Canada’s electricity sector is fundamental to our strong economy and high standard of living. As a sector that provides an essential service, it faces intense scrutiny from a myriad of stakeholders, including : federal, provincial and municipal levels of government; regulatory bodies; policy makers; and consumers. As the sector continues to evolve, so, too, will opportunities, crises, regulatory structures, production and distribution models, as well as consumer expectations.
I’ve had the pleasure of witnessing the sector’s various permutations over the last few decades and taking an active role in shaping change.
Effective change agents are crucial to any practice group’s success. New business opportunities require nimble and informed lawyers who can expand their knowledge and skills to keep pace with constant transformation and provide strategic business advice to their clients. As effective change agents, we must anticipate the blind spots in policy, ask tough questions, possess a clear understanding of multiple (and often conflicting) perspectives, be curious and willing to facilitate the progression from present situation to future opportunity.
The electricity sector is subject to a vast network of issues that extend far beyond the tangible matter of keeping the lights on. What are the implications of present and potential changes for our clients, their contracts, financial matters and attendant policies? Effective change agents must navigate intangibles and propose practical solutions.
The electricity sector has seen significant change over the past decade, including the shift to renewables, the growth of intermittent producers (e.g., wind and solar) and decentralized production and distribution. The issues we have seen in Ontario have functioned as a bellwether for the rest of the country. They are also an example of the sector’s politicization, which will continue in the face of the climate crisis.
Governments in recent years have decided to foster certain forms of generation through favourable policies, the availability of long-term, favourably priced contracts, feed-in-tariffs and other support mechanisms. Of particular note was the enactment of the Green Energy Act in 2009, which became a key election issue and was criticized by some as being responsible for the increase in the market price of Ontario’s electricity.
It’s crucial that lawyers stay abreast of the sector’s many dynamic parts. We must be aware of developments in all levels of government policy, study ministerial directives and publications, consult with policy specialists, consultants and lobbyists and actively participate in professional associations. Most importantly, we must listen to our clients, who are often ahead of the curve in terms of emerging trends and issues.
In the coming years, there will be a continued focus on distributed generation, renewables and the sector’s relationship with Indigenous communities, including the duty to consult and accommodate. The Independent Electricity System Operator’s Market Renewal Program (MRP) will be of particular interest, as it will propose sweeping reforms to how Ontario schedules supplies and prices electricity. Its potential effects cannot be overstated: The MRP promises Ontarians significant benefits in terms of cost and access. The introduction of new players and stakeholders into an already complex sector will create yet another series of considerations that change agents must anticipate and address.
Questions surrounding operations, mergers of municipal electric utilities, the privatization of public utilities, planning and compensation models will continue to evolve, and operators will need skilled legal advice in order to compete in an increasingly decentralized market. Ontario’s sector will continue to be challenged by the growth of smaller generation projects that are connected to central distribution lines.
Practising law in a sector subject to constant change can be seen as a challenge or an opportunity, requiring nimble, curious lawyers who offer their clients tested strategic advice, current knowledge, vigilant advocacy and innovative results.
Linda L. Bertoldi recently retired as the national leader of BLG’s top-ranked Electricity Markets Group. Stephanie Hart is a communications specialist at BLG