The Ontario Energy Board is undertaking a proceeding to review issues related to the regulation of gas storage and the need for rates for gas-fired electricity generators.

Key issues in the OEB proceeding include:

§         Rates for gas-fired generators—whether the OEB should order the utilities to develop particular rates, terms and conditions for gas generators and other eligible customers

§         Storage regulation—whether the OEB should forebear and allow rates for gas storage to be market-based or whether the OEB should continue to regulate storage rates on the basis of costs

AMPCO’s perspective:

§         Essentially the proceeding is considering a “joint optimization” challenge: better gas supply services and rates for gas-fired generators might produce lower electricity costs, but preferential gas rates for generators that induce inefficient generator behaviour might compromise service and cause higher costs for industrial gas customers

§         A strategic issue relates to the scale and scope of new gas-fired generation and the electricity cost implications for major power consumers, balanced by the need to recognize where gas-fired generation is needed and desirable for voltage support, grid reliability and to enhance peaking and ramping service supplies

§         There is a potential opportunity to achieve improved rates, terms and conditions of services among Union, Enbridge, Vector and TransCanada; most industrial gas users are in the Union franchise while most new gas-fired generation will be in the Enbridge franchise; enhanced deliverability and contract terms will require cooperation and consistency among all pipelines.