Drought hits TVA power production

Ontario electricity pricing consultations will gather business input on OEB rate design, Industrial Conservation Initiative, dynamic pricing, global adjustment, and system costs through online feedback and sector-specific in-person sessions province-wide.

Key Points

Consultations gathering business input on rates, programs, and OEB policy to improve fairness and reduce system costs.

✅ Consults on ICI, GA, dynamic pricing structures

✅ Seeks views on OEB C&I rate design changes

✅ In-person sessions across key industrial sectors

The Ontario government has announced plans to hold consultations to seek input from businesses about industrial electricity pricing and programs. This will be done through Ontario's online consultations directory and though in-person sector-specific consultation sessions across the province. The in-person sessions will be held in all areas of Ontario, and will target "key industries," including automotive and the build-out of electric vehicle charging stations infrastructure, forestry, mining, agriculture, steel, manufacturing and chemicals.

On April 1, 2019, the Ontario government published a consultation notice for this process, confirming that it is looking for input on "electricity rate design, existing tax-based incentives, reducing system costs and regulatory and delivery costs," including related proposals such as the hydrogen rate reduction proposal under discussion. The consultation process includes a list of nine questions for respondents (and presumably participants in the in-person sessions) to address. These include questions about:

The benefits of the Industrial Conservation Initiative (described below), including how it could be changed to improve fairness and industrial competitiveness, and how it could complement programs like the Hydrogen Innovation Fund that support industrial innovation.

Dynamic pricing structures that allow for lower rates in return for responding to price signals versus a flat rate structure that potentially costs more, but is more stable and predictable, as Ontario's energy storage expansion accelerates.

Interest in an all-in commodity contract with an electricity retailer, even if it involves a risk premium.

Interested parties are invited to submit their comments before May 31, 2019.

The government's consultation announcement follows recent developments in the Ontario Energy Board's (OEB) review of electricity ratemaking for commercial and industrial customers, and intertie projects such as the Lake Erie Connector that could affect market dynamics.

In December 2018, the OEB published a paper from its Market Surveillance Panel (MSP) examining the Industrial Conservation Initiative (ICI), and potential alternative approaches. The ICI is a program that allows qualifying large industrial customers to base their global adjustment (GA) payments on their consumption during five peak demand hours in a year. Customers who find ways to reduce consumption at those times, perhaps through DERs and enabling energy storage options, will reduce their electricity costs. This shifts GA costs to other customers. The MSP found that the ICI does not fairly allocate costs to those who cause them and/or benefit from them, and recommends that a better approach should be developed.

In February 2019, the OEB released its Staff Report to the Board on Rate Design for Commercial and Industrial Electricity Customers, setting out recommendations for new rate designs for electricity commercial and industrial (C&I) rate classes as Ontario increasingly turns to battery storage to meet rising demand. As described in an earlier post, the Staff Report includes recommendations to: (i) establish a fixed distribution charge for commercial customers with demands under 10 kW; (ii) implement a demand charge (rather than the current volumetric charge) for C&I customers with demands between 10kW and 50kW; and (iii) introduce a "capacity reserve charge" for customers with load displacement generation to replace stand-by charges and provide for recognition of the benefits of this generation on the system. The OEB held a stakeholder information session in mid-March on this initiative, and interested parties are now filing submissions in response to the Staff Report.

Whether and how the OEB's processes will fit together with the government's consultation process remains to be seen.

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South Carolina Energy Freedom Act lifts net metering caps, reforms PURPA, and overhauls utility planning to boost solar competition, grid resiliency, and consumer choice across the Southeast amid Santee Cooper debt and utility monopoly pressure.

Key Points

A bipartisan reform lifting net metering caps, modernizing PURPA, and updating utility planning to expand solar.

✅ Lifts net metering cap to accelerate rooftop and community solar.

✅ Reforms PURPA contracts to enable fair pricing and transparent procurement.

✅ Modernizes utility IRP and opens markets to competition and customer choice.

The South Carolina House has approved the latest version of the Energy Freedom Act, a bill that overhauls the state’s electricity policies, including lifting the net metering caps and reforming PURPA implementation and utility planning processes in a way that advocates say levels the playing field for solar at all scales.

With Governor Henry McMaster (R) expected to sign the bill shortly, this is a major coup not just for solar in the state, but the region. This is particularly notable given the struggle that solar has had just to gain footing in many parts of the South, which is dominated by powerful utility monopolies and conservative politicians.

Two days ago when the bill passed the Senate we covered the details of the policy, but today we’re going to take a look at the politics of getting the Energy Freedom Act passed, and what this means for other Southern states and “red” states.

Opportunity amid crisis

The first thing to note about this bill is that it comes within a crisis in South Carolina’s electricity sector. This was the first legislative session following state-run utility Santee Cooper’s formal abandonment of a project to build two new reactors at the Virgil C. Sumner nuclear power plant, on which work stopped nearly two years ago.

Santee Cooper still holds $4 billion in construction debt related to the nuclear projects. According to an article in The State, this is costing its customers $5 per month toward the current debt, and this will rise to $13 per month for the next 40 years.

Such costs are particularly unwelcome in South Carolina, which has the highest annual electricity bills in the nation due to a combination of very high electricity usage driven by widespread air conditioning during the hot summers and higher prices per unit of power than other Southern states.

Following this fiasco, Santee Cooper’s CEO has stepped down, and the state government is currently considering selling the utility to a private entity. According to Maggie Clark, southeast state affairs senior manager for Solar Energy Industries Association, all of this set the stage for the bill that passed today.

“South Carolina is in a really ripe state for transformational energy policy in the wake of the VC Sumner nuclear plant cancellation,” Clark told pv magazine. “They were looking for a way forward, and I think this bill really provided them something to champion.”

Renewable energy policy for red states

This major win for solar policy comes in a state where the Republican Party holds majorities in both houses of the state’s legislature and sends bills to a Republican governor.

Broadly speaking, Republican politicians seldom show the level of interest in supporting renewable energy that Democrats do either at the state or national level, and show even less inclination to act to address greenhouse gas emissions. In fact, the 100% clean energy mandates that are being implemented in four states and Washington D.C. have only passed with Democratic trifectas, in other words with Republicans controlling neither house of the state legislature nor the governor’s office. (Note: This does not apply to Puerto Rico, which has a different party structure to the rest of the United States)

However, South Carolina shows there are Republican politicians who will support pro-renewable energy policies, and circumstances under which Republican majorities will vote for legislation that aids the adoption of solar. And these specific circumstances speak to both different priorities and ideological differences between the two parties.

SEIA’s Maggie Clark emphasizes that the Energy Freedom Act was about reforming market rules. “This was a way to provide a program that did not provide subsidies or incentives in any way, but to really open the market to competition,” explains Clark. “I think that appealing to conservatives in the South about energy independence and resiliency and ultimately cost savings is the winning message on this issue.”

Such messaging in South Carolina is not an accident. Not only has such messaging been successful in the past, but coalition partner Vote Solar paid for polling to find what messages resounded with the state’s voters, and found that choice and competition were likely to resound.

And all of this happened in the context of what Clark describes as an “extremely well-resourced effort”, with SEIA in particular dedicating national attention and resources to the state – as part of an effort by President and CEO Abigail Hopper to shift attention more towards state-level policy. Maggie Clark is one of two new regional staff who Hopper has hired, and SEIA’s first staff member focused on Southern states.

“Absolutely the South is a prioritized region,” Hopper told pv magazine, noting that three Southern states – the Carolinas and Florida – are among the 12 states that the organization has identified to work on this year. “It became clear that as a region it needed more attention.”

SEIA is not expecting fly-by-night victories, and Hopper attributes the success in South Carolina not only to a broad coalition, but to years of work on the ground in the state.

Nor is SEIA the only organization to grow its presence in the region. Vote Solar now has two full time staff located in the South, whereas two years ago its sole staff member dedicated to the region was located in Washington D.C.

Ideology versus reality in the South

The Energy Freedom Act aligns with conservative ideas about small government and competition, but the American right is not monolithic, nor do political ideas and actions always line up neatly, as other successful policies in other states in the region show

By far the largest deployment of renewable energy in the nation has been in Texas, aside from in California which leads overall. Here a system of renewable energy zones in the sparsely populated but windy and sunny west, north and center of the state feed cities to the east with power from wind and more recently solar.

This was enabled by transmission lines whose cost was socialized among the state’s ratepayers – a tremendous irony given that the state’s politicians would be some of the last in the nation to want to be identified with socializing anything.

Another example is Louisiana, which saw a healthy residential solar market over the last decade due to a 50% state rebate. The policy has expired, but when operating it was exactly the sort of outright subsidy that right-wing media and politicians rail against.

Of course there is also North Carolina, which built the 2nd-largest solar market in the nation on the back of successful state-level implementation of PURPA, a federal law. Finally there is Virginia, where large-scale projects are booming following a 2018 law that found that 5 GW of solar is in the public interest.

Furthermore, while conservatives continually expound the virtues of the free market, the reality of the electricity sector in the “deep red” South is anything but that. The region missed out on the wave of deregulation in the 1990s, and remains dominated by monopoly utilities regulated by the state: a union of big business and big government where competition is non-existent.

This has also meant that the solar which has been deployed in the South is mostly not the kind of rooftop solar that many think of as embodying energy independence, but rather large-scale solar built in farms, fields and forests.

Where to from here?

With such contradictions between stated ideology and practice, it is less clear what makes for successful renewable energy policy in the South. However, opening up markets appears to be working not only in South Carolina, but also in Florida, where third-party solar companies are making inroads after the state’s voters rejected a well-funded and duplicitous utilities’ campaign to kill distributed solar.

SEIA’s Hopper says that she is “aggressively optimistic” about solar in Florida. As utilities have dominated large-solar deployment in the state, even as the state declined federal solar incentives earlier this year, she says that she sees opening up the state’s booming utility-scale solar market to competition as a priority.

Some parts of the region may be harder than others, and it is notable that SEIA has not had as much to say about Alabama, Mississippi or Louisiana, which are largely controlled by utility giants Southern Company and Entergy, or the area under the thumb of the Tennessee Valley Authority, one of the most anti-solar entities in the power sector.

Abby Hopper says ultimately, demand from customers – both individuals and corporations – is the key to transforming policy. “You replicate these victories by customer demand,” Hopper told pv magazine. “That combination of voices from the customer are what’s going to drive change.”

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Ontario Global Adjustment Appeal spotlights Ontario's electricity fee, regulatory charge vs tax debate, FIT contracts, green energy policy, and constitutional challenge as National Steel Car contests soaring power costs before the Ontario Superior Court.

Key Points

Court challenge over Ontario's global adjustment fee, disputing its status as a regulatory charge instead of a tax.

✅ Challenges classification of global adjustment as tax vs regulatory charge.

✅ Focuses on FIT contracts, renewable energy payments, power cost impacts.

✅ Appeals Ontario ruling; implications for ratepayers and policy.

A manufacturer of steel rail cars is pursuing an appeal after its lawsuit challenging the constitutionality of a major Ontario electricity fee was struck down earlier this year.

Lawyers for Hamilton, Ont.-based National Steel Car Ltd. filed a notice of appeal in July after Ontario Superior Court Justice Wendy Matheson ruled in June that an electricity fee known as the global adjustment charge was a regulatory charge, and not an unconstitutional tax used to finance policy goals, as National Steel Car alleges.

The company, the decision noted, began its legal crusade last year after seeing its electricity bills had “increased dramatically” since the Ontario government passed green energy legislation nearly a decade ago, and amid concerns that high electricity rates are hurting Ontario manufacturers.

Under that legislation, the judge wrote, “private suppliers of renewable energy were paid to ’feed in’ energy into Ontario’s electricity grid.” The contracts for these so-called “feed-in tariff” contracts, or FIT contracts, were the “primary focus” of the lawsuit.

“The applicant seeks a declaration that part of the amount it has paid for electricity is an unconstitutional tax rather than a valid regulatory charge,” the judge added. “More specifically, it challenges part of the Global Adjustment, which is a component of electricity pricing and incorporates obligations under FIT contracts.”

Chiefly representing the difference between Ontario’s market price for power and the guaranteed price owed to generators, global adjustment now makes up the bulk of the commodity cost of electricity in the province. The fee has risen over the past decade, amid calls to reject steep Nova Scotia rate hikes as well — costing electricity customers $37 billion in global adjustment from 2006 to 2014, according to the province’s auditor general — because of investments in the electricity grid and green-energy contracts, among other reasons.

National Steel Car argued the global adjustment is a tax, and an unconstitutional one at that because it violated a section of the Constitution Act requiring taxes to be authorized by the legislature. The company also said the imposition of the global adjustment broke an Ontario law requiring a referendum to be held for new taxes.

The province, Justice Matheson wrote, had argued “that it is plain and obvious that these applications will fail.” In a decision released in June, the judge granted motions to strike out National Steel Car’s applications.

“The Global Adjustment,” she added, “is not a tax because its purpose, in pith and substance, is not to tax, and it is a regulatory charge and therefore, again, not a tax.”

Now, National Steel Car is arguing that the judge erred in several ways, including in fact, “by finding that the FIT contracts must be paid, when they can be cancelled.”

There has been a change in government at Queen’s Park since National Steel Car first filed its lawsuit last year, and that change has put green energy contracts under fire. The Progressive Conservative government of new Premier Doug Ford has already made a number of decisions on the electricity file, such as moving to cancel and wind down more than 750 renewable energy contracts, as well as repealing the province’s Green Energy Act.

The Tories also struck a commission of inquiry into the province’s finances that warned the global adjustment “may be struck down as unconstitutional,” a warning delivered amid cases where Nova Scotia's regulator approved a 14% rate hike in a high-profile decision.

“There is a risk that a court may find the global adjustment is not a valid regulatory charge if shifting costs over a longer period of time inadvertently results in future ratepayers cross-subsidizing today’s ratepayers,” the commission’s report said.

A spokesperson for Ontario’s Ministry of Energy, Northern Development and Mines said in an email that it would be “inappropriate to comment about the specifics of any case before the courts or currently under arbitration.”

National Steel Car is also prepared to fight its case all the way up to the Supreme Court of Canada, according to its lawyer.

“What is clear from our proceeding with the appeal is National Steel Car has every intention of seeing that lawsuit through to its conclusion if this government isn’t interested or prepared to reasonably settle it,” Jerome Morse said.

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EU Nuclear Reactor Life Extension focuses on energy security, carbon-free electricity, and safety as ageing reactors face gas shortages, high power prices, and regulatory approvals across the UK and EU amid winter supply risks.

Key Points

EU Nuclear Reactor Life Extension is the policy to keep ageing reactors safely generating affordable, low-carbon power.

✅ Extends reactor operation via inspections and component upgrades

✅ Addresses gas shortages, price volatility, and winter supply risks

✅ Requires national regulator approval and cost-benefit analysis

Shaken by the loss of Russian natural gas since the invasion of Ukraine, European countries are questioning whether they can extend the lives of their ageing nuclear reactors to maintain the supply of affordable, carbon-free electricity needed for net-zero across the bloc — but national regulators, companies and governments disagree on how long the atomic plants can be safely kept running.

Europe avoided large-scale blackouts last winter despite losing its largest supplier of natural gas, and as Germany temporarily extended nuclear operations to bolster stability, but industry is still grappling with high electricity prices and concerns about supply.

Given warnings from the International Energy Agency that the coming winters will be particularly at risk from a global gas shortage, governments have turned their attention to another major energy source — even as some officials argue nuclear would do little to solve the gas issue in the near term — that would exacerbate the problem if it too is disrupted: Europe’s ageing fleet of nuclear power plants.

Nuclear accounts for nearly 10% of energy consumed in the European Union, with transport, industry, heating and cooling traditionally relying on coal, oil and natural gas.

Historically nuclear has provided about a quarter of EU electricity and 15% of British power, even as Germany shut down its last three nuclear plants recently, underscoring diverging national paths.

Taken together, the UK and EU have 109 nuclear reactors running, even as Europe is losing nuclear power in several markets, most of which were built in the 1970s and 1980s and were commissioned to last about 30 years.

That means 95 of those reactors — nearly 90% of the fleet — have passed or are nearing the end of their original lifespan, igniting debates over how long they can safely continue to be granted operating extensions, with some arguing it remains a needed nuclear option for climate goals despite age-related concerns.

Regulations differ across borders, with some countries such as Germany turning its back on nuclear despite an ongoing energy crisis, but life extension discussions are usually a once-a-decade affair involving physical inspections, cost/benefit estimates for replacing major worn-out parts, legislative amendments, and approval from the national nuclear safety authority.

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Canada Clean Electricity Regulations outline a 2035 net-zero grid target, driving decarbonization via wind, solar, hydro, SMRs, carbon capture, and efficiency, balancing reliability, affordability, and federal-provincial collaboration while phasing out coal and limiting fossil-fuel generation.

Key Points

Federal rules to cap CO2 from power plants and deliver a reliable, affordable net-zero grid by 2035.

✅ Applies to fossil-fired units; standards effective by Jan 1, 2035.

✅ Promotes wind, solar, hydro, SMRs, carbon capture, and efficiency.

✅ Balances reliability, affordability, and emissions cuts; ongoing consultation.

Saskatchewan’s premier said the federal government is “changing goalposts” with its proposed target for a net-zero electricity grid.

“We were looking at a net-zero plan in Saskatchewan and across Canada by the year 2050. That’s now been bumped to 2035. Well there are provinces that quite frankly aren’t going to achieve those types of targets by 2035,” Premier Scott Moe said Wednesday.

Ottawa proposed the Clean Electricity Regulations – formerly the Clean Electricity Standard – as part of its target for Canada to transition to net-zero emissions by 2050.

The regulations would help the country progress towards an updated proposed goal of a net-zero electricity grid by 2035.

“They’re un-consulted, notional targets that are put forward by the federal government without working with industries, provinces or anyone that’s generating electricity,” Moe said.

The Government of Canada was seeking feedback from stakeholders on the plan’s regulatory framework document earlier this year, up until August 2022.

“The clean electricity standard is something that’s still being consulted on and we certainly heard the views of Saskatchewan – not just Saskatchewan, many other provinces – and I think that’s something that’s being reflected on,” Jonathan Wilkinson, Canada’s minister of natural resources, said during an event near Regina Wednesday.

“We also recognize that the federal government has a role to play in helping provinces to make the kinds of changes that would need to be made in order to actually achieve a clean grid,” Wilkinson added.

The information received during the consultation will help inform the development of the proposed regulations, which are expected to be released before the end of the year, according to the federal government.

NET-ZERO ELECTRICITY GRID
The federal government said its Clean Electricity Regulations (CER) is part of a suite of measures, as the country moves towards a broad “decarbonization” of the economy, with Alberta's clean electricity path illustrating provincial approaches as well.

Net-zero emissions would mean Canada’s economy would either emit no greenhouse gas emissions or offset its emissions.

The plan encourages energy efficiency, abatement and non-emitting generation technologies such as carbon capture and storage and electricity generation options such as solar, wind, geothermal, small modular nuclear reactors (SMRs) and hydro, among others.

The government suggests consumer costs could be lowered by using some of these energy efficiency techniques, alongside demand management and a shift to lower-cost wind and solar power, echoing initiatives like the SaskPower 10% rebate aimed at affordability.

The CER focuses on three principles, each tied to affordability debates like the SaskPower rate hike in Saskatchewan:

 Maximize greenhouse gas reductions to achieve the 2035 target
 Ensure a reliable electrical grid to support Canadians and the economy
 Maintain electrical affordability

“Achieving a net-zero electricity supply is key to reaching Canada’s climate targets in two ways,” the government said in its proposed regulations.

“First, it will reduce [greenhouse gas] emissions from the production of electricity. Second, using clean electricity instead of fossil fuels in vehicles, heating and industry will reduce emissions from those sectors too.

The regulations would regulate carbon dioxide emissions from electricity generating units that combust any amount of fossil fuel, have a capacity above a small megawatt threshold and sell electricity onto a regulated electricity system.

New rules would also be implemented for the development of new electricity generation units firing fossil fuels in or after 2025 and existing units. All units would be subject to emission standards by Jan. 1, 2035, at the latest.

The federal government launched consultations on the proposed regulations in March 2022.

Canada also has a 2030 emissions reduction plan that works towards meeting its Paris Agreement target to reduce emissions by 40-45 per cent from 2005 levels by 2030. This plan includes regulations to phase out coal-fired electricity by 2030.

COLLABORATION
The province recently introduced the Saskatchewan First Act, in an attempt to confirm its own jurisdiction and sovereignty when it comes to natural resources.

The act would amend Saskatchewan’s constitution to exert exclusive legislative jurisdiction under the Constitution of Canada.

The province is seeking jurisdiction over the exploration of non-renewable resources, the development, conservation and management of non-renewable natural and forestry resources, and the operation of sites and facilities for the generation and production of electrical energy.

While the federal government and Saskatchewan have come head-to-head publicly over several policy concerns in the past year, both sides remain open to collaborating on issues surrounding natural resources.

“We do have provincial jurisdiction in the development of these natural resources. We’d like to work collaboratively with the federal government on developing some of the most sustainable potash, uranium, agri-food products in the world,” Moe said.

Minister Wilkinson noted that while both the federal and provincial governments aim to respect each other’s jurisdiction, there is often some overlap, particularly in the case of environmental and economic policies, with Alberta's electricity sector changes underscoring those tensions as well.

“My view is we should endeavour to try to figure out ways that we can work together, and to ensure that we’re actually making progress for Saskatchewanians and for Canadians,” Wilkinson said.

“I think that Canadians expect us to try to figure out ways to work together, and where there are some disputes that can’t get resolved, ultimately the Supreme Court will decide on the issue of jurisdiction as they did in the case on the price on pollution.”

Moe said Saskatchewan is always open to working with the federal government, but not at the expense of its “provincial, constitutional autonomy.”

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China Renewable Energy Law drives growth in wind power, solar thermal, and photovoltaic capacity, supporting grid integration and five-year plans, even as China leads CO2 emissions, with policy incentives, compliance inspections, and national resource assessments.

Key Points

A legal framework that speeds wind, solar thermal, and PV growth in China via mandates, incentives, and grid rules.

✅ 2018 renewables: 1.87T kWh, 26.7% of national power

✅ Over 100 State Council policies enabling deployment

✅ Law inspections and regional oversight across six provinces

China leads renewable energies, installing more wind power, solar thermal and photovoltaic than any other country, as seen in the China solar PV growth reported in 2016, but also leads CO2 emissions, and much remains to be done.

The effective application of Chinas renewable energy law has boosted the use of renewable energy in the country and facilitated the rapid development of the sector, as solar parity across Chinese cities indicates, a report said.

The report on compliance with renewable energy law was presented today at the current bimonthly session of the Standing Committee of the National Peoples Assembly (APN).

Electricity generated by renewable energy amounted to about 1.87 trillion kilowatts per hour in 2018, representing 26.7 percent of Chinas total energy production in the year, aligning with trends where wind and solar doubling globally over five years, the report said.

Ding Zhongli, vice president of the NPC Standing Committee, presented the report to the legislators at the second plenary meeting of the session.

An inspection of the law enforcement was carried out from August to November, as U.S. renewables hit 28% record showed momentum elsewhere. A total of 21 members of the NPC Standing Committee and the NPC Environmental Protection and Resource Conservation Committee, as well as national legislators, traveled to six regions at the provincial level on inspection visits. Twelve legislative bodies at the provincial level inspected the law enforcement efforts in their jurisdictions.

The relevant State Council agencies have implemented more than 100 regulations and policies to foster a good policy environment for the development of renewable energy, as seen in markets where U.S. renewable electricity surpassed coal in 2022. Local regulations have also been formulated based on local conditions, according to the report.

In accordance with the law, a thorough investigation of the national conditions of renewable energy resources was undertaken.

In 2008 and 2014 atlas of solar energy resources and wind energy evaluation of China were issued. The relevant agencies of the State Council have also implemented five-year plans for the development of renewable energy, which have provided guidance to the sector, while countries like Ireland's one-third green power target remain in focus within four years.

The main provisions of the law have been met, the law has been effectively applied and the purpose of the legislation has been met, and this momentum is echoed abroad, with U.S. renewables near one-fourth according to projections, Ding said.

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