the Board, as it read on the day this section came into force; ("mode de facturation à versements égaux")

"PPVA account" means a Purchased Power Variance/Deferral Account as described in the Electricity Distribution Rate Handbook issued by the Board, as it read on the day this section came into force; ("compte PPVA")

"retailer-consolidated billing" means retailer-consolidated billing as described in the Retail Settlement Code. ("facturation consolidée assurée par le détaillant")

Repeal

(24) This section is repealed on a day to be named by proclamation of the Lieutenant Governor.

Payments by IMO to consumers

79.2 (1) The IMO shall make a payment in accordance with the regulations to a market participant that is a low-volume consumer or designated consumer.

Same

(2) If required by the regulations, the IMO shall make a payment in accordance with the regulations to a consumer other than a consumer described in subsection (1).

No assignment

(3) An assignment by a consumer to a retailer of the entitlement to any payment does not apply to a payment under this section, whether the assignment was made before or after this section came into force.

Purpose of payments

(4) The payments by the IMO that are required under this section are for the purpose of reimbursing consumers for part of the commodity price they paid for electricity.

Repeal

(5) This section is repealed on a day to be named by proclamation of the Lieutenant Governor.

Orders under s. 78 in effect on Nov. 11, 2002

79.3 (1) If an order under section 78 was in effect on November 11, 2002, the order applies to electricity used on or after December 1, 2002.

Interim orders

(2) If an interim order under section 78 was in effect on November 11, 2002, the order shall be deemed to be a final order and applies to electricity used on or after December 1, 2002.

New or amended orders

(3) Subsections (1) and (2) are subject to,

(a) a new order under section 78 that is made pursuant to an application approved by the Minister under section 79.6;

(b) an amendment to an order under section 78 that is made pursuant to section 79.8;

(c) a new order under section 78 or an amendment to an order under section 78 that is made pursuant to section 79.9; or

(d) a new order under section 78 that is made pursuant to an application that is deemed to have been made under subsection 159.1 (7) of the Electricity Act, 1998.

Void orders

(4) The following orders are void:

1. Any order under section 78 that was made after November 11, 2002 and before this section came into force.

2. Any order under section 78 that was made on or before November 11, 2002 but was not in effect on November 11, 2002.

Pending applications, etc.

(5) The following proceedings are discontinued on the day this section comes into force:

1. Any application that was commenced before this section comes into force for an order under section 78.

2. Any appeal under section 33 that was commenced before this section comes into force from an order issued to a distributor under section 78.

3. Any petition under section 34 that was commenced before this section comes into force in respect of an order under section 78.

4. Any review under section 21.2 of the Statutory Powers Procedure Act that was commenced before this section comes into force of an order under section 78.

Same

(6) Sections 33 and 34 of this Act and section 21.2 of the Statutory Powers Procedure Act do not apply to an order under section 78 that was in effect on November 11, 2002.

Commodity price for electricity: low-volume and
designated consumers

79.4 (1) Despite section 79.3, despite any order under section 78 and, subject to subsection (6), despite any agreement to the contrary, the commodity price for electricity payable by a low-volume consumer or designated consumer is 4.3 cents per kilowatt hour or such lower price as may be determined in accordance with the regulations.

Exception: consumers who file statement

(2) Subsection (1) does not apply to a consumer if,

(a) the consumer files a written statement with,

(i) the distributor with whom the consumer has an account, if the consumer is not a market participant, or

(ii) the IMO, if the consumer is a market participant,

indicating that the consumer does not wish to have subsection (1) apply to the consumer; and

(b) at the time the statement is filed under clause (a), a regulation prescribing criteria for the purpose of this clause is in force and those criteria are met.

Exception: no order under s. 78

(3) Subsection (1) does not apply to a consumer who has an account with a distributor on the day this section comes into force with respect to the distribution of electricity to a property if there is no order under section 78 that approves or fixes the rates that may be charged by the distributor on that day.

Exception: no connection to IMO-controlled grid

(4) Subsection (1) does not apply to a consumer to whom electricity is distributed through a distribution system that is not connected to the IMO-controlled grid.

Exception: service transaction request,
contract entered into after commencement

(5) Subsection (1) does not apply to a consumer if, after the day this section comes into force, the consumer renews or enters into a contract with respect to which a service transaction request as defined in the Retail Settlement Code is or has been implemented to enable the consumer to purchase electricity from a competitive retailer as defined in the Retail Settlement Code.

Contracts entered into after commencement

(6) Subject to subsection (5), the commodity price for electricity payable by a consumer under subsection (1) is subject to any contract the consumer renews or enters into after the day this section comes into force.

Application

(7) Subsection (1) applies to electricity used on or after December 1, 2002.

Commodity price for electricity: other consumers

79.5 (1) Despite section 79.3, despite any order under section 78 and despite any agreement to the contrary, the commodity price for electricity payable by a consumer who is not a low-volume consumer or designated consumer is the price determined in accordance with the regulations if,

(a) the consumer files a written statement with,

(i) the distributor with whom the consumer has an account, or

(ii) the IMO, if the consumer is a market participant,

indicating that the consumer wishes to have this subsection apply to the consumer; and

(b) at the time the statement is filed under clause (a), a regulation prescribing criteria for the purpose of this clause is in force and those criteria are met.

Same

(2) Subsection (1) only applies to electricity used by a consumer after the consumer files the written statement referred to in clause (1) (a).

Applications under s. 78

79.6 (1) An application for an order under section 78 may be made only with the written approval of the Minister.

Grounds for approval

(2) The Minister may give an approval under this section only if,

(a) the rates proposed by the applicant are lower than the rates in effect at the time the Minister's approval is sought;

(b) there is no order under section 78 in effect at the time the Minister's approval is sought;

(c) the applicant has incurred extraordinary costs; or

(d) the Minister is of the opinion that other circumstances justify the giving of approval.

Interests of consumers

(3) In deciding whether to give an approval under this section, the Minister shall consider the interests of consumers with respect to prices and the reliability and quality of electricity service.

Conditions

(4) The Minister may impose such conditions on the application as he or she considers appropriate in an approval given under this section and, despite any other provision of this Act, the Board shall comply with the conditions in making any order on the application.

Board may not commence proceeding

(5) Despite subsection 19 (4), the Board may not commence a proceeding of its own motion for an order under section 78.

Board may not review

79.7 Section 21.2 of the Statutory Powers Procedure Act does not apply to an order under section 78.

Minister may require amendment

79.8 (1) Despite any other provision of this Act, the Minister may require the Board to amend an order under section 78, including an order referred to in subsection 79.3 (1) or (2), in the manner specified by the Minister.

No hearing

(2) The Board shall amend the order as required by the Minister without holding a hearing.

Minister may require review

79.9 (1) The Minister may require the Board to review any order under section 78, including an order referred to in subsection 79.3 (1) or (2), or any part of an order, and to report to the Minister on the results of the review, including any recommendations of the Board.

Same

(2) The Minister may specify the terms of reference for the review, including the date the review is to begin and the date by which the report must be delivered to the Minister.

Minister's power

(3) Despite any other provision of this Act, after receiving a report from the Board, the Minister may in writing require the Board to implement any recommendation of the Board or to take any other action specified by the Minister, including,

(a) revoking the order and issuing a new order in accordance with any conditions specified by the Minister; or

(b) amending the order in accordance with any conditions specified by the Minister.

No hearing

(4) The Board shall comply with any requirement of the Minister under subsection (3) without holding a hearing.

Hydro One Networks Inc.

79.10 Despite subsection 79.3 (1), the rates set out in Appendix A-2 and Appendix G-2 of the order made by the Board under section 78 on August 30, 2002 with respect to Hydro One Networks Inc. do not apply to electricity used on or after December 1, 2002.

Repeal

79.11 Sections 79.3 to 79.10 are repealed on a day to be named by proclamation of the Lieutenant Governor that is not earlier than May 1, 2006.

Deferral accounts

79.12 (1) Hydro One Networks Inc. may establish a deferral account that records the amounts that, in the absence of section 79.10, it would have collected before the day named under section 79.11, if the Appendix G-2 referred to in section 79.10 had applied to electricity used on or after December 1, 2002.

Same

(2) A distributor may establish a deferral account that, if the distributor made a payment to a consumer under subsection 79.1 (1) not later than December 31, 2002, records the amounts of other expenses incurred by the distributor in making that payment.

Regulatory assets

79.13 The following amounts shall be deemed to be regulatory assets until the Board addresses the disposition of the amounts in an order under section 78:

1. An amount recorded by a distributor in Account 1570 established in accordance with the Accounting Procedures Handbook issued by the Board, as it read on the day this section comes into force.

2. An amount recorded in a Retail Settlement Variance Account established in accordance with the Electricity Distribution Rate Handbook issued by the Board, as it read on the day this section comes into force.

3. An amount recorded in a deferral account established under section 79.12.

4. An amount recorded in an account prescribed by the regulations.

Overpayments

79.14 If a consumer pays an amount in excess of the amount that may be charged under this Part, the person to whom the amount was paid shall as soon as possible refund the excess to the consumer or credit the consumer's account with the excess.

(12) The Act is amended by adding the following section:

Form of invoice

79.15 (1) The Minister may require that invoices issued to low-volume or designated consumers in respect of electricity be in a form approved by the Minister.

Different forms

(2) The Minister may approve different forms of invoice and may specify the circumstances in which each form shall be used.

Errors

(3) No defect, error or omission in the form or substance of an invoice issued to a low-volume or designated consumer in respect of electricity invalidates any proceeding for the recovery of the amount payable under the invoice.

(13) Section 86 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 9, is amended by adding the following subsection:

Sale of assets of OEFC to or by Hydro One Inc., etc.

(7) Despite subsection (1) and any order of the Board, the sale, lease, conveyance, transfer, assignment, assumption or other disposition of any of the assets, rights, liabilities or obligations of the Ontario Electricity Financial Corporation to or by Hydro One Inc. or a subsidiary of Hydro One Inc. after March 31, 1999, including any such sale, lease, conveyance, transfer, assignment, assumption or other disposition completed before this subsection came into force, does not require an order from the Board granting leave.

(14) Subclause 88 (1) (a.1) (v) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(15) Clause 88 (1) (b) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(16) Clause 88 (1) (c) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(17) Subsection 88 (1) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by adding the following clauses:

(g.1) requiring a distributor, in the circumstances and in the manner prescribed by the regulations, to subtract the amount of electricity conveyed into the distribution system by a generator from the amount consumed from the system by the generator, for billing purposes, if the generator generates electricity primarily for the generator's own use;

(g.2) prescribing consumers and classes of consumers for the purpose of clause (f) of the definition of "designated consumer" in section 56;

(g.3) prescribing an amount of electricity for the purpose of the definition of "low-volume consumer" in section 56;

. . . . .

(j) prescribing the calculations to be made by distributors and retailers under subsection 79.1 (12) and governing the time within which the calculations must be made;

(k) governing the circumstances in which a further payment shall be made to a low-volume consumer under subsection 79.1 (12);

(l) prescribing the calculations to be made by distributors under subsection 79.1 (13) and governing the time within which the calculations must be made;

(m) governing the circumstances in which a further reduction shall be made to a low-volume consumer's equal billing plan account under subsection 79.1 (13), governing the determination of the amount of the reduction and governing the time within which the reduction must be made;

(n) governing the circumstances in which a payment must be made under subsection 79.1 (16) to a consumer who is not a low-volume consumer or designated consumer;

(o) governing the determination of the amount of a payment under subsection 79.1 (12), (14), (15) or (16), governing the time within which the payment must be made and governing the method of making the payment;

(p) governing the circumstances in which a payment must be made under subsection 79.2 (2);

(q) governing the determination of the amount of a payment under section 79.2, governing the time within which the payment must be made and governing the method of making the payment;

(r) prescribing prices or methods for determining prices for the purpose of subsection 79.4 (1);

(s) prescribing criteria for the purpose of clause 79.4 (2) (b);

(t) prescribing prices or methods for determining prices for the purpose of subsection 79.5 (1);

(u) prescribing criteria for the purpose of clause 79.5 (1) (b);

(v) providing that a statement under clause 79.5 (1) (a) must be filed within a time period determined in accordance with the regulations;

(w) authorizing or requiring a person to establish one or more deferral or variance accounts;

(x) governing the operation of the accounts referred to in section 79.12 or established under clause (w);

(y) prescribing accounts for the purpose of paragraph 4 of section 79.13;

(z) despite any order of the Board or any condition of a licence, governing the calculation of interest on amounts in deferral or variance accounts authorized or required under this Act or by the Board, including requiring an interest rate of 0 per cent;

(z.1) providing for such transitional matters as the Lieutenant Governor in Council considers necessary or advisable in connection with the repeal of sections 79.3 to 79.10, including governing the disposition of amounts referred to in section 79.13;

(z.2) prescribing information that must or that may be included on invoices issued to low-volume consumers or designated consumers in respect of electricity;

(z.3) respecting the manner in which invoices issued to low-volume consumers or designated consumers in respect of electricity are provided to those consumers;

(z.4) governing the amount of deposits charged by distributors as a condition of distributing electricity to consumers or of retailing electricity to consumers in order to meet a distributor's obligations under section 29 of the Electricity Act, 1998, and requiring distributors to refund to consumers all or part of any such amounts charged after November 25, 2002.

(18) Section 88 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by adding the following subsections:

Commodity price for electricity

(2.1) The first regulation made under clause (1) (r) or (t) may provide that it applies to electricity used before the regulation came into force, but the regulation may not apply to electricity used before December 1, 2002.

Criteria relating to subs. 79.5 (1)

(2.2) If a regulation under clause (1) (u) prescribes criteria that can be met only if a consumer does something, the consumer may do the thing despite any agreement to the contrary, the consumer is not liable for doing the thing in contravention of any agreement to the contrary, and doing the thing shall be deemed not to constitute a breach, termination, repudiation or frustration of any contract.

Subdelegation

(2.3) A regulation under clause (1) (x) may authorize a person to determine any matter that may be determined by the Lieutenant Governor in Council under that clause.

(19) Part V of the Act is amended by adding the following section:

Compensation of distributors, retailers, etc.
Purposes

88.0.1 (1) The purpose of this section is to make such financial arrangements as the Lieutenant Governor in Council or a person referred to in subsection (4) considers appropriate,

(a) to compensate distributors for payments made by them under section 79.1 and for reductions made to PPVA accounts or equal billing plan accounts under that section, other than reductions related to interest;

(b) to compensate retailers for payments made by them under section 79.1;

(c) to compensate the IMO for payments made by it under section 79.2;

(d) to offset differences between the commodity price for electricity in contracts between retailers and consumers that were in effect on November 11, 2002 and the commodity price for electricity in the IMO-administered markets;

(e) to offset differences between the commodity price for electricity supplied by generators and the commodity price for electricity payable by consumers as a result of the operation of sections 79.4 and 79.5; and

(f) to make payments to the IMO in respect of liabilities or expenses it incurs after the coming into force of this section as a result of carrying out its objects under the Electricity Act, 1998.

Regulations

(2) The Lieutenant Governor in Council may make regulations,

(a) requiring the Financial Corporation or a subsidiary of the Financial Corporation to make payments to distributors, retailers or the IMO and prescribing methods for determining the amounts payable;

(b) requiring distributors to make payments to retailers and prescribing methods for determining the amounts payable;

(c) requiring the IMO or a distributor or retailer to make payments to the Financial Corporation or a subsidiary of the Financial Corporation and prescribing methods for determining the amounts payable;

(d) governing the payments required under clause (a), (b) or (c), including methods of payment and the times within which payments must be made;

(e) governing the calculation of amounts payable by distributors and consumers to the IMO for the operation of the IMO-administered markets and the operation of the IMO-controlled grid;

(f) authorizing distributors to set off amounts against amounts they owe to the IMO or other distributors, and prescribing methods for determining the amounts that may be set off;

(g) governing the set-offs authorized under clause (f), including methods of set-off and the times within which amounts may be set off;

(h) requiring distributors, retailers, consumers who are not low-volume consumers or designated consumers, or the IMO to provide information for the purposes of this section to the Financial Corporation or a subsidiary of the Financial Corporation, the IMO or distributors.

General or particular

(3) A regulation under subsection (2) may be general or particular in its application.

Subdelegation

(4) A regulation under subsection (2) may authorize a person to require, authorize, prescribe or otherwise determine any matter that may be required, authorized, prescribed or otherwise determined by the Lieutenant Governor in Council under subsection (2).

Provision of information

(5) A person may do anything required by a regulation made under clause (2) (h) despite any agreement to the contrary, the person is not liable for doing the thing in contravention of any agreement to the contrary, and doing the thing shall be deemed not to constitute a breach, termination, repudiation or frustration of any contract.

Conflict with market rules

(6) In the event of a conflict, a regulation made under clause (2) (c), (d), (e), (f) or (g) prevails over the market rules to the extent of the conflict.

Investigations and inquiries

(7) Any person thereunto authorized by the Minister of Finance for any purpose related to the administration of this section or any regulation made under it may at all reasonable times enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business, and,

(a) audit or examine the books and records and any account, voucher, letter or other document that relates or may relate to the information that is or should be in the books or records;

(b) examine any property, process or matter, an examination of which may, in the person's opinion, assist in ascertaining the information that is or should be in the books or records; and

(c) require a distributor, retailer or the IMO or a partner or the president, manager, secretary or any director, agent or representative thereof and any other person on the premises of a distributor, retailer or the IMO to give him or her all reasonable assistance with the audit or examination and to answer all questions relating to the audit or examination, either orally or, if he or she so requires, in writing, on oath or by statutory declaration, and for that purpose require such person to attend at the premises or place with him or her.

Same

(8) The Minister of Finance may, for any purpose related to the administration of this section or the regulations made under it, by registered letter, or by a demand served personally or delivered by a courier service, within such reasonable time as is stipulated in the registered letter or demand, require from any person, partnership, syndicate, trust, corporation, or other business entity or from any partner, agent, member, director or officer thereof,

(a) any information required to be provided to any person by a regulation under clause (2) (h);

(b) production of books, letters, accounts, invoices, financial statements, computer programs or data files, or any other documents on paper or stored electronically;

(c) particulars of any amounts paid or payable to or by, or held on behalf of, a distributor, retailer, consumer or the IMO; or

(d) a written statement, concerning any matter that may be relevant to the administration of this section or the regulations made under it.

Same

(9) The Minister of Finance may require that a written statement referred to in clause (8) (d) be made by way of affidavit or statutory declaration.

Admission of evidence

(10) The Minister of Finance, or a person authorized by the Minister, may, for any purpose related to the administration of this section or the regulations made under it, reproduce from original data stored electronically any information previously submitted as required under this section or the regulations in any form by any person, and the electronically reproduced document shall be admissible in evidence and shall have the same probative force as the original document would have had if it had been proved in the ordinary way.

Inquiry

(11) The Minister of Finance may, for any purpose related to the administration of this section or the regulations made under it, authorize any person, whether or not the person is an officer of the Ministry of Finance, to make such inquiry as the Minister of Finance considers necessary with reference to anything relating to the administration of this section or the regulations.

Copies

(12) If a book, record or other document is examined or produced under this section, the person by whom it is examined or to whom it is produced or any officer of the Ministry of Finance may make, or cause to be made, one or more copies thereof, and a document purporting to be certified by the person to be a copy made pursuant to this section is admissible in evidence and has the same probative force as the original document would have if proved in the ordinary way.

Compliance

(13) No person shall hinder or molest or interfere with any person doing anything that the person is authorized by this section to do or prevent or attempt to prevent any person doing any such thing.

Same

(14) Despite any other law to the contrary, every person shall, unless the person is unable to do so, do everything he, she or it is required by this section to do.

Administration of oaths

(15) Declarations or affidavits in connection with statements of information submitted pursuant to this section may be taken before any person having authority to administer an oath or before any person specially authorized for that purpose by the Lieutenant Governor in Council, but any person so specially authorized shall not charge any fee therefor.

Powers of inquiry

(16) For the purpose of an inquiry under subsection (11), the person authorized to make the inquiry has the powers of a commission under Part II of the Public Inquiries Act, which Part applies to the inquiry as if it were an inquiry under that Act.

No approval required for subsidiary

(17) A subsidiary of the Financial Corporation may be established for the purposes of this section without the approval of the Minister of Finance under subsection 72 (1) of the Electricity Act, 1998.

Money paid to Financial Corporation

(18) Money paid to the Financial Corporation or a subsidiary of the Financial Corporation under this section is the property of the Financial Corporation or the subsidiary, as the case may be.

Definition

(19) In this section,

"Financial Corporation" has the same meaning as in the Electricity Act, 1998.

(20) Clause 126 (1) (b) of the Act is amended by adding at the end "or in any circumstances where information is required or authorized to be provided under this Act".

Retail Sales Tax Act

5. (1) The Retail Sales Tax Act is amended by adding the following section:

Rebate, energy-efficient appliance
Definitions

9.1 (1) In this section,

"appliance" means a refrigerator, dishwasher, clothes washer or another household appliance prescribed by the Minister; ("appareil ménager")

"energy-efficient appliance" means an appliance that is listed as "Energy Star Qualified" in the EnerGuide Appliance Directory published by Natural Resources Canada for 2002 or 2003. ("appareil ménager éconergétique")

Rebate

(2) The Minister may rebate to the purchaser of an energy-efficient appliance the amount of tax paid by the purchaser under section 2 on the sale of the appliance to the purchaser if,

(a) the contract for the sale is entered into after November 25, 2002 and before November 26, 2003;

(b) the sale is the first sale of the appliance to any purchaser and, if the sale is a rental or lease, the term of the rental or lease is at least 365 days;

(c) delivery of the appliance occurs before January 1, 2004;

(d) the purchaser makes an application for the rebate on or before the fourth anniversary of the sale of the appliance to the purchaser or, if the sale is a rental or lease, on or before the fourth anniversary of the day the last rental or lease payment is required to be made; and

(e) the application for the rebate referred to in clause (d) is in writing and contains the information required by the Minister.

(2) Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232 and 2001, chapter 23, section 207, is amended by adding the following clauses:

(q) providing for a rebate to the owner of an eligible electricity generating facility that generates electricity from an alternative or renewable source of energy, as defined by the Minister, or to the owner of an eligible deep lake-water cooling facility, as defined by the Minister, of all or part of the tax paid in respect of eligible tangible personal property that is purchased and incorporated into the facility after November 25, 2002 and before January 1, 2008, and prescribing the terms and conditions under which the rebate may be made including,

(i) the conditions an electricity generating facility or deep lake-water cooling facility must satisfy to be an eligible electricity generating facility or eligible deep lake-water cooling facility for the purposes of the rebate,

(ii) the class or classes of tangible personal property that are eligible tangible personal property for the purposes of the rebate,

(iii) the manner of determining the amount of the rebate, and

(iv) circumstances in which all or part of the rebate must be repaid and rules applicable to the repayment;

(r) providing for a rebate of all or part of the tax paid in respect of a solar energy system, as defined by the Minister, that is purchased and incorporated into residential premises after November 25, 2002 and before November 26, 2007, and prescribing the terms and conditions under which the rebate may be made including,

(i) the person to whom the rebate is payable,

(ii) the manner of determining the amount of the rebate, and

(iii) the class or classes of residential premises that qualify for the purposes of the rebate.

(3) Section 48 of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232 and 2001, chapter 23, section 207, is amended by adding the following subsection:

May be general or specific

(3.1) A regulation made under clause (3) (q) may be general or specific in its application and may apply differently to different facilities or classes of facilities.

Miscellaneous

Protection from liability

6. (1) Subject to section 88.0.1 of the Ontario Energy Board Act, 1998, the Crown and its agents are not liable to compensate any person for any past, present or future losses or expenses relating to or resulting from any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

No proceeding

(2) No proceeding shall be commenced against the Crown or its agents for compensation for any past, present or future losses or expenses relating to or resulting from any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

Same

(3) Without limiting the generality of subsections (1) and (2), the losses and expenses referred to in those subsections include,

(a) loss of profit or other benefit of an existing contract;

(b) loss of profit or other benefit of a future contract;

(c) loss of business opportunity;

(d) loss of business or costs consequential on loss of business;

(e) costs of compliance with any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or the regulations made under those amendments, whether administrative, financial, operational, or otherwise;

(f) loss of interest or of use of capital, or reduction of capital;

(g) loss arising from the failure of any person to achieve a desired or anticipated rate of return on its business activities; and

(h) loss arising from the reduction or cessation of business activity due to lost profits or benefits, real or anticipated, or the actions of creditors, suppliers or customers.

Definition

(4) In this section,

"compensation" includes compensatory, consequential, special, aggravated and punitive damages, contribution and indemnity, equitable remedies, any other payment to limit, make good or atone for the physical, economic or emotional losses of any person, and any order to require or stop the taking of any action, and "compensate" has a corresponding meaning.

Commencement and Short Title

Commencement

7. (1) Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

Same

(2) Subsections 3 (4), (6), (9), (11), (13), (16), (19) and (25) and 4 (8) and (12) come into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Subsection 4 (7) comes into force on January 1, 2003.

Short title

8. The short title of this Act is the Electricity Pricing, Conservation and Supply Act, 2002.

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 210 and does not form part of the law. Bill 210 has been enacted as Chapter 23 of the Statutes of Ontario, 2002.

Assessment Act

Section 3.1 of the Assessment Act provides a temporary exemption from municipal property taxes and school taxes for new electricity generating facilities and additions to existing electricity generating facilities if the facility or the addition to the facility generates electricity from an alternative or renewable source of energy. The new facility or addition to the facility must commence generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008. Subject to certain rules, the exemption applies for the first 120 months in which the facility or addition to the facility generates electricity.

Corporations Tax Act

The amendments to the Corporations Tax Act provide incentives to corporations that generate electricity from alternative or renewable sources of energy.

Section 13.6 of the Act permits the corporation to deduct from income an amount calculated by reference to the amount of income it may derive from increasing the amount of electricity it supplies to the Ontario electricity grid by generating electricity from an alternative or renewable source of energy.

Clause 62 (1) (i) of the Act has the effect of permitting the corporation to calculate its taxable paid-up capital for capital tax purposes as if it has taken advantage of the proposed 100 per cent accelerated write-off of the cost of property purchased to use in generating electricity from an alternative or renewable source of energy.

The amendment to subsection 112 (1) of the Act authorizes the Lieutenant Governor in Council to make a regulation extending the time period during which a corporation may carry forward non-capital losses incurred in operating an electricity generating facility that is a qualifying electricity generating facility under section 13.6 of the Act.

Subsection 112 (4) of the Act authorizes the Minister of Energy or his or her delegate to determine if property belongs to a particular class of property for the purposes of calculating a corporation's capital cost allowance.

Electricity Act, 1998

Under section 19 of the Electricity Act, 1998, the Independent Electricity Market Operator must submit its proposed expenditure and revenue requirements for each fiscal year and the fees it proposes to charge during the year to the Ontario Energy Board for review. Section 19 is amended to provide that this submission may be made only with the approval of the Minister of Energy.

Section 31 of the Act is amended to prohibit a distributor from shutting off the distribution of electricity to a property until after March 31, 2003 or during such periods as may be prescribed by regulation.

The process governing the making of market rules by the Independent Electricity Market Operator is revised (sections 32 to 35 of the Act). The changes include permitting the Minister of Energy to revoke amendments if he or she is of the opinion that they will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service.

A new section 46.2 of the Act permits the use of City of Toronto land in connection with the generation of electricity using a fuel prescribed by the regulations, the transmission of electricity or the distribution of electricity if the land was used by Ontario Hydro in connection with the generation of electricity using fossil fuels before March 31, 1999.

Section 92.1 of the Act imposes a tax on hydro-electric generating stations, calculated by reference to the amount of gross revenue from the generation of electricity. Subsection 92.1 (6) of the Act has the effect of exempting from tax the amount of gross revenue resulting from the generation of electricity from eligible capacity for the first 120 months after the eligible capacity is put into service. The amendments to section 92.1 of the Act permit the 120-month "exemption" period to be extended by regulation for one or more hydro-electric generating stations.

Section 114 of the Act is amended to give the Lieutenant Governor in Council authority to make regulations requiring electricity meters or other devices to be offered, installed or used to promote energy conservation, energy efficiency or load management.

A municipality that beneficially owns, directly or indirectly, voting securities in a corporation that was incorporated as provided in subsection 142 (1) of the Act and that is licensed to distribute electricity may, within 90 days after the Bill receives Royal Assent, pass a resolution providing that the municipality affirms that the corporation should continue to be incorporated as provided in subsection 142 (1). Where a municipality does not pass the resolution, consequences are provided for. For example, the corporation may not declare dividends or dispose of all or substantially all of its assets, and an application is deemed to have been made to the Ontario Energy Board for a rate order that incorporates a 0 per cent return on common equity. A method is established by which non-municipal shareholders of such a corporation can be compensated for their equity investments.

Ontario Energy Board Act, 1998

A new section 27.1 of the Ontario Energy Board Act, 1998 allows the Minister of Energy to issue directives to the Ontario Energy Board that require the Board to take steps specified in the directives to promote energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

An amendment to section 70 of the Act requires licences issued to electricity distributors to contain conditions governing the connection of generation facilities to the distribution system. Under the conditions, a distributor will be required to allow certain generators specified by regulation to connect to the distribution system, up to a maximum limit set by the conditions. The regulations that relate to these generators require a distributor, for billing purposes, to subtract the electricity conveyed into the distribution system by the generator from the electricity consumed from the system by the generator (net metering).

A new section 79.1 of the Act requires distributors and retailers to make payments to certain consumers. Some consumers must be paid $75 under the section, by December 31, 2002 if possible, with a further payment if required by regulation. Other consumers must receive payments in accordance with regulations. In other cases, certain accounts relating to a consumer must be reduced. The purpose of the payments under section 79.1 is to reimburse consumers for part of the commodity price they paid for electricity.

A new section 79.2 of the Act requires the Independent Electricity Market Operator to make payments to certain consumers. Again, the purpose of the payments is to reimburse consumers for part of the commodity price they paid for electricity.

Under the new section 79.3 of the Act, orders made by the Ontario Energy Board that approved or fixed electricity rates and that were in effect on November 11, 2002 will apply to electricity used on or after December 1, 2002, unless replaced or amended. An application for a new rate order may be made only with the approval of the Minister of Energy (see the new section 79.6). In deciding whether to give an approval, the Minister must consider the interests of consumers with respect to prices and the reliability and quality of electricity service. The Minister may attach conditions to the approval that must be complied with by the Board in making any order on the application.

The new sections 79.4 and 79.5 of the Act contain special rules applicable to the commodity price for electricity:

1. Section 79.4 applies to low-volume consumers and to other consumers referred to in the Act as "designated consumers". In this case, the commodity price for electricity is fixed at 4.3 cents per kilowatt hour or such lower rate as is prescribed by regulation. There are certain exceptions provided for in section 79.4. For example, a consumer may in certain circumstances give notice that the consumer does not wish to have the section 79.4 commodity price apply. Also, if a consumer enters into or renews a contract after section 79.4 comes into force pursuant to which a service transaction request is implemented to enable the consumer to purchase electricity from a competitive retailer, the section 79.4 commodity price does not apply.

2. Section 79.5 applies to consumers who are not low-volume consumers or designated consumers. The section only applies if criteria prescribed by regulation are met and the consumer gives notice that the consumer wishes the section to apply. If section 79.5 applies to a consumer, the commodity price for electricity is determined by regulation.

A new section 79.8 of the Act allows the Minister of Energy to require the Ontario Energy Board to amend an electricity rate order. A new section 79.9 allows the Minister to require the Board to review a rate order and, after receiving the Board's report, the Minister may require the Board to amend the order or replace it.

The new provisions of the Act that relate to electricity rates may be repealed by proclamation of the Lieutenant Governor, but the repeal cannot occur before May 1, 2006.

A new section 79.13 of the Act provides that amounts recorded in certain accounts shall be deemed to be regulatory assets.

A new section 79.15 of the Act allows the Minister of Energy to require that invoices issued to low-volume consumers and designated consumers in respect of electricity be in a form approved by the Minister.

A new section 88.0.1 of the Act allows the Lieutenant Governor in Council to make regulations to make financial arrangements for the following purposes:

1. To compensate distributors, retailers and the Independent Electricity Market Operator for payments made under sections 79.1 and 79.2 of the Act.

2. To offset differences between the commodity price for electricity in certain contracts between retailers and consumers and the commodity price for electricity in the markets established by the Independent Electricity Market Operator's market rules.

3. To offset differences between the commodity price for electricity supplied by generators and the commodity price for electricity payable by consumers as a result of the operation of sections 79.4 and 79.5 of the Act.

4. To make payments to the Independent Electricity Market Operator in respect of certain liabilities or expenses it incurs as a result of carrying out its objects under the Electricity Act, 1998.

The regulations made under section 88.0.1, for example, may require the Ontario Electricity Financial Corporation to make payments to distributors, retailers or the Independent Electricity Market Operator, and may require distributors to make payments to retailers. Other kinds of payments may also be required. Distributors may be authorized to set off amounts against amounts they owe to the Independent Electricity Market Operator or other distributors. The Minister of Finance may conduct investigations related to the administration of section 88.0.1 and the regulations made under that section.

Retail Sales Tax Act

Section 9.1 of the Retail Sales Tax Act provides a one-year rebate of retail sales tax paid on the purchase, rental or lease of a new energy-efficient household appliance.

The amendments to subsection 48 (3) of the Act authorize the Minister of Finance to make regulations to provide tax rebates in respect of,

(a) tangible personal property incorporated into an electricity generating facility that generates electricity from an alternative or renewable source of energy or into a deep lake-water cooling facility; and

(b) solar energy systems installed in residential premises.

Miscellaneous

The Bill provides the Crown and its agents with protection from liability for any losses relating to any amendment made by the Bill to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

Most of the amendments to the Bill come into force on Royal Assent. These include the amendments to the Electricity Act, 1998 that deal with the Independent Electricity Market Operator's expenditure and revenue requirements and fees, and the amendments that deal with the process governing the making of market rules. However, these amendments may be reversed on a day to be named by proclamation of the Lieutenant Governor.

The amendment to the Ontario Energy Board Act, 1998 that requires licences issued to electricity distributors to contain conditions governing the connection of generation facilities comes into force on a day to be named by proclamation of the Lieutenant Governor, as does the amendment that allows the Minister of Energy to require that invoices issued to certain consumers in respect of electricity be in a form approved by the Minister.

[37] Bill 210 Original (PDF)

Bill 210 2002

An Act to amend various Acts
in respect of the pricing, conservation
and supply of electricity and in respect
of other matters related to electricity

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Assessment Act

1. The Assessment Act is amended by adding the following section:

Electricity generating facilities that use alternative or
renewable energy
Definitions

3.1 (1) In this section,

"alternative or renewable source of energy" means a source of energy prescribed in the regulations; ("source d'énergie renouvelable ou de remplacement")

"eligible machinery" means machinery or equipment used in generating electricity that satisfies the conditions prescribed in the regulations. ("machines admissibles")

Exemption from taxation, new facility

(2) Subject to subsection (7), land that is an electricity generating facility that generates electricity from an alternative or renewable source of energy is exempt from taxation for the time period determined under subsection (6) if,

(a) the facility,

(i) commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008, or

(ii) is a facility designated by the Minister; and

(b) the facility satisfies the conditions prescribed in the regulations.

Exemption from taxation, addition to an existing facility

(3) Subject to subsection (7), land that is an addition to an existing electricity generating facility is exempt from taxation for the time period determined under subsection (6) if,

(a) the addition to the facility is the result of an expansion of the existing facility, as determined under the rules prescribed in the regulations;

(b) electricity is generated in the addition to the facility from an alternative or renewable source of energy;

(c) the addition to the facility,

(i) commences generating the electricity described in clause (b) after November 25, 2002 and before January 1, 2008, or

(ii) is an addition to a facility that is designated by the Minister; and

(d) the addition to the facility satisfies the conditions prescribed in the regulations.

Same

(4) If an electricity generating facility or an addition to an electricity generating facility is exempt from taxation under this section, the following real property is exempt from taxation for the same period of time as the facility or the addition to a facility:

1. Buildings and structures,

i. that are used in connection with the facility or the addition to a facility, and

ii. that satisfy the conditions prescribed in the regulations.

2. Land, not in excess of the area determined in the manner prescribed in the regulations, that is used in connection with the facility or the addition to a facility.

3. Eligible machinery used in generating electricity at the facility or the addition to a facility, to the extent that it is not exempt from taxation under paragraph 18 of subsection 3 (1).

Designation of facility or addition

(5) The Minister may, for the purposes of this section, designate,

(a) an electricity generating facility that satisfies the conditions for designation prescribed in the regulations; or

(b) an addition to an electricity generating facility that satisfies the conditions for designation prescribed in the regulations.

Exemption period

(6) The time period during which an electricity generating facility or an addition to an electricity generating facility is exempt from taxation under this section is,

(a) the first 120 months in which the facility or addition generates electricity from an alternative or renewable source of energy if the facility or addition commences generating electricity from an alternative or renewable source after November 25, 2002 and before January 1, 2008 and is not designated by the Minister; or

(b) the time period determined under the rules prescribed in the regulations if the facility or addition is designated by the Minister.

Exception

(7) Despite subsection (6), if an amount of electricity generated and sold by an electricity generating facility or an addition to an electricity generating facility is in excess of the amount determined for the facility or the addition under the rules prescribed in the regulations, but that amount is not supplied to the IMO-controlled grid, as defined in the Electricity Act, 1998, or to a person or category of persons prescribed in the regulations in such circumstances as may be prescribed in the regulations, the exemption from taxation for the facility or addition,

(a) shall cease to apply for the time periods determined under the rules prescribed in the regulations; or

(b) shall be reduced in the manner and for the time periods determined under the rules prescribed in the regulations.

Regulations

(8) The Minister may make regulations,

(a) prescribing sources of energy for the purposes of the definition of "alternative or renewable source of energy" in subsection (1);

(b) prescribing conditions that an electricity generating facility or an addition to an electricity generating facility must satisfy for the purposes of this section;

(c) prescribing the conditions that machinery or equipment must satisfy to be eligible machinery for the purposes of this section;

(d) prescribing rules for determining if an addition to an electricity generating facility is the result of an expansion of the existing facility;

(e) prescribing the manner for determining the area of land used in connection with an electricity generating facility or an addition to an electricity generating facility;

(f) prescribing conditions that buildings or structures must satisfy for the purposes of subparagraph 1 ii of subsection (4);

(g) prescribing rules for determining, for the purposes of this section, when an electricity generating facility or an addition to an electricity generating facility commences generating electricity;

(h) prescribing conditions for designation that an electricity generating facility or an addition to an electricity generating facility must satisfy to be eligible to be designated by the Minister;

(i) prescribing rules for determining the time period under clause (6) (b) that applies to a facility or an addition to a facility that is designated by the Minister;

(j) prescribing persons, categories of persons, circumstances, amounts, time periods and rules for the purposes of subsection (7);

(k) providing for compensation to be paid to municipalities in respect of tax revenues foregone as a result of the application of this section.

Same

(9) A regulation under subsection (8) may be general or specific and may apply differently to different electricity generating facilities or types of facilities and different additions or types of additions to electricity generating facilities.

Corporations Tax Act

2. (1) Subdivision A of Division B of Part II of the Corporations Tax Act is amended by adding the following section:

Incentive for new electricity supply

13.6 (1) In computing its income from a business for a taxation year, a corporation may deduct an incentive equal to the amount by which the sum of all amounts, each of which is an amount determined under subsection (2) in respect of a qualifying electricity generating facility, exceeds the sum of all amounts, if any, each of which is an amount determined in accordance with the rules prescribed by the Minister.

Amount in respect of a facility

(2) For the purposes of subsection (1), an amount in respect of a qualifying electricity generating facility is the amount determined in accordance with the rules prescribed by the Minister in respect of the corporation's income earned in the taxation year, but after November 25, 2002, from the sale of electricity,

(a) that is generated by the facility from an alternative or renewable source of energy;

(b) that is generated after November 25, 2002 and on or before the ninth anniversary of the last day of the first taxation year of the corporation in which the corporation first deducted an amount under this section in respect of the facility;

(c) that qualifies as a new electricity supply generated by the facility under the rules prescribed by the Minister; and

(d) that is supplied,

(i) to the IMO-controlled grid, as defined in the Electricity Act, 1998, or

(ii) to a person or class of persons prescribed by the Minister, in such circumstances as may be prescribed by the Minister.

Qualifying electricity generating facility

(3) An electricity generating facility is a qualifying electricity generating facility if,

(a) the facility,

(i) commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008, or

(ii) is a facility designated by the Minister; and

(b) the facility satisfies the conditions prescribed by the Minister.

Designation of facility

(4) The Minister may, for the purposes of this section, designate an electricity generating facility that,

(a) generates electricity from an alternative or renewable source of energy; and

(b) satisfies the conditions for designation prescribed by the Minister.

Definition

(5) In this section,

"alternative or renewable source of energy" means a source of energy prescribed by the Minister.

Regulations

(6) The Minister may make regulations,

(a) prescribing alternative or renewable sources of energy;

(b) prescribing rules for determining amounts referred to in subsection (1) that are deducted in determining the amount of a corporation's incentive for new electricity supply for a taxation year;

(c) prescribing rules for determining the amount of electricity generated by a qualifying electricity generating facility from an alternative or renewable source of energy;

(d) prescribing rules for determining whether any electricity generated by a qualifying electricity generating facility qualifies as a new electricity supply;

(e) prescribing rules for determining the amount of new electricity supply generated by a qualifying electricity generating facility;

(f) prescribing rules for calculating the amount in respect of a qualifying electricity generating facility for the purposes of subsection (2);

(g) prescribing persons or classes of persons and circumstances for the purposes of subclause (2) (d) (ii);

(h) prescribing rules for determining if a qualifying electricity generating facility commences generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008;

(i) prescribing the conditions that must be satisfied for the purposes of clause (3) (b);

(j) prescribing conditions for designation that an electricity generating facility must satisfy to be eligible to be designated by the Minister;

(k) prescribing any other matter that the Minister considers necessary or advisable for the purposes of this section.

Same

(7) A regulation under subsection (6) may be general or specific and may prescribe different persons, classes of persons, rules, conditions, circumstances or other things in respect of different electricity generating facilities or classes of facilities.

(2) Subsection 62 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 26, 1997, chapter 19, section 4, 1997, chapter 43, Schedule A, section 32, 1998, chapter 5, section 19, 1998, chapter 34, section 48 and 2001, chapter 23, section 41, is amended by adding the following clause:

Electricity generating assets

(i) all amounts, except to the extent that they have been deducted by the corporation in computing its income under Part II for the taxation year or any prior taxation year, that are deductible by the corporation under clause 11 (10) (a) on account of property,

(i) that is used in generating electricity from a renewable or alternative energy source, and

(ii) that is qualifying property for the purposes of this clause under the rules prescribed by the regulations.

(3) Subsection 112 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 52, 1996, chapter 18, section 23, 1996, chapter 24, section 31, 1997, chapter 43, Schedule A, section 51, 1998, chapter 15, Schedule E, section 5 and 2001, chapter 23, section 63, is amended by adding the following clause:

(d.2) governing the carry-forward of non-capital losses incurred by corporations in operating qualifying electricity generating facilities to which section 13.6 applies, including permitting the carry-forward of the losses to a taxation year that is later than the last taxation year for which the losses would otherwise be deductible under section 111 of the Income Tax Act (Canada), as it applies for the purposes of this Act;

(4) Section 112 of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 52, 1996, chapter 18, section 23, 1996, chapter 24, section 31, 1997, chapter 43, Schedule A, section 51, 1998, chapter 15, Schedule E, section 5 and 2001, chapter 23, section 63, is amended by adding the following subsection:

Determination for purposes of capital cost allowance

(4) A regulation that provides for the determination of all or a part of the amount of a deduction under clause 11 (10) (a) for a taxation year may authorize the Minister of Energy or his or her delegate to determine if property belongs to a class of property in respect of which part or all of the deduction may be claimed.

Electricity Act, 1998

3. (1) Clause 1 (g) of the Electricity Act, 1998 is repealed and the following substituted:

(g) to promote energy conservation, energy efficiency, load management and the use of cleaner energy sources, including alternative and renewable energy sources, in a manner consistent with the policies of the Government of Ontario.

(2) The definition of "Minister" in subsection 2 (1) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 1, Schedule A, section 2, is amended by striking out "Minister of Environment and Energy" and substituting "Minister of Energy".

(3) Section 19 of the Act is amended by adding the following subsections:

Minister's approval

(1.1) The IMO shall not submit anything to the Board under subsection (1) without the approval of the Minister.

Interests of consumers

(1.2) In deciding whether to give an approval under subsection (1.1), the Minister shall consider the interests of consumers with respect to prices and the reliability and quality of electricity service.

(4) Subsections 19 (1.1) and (1.2) of the Act, as enacted by subsection (3), are repealed.

(5) Section 19 of the Act is amended by adding the following subsections:

Refusal by Minister

(3.1) If the Minister refuses to give the approval required by subsection (1.1), the expenditure and revenue requirements and fees applicable to the current fiscal year continue to apply to the next fiscal year.

Current submission

(3.2) After this subsection comes into force, the Board shall take no further action with respect to the submission made by the IMO under subsection (1) for the 2003 fiscal year.

Same

(3.3) The expenditure and revenue requirements and fees that applied to the 2002 fiscal year shall be deemed to apply to the 2003 fiscal year.

(6) Subsections 19 (3.1), (3.2) and (3.3) of the Act, as enacted by subsection (5), are repealed.

(7) Section 31 of the Act is amended by adding the following subsections:

Exception

(4) A distributor shall not shut off the distribution of electricity to a property under subsection (1) during the period that begins on the day this subsection comes into force and ends on March 31, 2003 or during any other period prescribed by the regulations.

Restoration of electricity

(5) If a distributor shuts off the distribution of electricity to a property under subsection (1) after November 11, 2002 and before April 1, 2003, or during a period prescribed by the regulations, the distributor shall, as soon as possible,

(a) restore, without charge, the distribution of electricity to the property; and

(b) compensate any person who suffered a loss as a result of the shut off of electricity.

(8) Section 32 of the Act is amended by adding the following subsection:

Notice to Minister

(9) The IMO shall not make a rule under this section unless it first gives the Minister an assessment of the impact of the rule on the interests of consumers with respect to prices and the reliability and quality of electricity service.

(9) Subsection 32 (9) of the Act, as enacted by subsection (8), is repealed.

(10) Section 33 of the Act is amended by adding the following subsections:

Notice to Minister

(1.1) The IMO shall give the Minister a copy of the amendment and such other information as is prescribed by the regulations on or before the date the IMO publishes the amendment under subsection (1).

Minister's power to revoke

(1.2) If the Minister is of the opinion that the amendment will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service, the Minister may, not later than 15 days after the amendment is published under subsection (1), revoke the amendment on a date specified by the Minister and refer the amendment back to the IMO for further consideration.

(11) Subsections 33 (1.1) and (1.2) of the Act, as enacted by subsection (10), are repealed.

(12) Section 33 of the Act is amended by adding the following subsection:

Effect of revocation by Minister

(3.1) If the Minister revokes the amendment under subsection (1.2),

(a) subsection (2) ceases to apply to the amendment; and

(b) the Board shall not proceed with any review that arises from an application that was made under subsection (2) before the Minister revoked the amendment.

(13) Subsection 33 (3.1) of the Act, as enacted by subsection (12), is repealed.

(14) Subsection 34 (1) of the Act is amended by adding the following paragraph:

5. A reason prescribed by the regulations.

(15) Section 34 of the Act is amended by adding the following subsections:

Notice to Minister

(2.1) The IMO shall give the Minister a copy of the amendment and such other information as is prescribed by the regulations on or before the date the IMO publishes the amendment under subsection (2).

Minister's power to revoke

(2.2) If the Minister is of the opinion that the amendment will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service, the Minister may, not later than 15 days after the amendment is published under subsection (2), revoke the amendment on a date specified by the Minister and refer the amendment back to the IMO for further consideration.

(16) Subsections 34 (2.1) and (2.2) of the Act, as enacted by subsection (15), are repealed.

(17) Subsection 34 (3) of the Act is amended by striking out "any person" and substituting "a person who is directly affected by the amendment".

(18) Section 34 of the Act is amended by adding the following subsection:

Effect of revocation by Minister

(4.1) If the Minister revokes the amendment under subsection (2.2),

(a) subsection (3) ceases to apply to the amendment; and

(b) the Board shall not proceed with any review that arises from an application that was made under subsection (3) before the Minister revoked the amendment.

(19) Subsection 34 (4.1) of the Act, as enacted by subsection (18), is repealed.

(20) Subsection 35 (1) of the Act is repealed and the following substituted:

Other reviews of market rules

(1) On application by a person who is directly affected by a provision of the market rules, the Board may review the provision.

(21) The Act is amended by adding the following section:

Toronto land used by Ontario Hydro

46.2 (1) Despite section 46.1, if, before March 31, 1999, Ontario Hydro occupied and used land in the City of Toronto in connection with the generation of electricity using fossil fuels and for any ancillary use, any occupier of the land may,

(a) use the land in connection with any one or more of the generation of electricity using a type of fuel prescribed by the regulations, the transmission of electricity and the distribution of electricity and for any ancillary uses; and

(b) use or erect on the land any building or structure in connection with a use of the land that is authorized by clause (a).

Conflict

(2) This section applies despite any provision of the Planning Act or any other Act and despite any by-law, regulation or order made under the Planning Act or any other Act.

(22) Subsection 92.1 (6) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 25, section 46, is repealed and the following substituted:

Exception

(6) There may be deducted, in determining the amount of gross revenue referred to in subsections (4) and (5), the amount of gross revenue resulting from the generation of electricity from eligible capacity, as determined by regulation, for the time period that is the longer of,

(a) the first 120 months after the eligible capacity is put in service, as determined by regulation; and

(b) such length of time, after the eligible capacity is first put in service, as the Minister of Finance may prescribe in the regulations.

(23) Subsection 92.1 (21) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 25, section 46 and amended by 2001, chapter 23, section 68, is amended by adding the following clause:

(e.1) prescribing a length of time longer than 120 months that applies to one or more hydro-electric generating stations for the purposes of subsection (6);

(24) Subsection 114 (1) of the Act, as amended by the Statutes of Ontario, 2001, chapter 23, section 69, is amended by adding the following clauses:

(f.1) prescribing periods for the purpose of subsections 31 (4) and (5);

. . . . .

(g.1) prescribing information for the purposes of subsections 33 (1.1) and 34 (2.1);

(g.2) prescribing reasons for the purpose of paragraph 5 of subsection 34 (1);

. . . . .

(h.2) for the purpose of clause 46.2 (1) (a), prescribing types of fuel;

. . . . .

(l.1) requiring persons to offer, install or use electricity meters or other devices of a type specified by the regulations for the purpose of promoting energy conservation, energy efficiency or load management;

(25) Clause 114 (1) (g.1) of the Act, as enacted by subsection (24), is repealed.

(26) The Act is amended by adding the following sections:

Resolution

159.1 (1) A municipality which has an interest described in subsection (3) in respect of a corporation that was incorporated as provided in subsection 142 (1) and that is licensed under the Ontario Energy Board Act, 1998 to distribute electricity may, within 90 days after this section comes into force, pass a resolution providing that the municipality affirms that the corporation should continue to be incorporated as provided in subsection 142 (1).

Where more than one municipality

(2) Where an interest described in paragraphs 1 or 2 of subsection (3) is held by more than one municipality, or where two or more municipalities together have the rights described in paragraph 3 of subsection (3), each of those municipalities may pass the resolution described in subsection (1).

Interests in corporation

(3) The following are the interests in a corporation for the purposes of subsection (1):

1. Direct or indirect beneficial ownership or voting control of all or a majority of the voting shares of the corporation.

2. Direct or indirect beneficial ownership of all or a majority of the voting shares of a corporation that owns all or a majority of the voting shares of the corporation.

3. Any other form of corporate organization that gives the municipality rights or entitlements similar to those of a person who owns all or a majority of the voting securities in a corporation incorporated under the Business Corporations Act.

When subs. (5) and (7) apply

(4) Subsections (5) and (7) apply if, within 90 days after this section comes into force, the Minister does not receive a certificate or certificates certifying the passing of the resolution in the form provided for in the regulations from the clerk or other appropriate official of the municipality or municipalities that alone or together,

(a) directly or indirectly beneficially own a majority of the voting shares of a corporation described in subsection (1);

(b) directly or indirectly beneficially own a majority of the voting shares of a corporation that owns all or a majority of the voting shares of a corporation described in subsection (1); or

(c) with respect to a corporation mentioned in subsection (1), have the rights or entitlements similar to those of a person who owns all or a majority of the voting securities of a corporation incorporated under the Business Corporations Act.

Consequences of failure to pass resolution

(5) If the Minister does not receive the certificate or certificates within the time set out in subsection (4), the following apply:

1. The board of directors of the corporation described in subsection (1) shall not declare, and the corporation shall not pay, dividends for the benefit of any person.

2. The corporation described in subsection (1) shall not sell, lease or otherwise dispose of all or substantially all of its assets, liabilities, rights or obligations, and shall not dismiss all or substantially all of its employees.

3. A shareholder of the corporation described in subsection (1) shall not sell, convey, transfer, assign or otherwise dispose of any of its interest in the corporation except as provided in section 159.2.

4. The corporation described in subsection (1) shall not increase the amount of an obligation to a shareholder that is a municipality provided for in a debt obligation within the meaning of the Business Corporations Act, either by creating a new debt obligation or amending an existing debt obligation, and where such a debt obligation was created or amended after November 25, 2002, the increased amount of obligation shall be deemed not to exist.

5. If the corporation mentioned in subsection (1) increases the amount of an obligation to a shareholder other than a municipality that is provided for in a debt obligation within the meaning of the Business Corporations Act or in a contractual obligation, either by creating a new debt obligation or contractual obligation or amending an existing debt obligation or contractual obligation, that shareholder shall not increase the amount of its obligations to a municipality, and where such an obligation was created or amended after November 25, 2002, the increased amount of obligation shall be deemed not to exist.

6. A corporation described in subsection (1) shall not enter into an agreement for goods or services with an affiliate, a shareholder of the corporation or a municipality other than in the ordinary course of business for fair value of the goods or services provided under that agreement and where such an agreement was entered into after November 25, 2002, the agreement is void.

7. A corporation described in subsection (1) shall not amend or cause to be amended any existing agreement for goods or services with an affiliate, a shareholder of the corporation or a municipality that increases the financial obligations or liability of the corporation and where such an amendment was made after November 25, 2002, the amendment is void.

Non-application of articles, etc.

(6) Subsection (5) applies despite,

(a) the articles of incorporation of any corporation;

(b) the by-laws of any corporation;

(c) any shareholder agreement or resolution or direction of shareholders;

(d) any other instrument or agreement; and

(e) the Business Corporations Act and any other Act or law.

Additional consequences of failure to pass resolution

(7) If the Minister does not receive the appropriate certificate or certificates within the time set out in subsection (4), an application shall be deemed to have been made to the Board under section 78 of the Ontario Energy Board Act, 1998 to replace each order made by the Board under section 78 of that Act with respect to the corporation.

Authority for deemed application

(8) Section 79.6 of the Ontario Energy Board Act, 1998 does not apply to an application that is deemed to be made under subsection (7).

Contents of application

(9) An application described in subsection (7) shall be deemed to be based on a projected revenue requirement that incorporates a 0 per cent return on common equity.

Board must make order

(10) The Board shall, upon giving notice to the corporation, make an order that incorporates a 0 per cent return on common equity despite section 78 or 79 of the Ontario Energy Board Act, 1998 and in making the order shall not increase any of the other components of the revenue requirement or increase any rates set out in any order that is in effect at the time that the deemed application is made.

No hearing

(11) The Board shall make the order described in subsection (10) without holding a hearing.

Effectiveness of order

(12) An order described in subsection (10) shall be deemed to have come into force 90 days after this section came into force.

Regulations

(13) The Minister may make regulations governing the form and content of the certificate for the purposes of subsection (4).

Compensation for certain shareholders

159.2 (1) A shareholder of a corporation to which an order described in subsection 159.1 (10) applies or of a corporation that beneficially owns, directly or indirectly, all or a majority of the voting shares of a corporation to which an order described in subsection 159.1 (10) applies is entitled to be paid by the municipality or, if voting shares in the corporation are beneficially owned, directly or indirectly by more than one municipality, by the municipalities, the fair value of all or part of its voting securities in the corporation of which it is a shareholder, determined as of the close of business on November 8, 2002, if the shareholder is not,

(a) a municipality; or

(b) a corporation of which a municipality beneficially owns, directly or indirectly, all or a majority of the voting shares.

Demand for payment of fair value

(2) A shareholder who is entitled to be paid under subsection (1) and who wishes to exercise his or her entitlement shall deliver to the municipality or municipalities, within 30 days from the making of the order described in subsection 159.1 (10), a written notice containing,

(a) the shareholder's name and mailing address;

(b) the number and class of securities in respect of which the shareholder is claiming payment;

(c) a demand for payment of the fair value of the voting securities; and

(d) the name of a valuator designated by the shareholder from a list of valuators set by the Minister.

Valuation by mutual agreement

(3) The shareholder and the municipality or municipalities, as the case may be, may enter into any agreement or arrangement to determine the fair value of the shareholder's voting securities, the timing and method of the payment to the shareholder of the fair value, the transfer of the voting securities to the municipality or municipalities, as the case may be, or any other related matter.

Same

(4) Where the shareholder and the municipality or municipalities, as the case may be, enter into an agreement or arrangement described in subsection (3), subsections (5) to (13) do not apply or shall cease to apply, as the case may be.

Valuator chosen by municipality

(5) Where the shareholder and the municipality or municipalities, as the case may be, do not enter into a written agreement or arrangement described in subsection (3), the municipality or municipalities shall, within 45 days of receiving the notice under subsection (2), designate a valuator from a list of valuators set by the Minister that is not the valuator designated by the shareholder.

Designation of valuator

(6) The following rules apply to the designation of a valuator:

1. If the shareholder or the municipality or municipalities have not designated a valuator or if paragraph 2 applies, the Lieutenant Governor in Council shall designate a valuator for the shareholder or municipality or municipalities from the list of valuators set by the Minister.

2. A valuator is not eligible to be chosen by the shareholder or the municipality or municipalities, as the case may be, if the valuator has provided any service to either the shareholder or the municipality or municipalities in the prior 12-month period.

3. If more than one municipality beneficially owns, directly or indirectly, voting shares in the corporation, all the municipalities must agree on the valuator, and if they cannot agree on the valuator, the valuator shall be designated as under paragraph 1.

4. The reasonable remuneration and expenses of the valuator shall be paid by the party who designated the valuator, or for whom the valuator was designated.

Report

(7) Within 90 days from the day that the second valuator is designated, each valuator shall deliver to the municipality or municipalities and to the shareholder a report,

(a) determining the amount of the payment to which, in the opinion of the valuator, the shareholder is entitled under subsection (1); and

(b) setting out, in detail, the basis upon which the valuator determined the amount.

SPPA

(8) The Statutory Powers Procedure Act does not apply to the determination of an amount by a valuator under this section.

Criteria

(9) The Minister may establish criteria to be applied by valuators in determining amounts under subsection (7).

Not regulations

(10) Criteria established by the Minister under subsection (9) are not regulations for the purposes of the Regulations Act.

Payment of fair value

(11) The municipality or municipalities shall pay a shareholder who is entitled to be paid under subsection (1) the arithmetic mean of the two amounts determined by the valuators within six months after both reports of the valuators have been delivered.

Where more than one municipality

(12) If more than one municipality beneficially owns, directly or indirectly, voting securities in the corporation whose voting securities are being valued, the amounts that they are liable to pay shall be determined and the deemed transfer under subsection (13) shall be made on a proportional basis in accordance with the extent of their ownership in the corporation.

Claims nullified

(13) Where payment has been tendered under subsection (11),

(a) the voting securities shall be deemed to be transferred to the municipality or municipalities; and

(b) the shareholder shall be deemed to be fully compensated for its voting securities in the corporation, and shall have no claim or cause of action for any further compensation or payment in relation to anything done in accordance with this section or section 159.1.

Definition

159.3 In sections 159.1 and 159.2,

"municipality" includes a municipal corporation and a municipality acting through its council.

Ontario Energy Board
Act, 1998

4. (1) Paragraph 6 of section 1 of the Ontario Energy Board Act, 1998 is repealed and the following substituted:

6. To promote energy conservation, energy efficiency, load management and the use of cleaner energy sources, including alternative and renewable energy sources, in a manner consistent with the policies of the Government of Ontario.

(2) Paragraph 5 of section 2 of the Act is repealed and the following substituted:

5. To promote energy conservation and energy efficiency in a manner consistent with the policies of the Government of Ontario.

(3) The definition of "Minister" in section 3 of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 1, is amended by striking out "Minister of Environment and Energy" and substituting "Minister of Energy".

(4) The Act is amended by adding the following section:

Conservation directives

27.1 (1) The Minister may issue, and the Board shall implement, directives that have been approved by the Lieutenant Governor in Council that require the Board to take steps specified in the directives to promote energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

Publication

(2) A directive issued under this section shall be published in The Ontario Gazette.

(5) The Act is amended by adding the following section:

Licence condition directives

28.1 (1) The Minister may issue, and the Board shall implement, directives that have been approved by the Lieutenant Governor in Council that require the Board, in the manner specified in the directives, to amend conditions in licences issued by the Board that relate to the directive issued to the Board pursuant to an order of the Lieutenant Governor in Council that was dated March 24, 1999 and is available on request from the Minister.

No hearing

(2) The Board shall amend the conditions as required by a directive without holding a hearing.

(6) Section 56 of the Act is amended by adding the following definitions:

"designated consumer" means a consumer, other than a low-volume consumer, that,

(a) is a municipality as defined in the Municipal Act, including a regional and district municipality and the County of Oxford,

(b) is a university or college of applied arts and technology or other post-secondary education institution that receives regular and ongoing operating funds from Ontario for the purpose of providing post-secondary education,

(c) is a board or private school, both as defined in the Education Act,

(d) is a hospital as defined in the Public Hospitals Act, a private hospital operated under the authority of a licence issued under the Private Hospitals Act, an institution as defined in the Mental Hospitals Act, a nursing home within the meaning of the Nursing Homes Act or a home within the meaning of the Homes for the Aged and Rest Homes Act,

(e) is a registered charity as defined in subsection 248 (1) of the Income Tax Act (Canada) that has a registration number issued by the Canada Customs and Revenue Agency, or

(f) is a consumer prescribed by the regulations or a member of a class of consumers prescribed by the regulations; ("consommateur désigné")

"low-volume consumer" means a consumer who annually uses less than 150,000 kilowatt hours of electricity or such other amount of electricity as is prescribed by the regulations; ("petit consommateur")

"market participant" means a person who is authorized by the market rules to participate in the IMO-administered markets or to cause or permit electricity to be conveyed into, through or out of the IMO-controlled grid; ("intervenant du marché")

"Retail Settlement Code" means the Retail Settlement Code issued by the Board, as amended from time to time; ("code appelé Retail Settlement Code")

(7) Clause (a) of the definition of "designated consumer" in section 56 of the Act, as enacted by subsection (6), is repealed and the following substituted:

(a) a municipality as defined in the Municipal Act, 2001,

(8) Section 70 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 7, is amended by adding the following subsection:

Distributors: connection of generation facilities

(6.1) The licence issued to a distributor shall contain conditions governing the connection of generation facilities to the distribution system, including the maximum cumulative generating capacity from generators to whom the regulations made under clause 88 (1) (g.1) apply that the distributor must allow to be connected to the distribution system.

(9) Paragraph 9 of subsection 73 (1) of the Act is repealed and the following substituted:

9. Providing services related to the promotion of energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

(10) Clause 74 (1) (a) of the Act is amended by striking out "under section 27 or 28" and substituting "under section 27, 27.1 or 28".

(11) The Act is amended by adding the following sections:

Payments to consumers

79.1 (1) A distributor that was licensed under this Part on November 11, 2002 to own or operate a distribution system shall make a payment of $75 in accordance with this section to each low-volume consumer who had an account with the distributor on November 25, 2002 with respect to the distribution of electricity to a property.

Same

(2) If a retailer that was licensed under this Part on November 11, 2002 to retail electricity had a contract with a low-volume consumer on November 25, 2002 with respect to the retailing of electricity to a property and the retailer bills the consumer under retailer-consolidated billing,

(a) subsection (1) does not apply to the consumer; and

(b) the retailer shall make a payment of $75 in accordance with this section to the consumer.

More than one account

(3) A low-volume consumer who is entitled to a payment under subsection (1) is entitled to a payment in respect of each account that the consumer had with the distributor on November 25, 2002 with respect to the distribution of electricity.

More than one contract

(4) A low-volume consumer who is entitled to a payment under subsection (2) is entitled to a payment in respect of each contract that the consumer had with the retailer on November 25, 2002 with respect to the retailing of electricity.

Time for payment

(5) The payment required by subsection (1) or (2) shall be made not later than December 31, 2002.

Same

(6) If it is not possible for a distributor or retailer to comply with subsection (5), the payment shall be made as soon as possible.

Method of payment

(7) The payment required by subsection (1) or (2) shall be made by mailing or hand-delivering a cheque to the low-volume consumer.

Consumers with PPVA accounts greater than zero

(8) If a distributor maintains a PPVA account in respect of a low-volume consumer and, on the day this section comes into force, the balance of the PPVA account is greater than zero and is to the credit of the distributor,

(a) subsections (1) and (2) do not apply to the consumer; and

(b) the distributor shall reduce the balance of the consumer's PPVA account to zero.

Equal billing

(9) If a distributor maintains an equal billing plan account in respect of a low-volume consumer and, on the day this section comes into force, the balance of the consumer's equal billing plan account shows that the consumer owes an amount of money to the distributor,

(a) subsections (1) and (2) do not apply to the consumer; and

(b) the distributor shall determine the portion of the account that relates to the commodity price for electricity and reduce that portion by,

(i) the amount of interest that was added to the account in respect of that portion, and

(ii) the lesser of,

(A) $75, and

(B) the amount, after the reduction required by subclause (i) is made, of the portion of the account that relates to the commodity price for electricity.

Time for reduction

(10) A reduction required by subsection (8) or (9) shall be made not later than December 31, 2002.

Same

(11) If it is not possible for a distributor to comply with subsection (10), the reduction shall be made as soon as possible.

Further payments

(12) Every distributor or retailer that has made a payment to a low-volume consumer under subsection (1) or (2) shall make the calculations prescribed by the regulations and, if required by the regulations, shall make a further payment to the consumer.

Further reductions

(13) Every distributor that has made a reduction to a low-volume consumer's equal billing plan account under subsection (9) shall make the calculations prescribed by the regulations and, if required by the regulations, shall make a further reduction to the account.

Designated consumers

(14) A distributor that was licensed under this Part on November 11, 2002 to own or operate a distribution system shall make a payment in accordance with the regulations to each designated consumer who had an account with the distributor on November 25, 2002 with respect to the distribution of electricity to a property.

Same

(15) If a retailer that was licensed under this Part on November 11, 2002 to retail electricity had a contract with a designated consumer on November 25, 2002 with respect to the retailing of electricity to a property and the retailer bills the consumer under retailer-consolidated billing,

(a) subsection (14) does not apply to the consumer; and

(b) the retailer shall make a payment in accordance with the regulations to the consumer.

Payments to other consumers

(16) If required by the regulations, a distributor or retailer shall make a payment in accordance with the regulations to a consumer who is not a low-volume consumer or designated consumer.

Information to be provided

(17) If required by the Minister, a distributor or retailer who makes a payment to a consumer under this section or who makes a reduction to an account under subsection (8), (9) or (13) shall, at the same time or within such other time as may be specified by the Minister, provide the consumer with such information as the Minister specifies.

Same

(18) The Minister may require that the information referred to in subsection (17) be provided in a form approved by the Minister.

Exception: no order under s. 78

(19) This section does not apply to a distributor if there is no order under section 78 that approves or fixes the rates that may be charged by the distributor on the day this section comes into force.

Exception: no connection to IMO-controlled grid

(20) This section does not apply to a distributor if the distributor's distribution system is not connected to the IMO-controlled grid.

No assignment

(21) An assignment by a consumer to a retailer of the entitlement to any payment does not apply to a payment under this section, whether the assignment was made before or after this section came into force.

Purpose of payments

(22) The payments by distributors and retailers that are required under this section are for the purpose of reimbursing consumers for part of the commodity price they paid for electricity.

Definitions

(23) In this section,

"equal billing plan" has the same meaning as an equal billing plan or equivalent form of levelized or budget billing referred to in the Standard Supply Service Code issued by the Board, as it read on the day this section came into force; ("mode de facturation à versements égaux")

"PPVA account" means a Purchased Power Variance/Deferral Account as described in the Electricity Distribution Rate Handbook issued by the Board, as it read on the day this section came into force; ("compte PPVA")

"retailer-consolidated billing" means retailer-consolidated billing as described in the Retail Settlement Code. ("facturation consolidée assurée par le détaillant")

Repeal

(24) This section is repealed on a day to be named by proclamation of the Lieutenant Governor.

Payments by IMO to consumers

79.2 (1) The IMO shall make a payment in accordance with the regulations to a market participant that is a low-volume consumer or designated consumer.

Same

(2) If required by the regulations, the IMO shall make a payment in accordance with the regulations to a consumer other than a consumer described in subsection (1).

No assignment

(3) An assignment by a consumer to a retailer of the entitlement to any payment does not apply to a payment under this section, whether the assignment was made before or after this section came into force.

Purpose of payments

(4) The payments by the IMO that are required under this section are for the purpose of reimbursing consumers for part of the commodity price they paid for electricity.

Repeal

(5) This section is repealed on a day to be named by proclamation of the Lieutenant Governor.

Orders under s. 78 in effect on Nov. 11, 2002

79.3 (1) If an order under section 78 was in effect on November 11, 2002, the order applies to electricity used on or after December 1, 2002.

Interim orders

(2) If an interim order under section 78 was in effect on November 11, 2002, the order shall be deemed to be a final order and applies to electricity used on or after December 1, 2002.

New or amended orders

(3) Subsections (1) and (2) are subject to,

(a) a new order under section 78 that is made pursuant to an application approved by the Minister under section 79.6;

(b) an amendment to an order under section 78 that is made pursuant to section 79.8;

(c) a new order under section 78 or an amendment to an order under section 78 that is made pursuant to section 79.9; or

(d) a new order under section 78 that is made pursuant to an application that is deemed to have been made under subsection 159.1 (7) of the Electricity Act, 1998.

Void orders

(4) The following orders are void:

1. Any order under section 78 that was made after November 11, 2002 and before this section came into force.

2. Any order under section 78 that was made on or before November 11, 2002 but was not in effect on November 11, 2002.

Pending applications, etc.

(5) The following proceedings are discontinued on the day this section comes into force:

1. Any application that was commenced before this section comes into force for an order under section 78.

2. Any appeal under section 33 that was commenced before this section comes into force from an order issued to a distributor under section 78.

3. Any petition under section 34 that was commenced before this section comes into force in respect of an order under section 78.

4. Any review under section 21.2 of the Statutory Powers Procedure Act that was commenced before this section comes into force of an order under section 78.

Same

(6) Sections 33 and 34 of this Act and section 21.2 of the Statutory Powers Procedure Act do not apply to an order under section 78 that was in effect on November 11, 2002.

Commodity price for electricity: low-volume and
designated consumers

79.4 (1) Despite section 79.3, despite any order under section 78 and, subject to subsection (6), despite any agreement to the contrary, the commodity price for electricity payable by a low-volume consumer or designated consumer is 4.3 cents per kilowatt hour or such lower price as may be determined in accordance with the regulations.

Exception: consumers who file statement

(2) Subsection (1) does not apply to a consumer if,

(a) the consumer files a written statement with,

(i) the distributor with whom the consumer has an account, if the consumer is not a market participant, or

(ii) the IMO, if the consumer is a market participant,

indicating that the consumer does not wish to have subsection (1) apply to the consumer; and

(b) at the time the statement is filed under clause (a), a regulation prescribing criteria for the purpose of this clause is in force and those criteria are met.

Exception: no order under s. 78

(3) Subsection (1) does not apply to a consumer who has an account with a distributor on the day this section comes into force with respect to the distribution of electricity to a property if there is no order under section 78 that approves or fixes the rates that may be charged by the distributor on that day.

Exception: no connection to IMO-controlled grid

(4) Subsection (1) does not apply to a consumer to whom electricity is distributed through a distribution system that is not connected to the IMO-controlled grid.

Exception: service transaction request,
contract entered into after commencement

(5) Subsection (1) does not apply to a consumer if, after the day this section comes into force, the consumer renews or enters into a contract with respect to which a service transaction request as defined in the Retail Settlement Code is or has been implemented to enable the consumer to purchase electricity from a competitive retailer as defined in the Retail Settlement Code.

Contracts entered into after commencement

(6) Subject to subsection (5), the commodity price for electricity payable by a consumer under subsection (1) is subject to any contract the consumer renews or enters into after the day this section comes into force.

Application

(7) Subsection (1) applies to electricity used on or after December 1, 2002.

Commodity price for electricity: other consumers

79.5 (1) Despite section 79.3, despite any order under section 78 and despite any agreement to the contrary, the commodity price for electricity payable by a consumer who is not a low-volume consumer or designated consumer is the price determined in accordance with the regulations if,

(a) the consumer files a written statement with,

(i) the distributor with whom the consumer has an account, or

(ii) the IMO, if the consumer is a market participant,

indicating that the consumer wishes to have this subsection apply to the consumer; and

(b) at the time the statement is filed under clause (a), a regulation prescribing criteria for the purpose of this clause is in force and those criteria are met.

Same

(2) Subsection (1) only applies to electricity used by a consumer after the consumer files the written statement referred to in clause (1) (a).

Applications under s. 78

79.6 (1) An application for an order under section 78 may be made only with the written approval of the Minister.

Grounds for approval

(2) The Minister may give an approval under this section only if,

(a) the rates proposed by the applicant are lower than the rates in effect at the time the Minister's approval is sought;

(b) there is no order under section 78 in effect at the time the Minister's approval is sought;

(c) the applicant has incurred extraordinary costs; or

(d) the Minister is of the opinion that other circumstances justify the giving of approval.

Interests of consumers

(3) In deciding whether to give an approval under this section, the Minister shall consider the interests of consumers with respect to prices and the reliability and quality of electricity service.

Conditions

(4) The Minister may impose such conditions on the application as he or she considers appropriate in an approval given under this section and, despite any other provision of this Act, the Board shall comply with the conditions in making any order on the application.

Board may not commence proceeding

(5) Despite subsection 19 (4), the Board may not commence a proceeding of its own motion for an order under section 78.

Board may not review

79.7 Section 21.2 of the Statutory Powers Procedure Act does not apply to an order under section 78.

Minister may require amendment

79.8 (1) Despite any other provision of this Act, the Minister may require the Board to amend an order under section 78, including an order referred to in subsection 79.3 (1) or (2), in the manner specified by the Minister.

No hearing

(2) The Board shall amend the order as required by the Minister without holding a hearing.

Minister may require review

79.9 (1) The Minister may require the Board to review any order under section 78, including an order referred to in subsection 79.3 (1) or (2), or any part of an order, and to report to the Minister on the results of the review, including any recommendations of the Board.

Same

(2) The Minister may specify the terms of reference for the review, including the date the review is to begin and the date by which the report must be delivered to the Minister.

Minister's power

(3) Despite any other provision of this Act, after receiving a report from the Board, the Minister may in writing require the Board to implement any recommendation of the Board or to take any other action specified by the Minister, including,

(a) revoking the order and issuing a new order in accordance with any conditions specified by the Minister; or

(b) amending the order in accordance with any conditions specified by the Minister.

No hearing

(4) The Board shall comply with any requirement of the Minister under subsection (3) without holding a hearing.

Hydro One Networks Inc.

79.10 Despite subsection 79.3 (1), the rates set out in Appendix A-2 and Appendix G-2 of the order made by the Board under section 78 on August 30, 2002 with respect to Hydro One Networks Inc. do not apply to electricity used on or after December 1, 2002.

Repeal

79.11 Sections 79.3 to 79.10 are repealed on a day to be named by proclamation of the Lieutenant Governor that is not earlier than May 1, 2006.

Deferral accounts

79.12 (1) Hydro One Networks Inc. may establish a deferral account that records the amounts that, in the absence of section 79.10, it would have collected before the day named under section 79.11, if the Appendix G-2 referred to in section 79.10 had applied to electricity used on or after December 1, 2002.

Same

(2) A distributor may establish a deferral account that, if the distributor made a payment to a consumer under subsection 79.1 (1) not later than December 31, 2002, records the amounts of other expenses incurred by the distributor in making that payment.

Regulatory assets

79.13 The following amounts shall be deemed to be regulatory assets until the Board addresses the disposition of the amounts in an order under section 78:

1. An amount recorded by a distributor in Account 1570 established in accordance with the Accounting Procedures Handbook issued by the Board, as it read on the day this section comes into force.

2. An amount recorded in a Retail Settlement Variance Account established in accordance with the Electricity Distribution Rate Handbook issued by the Board, as it read on the day this section comes into force.

3. An amount recorded in a deferral account established under section 79.12.

4. An amount recorded in an account prescribed by the regulations.

Overpayments

79.14 If a consumer pays an amount in excess of the amount that may be charged under this Part, the person to whom the amount was paid shall as soon as possible refund the excess to the consumer or credit the consumer's account with the excess.

(12) The Act is amended by adding the following section:

Form of invoice

79.15 (1) The Minister may require that invoices issued to low-volume or designated consumers in respect of electricity be in a form approved by the Minister.

Different forms

(2) The Minister may approve different forms of invoice and may specify the circumstances in which each form shall be used.

Errors

(3) No defect, error or omission in the form or substance of an invoice issued to a low-volume or designated consumer in respect of electricity invalidates any proceeding for the recovery of the amount payable under the invoice.

(13) Section 86 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 9, is amended by adding the following subsection:

Sale of assets of OEFC to or by Hydro One Inc., etc.

(7) Despite subsection (1) and any order of the Board, the sale, lease, conveyance, transfer, assignment, assumption or other disposition of any of the assets, rights, liabilities or obligations of the Ontario Electricity Financial Corporation to or by Hydro One Inc. or a subsidiary of Hydro One Inc. after March 31, 1999, including any such sale, lease, conveyance, transfer, assignment, assumption or other disposition completed before this subsection came into force, does not require an order from the Board granting leave.

(14) Subclause 88 (1) (a.1) (v) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(15) Clause 88 (1) (b) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(16) Clause 88 (1) (c) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by striking out "the Minister" and substituting "the Minister of the Environment".

(17) Subsection 88 (1) of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by adding the following clauses:

(g.1) requiring a distributor, in the circumstances and in the manner prescribed by the regulations, to subtract the amount of electricity conveyed into the distribution system by a generator from the amount consumed from the system by the generator, for billing purposes, if the generator generates electricity primarily for the generator's own use;

(g.2) prescribing consumers and classes of consumers for the purpose of clause (f) of the definition of "designated consumer" in section 56;

(g.3) prescribing an amount of electricity for the purpose of the definition of "low-volume consumer" in section 56;

. . . . .

(j) prescribing the calculations to be made by distributors and retailers under subsection 79.1 (12) and governing the time within which the calculations must be made;

(k) governing the circumstances in which a further payment shall be made to a low-volume consumer under subsection 79.1 (12);

(l) prescribing the calculations to be made by distributors under subsection 79.1 (13) and governing the time within which the calculations must be made;

(m) governing the circumstances in which a further reduction shall be made to a low-volume consumer's equal billing plan account under subsection 79.1 (13), governing the determination of the amount of the reduction and governing the time within which the reduction must be made;

(n) governing the circumstances in which a payment must be made under subsection 79.1 (16) to a consumer who is not a low-volume consumer or designated consumer;

(o) governing the determination of the amount of a payment under subsection 79.1 (12), (14), (15) or (16), governing the time within which the payment must be made and governing the method of making the payment;

(p) governing the circumstances in which a payment must be made under subsection 79.2 (2);

(q) governing the determination of the amount of a payment under section 79.2, governing the time within which the payment must be made and governing the method of making the payment;

(r) prescribing prices or methods for determining prices for the purpose of subsection 79.4 (1);

(s) prescribing criteria for the purpose of clause 79.4 (2) (b);

(t) prescribing prices or methods for determining prices for the purpose of subsection 79.5 (1);

(u) prescribing criteria for the purpose of clause 79.5 (1) (b);

(v) providing that a statement under clause 79.5 (1) (a) must be filed within a time period determined in accordance with the regulations;

(w) authorizing or requiring a person to establish one or more deferral or variance accounts;

(x) governing the operation of the accounts referred to in section 79.12 or established under clause (w);

(y) prescribing accounts for the purpose of paragraph 4 of section 79.13;

(z) despite any order of the Board or any condition of a licence, governing the calculation of interest on amounts in deferral or variance accounts authorized or required under this Act or by the Board, including requiring an interest rate of 0 per cent;

(z.1) providing for such transitional matters as the Lieutenant Governor in Council considers necessary or advisable in connection with the repeal of sections 79.3 to 79.10, including governing the disposition of amounts referred to in section 79.13;

(z.2) prescribing information that must or that may be included on invoices issued to low-volume consumers or designated consumers in respect of electricity;

(z.3) respecting the manner in which invoices issued to low-volume consumers or designated consumers in respect of electricity are provided to those consumers;

(z.4) governing the amount of deposits charged by distributors as a condition of distributing electricity to consumers or of retailing electricity to consumers in order to meet a distributor's obligations under section 29 of the Electricity Act, 1998, and requiring distributors to refund to consumers all or part of any such amounts charged after November 25, 2002.

(18) Section 88 of the Act, as amended by the Statutes of Ontario, 2002, chapter 1, Schedule B, section 10, is amended by adding the following subsections:

Commodity price for electricity

(2.1) The first regulation made under clause (1) (r) or (t) may provide that it applies to electricity used before the regulation came into force, but the regulation may not apply to electricity used before December 1, 2002.

Criteria relating to subs. 79.5 (1)

(2.2) If a regulation under clause (1) (u) prescribes criteria that can be met only if a consumer does something, the consumer may do the thing despite any agreement to the contrary, the consumer is not liable for doing the thing in contravention of any agreement to the contrary, and doing the thing shall be deemed not to constitute a breach, termination, repudiation or frustration of any contract.

Subdelegation

(2.3) A regulation under clause (1) (x) may authorize a person to determine any matter that may be determined by the Lieutenant Governor in Council under that clause.

(19) Part V of the Act is amended by adding the following section:

Compensation of distributors, retailers, etc.
Purposes

88.0.1 (1) The purpose of this section is to make such financial arrangements as the Lieutenant Governor in Council or a person referred to in subsection (4) considers appropriate,

(a) to compensate distributors for payments made by them under section 79.1 and for reductions made to PPVA accounts or equal billing plan accounts under that section, other than reductions related to interest;

(b) to compensate retailers for payments made by them under section 79.1;

(c) to compensate the IMO for payments made by it under section 79.2;

(d) to offset differences between the commodity price for electricity in contracts between retailers and consumers that were in effect on November 11, 2002 and the commodity price for electricity in the IMO-administered markets;

(e) to offset differences between the commodity price for electricity supplied by generators and the commodity price for electricity payable by consumers as a result of the operation of sections 79.4 and 79.5; and

(f) to make payments to the IMO in respect of liabilities or expenses it incurs after the coming into force of this section as a result of carrying out its objects under the Electricity Act, 1998.

Regulations

(2) The Lieutenant Governor in Council may make regulations,

(a) requiring the Financial Corporation or a subsidiary of the Financial Corporation to make payments to distributors, retailers or the IMO and prescribing methods for determining the amounts payable;

(b) requiring distributors to make payments to retailers and prescribing methods for determining the amounts payable;

(c) requiring the IMO or a distributor or retailer to make payments to the Financial Corporation or a subsidiary of the Financial Corporation and prescribing methods for determining the amounts payable;

(d) governing the payments required under clause (a), (b) or (c), including methods of payment and the times within which payments must be made;

(e) governing the calculation of amounts payable by distributors and consumers to the IMO for the operation of the IMO-administered markets and the operation of the IMO-controlled grid;

(f) authorizing distributors to set off amounts against amounts they owe to the IMO or other distributors, and prescribing methods for determining the amounts that may be set off;

(g) governing the set-offs authorized under clause (f), including methods of set-off and the times within which amounts may be set off;

(h) requiring distributors, retailers, consumers who are not low-volume consumers or designated consumers, or the IMO to provide information for the purposes of this section to the Financial Corporation or a subsidiary of the Financial Corporation, the IMO or distributors.

General or particular

(3) A regulation under subsection (2) may be general or particular in its application.

Subdelegation

(4) A regulation under subsection (2) may authorize a person to require, authorize, prescribe or otherwise determine any matter that may be required, authorized, prescribed or otherwise determined by the Lieutenant Governor in Council under subsection (2).

Provision of information

(5) A person may do anything required by a regulation made under clause (2) (h) despite any agreement to the contrary, the person is not liable for doing the thing in contravention of any agreement to the contrary, and doing the thing shall be deemed not to constitute a breach, termination, repudiation or frustration of any contract.

Conflict with market rules

(6) In the event of a conflict, a regulation made under clause (2) (c), (d), (e), (f) or (g) prevails over the market rules to the extent of the conflict.

Investigations and inquiries

(7) Any person thereunto authorized by the Minister of Finance for any purpose related to the administration of this section or any regulation made under it may at all reasonable times enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business, and,

(a) audit or examine the books and records and any account, voucher, letter or other document that relates or may relate to the information that is or should be in the books or records;

(b) examine any property, process or matter, an examination of which may, in the person's opinion, assist in ascertaining the information that is or should be in the books or records; and

(c) require a distributor, retailer or the IMO or a partner or the president, manager, secretary or any director, agent or representative thereof and any other person on the premises of a distributor, retailer or the IMO to give him or her all reasonable assistance with the audit or examination and to answer all questions relating to the audit or examination, either orally or, if he or she so requires, in writing, on oath or by statutory declaration, and for that purpose require such person to attend at the premises or place with him or her.

Same

(8) The Minister of Finance may, for any purpose related to the administration of this section or the regulations made under it, by registered letter, or by a demand served personally or delivered by a courier service, within such reasonable time as is stipulated in the registered letter or demand, require from any person, partnership, syndicate, trust, corporation, or other business entity or from any partner, agent, member, director or officer thereof,

(a) any information required to be provided to any person by a regulation under clause (2) (h);

(b) production of books, letters, accounts, invoices, financial statements, computer programs or data files, or any other documents on paper or stored electronically;

(c) particulars of any amounts paid or payable to or by, or held on behalf of, a distributor, retailer, consumer or the IMO; or

(d) a written statement, concerning any matter that may be relevant to the administration of this section or the regulations made under it.

Same

(9) The Minister of Finance may require that a written statement referred to in clause (8) (d) be made by way of affidavit or statutory declaration.

Admission of evidence

(10) The Minister of Finance, or a person authorized by the Minister, may, for any purpose related to the administration of this section or the regulations made under it, reproduce from original data stored electronically any information previously submitted as required under this section or the regulations in any form by any person, and the electronically reproduced document shall be admissible in evidence and shall have the same probative force as the original document would have had if it had been proved in the ordinary way.

Inquiry

(11) The Minister of Finance may, for any purpose related to the administration of this section or the regulations made under it, authorize any person, whether or not the person is an officer of the Ministry of Finance, to make such inquiry as the Minister of Finance considers necessary with reference to anything relating to the administration of this section or the regulations.

Copies

(12) If a book, record or other document is examined or produced under this section, the person by whom it is examined or to whom it is produced or any officer of the Ministry of Finance may make, or cause to be made, one or more copies thereof, and a document purporting to be certified by the person to be a copy made pursuant to this section is admissible in evidence and has the same probative force as the original document would have if proved in the ordinary way.

Compliance

(13) No person shall hinder or molest or interfere with any person doing anything that the person is authorized by this section to do or prevent or attempt to prevent any person doing any such thing.

Same

(14) Despite any other law to the contrary, every person shall, unless the person is unable to do so, do everything he, she or it is required by this section to do.

Administration of oaths

(15) Declarations or affidavits in connection with statements of information submitted pursuant to this section may be taken before any person having authority to administer an oath or before any person specially authorized for that purpose by the Lieutenant Governor in Council, but any person so specially authorized shall not charge any fee therefor.

Powers of inquiry

(16) For the purpose of an inquiry under subsection (11), the person authorized to make the inquiry has the powers of a commission under Part II of the Public Inquiries Act, which Part applies to the inquiry as if it were an inquiry under that Act.

No approval required for subsidiary

(17) A subsidiary of the Financial Corporation may be established for the purposes of this section without the approval of the Minister of Finance under subsection 72 (1) of the Electricity Act, 1998.

Money paid to Financial Corporation

(18) Money paid to the Financial Corporation or a subsidiary of the Financial Corporation under this section is the property of the Financial Corporation or the subsidiary, as the case may be.

Definition

(19) In this section,

"Financial Corporation" has the same meaning as in the Electricity Act, 1998.

(20) Clause 126 (1) (b) of the Act is amended by adding at the end "or in any circumstances where information is required or authorized to be provided under this Act".

Retail Sales Tax Act

5. (1) The Retail Sales Tax Act is amended by adding the following section:

Rebate, energy-efficient appliance
Definitions

9.1 (1) In this section,

"appliance" means a refrigerator, dishwasher, clothes washer or another household appliance prescribed by the Minister; ("appareil ménager")

"energy-efficient appliance" means an appliance that is listed as "Energy Star Qualified" in the EnerGuide Appliance Directory published by Natural Resources Canada for 2002 or 2003. ("appareil ménager éconergétique")

Rebate

(2) The Minister may rebate to the purchaser of an energy-efficient appliance the amount of tax paid by the purchaser under section 2 on the sale of the appliance to the purchaser if,

(a) the contract for the sale is entered into after November 25, 2002 and before November 26, 2003;

(b) the sale is the first sale of the appliance to any purchaser and, if the sale is a rental or lease, the term of the rental or lease is at least 365 days;

(c) delivery of the appliance occurs before January 1, 2004;

(d) the purchaser makes an application for the rebate on or before the fourth anniversary of the sale of the appliance to the purchaser or, if the sale is a rental or lease, on or before the fourth anniversary of the day the last rental or lease payment is required to be made; and

(e) the application for the rebate referred to in clause (d) is in writing and contains the information required by the Minister.

(2) Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232 and 2001, chapter 23, section 207, is amended by adding the following clauses:

(q) providing for a rebate to the owner of an eligible electricity generating facility that generates electricity from an alternative or renewable source of energy, as defined by the Minister, or to the owner of an eligible deep lake-water cooling facility, as defined by the Minister, of all or part of the tax paid in respect of eligible tangible personal property that is purchased and incorporated into the facility after November 25, 2002 and before January 1, 2008, and prescribing the terms and conditions under which the rebate may be made including,

(i) the conditions an electricity generating facility or deep lake-water cooling facility must satisfy to be an eligible electricity generating facility or eligible deep lake-water cooling facility for the purposes of the rebate,

(ii) the class or classes of tangible personal property that are eligible tangible personal property for the purposes of the rebate,

(iii) the manner of determining the amount of the rebate, and

(iv) circumstances in which all or part of the rebate must be repaid and rules applicable to the repayment;

(r) providing for a rebate of all or part of the tax paid in respect of a solar energy system, as defined by the Minister, that is purchased and incorporated into residential premises after November 25, 2002 and before November 26, 2007, and prescribing the terms and conditions under which the rebate may be made including,

(i) the person to whom the rebate is payable,

(ii) the manner of determining the amount of the rebate, and

(iii) the class or classes of residential premises that qualify for the purposes of the rebate.

(3) Section 48 of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232 and 2001, chapter 23, section 207, is amended by adding the following subsection:

May be general or specific

(3.1) A regulation made under clause (3) (q) may be general or specific in its application and may apply differently to different facilities or classes of facilities.

Miscellaneous

Protection from liability

6. (1) Subject to section 88.0.1 of the Ontario Energy Board Act, 1998, the Crown and its agents are not liable to compensate any person for any past, present or future losses or expenses relating to or resulting from any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

No proceeding

(2) No proceeding shall be commenced against the Crown or its agents for compensation for any past, present or future losses or expenses relating to or resulting from any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

Same

(3) Without limiting the generality of subsections (1) and (2), the losses and expenses referred to in those subsections include,

(a) loss of profit or other benefit of an existing contract;

(b) loss of profit or other benefit of a future contract;

(c) loss of business opportunity;

(d) loss of business or costs consequential on loss of business;

(e) costs of compliance with any amendment made by this Act to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or the regulations made under those amendments, whether administrative, financial, operational, or otherwise;

(f) loss of interest or of use of capital, or reduction of capital;

(g) loss arising from the failure of any person to achieve a desired or anticipated rate of return on its business activities; and

(h) loss arising from the reduction or cessation of business activity due to lost profits or benefits, real or anticipated, or the actions of creditors, suppliers or customers.

Definition

(4) In this section,

"compensation" includes compensatory, consequential, special, aggravated and punitive damages, contribution and indemnity, equitable remedies, any other payment to limit, make good or atone for the physical, economic or emotional losses of any person, and any order to require or stop the taking of any action, and "compensate" has a corresponding meaning.

Commencement and Short Title

Commencement

7. (1) Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

Same

(2) Subsections 3 (4), (6), (9), (11), (13), (16), (19) and (25) and 4 (8) and (12) come into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Subsection 4 (7) comes into force on January 1, 2003.

Short title

8. The short title of this Act is the Electricity Pricing, Conservation and Supply Act, 2002.

EXPLANATORY NOTE

Assessment Act

Section 3.1 of the Assessment Act provides a temporary exemption from municipal property taxes and school taxes for new electricity generating facilities and additions to existing electricity generating facilities if the facility or the addition to the facility generates electricity from an alternative or renewable source of energy. The new facility or addition to the facility must commence generating electricity from an alternative or renewable source of energy after November 25, 2002 and before January 1, 2008. Subject to certain rules, the exemption applies for the first 120 months in which the facility or addition to the facility generates electricity.

Corporations Tax Act

The amendments to the Corporations Tax Act provide incentives to corporations that generate electricity from alternative or renewable sources of energy.

Section 13.6 of the Act permits the corporation to deduct from income an amount calculated by reference to the amount of income it may derive from increasing the amount of electricity it supplies to the Ontario electricity grid by generating electricity from an alternative or renewable source of energy.

Clause 62 (1) (i) of the Act has the effect of permitting the corporation to calculate its taxable paid-up capital for capital tax purposes as if it has taken advantage of the proposed 100 per cent accelerated write-off of the cost of property purchased to use in generating electricity from an alternative or renewable source of energy.

The amendment to subsection 112 (1) of the Act authorizes the Lieutenant Governor in Council to make a regulation extending the time period during which a corporation may carry forward non-capital losses incurred in operating an electricity generating facility that is a qualifying electricity generating facility under section 13.6 of the Act.

Subsection 112 (4) of the Act authorizes the Minister of Energy or his or her delegate to determine if property belongs to a particular class of property for the purposes of calculating a corporation's capital cost allowance.

Electricity Act, 1998

Under section 19 of the Electricity Act, 1998, the Independent Electricity Market Operator must submit its proposed expenditure and revenue requirements for each fiscal year and the fees it proposes to charge during the year to the Ontario Energy Board for review. Section 19 is amended to provide that this submission may be made only with the approval of the Minister of Energy.

Section 31 of the Act is amended to prohibit a distributor from shutting off the distribution of electricity to a property until after March 31, 2003 or during such periods as may be prescribed by regulation.

The process governing the making of market rules by the Independent Electricity Market Operator is revised (sections 32 to 35 of the Act). The changes include permitting the Minister of Energy to revoke amendments if he or she is of the opinion that they will unduly and adversely affect the interests of consumers with respect to prices or the reliability or quality of electricity service.

A new section 46.2 of the Act permits the use of City of Toronto land in connection with the generation of electricity using a fuel prescribed by the regulations, the transmission of electricity or the distribution of electricity if the land was used by Ontario Hydro in connection with the generation of electricity using fossil fuels before March 31, 1999.

Section 92.1 of the Act imposes a tax on hydro-electric generating stations, calculated by reference to the amount of gross revenue from the generation of electricity. Subsection 92.1 (6) of the Act has the effect of exempting from tax the amount of gross revenue resulting from the generation of electricity from eligible capacity for the first 120 months after the eligible capacity is put into service. The amendments to section 92.1 of the Act permit the 120-month "exemption" period to be extended by regulation for one or more hydro-electric generating stations.

Section 114 of the Act is amended to give the Lieutenant Governor in Council authority to make regulations requiring electricity meters or other devices to be offered, installed or used to promote energy conservation, energy efficiency or load management.

A municipality that beneficially owns, directly or indirectly, voting securities in a corporation that was incorporated as provided in subsection 142 (1) of the Act and that is licensed to distribute electricity may, within 90 days after the Bill receives Royal Assent, pass a resolution providing that the municipality affirms that the corporation should continue to be incorporated as provided in subsection 142 (1). Where a municipality does not pass the resolution, consequences are provided for. For example, the corporation may not declare dividends or dispose of all or substantially all of its assets, and an application is deemed to have been made to the Ontario Energy Board for a rate order that incorporates a 0 per cent return on common equity. A method is established by which non-municipal shareholders of such a corporation can be compensated for their equity investments.

Ontario Energy Board Act, 1998

A new section 27.1 of the Ontario Energy Board Act, 1998 allows the Minister of Energy to issue directives to the Ontario Energy Board that require the Board to take steps specified in the directives to promote energy conservation, energy efficiency, load management or the use of cleaner energy sources, including alternative and renewable energy sources.

An amendment to section 70 of the Act requires licences issued to electricity distributors to contain conditions governing the connection of generation facilities to the distribution system. Under the conditions, a distributor will be required to allow certain generators specified by regulation to connect to the distribution system, up to a maximum limit set by the conditions. The regulations that relate to these generators require a distributor, for billing purposes, to subtract the electricity conveyed into the distribution system by the generator from the electricity consumed from the system by the generator (net metering).

A new section 79.1 of the Act requires distributors and retailers to make payments to certain consumers. Some consumers must be paid $75 under the section, by December 31, 2002 if possible, with a further payment if required by regulation. Other consumers must receive payments in accordance with regulations. In other cases, certain accounts relating to a consumer must be reduced. The purpose of the payments under section 79.1 is to reimburse consumers for part of the commodity price they paid for electricity.

A new section 79.2 of the Act requires the Independent Electricity Market Operator to make payments to certain consumers. Again, the purpose of the payments is to reimburse consumers for part of the commodity price they paid for electricity.

Under the new section 79.3 of the Act, orders made by the Ontario Energy Board that approved or fixed electricity rates and that were in effect on November 11, 2002 will apply to electricity used on or after December 1, 2002, unless replaced or amended. An application for a new rate order may be made only with the approval of the Minister of Energy (see the new section 79.6). In deciding whether to give an approval, the Minister must consider the interests of consumers with respect to prices and the reliability and quality of electricity service. The Minister may attach conditions to the approval that must be complied with by the Board in making any order on the application.

The new sections 79.4 and 79.5 of the Act contain special rules applicable to the commodity price for electricity:

1. Section 79.4 applies to low-volume consumers and to other consumers referred to in the Act as "designated consumers". In this case, the commodity price for electricity is fixed at 4.3 cents per kilowatt hour or such lower rate as is prescribed by regulation. There are certain exceptions provided for in section 79.4. For example, a consumer may in certain circumstances give notice that the consumer does not wish to have the section 79.4 commodity price apply. Also, if a consumer enters into or renews a contract after section 79.4 comes into force pursuant to which a service transaction request is implemented to enable the consumer to purchase electricity from a competitive retailer, the section 79.4 commodity price does not apply.

2. Section 79.5 applies to consumers who are not low-volume consumers or designated consumers. The section only applies if criteria prescribed by regulation are met and the consumer gives notice that the consumer wishes the section to apply. If section 79.5 applies to a consumer, the commodity price for electricity is determined by regulation.

A new section 79.8 of the Act allows the Minister of Energy to require the Ontario Energy Board to amend an electricity rate order. A new section 79.9 allows the Minister to require the Board to review a rate order and, after receiving the Board's report, the Minister may require the Board to amend the order or replace it.

The new provisions of the Act that relate to electricity rates may be repealed by proclamation of the Lieutenant Governor, but the repeal cannot occur before May 1, 2006.

A new section 79.13 of the Act provides that amounts recorded in certain accounts shall be deemed to be regulatory assets.

A new section 79.15 of the Act allows the Minister of Energy to require that invoices issued to low-volume consumers and designated consumers in respect of electricity be in a form approved by the Minister.

A new section 88.0.1 of the Act allows the Lieutenant Governor in Council to make regulations to make financial arrangements for the following purposes:

1. To compensate distributors, retailers and the Independent Electricity Market Operator for payments made under sections 79.1 and 79.2 of the Act.

2. To offset differences between the commodity price for electricity in certain contracts between retailers and consumers and the commodity price for electricity in the markets established by the Independent Electricity Market Operator's market rules.

3. To offset differences between the commodity price for electricity supplied by generators and the commodity price for electricity payable by consumers as a result of the operation of sections 79.4 and 79.5 of the Act.

4. To make payments to the Independent Electricity Market Operator in respect of certain liabilities or expenses it incurs as a result of carrying out its objects under the Electricity Act, 1998.

The regulations made under section 88.0.1, for example, may require the Ontario Electricity Financial Corporation to make payments to distributors, retailers or the Independent Electricity Market Operator, and may require distributors to make payments to retailers. Other kinds of payments may also be required. Distributors may be authorized to set off amounts against amounts they owe to the Independent Electricity Market Operator or other distributors. The Minister of Finance may conduct investigations related to the administration of section 88.0.1 and the regulations made under that section.

Retail Sales Tax Act

Section 9.1 of the Retail Sales Tax Act provides a one-year rebate of retail sales tax paid on the purchase, rental or lease of a new energy-efficient household appliance.

The amendments to subsection 48 (3) of the Act authorize the Minister of Finance to make regulations to provide tax rebates in respect of,

(a) tangible personal property incorporated into an electricity generating facility that generates electricity from an alternative or renewable source of energy or into a deep lake-water cooling facility; and

(b) solar energy systems installed in residential premises.

Miscellaneous

The Bill provides the Crown and its agents with protection from liability for any losses relating to any amendment made by the Bill to the Electricity Act, 1998 or the Ontario Energy Board Act, 1998, or from any action taken pursuant to those amendments or pursuant to regulations made under those amendments.

Most of the amendments to the Bill come into force on Royal Assent. These include the amendments to the Electricity Act, 1998 that deal with the Independent Electricity Market Operator's expenditure and revenue requirements and fees, and the amendments that deal with the process governing the making of market rules. However, these amendments may be reversed on a day to be named by proclamation of the Lieutenant Governor.

The amendment to the Ontario Energy Board Act, 1998 that requires licences issued to electricity distributors to contain conditions governing the connection of generation facilities comes into force on a day to be named by proclamation of the Lieutenant Governor, as does the amendment that allows the Minister of Energy to require that invoices issued to certain consumers in respect of electricity be in a form approved by the Minister.