Minister’s directive
To: the independent electricity system operator

I, Todd Smith, Minister of Energy, hereby direct the Independent Electricity System Operator (IESO) pursuant to section 25.32 of the Electricity Act, 1998 (Act) in regard to certain projects or undertakings that were initiated or continued under the electricity conservation and demand management (CDM) procurement initiative known as the 2015–2020 Conservation First Framework (CFF), as follows:

Background

Our government recognizes that CDM programs help electricity consumers manage their bills, lower overall electricity system demand and are an important contributor to the Ontario economy.

The CFF was originally established under the direction entitled “2015–2020 Conservation First Framework” issued to the Ontario Power Authority on March 31, 2014, and was discontinued pursuant to the Minister’s Directive issued to the IESO on March 21, 2019. The Directive discontinuing the CFF was itself approved by the Lieutenant Governor in Council pursuant to Order-in-Council No. 380/2019 dated March 20, 2019. Since then, the CFF has been replaced by two successive new CDM frameworks.

We are aware that the Novel Coronavirus (covid-19) has continued to delay the completion of certain projects that were undertaken under the CFF. The ongoing challenges presented by covid-19 that have negatively impacted the completion of projects include supply chain disruptions, facility closures, and both local and international labour restrictions.

Pursuant to the Minister’s Directive issued to the IESO on July 22, 2020, as approved by the Lieutenant Governor in Council pursuant to Order-in-Council No. 1054/2020 dated July 22, 2020 (the First CFF Extension Directive), the IESO was permitted to extend in-service deadlines and other time periods for certain projects that were undertaken under the CFF. The deadlines were extended again to December 31, 2021 pursuant to the Minister’s Directive issued to the IESO on June 10, 2021, as approved by the Lieutenant Governor in Council pursuant to Order-in-Council No. 793/2021 dated June 10, 2021 (the Second CFF Extension Directive).

The government understands the need for ongoing flexibility in responding to the challenges businesses face during this difficult time. We are therefore directing the IESO to take steps that may be necessary or advisable in order to enable further extensions of in-service deadlines, and other contract-performance-related time periods for CFF projects to no later than August 31, 2022, with further provisions on extension periods outlined below. Certain projects may qualify for a further four-month extension if specific eligibility criteria are met as set out below.

These extensions are intended to offset the disruptions referred to above that are caused by covid-19, and to provide stability for participants and those businesses involved in the supply chain, including the vendor and contractor community that support the implementation of the above-noted CFF projects. This extension is not expected to have a material impact on electricity bills.

It is our hope that the challenges presented by covid-19 will continue to improve and that with this Directive participants who remain committed to advancing their projects will be able to complete them.

Directive

Therefore, in accordance with the authority I have pursuant to section 25.32 of the Act, I hereby direct the IESO as follows:

  1. Paragraph 1 under the heading “Directive” in the First CFF Extension Directive as amended by the Second CFF Extension Directive is deleted in its entirety and replaced with the following:

    “In respect of participant agreements under the CFF (i) entered into by the IESO, or (ii) entered into by a local distribution company (LDC) and that were, as of September 3, 2020, compliant with the CFF Program Wind- Down Guideline dated March 21, 2019, the IESO may take such steps as are commercially reasonable to facilitate the implementation of this Directive, including to amend, reinstate or restate those agreements or facilitate the amendments, reinstatements or restatements of those agreements, as applicable, to extend in-service deadlines and other time periods (including those related to project implementation, savings achievement, reporting, and termination) in those participant agreements until August 31, 2022, and to take any further steps or to facilitate any other commercially reasonable steps including facilitating amendments, reinstatements or restatements that result from any such extensions. Any electricity savings or demand reductions achieved during any extended time period shall continue to be attributable to the CFF. LDCs are expected to work collaboratively and proactively with the IESO in order to identify projects on a timely basis, having regard to the timelines provided for in, and having regard to, the spirit and intent of this Directive for the benefit of program participants and ratepayers.”

  2. In respect of the participant agreements described in paragraph 1, where any participant fails to meet the extended deadlines and time periods arising from the extension to August 31, 2022 as described in paragraph 1, the IESO shall take such steps as are commercially reasonable to extend such in-service and other deadlines and time periods under those participant agreements such that the in- service and other deadlines and time periods associated with the agreements are extended until December 31, 2022 (including to take any further steps or facilitate any other commercially reasonable steps that result from any such extensions), if all of the following conditions are met:
    1. The participant agreement has not been terminated and has not expired as of August 31, 2022; and
    2. The participant has, on or after July 1, 2022 and on or before July 31, 2022, delivered to its contract counterparty, an attestation signed by the participant that includes all of the following:
      1. Confirmation of material progress in the participant’s activities having regard to the overall objectives and outcomes contemplated under the participant agreement, such as equipment essential to the completion of the project, as contemplated by or under the participant agreement and that is relevant to the completion of the project, has been purchased and/or essential consulting services engaged;
      2. Confirmation that based on the information available and project progress made to date and subject to the resolution of project disruptions related to covid-19, the participant can reasonably be expected to meet the relevant deadlines and time periods provided for in the participant agreement on or before December 31, 2022;
      3. Confirmation that the participant will report to its contract counterparty each month on project progress and the anticipated in-service date; and
      4. Acknowledgement that the project, including the performance criteria established by or within the participant agreement as may be amended by any amending agreement or conditional waiver implementing this Directive, may be selected for an audit by the IESO and/or the LDC, as applicable.
  3. If any participant agreement described in paragraph 1 or paragraph 2 requires a reinstatement in order to implement the extension contemplated in this Directive, such participant agreement shall be reinstated on or before August 31, 2022.
  4. In implementing this directive, the IESO shall take such commercially reasonable steps as are necessary or appropriate to minimize costs associated with the extension of the participant agreements described in paragraph 1 and paragraph 2. In the case that the forecasted costs to implement this Directive are expected to increase the total CFF wind-down costs as of the date of the Second CFF Extension Directive by more than $15 million, the IESO shall advise the Ministry of Energy in advance. The IESO shall provide such reports and information as may be requested by the Ministry of Energy in respect of the costs that are being or anticipated to be expended or accrued in implementing this Directive.

General

This Directive takes effect on the date it is issued.

Order in Council 1749/2021