Category:Energy

This is an overview of the ECO's past reporting on electricity production and use in Ontario. Click here for more information about the Environmental Commissioner of Ontario and our activities.

The availability of electric power has played a key role in the development of Ontario’s economy. The province’s first electricity generating facilities date back to the late 1800s. Since that time, the province has developed facilities that generate electricity using waterpower, coal, oil, natural gas, wind, uranium and other resources. Currently, the generating mix in Ontario is dominated by three main generating technologies: nuclear, fossil fuel (coal, oil, natural gas) and hydroelectric.

Every form of electricity generation has some degree of environmental impact. For example, coal plants generate pollutants that create smog and acid rain. Hydroelectric dams can have serious impacts on aquatic habitats, including barriers for fish seeking spawning grounds. Nuclear power creates concerns about the transportation, storage and safety of radioactive material.

Given the wide array of environmental implications, the Environmental Commissioner of Ontario (ECO) has been monitoring and reporting on government decisions related to electricity generation, as well as efforts to curb demand. More efficient use of electricity and reliance on more benign forms of generation can reduce the environmental impacts of this sector, and make an important contribution towards sustainability.

In 1998, the Ontario government introduced the Energy Competition Act, 1998 (ECA). The principle goal of the Electricity Act part of the ECA was to promote competition in the electricity sector. For a full review of the ECA, see the ECO’s 1998/1999 Annual Report, Open Doors. Before the ECA, most matters related to supply, price and distribution of electricity were managed by Ontario Hydro, as well as the Ontario Energy Board.

Before the market opened on May 1, 2002, most customers were in effect paying a regulated price for electricity. When the market was opened to competition, the commodity price of electricity (i.e. what the generator was charging) was free to float, rising and falling with demand. Among other things, the new Electricity Act created several new entities - Ontario Power Generation, Hydro One, Independent Electricity System Operator, Electrical Safety Authority, and Ontario Electricity Financial Corporation - which were not crown corporations. The Power Corporation Act was repealed by the Electricity Act. Cabinet was provided with new regulation-making powers under the Ontario Energy Board Act and the Environmental Protection Act. Amendments to the Environmental Protection Act allowed Cabinet to establish and promote programs and other measures for the use of economic and financial instruments and market-based approaches for the purposes of improve existing environmental standards and achieving environmental quality goals.

In 2001, MOE filed O. Reg. 116/01 under the Environmental Assessment Act (EAA), which modified how the EAA would apply to electricity generating and distribution projects. Ontario Reg. 116/01 sets out what kinds of projects are subject to the EAA. The regulation installed a new kind of environmental assessment process for screening certain proposed electricity projects that have significant environmental impacts due to their technology or size. The primary effect of O. Reg. 116/01 was to ensure electricity projects can proceed with minimal delay, assist with the development of electricity market competition and regulatory and process certainty. Our 2001/2002 Annual Report, Developing Sustainability contains a complete review of O. Reg. 116/01.

Another significant development for the electricity sector occurred in 2002. The The Electricity Pricing, Supply and Conservation Act, 2002 (EPSCA) capped the commodity price of electricity until May 2006, reversing some of the measures under the ECA. The Act also advanced measures to encourage the use of renewable and alternative energy and to promote electricity conservation. Through incentives, it promoted public and private sector energy efficiency initiatives and aimed to reduce consumer demands. For more on the EPSCA and a review of Ontario’s power generation capabilities, see the ECO’s 2002/2003 Annual Report, Thinking Beyond the Near and the Now. In the same report, the ECO also commented on the current and future state of Ontario’s energy generating capacities.

In December 2003, the Ontario legislature passed Bill 4 - the Ontario Energy Board Amendment Act (Electricity Pricing Act), 2003. This legislation and accompanying regulations allowed for the increase of the price of electricity for many Ontarians. It also permitted the Ontario Energy Board to set the price of electricity for residential and low-volume consumers; simplified the process for changing the rate charged for transmitting electricity; and linked the financial returns of local electricity distributing companies with energy conservation performance. ENG’s new direction on electricity pricing changes was reviewed by the ECO in the 2003/2004 Annual Report, Choosing Our Legacy (p. 106).

In June 2004, ENG introduced Bill 100, the Electricity Restructuring Act (ERA). Among other things, the Act established the Ontario Power Authority (OPA), tasked to ensure the viability of Ontario’s electricity supply over the long term. It also created the Conservation Bureau within the OPA, headed by a chief Conservation Officer. The Bureau was charged with planning and coordinating electricity conservation and demand management measures, and monitoring and reporting on Ontario’s progress in achieving conservation targets. The ERA also changed the way the price of electricity was set. Part of the electricity supply would be price-regulated by the Ontario Energy Board, and the remainder would be governed by paid contract or competitive market prices. Finally, the ERA gave Ontario Power Generation the unfettered authority to develop a hydro-electric generation project on the Niagara River. The ECO reviewed the ERA in the 2004/2005 Annual Report, Planning Our Landscape (p. 103).

Ontario Regulation 496/07 under the Environmental Protection Act was filed on August 24, 2007. The regulation ended the use of coal at the Atikokan, Lambton, Nanticoke and Thunder Bay electricity generating stations after December 31, 2014. Ontario’s coal-fired power plants currently produce 6,434 megawatts of electricity and generate approximately 16-20 per cent of the province’s electricity supply. Coal provides intermediate and peaking capacity to cater to fluctuations in Ontario’s electricity demands. This government plan to phase out the use of coal was reviewed in the ECO’s 2007-2008 Annual Report, Getting to K(no)w.