Jim MacDougall From: Jim MacDougall Sent: January-15-09 4:47 PM To: 'jdalton@poweradvisoryllc.com'; Alexander Forstner Cc: Sarah Simmons; Patricia Lightburn Subject: RE: Final report Looks good John; I still get hearburn over residential PV. We pulled an ad from SunVolts using Sanyo panels and Xantrex inverters at about $8/W for 100 systems in Halton …⇥ In any event, we will likely go lower than is currently in the Navigant report for our derivation of FIT pricing, certainly for residential. Sarah, take a look at the 2008, 2010 and 2015 prices to confirm your assumed digression rates in the model. Jim MacDougall, P.Eng.✓ Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: jdalton@poweradvisoryllc.com [mailto:jdalton@poweradvisoryllc.com]⇠ Sent: January 14, 2009 6:01 PM⇠ To: Alexander Forstner; Jim MacDougall⇠ Subject: Fw: Final report⇠ I'll take a look as well.⇥ I assume that this is a final draft. ----- Original Message ----- From: Andrew Kinross To: John Dalton Cc: Todd Williams ; Wesley Stevens ; Lisa Frantzis ; Alex Payne Sent: Wednesday, January 14, 2009 3:23 PM Subject: Final report John, Attached is our final report. As you requested, I've kept the "draft" label. The first file shows all the changes we've⇥ made since we talked last; the second file is a clean version with all changes accepted.⇥ The main things we've done are as follows: - incorporated our comments to your questions - added Section 2.1.2 on the "low low" end of Central Ground Mount Installed System Prices (we used $4.50/W in 201 0 and $3.00/W in 201 5). Keep in mind that certain unanticipated technology breakthroughs and/or commercial 1 201 0 and $3.00/W in 201 5). Keep in mind that certain unanticipated technology breakthroughs and/or commercial⇥ scale- ups and/or scale economies through faster- than - anticipated market growth need to occur for these prices to be achieved. - modified our December 2008 low end of central ground mount to $5.50/W from $6.00/W based on information that we have learned - added some news items that have occured (i.e. Day4 Energy laid of 95 employees (34% of total headcount) and OptiSolar laid of 300 employees (50% of total headcount) in January 2009) Let me know if there are any questions/clarifications. Best regards, Andrew _______________________⇥ Andrew Kinross Director Energy Navigant Consulting, Inc.⌧ 77 South Bedford Drive Burlington , MA 01760⇢ Office: 781- 270 - 8486 Mobile: 508 - 740 - 9638 Fax: 781 - 270 - 0418⇢ akinross@navigantconsulting.com⇢ Assistant: Karen Mahoney Phone: 781 - 270 - 8353 kmahoney@navigantconsulting.com⇢ www.navigantconsulting.com⇢ Navigant Consulting named "Best Advisory – Renewable Energy" in the 9th Annual Environmental Finance and Carbon Finance Market Survey. This communication is from Navigant Consulting Inc. E- mail text or attachments may contain information which is confidential and may also be privileged. This communication is for the exclusive use of the intended recipient(s). If you have received this communication in error, please return it with the title "received in error" to NCISecurity@navigantconsulting.com, and then delete the email and destroy any copies of it. In addition, this communication is subject to, and incorporates by reference, additional disclaimers found in Navigant Consulting's "Email Disclaimer" section at www.NavigantConsulting.com. Navigant Consulting, Inc. Company Registration Number: UK Ltd. 3641719 Registered in Delaware , USA Registered Office Address: 30 South Wacker Drive, Suite 3400, Chicago, Illinois 60606 2 Sarah Simmons↵ From: Sarah Simmons↵ Sent: January-16-09 8:44 AM↵ To: Jim MacDougall; 'jdalton@poweradvisoryllc.com'; Alexander Forstner↵ Cc: Patricia Lightburn↵ Subject: RE: Final report↵ To follow - up with Jim ’ s comments, SunVolts was chosen as the preferred vendor for the Halton Residential Solar⌧ Project. Pricing and other details of the systems can be found here: http://www.thehen.net/images/stories/hrsp_onepage_sunvolts_oct08.pdf⌧ More info on the Halton Residential Solar Project can be found here: http://www.the- hen.net/index.php?⌧ option=com_content&task=section&id=21&Itemid=91⌧ Cheers,⌧ Sarah⌧ Sarah Simmons↵ Analyst⌧ Electricity Resources⌧ Ontario Power Authority⌧ 120 Adelaide St. W. Suite 1600⌧ Toronto , ON , M5H 1T1⌧ Tel 416.969.6213⌧ Fax 416.967.1947⌧ www.powerauthority.on.ca⌧ P please consider the environment before printing this email↵ From: Jim MacDougall Sent: January 15, 2009 4:47 PM To: 'jdalton@poweradvisoryllc.com'; Alexander Forstner Cc: Sarah Simmons; Patricia Lightburn Subject: RE: Final report Looks good John;⌧ I still get hearburn over residential PV.⌧ We pulled an ad from SunVolts using Sanyo panels and Xantrex inverters at about $8/W for 100 systems in Halton …⇤ In any event, we will likely go lower than is currently in the Navigant report for our derivation of FIT pricing, certainly⌧ for residential.⌧ Sarah, take a look at the 2008, 2010 and 2015 prices to confirm your assumed digression rates in the model.⌧ Jim MacDougall, P.Eng.↵ Manager, Distributed Generation⌧ Electricity Resources⌧ Ontario Power Authority⌧ 3 120 Adelaide St W, Suite 1600⌧ Toronto , ON M5H 1T1 , Canada⌧ tel 416.969.6415⌧ From: jdalton@poweradvisoryllc.com [mailto:jdalton@poweradvisoryllc.com] Sent: January 14, 2009 6:01 PM To: Alexander Forstner; Jim MacDougall Subject: Fw: Final report I'll take a look as well.⇤ I assume that this is a final draft.⌧ ----- Original Message ----- From: Andrew Kinross⌧ To: John Dalton⌧ Cc: Todd Williams ; Wesley Stevens ; Lisa Frantzis ; Alex Payne⌧ Sent: Wednesday, January 14, 2009 3:23 PM⌧ Subject: Final report⌧ John,⌧ Attached is our final report. As you requested, I've kept the "draft" label. The first file shows all the changes we've⇤ made since we talked last; the second file is a clean version with all changes accepted.⇤ The main things we've done are as follows:⌧ - incorporated our comments to your questions⌧ - added Section 2.1.2 on the "low low" end of Central Ground Mount Installed System Prices (we used $4.50/W in 201 0 and $3.00/W in 201 5). Keep in mind that certain unanticipated technology breakthroughs and/or commercial⇤ scale- ups and/or scale economies through faster- than - anticipated market growth need to occur for these prices to be achieved.⌧ - modified our December 2008 low end of central ground mount to $5.50/W from $6.00/W based on information that⌧ we have learned⌧ - added some news items that have occured (i.e. Day4 Energy laid of 95 employees (34% of total headcount) and OptiSolar laid of 300 employees (50% of total headcount) in January 2009)⌧ Let me know if there are any questions/clarifications.⌧ Best regards,⌧ Andrew⌧ _______________________⇥ Andrew Kinross Director Energy Navigant Consulting, Inc.⌧ 77 South Bedford Drive Burlington , MA 01760⇢ Office: 781- 270 - 8486 Mobile: 508 - 740 - 9638 Fax: 781 - 270 - 0418⇢ akinross@navigantconsulting.com⇢ Assistant: Karen Mahoney Phone: 781 - 270 - 8353 kmahoney@navigantconsulting.com⇢ www.navigantconsulting.com⇢ Navigant Consulting named "Best Advisory – Renewable Energy" in the 9th Annual Environmental Finance and Carbon Finance Market Survey. 4 This communication is from Navigant Consulting Inc. E- mail text or attachments may contain information which is confidential and may also be privileged. This communication is for the exclusive use of the intended recipient(s). If⌧ you have received this communication in error, please return it with the title "received in error" to⌧ NCISecurity@navigantconsulting.com, and then delete the email and destroy any copies of it. In addition, this communication is subject to, and incorporates by reference, additional disclaimers found in Navigant Consulting's "Email Disclaimer" section at www.NavigantConsulting.com. Navigant Consulting, Inc.⌧ Company Registration Number: UK Ltd. 3641719⌧ Registered in Delaware , USA⌧ Registered Office Address: 30 South Wacker Drive, Suite 3400, Chicago, Illinois 60606⌧ 5 Robert Cary↵ From: Robert Cary↵ Sent: January-31-09 12:01 PM↵ To: 'Smith, Elliot'; 'Sadikman, Jacob'; Jason Chee-Aloy; 'John Dalton'; Jim↵ MacDougall; Patricia Lightburn↵ Cc: 'Sebastiano, Rocco'↵ Subject: HLD update incorporating proposed contract framework for 2-staged connection↵ assessment etc↵ Attachments: FIT HLD Draft 2009 01 18 RC 2009 01 30.doc↵ Group,⌥ Please see an update to the HLD. Changes are generally tracked. In a few places I missed the tracking, so they are highlighted.⌥ Not Responsive 6 Not Responsive Not Responsive Not Responsive Not Responsive 11 DRAFT FEED-IN TARIFF (FIT) PROGRAM HIGH LEVEL DESIGN ONTARIO POWER AUTHORITY JANUARY 20, 2009 RC markup 2009 01 30& 12 Table of Contents 1.0 INTRODUCTION ................................................................................................... 6✏ 1.1 Background .......................................................................................................... 6 1.1.1 FIT Program Assisting Ontario Government’s Plans for a ‘Green’⇠ Economy 6 1.1.2 FIT Program Definition............................................................................. 6 1.1.3 Green Energy Act, 2009 ............................................................................ 7 1.1.4 Renewable Energy Supply Integration Team (RESIT) ............................. 8 2.0 FIT PROGRAM SCOPE ......................................................................................... 9 2.1 Benefits and Objectives........................................................................................ 9 3.0 HIGH-LEVEL DESIGN OVERVIEW.................................................................. 10 3.1 FIT Program Overview ...................................................................................... 10 3.1 High-Level Design Overview ............................................................................ 11 3.1.1 Qualified Generation Resources.............................................................. 11 3.1.2 Integration with IPSP and Other Resource Developments ..................... 11 3.1.3 FIT Price Schedule .................................................................................. 12 3.1.4 Generation Resource Eligibility Requirements ....................................... 12 3.1.5 Application Process ................................................................................. 13 3.1.6 OPA Procurement Contract..................................................................... 13 4.0 QUALIFIED GENERATION RESOURCES ....................................................... 14 5.0 INTEGRATION WITH IPSP AND OTHER RESOURCE DEVELOPMENTS . 16 5.1 Assessing Conservation and Generation Developments .................................... 17 5.2 Assessing Transmission and Distribution through Resource Integration .......... 17 5.3 Establishing FIT Program Targets ..................................................................... 18 5.4 Re-establishing FIT Program Targets ................................................................ 19 6.0 FIT PRICING SCHEDULE................................................................................... 20 6.1 Introduction ........................................................................................................ 20 6.2 Pricing Methodology........................................................................................ 20 6.3 Degression Rates ................................................................................................ 21 6.4 Tranche Sizes ..................................................................................................... 21 6.5 FIT Price Schedule ............................................................................................. 21 6.6 Price Reviews ..................................................................................................... 22 6.7 Alternative Procurement Approaches ................................................................ 22 7.0 FIT ELIGIBILITY AND REQUIREMENTS ....................................................... 22 7.1 Overview of Generation Resource Eligibility Requirements............................. 22 7.1.1 Renewable Energy Supply Resource ...................................................... 23 7.1.2 Located in Ontario................................................................................... 23 7.1.3 Technology defined in FIT Price Schedule ............................................. 23 7.1.4 New Build, Upgrade or Expansion ......................................................... 23 7.1.5 Program Transmission Availability ........................................................ 24 7.1.6 Metering Requirements ........................................................................... 24 7.1.7 Eligibility of Projects with Existing Contracts........................................ 24 7.1.8 Phased Development ............................................................................... 24 7.1.9 CIA and SIA Requirements .................................................................... 25 January 18,&2009 Draft& 2 13 7.2 Contract prerequisites......................................................................................... 25 7.2.1 Environmental Assessment (Class B and C Projects) ............................. 25 7.2.2 Apply for Municipal Approvals (Class B and C projects) ...................... 25 7.2.3 Site Control (all projects) ........................................................................ 25 7.2.4 Resource Plan (all projects 1 MW and greater) ...................................... 25 7.2.5 Financing Plan (all Class C projects) ...................................................... 26 8.0 FIT APPLICATION PROCESS ............................................................................ 26 8.1 Before submitting an application to the OPA .................................................... 26 8.1.1 Responsibility for completeness and eligibility of application ............... 26 8.1.2 Application requirements ........................................................................ 27 8.2 Submitting an application to the OPA................................................................ 27 8.2.1 Content of application form .................................................................... 27 8.2.2 Supporting information attached to application form: ............................ 28 8.2.3 Application fee ........................................................................................ 28 8.2.4 Form of application ................................................................................. 28 8.2.5 Assignment of application number and date ........................................... 28 8.2.6 Application control.................................................................................. 28 8.3 OPA application review ..................................................................................... 29 8.3.1 Initial review for completeness ............................................................... 29 8.3.2 Timeline and sequence of reviews .......................................................... 29 8.3.3 Amendment of application ...................................................................... 30 8.3.4 Withdrawal of application ....................................................................... 30 8.3.5 Requests for clarification or additional information ............................... 30 8.3.6 Review for compliance and target levels ................................................ 30 8.4 Status and OPA notification of application outcome ......................................... 30 8.4.1 Fully accepted applications ..................................................................... 30 8.4.2 Partially accepted applications ................................................................ 30 8.4.3 Applications rejected for exceeding target .............................................. 31 8.4.4 Applications rejected for other reasons ................................................... 31 8.5 Execution of contract ......................................................................................... 32 8.5.1 Timeline .................................................................................................. 32 8.5.2 Process for execution .............................................................................. 32 8.5.3 Failure to execute .................................................................................... 32 8.6 Program initialization provisions ....................................................................... 32 Reference to Appendix 2 or include all initialization provisions here...................... 32 9.0 OPA PROCUREMENT CONTRARCT: STANDARD PROVISIONS ............... 33 9.1 General principles .............................................................................................. 33 9.1.1 Family of contracts.................................................................................. 33 9.1.2 Parties ...................................................................................................... 34 9.1.3 IESO requirements .................................................................................. 34 9.2 Term ................................................................................................................... 34 9.3 Laws, regulations and IESO-Administered Market requirements ..................... 35 9.3.1 Compliance obligations ........................................................................... 35 9.3.2 IESO obligations in respect of distribution-connected and load-connected✏ contract facilities ....................................................................................................... 35 9.3.3 Changes to laws, regulations, Market Rules, etc..................................... 36 January 18, 2009 Draft 3 14 9.4 Development and operation of facility ............................................................... 36 9.4.1 General .................................................................................................... 36 9.4.2 No removal before term .......................................................................... 36 9.5 Connection and transmission/distribution upgrades .......................................... 37 9.5.1 Smallest distribution connected projects................................................. 37 9.5.2 Large projects & transmission connected projects.................................. 37 9.5.3 Connection in advance of distribution or transmission upgrades ........... 37 9.5.4 Commercial operation in advance of distribution or transmission✏ upgrades 37 9.6 Connection cost allocation ................................................................................. 37 9.7 Contract Milestones............................................................................................ 38 9.8 Metering ............................................................................................................. 39 9.8.1 Metering point ......................................................................................... 39 9.8.2 General requirements: ............................................................................. 39 9.8.3 Consolidation of output metering............................................................ 39 9.8.4 Metering provisions for small and medium Contract Facilities .............. 40 9.8.5 IESO Administered Market metering provisions applicable to large Contract Facilities ..................................................................................................... 40 9.9 Commercial operation ........................................................................................ 40 9.9.1 Definition of Commercial Operation Date .............................................. 40 9.9.2 Demonstration of Commercial Operation ............................................... 40 9.9.3 Operations before Commercial Operation Date ...................................... 40 9.10 Operating covenants ....................................................................................... 41 9.11 Dispatch (including constrained off rights for larger projects) ...................... 41 9.11.1 IESO Dispatch rights............................................................................... 41 9.11.2 Compensation for being constrained off ................................................. 41 9.12 Maintenance scheduling coordination rights (for larger projects).................. 41 9.13 Insurance......................................................................................................... 42 9.14 Compliance with laws and regulations ........................................................... 42 9.15 Related products and environmental attributes .............................................. 42 9.16 Settlements and payments .............................................................................. 42 9.16.1 Basis of payment ..................................................................................... 42 9.16.2 Price escalation........................................................................................ 42 9.16.3 WPPI & RPPI .......................................................................................... 43 9.16.4 Taxes ....................................................................................................... 43 9.16.5 Related Products and Future Contract Related Products ........................ 44 9.16.6 Means of payment ................................................................................... 44 9.17 Operating and performance incentives ........................................................... 44 9.18 Credit and security requirements .................................................................... 44 9.18.1 OPA project completion security tranche 1 ............................................ 44 9.18.2 OPA project completion security tranche 2 ............................................ 45 9.18.3 OPA project operations security ............................................................. 45 9.18.4 Events triggering claim on security......................................................... 45 9.18.5 Form of security ...................................................................................... 45 9.19 Representations of the Supplier and the OPA ................................................ 45 9.20 Confidentiality ................................................................................................ 46 January 18, 2009 Draft 4 15 9.21 Termination and default✏ .................................................................................. 46✏ 9.21.1 Events of Supplier default before COD .................................................. 46 9.21.2 Events of Supplier default after COD ..................................................... 46 9.21.3 Notice & remedy provisions ................................................................... 46 9.21.4 OPA rights arising from un-remedied default ......................................... 47 9.22 Force majeure ................................................................................................. 47 9.22.1 Before Commercial Operation Date........................................................ 47 9.22.2 After Commercial Operation Date .......................................................... 47 9.23 Lender’s rights ................................................................................................ 47 9.24 Discriminatory action ..................................................................................... 48 9.25 Liability and indemnification ......................................................................... 48 9.26 Contract operation and administration ........................................................... 48 9.27 Dispute resolution ........................................................................................... 48 9.28 Assignment and change of control ................................................................. 49 Appendix A1, Connections ......................................................................................... 50 A1.1. Purpose of this appendix................................................................................. 50 A2.2. General principles for queue management ..................................................... 50 A2.1 Initial queue position and integration with non-FIT projects.................. 50 A2.2 First-ready, first served ........................................................................... 50 A2.3 Interaction between transmission and distribution.................................. 51 A2.4 Legacy queue projects ............................................................................. 51 A1.3 Queue management, transmission and distribution connected projects ......... 52 A1.3.1 Transmission connected projects ............................................................ 52 A1.3.2 Distribution connected projects without transmission implications ....... 52 A1.3.3 Distribution connected projects with transmission implications............. 52 A1.3.4 Relationship with OPA contract milestones............................................ 52 A1.3.5 Summary table for non-hydraulic FIT projects ....................................... 53 Timeliness for Dx and Tx Connected > 1 MW Non-Waterpower Projects (note 1) ........ 53 A1.3.6 Hydraulic project milestones................................................................... 54 A1.4 Cost allocation, transmission connected projects ........................................... 55 A1.4.1 Connection costs ..................................................................................... 55 A1.4.2 Network upgrades ................................................................................... 56 A1.4.3 Enabler lines ............................................................................................ 56 A1.5 Cost allocation, distribution connected projects ............................................. 56 A1.5.1 Without transmission implications.......................................................... 56 A1.5.2 With transmission implications ............................................................... 56 A1.5.3 Distributors’ cost recovery ...................................................................... 56 Appendix A2.0 FIT program initialization ................................................................... 57 A2.1 Purpose of this appendix................................................................................. 57 A2.2 Initialization concerns to be addressed ........................................................... 57 A2.2.1 Equity among applicants ......................................................................... 57 A2.2.2 OPA Workload and target 60 day timeline ............................................. 57 A2.2.3 Website overload ..................................................................................... 57 A2.2.4 Application controls to resolve (a), (b) and (c). ...................................... 58 A2.2.5 Secondary market concerns? ................................................................... 58 Appendix 3.0 IESO changes identified.......................................................................... 58 January 18,&2009 Draft& 5 16 A3.1 Purpose of this appendix................................................................................. 58 A3.2 Connection assessment and queue management ............................................ 59 A3.3 Distribution-connected generation provisions ................................................ 59 A3.3.1 Non-participant generator monitoring..................................................... 59 A3.3.2 Forecasting .............................................................................................. 59 A3.3.3 Maintenance scheduling .......................................................................... 59 A3.3.4 Curtailment.............................................................................................. 59 Not Responsive 17 Not Responsive Not Responsive ⇥ Main recommendations from the RESIT: Not Responsive o Establish a FIT price schedule that enables development of a broad range✏ of projects but still consider customized procurement processes for large✏ renewable energy supply projects (e.g., solar PV farms, large on- and offshore wind, large hydro, storage) January 18, 2009 Draft 8 19 ⇥ The above recommendations trigger subsequent work to be led by various✏ members of the RESIT o OPA: develop and consult FIT Program rules, contracts and price✏ schedule; continue chairing RESIT to ensure effective Program✏ development and implementation Not Responsive 20 Not Responsive Not Responsive 3.1.3 FIT Price Schedule ⇥ The FIT Price Schedule shall categorize all eligible renewable energy supply✏ resources by size and technology where specific prices will be applied to the✏ respective size/technology category ⇥ Prices may re-calibrate or adjust over the life of a procurement contract based on✏ the applicable Program rules (e.g., degression, etc.)✏ ⇥ The FIT Price Schedule may be amended in accordance with the applicable Program rules (e.g., definition of technologies, changes to size classification,✏ price levels, pricing methodologies, etc.) Not Responsive 23 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 6.0 6.1 FIT PRICING SCHEDULE Introduction✏ ⇥ This section outlines the proposed approach for establishing contract prices for✏ each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and✏ proponents (e.g., recognizing the unique circumstances of community-based✏ projects) to promote broad participation in the program. This will allow for✏ development over the full range of cost-effective project sizes and technologies. 6.2 Pricing Methodology ⇥ The proposed FIT pricing model is based on project costs plus a reasonable rate of✏ return. Prices account for the following components: o o o o o ⇥ Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return.✏ Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from✏ reliable sources with transparent assumptions, which can be updated as✏ appropriate and necessary. ⇥ Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index. PV prices are constant and don’t escalate. ⇥ Pricing adders to applicable FITs will be applied to projects that meet specific policy objectives, for example priority proponents (i.e., community-based projects) or domestic content. These pricing adders are discussed below. ⇥ Given that project costs can vary significantly depending on site conditions,✏ proponent experience and the cost and performance characteristics of the various✏ technologies, the FIT prices are based on lower cost projects. This incents the✏ development of the lowest cost projects and mitigates the cost risks to Ontario✏ consumers. As outlined below, under the FIT pricing model rates (prices) will be✏ reassessed if market uptake is well below expectations. To the degree that prices✏ are higher than required by efficient renewable energy supply projects, then✏ supply is likely to exceed near term connection and transmission limits, resulting✏ in increased inefficiencies. January 18, 2009 Draft 20 31 6.3 Degression Rates ⇥ PV projects contract price will decline by 10% per year with the price fixed based✏ on the contract application date. The initial year contract prices for other✏ technologies will escalate with inflation as measured by the consumer price index. The OPA will reserve the right to modify contract prices for future years (but with✏ no impact on any FIT projects that have applied for or executed contracts with the✏ OPA) to reflect major changes in foreign exchange rates and other variables that✏ have a dramatic impact on the cost of FIT projects. 6.4 Tranche Sizes ⇥ The tranche sizes for different technologies will consider the “inflection points” at⇠ which the costs of projects change significantly. However, FIT tranche sizes will be presented only for economically viable project sizes, recognizing that in some✏ instance smaller projects are better suited to specific applications (e.g., residential✏ PV projects are limited by available rooftop space and are sized to serve the loads✏ of participating customers). ⇥ The tranche sizes will be based on the sizes of typical renewable energy supply✏ projects that participated in the RESOP and “cutpoints” that are used in other⇠ renewable energy supply programs. The OPA will monitor the number of projects that are developed for the different size tranches and adjust the✏ “cutpoints” for tranches as necessary to meet program objectives. 6.5 FIT Price Schedule✏ ⇥ The FIT price schedule for each of the applicable technologies and tranche sizes is presented below. INSERT PRICE SCHEDULE ⇥ The prices shown in the table assume a flat output profile. Projects that can schedule their output and reliably operate during On-Peak Hours (11 am to 7 pm✏ ET) will receive a time differentiated price that will offer a higher return than✏ realized by projects that aren’t capable of scheduling their output. Intermittent generation projects are not eligible for this payment option. These prices will be✏ set so that Suppliers with schedulable renewable energy supply projects that don’t⇠ produce a higher proportion of their total output during peak periods will realize✏ lower returns. ⇥ [An Option] Community-based projects will receive a higher FIT price to✏ compensate them for their inability to utilize the tax benefits realized by for-profit projects. This benefit will vary for the different technologies, but for large wind✏ projects this represents about $10/MWh. January 18, 2009 Draft 21 32 ⇥ The contract payments for a generator that is connected to a load will be reduced✏ to account for the portion of the total generation that is consumed by the load. The amount of the reduction will be determined by the product of the amounts of✏ generation consumed by the load and the Hourly Ontario Energy Price for nonRPP customers and the RPP for RPP eligible customers. Where the resulting price✏ is negative, payments shall be made by the generator to the OPA. 6.6 Price Reviews ⇥ A primary objective of the FIT program is to provide stability that facilitates local✏ investment in renewable energy technology production facilities. As such, FIT✏ prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual (application /✏ contract ?) capacity targets for specific technologies are exceeded. For example✏ with a large PV (>1 MW) target of 100 MW per year, if the OPA contracts for✏ greater than 100 MW of large PV in any 12 month period then it will reassess✏ prices for large PV projects. 6.7 Alternative Procurement Approaches ⇥ For renewable energy supply technologies where there is limited experience that✏ can be used to estimate the technologies’ costs (e.g., off-shore wind) or where✏ costs and performance can vary widely based on site specific conditions (e.g.,✏ large water power and pumped storage) alternative procurement approaches will be used. These alternative procurement approaches will include RFPs where✏ there are a significant number of prospective suppliers that can satisfy the✏ identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. Not Responsive 33 7.1.3 ⇥ Technology defined in FIT Price Schedule Meet one of the categories as defined in the FIT price schedule. The eligible✏ renewable energy supply resource and the gross nameplate capacity for the projects must be specified, consistent and included in both: ⇥ ⇥ ⇥ the associated Connection or System Impact Assessment, the FIT application documentation Renewable energy supply projects that are specifically excluded from✏ participating in the FIT include large on-shore wind projects (greater than 50✏ MW); large hydroelectric projects (greater than 20 MW); off-shore wind projects; and pumped storage hydroelectric projects. Not Responsive 34 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 9.16 Settlements and payments Ref RESOP sections 4.3 to 4.6 REF RES III articles 3 & 5 Escalation percentage may be differentiated by technology Means of payment (LDC vs IESO-OPA) will be differentiated by scale for large projects Parameters to be included in schedule 3, referenced from here. 9.16.1 Basis of payment ⇥ ⇥ All primary payments are energy based. Payments for related products, etc may be based on other metrics. 9.16.2 Price escalation ⇥ The energy price paid in any year is based on January 18, 2009 Draft 42 53 o Base Price in effect on the Contract Base Date, 20% escalated each✏ calendar year @ CPI ⇥ ⇥ Note that RES III is only 15% escalated Note that RESOP includes a year-on-year price ratchet. I5 would suggest the CPI escalator be always referenced back to5 the base date.5 o All contracts within the same price review period are therefore priced✏ identically (subject to size & technology) ⇥ Contract Base Date for price could be o FIT contract Application Date per applicant (recommended) Provides maximum certainty at time of application; may encourage5 delay or acceleration of application in advance of a price change date5 (with implications for the notice to be given of price changes) o Application acceptance date5 Leaves applicant exposed (positively or negatively) to price changes5 during the application process, and OPA able to adjust acceptance5 date according to price changes it is about to announce o Contract Date Leaves applicant exposed to price changes up to contract execution,5 and gives some applicants flexibility to delay signing past a price5 change date o COD5 Maximum exposure for applicants ⇥ – difficult to finance Recommendation is to use the FIT contract Application Date. Not Responsive 54 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft Jim MacDougall From: Jim MacDougall Sent: February-05-09 10:36 AM To: Sarah Simmons Cc: Patricia Lightburn; 'John Dalton' Subject: RE: pv farms I think at the end of the day it ’s a judgement call wrt rate impacts.⇡ How does Alex get 3000 -8000 MW? What kind of policy environment does that look like?⇢ Can you put down some scenarios (from the two that we discussed (low and high (700- 1500) and then add a few more like 2500⇡ and 5000 MW?⇡ I would suggest a market growth curve to arrive at these numbers, but would still apply price decline based on MW contracted.⇢ I still support fast price decline for PV – maybe 8 -9% per 100 -200 MW (depending on ultimate goal.)⇡ We need some rate impacts from Simon so can you please construct the scenarios (say the 4 above) apply the 42 cent start price and decline at 8% for all scenarios.⇡ What about:⇡ 700 MW drop price every 75 MW⇡ 1500 MW – drop price every 100 MW but trigger for price reduction growing by 10% per reduction⇡ 2500 MW drop price every 150 MW but trigger for price reduction growing by 10% per reduction⇡ 5000 MW drop price every 200 MW trigger for price reduction growing by 10% per reduction⇡ And get a range of rate impact numbers⇡ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St W, Suite 1600⇡ Toronto , ON M5H 1T1 , Canada⇡ tel 416.969.6415⇡ From: Sarah Simmons Sent: February 5, 2009 9:22 AM⇠ To: Jim MacDougall⇠ Subject: FW: pv farms⇠ Morning Jim,⇡ I’ m comfortable with the strategy in terms of roof- top PV. However, I feel like I’ ve hit a bit of a road block with the solar pv strategy with respect to farms.⇡ I met with Alex yesterday afternoon to discuss his recent ranges for solar pv farms. The range of Achievable Potential is⇢ between 3000 MW and 8000 MW. He recognizes that he has many assumptions that are affecting these results.⇢ Basically, I’m l not sure what range I should propose in my strategy given these results. I want to say something like:⇢ although there is 3000 -8000 MW that is achievable growing the industry in this way is unlikely because:⇡ ¡ industry is still developing⇡ ¡ cost to rate payer is significant.⇡ 71 I’ m stumbling a bit with the “ cost to rate payers”. Simon done some analysis for the roof- top PV, but given that we don ’ t know⇡ what the FIT price will be, I’m not to sure we will get accurate results.⇡ I know we want to do the price decline for PV farms based on MW and not on year… but, I ’m struggling to determine how big the capacity segments should be and how much the decline should be.⇢ I’ ll play around with the numbers some more and let you know what I come up with.⇡ Talk to you soon,⇡ Sarah Simmons Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON, M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email✓ From: Alexander Forstner⇠ Sent: February 4, 2009 10:41 AM⇠ To: Sarah Simmons⇠ Subject: RE: pv farms⇠ I’ve just finished making this. The upper estimate is the base assumptions with a few modification in the model to make this⇢ more appropriate for farms. The land area was varied until the 2008- 2011 values were reasonably close to the RESOP numbers. The lower bound adjusts the land area until the model output is close to 25% of the RESOP estimates. This is⇢ therefore reflective of the uncertainty in the available land area and the attrition rate for RESOP. I’ m going to apply more sensitivities to this now and I’ ll keep you posted.⇡ Alexander Forstner⇡ Planning Analyst 72 T: 416- 939- 6387⇡ F: 416- 967- 1947⇡ E: alexander.forstner@powerauthority.on.ca⇡ From: Sarah Simmons Sent: February 4, 2009 10:34 AM⇠ To: Alexander Forstner⇠ Subject: pv farms⇠ Hey,⇡ Have you any idea of ranges for PV farms? Even roughly?⇢ Sarah Simmons Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON, M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email✓ 73 Jim MacDougall From: Jim MacDougall Sent: February-13-09 8:16 AM To: Robert Cary; 'Smith, Elliot'; 'Sadikman, Jacob'; Jason Chee-Aloy; 'John Dalton'; Patricia Lightburn Cc: 'Sebastiano, Rocco' Subject: RE: HLD update incorporating proposed contract framework for 2-staged connection assessment etc Attachments: FIT HLD Draft RC JM 2009 02 13.doc Attached is the current version of the HLD. Not Responsive 74 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive DRAFT FEED-IN TARIFF (FIT) PROGRAM HIGH LEVEL DESIGN ONTARIO POWER AUTHORITY JANUARY 20, 2009 RC markup 2009 01 30& 80 Table of Contents 1.0 INTRODUCTION ................................................................................................... 6✏ 1.1 Background .......................................................................................................... 6 1.1.1 FIT Program Assisting Ontario Government’s Plans for a ‘Green’⇠ Economy 6 1.1.2 FIT Program Definition............................................................................. 6 1.1.3 Green Energy Act, 2009 ............................................................................ 7 2.0 FIT PROGRAM SCOPE ......................................................................................... 8 2.1 Benefits and Objectives........................................................................................ 8 3.0 HIGH-LEVEL DESIGN OVERVIEW.................................................................... 9 3.1 FIT Program Overview ........................................................................................ 9 3.1 High-Level Design Overview ............................................................................ 10 3.1.1 Qualified Generation Resources.............................................................. 10 3.1.2 Integration with IPSP and Other Resource Developments ..................... 10 3.1.3 FIT Price Schedule .................................................................................. 10 3.1.4 Generation Resource Eligibility Requirements ....................................... 11 3.1.5 Application Process ................................................................................. 11 3.1.6 OPA Procurement Contract..................................................................... 12 4.0 QUALIFIED GENERATION RESOURCES ....................................................... 13 5.0 INTEGRATION WITH IPSP AND OTHER RESOURCE DEVELOPMENTS . 15 5.1 Assessing Conservation and Generation Developments .................................... 15 5.2 Assessing Transmission and Distribution through Resource Integration .......... 16 5.3 Establishing FIT Program Targets ..................................................................... 17 5.4 Re-establishing FIT Program Targets ................................................................ 18 6.0 FIT PRICING SCHEDULE................................................................................... 19 6.1 Introduction ........................................................................................................ 19 6.2 Pricing Methodology........................................................................................ 19 6.3 Degression Rates ................................................................................................ 20 6.4 Tranche Sizes ..................................................................................................... 20 6.5 FIT Price Schedule ............................................................................................. 20 6.6 Price Reviews ..................................................................................................... 21 6.7 Alternative Procurement Approaches ................................................................ 21 7.0 FIT ELIGIBILITY AND REQUIREMENTS ....................................................... 22 7.1 Overview of Generation Resource Eligibility Requirements............................. 22 7.1.1 Renewable Energy Supply Resource ...................................................... 22 7.1.2 Located in Ontario................................................................................... 22 7.1.3 Technology defined in FIT Price Schedule ............................................. 22 7.1.4 New Build, Upgrade or Expansion ......................................................... 23 7.1.5 Program Transmission Availability ........................................................ 23 7.1.6 Metering Requirements ........................................................................... 23 7.1.7 Eligibility of Projects with Existing Contracts........................................ 23 7.1.8 Phased Development ............................................................................... 24 7.1.9 CIA and SIA Requirements .................................................................... 24 7.2 Contract prerequisites......................................................................................... 24 January 18,&2009 Draft 2 81 7.2.1 Environmental Assessment (Class B and C Projects) ............................. 24✏ 7.2.2 Apply for Municipal Approvals (Class B and C projects) ...................... 24 7.2.3 Site Control (all projects) ........................................................................ 24 7.2.4 Resource Plan (all projects 1 MW and greater) ...................................... 25 7.2.5 Financing Plan (all Class C projects) ....... Error! Bookmark not defined. 8.0 FIT APPLICATION PROCESS ............................................................................ 25 8.1 Before submitting an application to the OPA .................................................... 25 8.1.1 Responsibility for completeness and eligibility of application ............... 25 8.1.2 Application requirements ........................................................................ 26 8.2 Submitting an application to the OPA................................................................ 26 8.2.1 Content of application form .................................................................... 26 8.2.2 Supporting information attached to application form: ............................ 27 8.2.3 Application fee ........................................................................................ 27 8.2.4 Form of application ................................................................................. 27 8.2.5 Assignment of application number and date ........................................... 27 8.2.6 Application control.................................................................................. 28 8.3 OPA application review ..................................................................................... 28 8.3.1 Initial review for completeness ............................................................... 28 8.3.2 Timeline and sequence of reviews .......................................................... 28 8.3.3 Amendment of application ...................................................................... 29 8.3.4 Withdrawal of application ....................................................................... 29 8.3.5 Requests for clarification or additional information ............................... 29 8.3.6 Review for compliance and target levels ................................................ 29 8.4 Status and OPA notification of application outcome ......................................... 30 8.4.1 Fully accepted applications ..................................................................... 30 8.4.2 Partially accepted applications ................................................................ 30 8.4.3 Applications rejected for exceeding target .............................................. 30 8.4.4 Applications rejected for other reasons ................................................... 31 8.5 Execution of contract ......................................................................................... 31 8.5.1 Timeline .................................................................................................. 31 8.5.2 Process for execution .............................................................................. 31 8.5.3 Failure to execute .................................................................................... 31 8.6 Program initialization provisions ....................................................................... 31 Reference to Appendix 2 or include all initialization provisions here...................... 31 9.0 OPA PROCUREMENT CONTRARCT: STANDARD PROVISIONS ............... 32 9.1 General principles .............................................................................................. 32 9.1.1 Family of contracts.................................................................................. 32 9.1.2 Parties ...................................................................................................... 33 9.1.3 IESO requirements .................................................................................. 33 9.2 Term ................................................................................................................... 34 9.3 Laws, regulations and IESO-Administered Market requirements ..................... 34 9.3.1 Compliance obligations ........................................................................... 34 9.3.2 IESO obligations in respect of distribution-connected and load-connected✏ contract facilities ....................................................................................................... 35 9.3.3 Changes to laws, regulations, Market Rules, etc..................................... 35 9.4 Development and operation of facility ............................................................... 35 January 18,&2009 Draft 3 82 9.4.1 General .................................................................................................... 35 9.4.2 No removal before term .......................................................................... 36 9.5 Connection and transmission/distribution upgrades .......................................... 36 9.5.1 Smallest distribution connected projects................................................. 36 9.5.2 Large projects & transmission connected projects.................................. 36 9.5.3 Connection in advance of distribution or transmission upgrades ........... 36 9.5.4 Commercial operation in advance of distribution or transmission✏ upgrades 37 9.6 Connection cost allocation ................................................................................. 37 9.7 Contract Milestones............................................................................................ 37 9.8 Metering ............................................................................................................. 38 9.8.1 Metering point ......................................................................................... 38 9.8.2 General requirements: ............................................................................. 38 9.8.3 Consolidation of output metering............................................................ 39 9.8.4 Metering provisions for small and medium Contract Facilities .............. 39 9.8.5 IESO Administered Market metering provisions applicable to large Contract Facilities ..................................................................................................... 39 9.9 Commercial operation ........................................................................................ 39 9.9.1 Definition of Commercial Operation Date .............................................. 39 9.9.2 Demonstration of Commercial Operation ............................................... 40 9.9.3 Operations before Commercial Operation Date ...................................... 40 9.10 Operating covenants ....................................................................................... 40 9.11 Dispatch (including constrained off rights for larger projects) ...................... 40 9.11.1 IESO Dispatch rights............................................................................... 40 9.11.2 Compensation for being constrained off ................................................. 40 9.12 Maintenance scheduling coordination rights (for larger projects).................. 41 9.13 Insurance......................................................................................................... 41 9.14 Compliance with laws and regulations ........................................................... 41 9.15 Related products and environmental attributes .............................................. 41 9.16 Settlements and payments .............................................................................. 41 9.16.1 Basis of payment ..................................................................................... 42 9.16.2 Price escalation........................................................................................ 42 9.16.3 WPPI & RPPI .......................................................................................... 42 9.16.4 Taxes ....................................................................................................... 42 9.16.5 Related Products and Future Contract Related Products ........................ 43 9.16.6 Means of payment ................................................................................... 43 9.17 Operating and performance incentives ........................................................... 43 9.18 Credit and security requirements .................................................................... 44 9.18.1 OPA project completion security tranche 1 ............................................ 44 9.18.2 OPA project completion security tranche 2 ............................................ 44 9.18.3 OPA project operations security ............................................................. 44 9.18.4 Events triggering claim on security......................................................... 44 9.18.5 Form of security ...................................................................................... 45 9.19 Representations of the Supplier and the OPA ................................................ 45 9.20 Confidentiality ................................................................................................ 45 9.21 Termination and default.................................................................................. 45 January 18, 2009 Draft 4 83 9.21.1 Events of Supplier default before COD .................................................. 45✏ 9.21.2 Events of Supplier default after COD ..................................................... 45 9.21.3 Notice & remedy provisions ................................................................... 46 9.21.4 OPA rights arising from un-remedied default ......................................... 46 9.22 Force majeure ................................................................................................. 46 9.22.1 Before Commercial Operation Date........................................................ 46 9.22.2 After Commercial Operation Date .......................................................... 47 9.23 Lender’s rights ................................................................................................ 47 9.24 Discriminatory action ..................................................................................... 47 9.25 Liability and indemnification ......................................................................... 47 9.26 Contract operation and administration ........................................................... 47 9.27 Dispute resolution ........................................................................................... 48 9.28 Assignment and change of control ................................................................. 48 Appendix A1, Connections ......................................................................................... 50 A1.1. Purpose of this appendix................................................................................. 50 A2.2. General principles for queue management ..................................................... 50 A2.1 Initial queue position and integration with non-FIT projects.................. 50 A2.2 First-ready, first served ........................................................................... 50 A2.3 Interaction between transmission and distribution.................................. 51 A2.4 Legacy queue projects ............................................................................. 51 A1.3 Queue management, transmission and distribution connected projects ......... 52 A1.3.1 Transmission connected projects ............................................................ 52 A1.3.2 Distribution connected projects without transmission implications ....... 52 A1.3.3 Distribution connected projects with transmission implications............. 52 A1.3.4 Relationship with OPA contract milestones............................................ 52 A1.3.5 Summary table for non-hydraulic FIT projects ....................................... 53 Timeliness for Dx and Tx Connected > 1 MW Non-Waterpower Projects (note 1) ........ 53 A1.3.6 Hydraulic project milestones................................................................... 54 A1.4 Cost allocation, transmission connected projects ........................................... 55 A1.4.1 Connection costs ..................................................................................... 55 A1.4.2 Network upgrades ................................................................................... 55 A1.4.3 Enabler lines ............................................................................................ 56 A1.5 Cost allocation, distribution connected projects ............................................. 56 A1.5.1 Without transmission implications.......................................................... 56 A1.5.2 With transmission implications ............................................................... 56 Distributors’ cost recovery ...................................................................... 56 A1.5.3 Appendix A2.0 FIT program initialization ................................................................... 57 A2.1 Purpose of this appendix................................................................................. 57 A2.2 Initialization concerns to be addressed ........................................................... 57 A2.2.1 Equity among applicants ......................................................................... 57 A2.2.2 OPA Workload and target 60 day timeline ............................................. 57 A2.2.3 Website overload ..................................................................................... 57 A2.2.4 Application controls to resolve (a), (b) and (c). ...................................... 58 A2.2.5 Secondary market concerns? ................................................................... 58 Appendix 3.0 IESO changes identified.......................................................................... 58 A3.1 Purpose of this appendix................................................................................. 58 January 18,&2009 Draft 5 84 A3.2 Connection assessment and queue management ............................................ 59 A3.3 Distribution-connected generation provisions ................................................ 59 A3.3.1 Non-participant generator monitoring..................................................... 59 A3.3.2 Forecasting .............................................................................................. 59 A3.3.3 Maintenance scheduling .......................................................................... 59 A3.3.4 Curtailment.............................................................................................. 59 A4.0 Micro-Scale Generation A5.0 Renewable Energy Supply Integration Team (RESIT) Not Responsive 85 Not Responsive Not Responsive ⇥ Other contracts will only be executed by the OPA if the following steps have been✏ met by the OPA and prospective project proponents: o For the initial FIT Program rules, contracts, and price schedule, the OPA✏ will prepare drafts of these documents and conduct stakeholder✏ consultation Not Responsive 88 Not Responsive 3.1.3 FIT Price Schedule ⇥ The FIT Price Schedule shall categorize all eligible renewable energy supply✏ resources by size and technology where specific prices will be applied to the✏ respective size/technology category ⇥ Prices may re-calibrate or adjust over time to reflect cost reductions or changes in✏ techniologies (e.g., degression, etc.) January 18, 2009 Draft 10 89 ⇥ The FIT Price Schedule may be amended in accordance with the applicable Program rules (e.g., definition of technologies, changes to size classification,✏ price levels, pricing methodologies, etc.) Not Responsive 90 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft 18 97 6.0 6.1 FIT PRICING SCHEDULE Introduction✏ ⇥ This section outlines the proposed approach for establishing contract prices for✏ each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and✏ proponents (e.g., recognizing the unique circumstances of community-based✏ projects) to promote broad participation in the program. This will allow for✏ development over the full range of cost-effective project sizes and technologies. 6.2 Pricing Methodology ⇥ The proposed FIT pricing model is based on project costs plus a reasonable rate of✏ return. Prices account for the following components: o o o o o ⇥ Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return.✏ Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from✏ reliable sources with transparent assumptions, which can be updated as✏ appropriate and necessary. ⇥ Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index. PV prices are constant and don’t escalate. ⇥ Pricing and eligibility for price categories may vary for projects that meet✏ specific policy objectives, for example priority proponents (i.e., community-based projects) or domestic content. .✏ ⇥ Given that project costs can vary significantly depending on site conditions,✏ proponent experience and the cost and performance characteristics of the various✏ technologies, the FIT prices are based on lower cost projects. This incents the✏ development of the lowest cost projects and mitigates the cost risks to Ontario✏ consumers. As outlined below, under the FIT pricing model rates (prices) will be✏ reassessed if market uptake is well below expectations. To the degree that prices✏ are higher than required by efficient renewable energy supply projects, then✏ supply is likely to exceed near term connection and transmission limits, resulting✏ in increased inefficiencies. January 18, 2009 Draft 19 98 6.3 Degression Rates ⇥ FIT pricing available to PV projects contract price will decline by 8-10% per✏ contracted capacity tranche or target. The price fixed based on the contract✏ execution date. The initial year contract prices for other technologies will✏ escalate with inflation as measured by the consumer price index. The OPA will reserve the right to modify contract prices for future years (but with no impact on✏ any FIT projects that have applied for or executed contracts with the OPA) to✏ reflect major changes in foreign exchange rates and other variables that have a✏ dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. 6.4 Tranche Sizes ⇥ The tranche sizes for different technologies will consider the “inflection points” at⇠ which the costs of projects change significantly. However, FIT tranche sizes will be presented only for economically viable project sizes, recognizing that in some✏ instance smaller projects are better suited to specific applications (e.g., residential✏ PV projects are limited by available rooftop space and are sized to serve the loads✏ of participating customers). ⇥ The tranche sizes will be based on the sizes of typical renewable energy supply✏ projects that participated in the RESOP and “cutpoints” that are used in other⇠ renewable energy supply programs. The OPA will monitor the number of projects that are developed for the different size tranches and adjust the✏ “cutpoints” for tranches as necessary to meet program objectives. 6.5 FIT Price Schedule✏ ⇥ The FIT price schedule for each of the applicable technologies and tranche sizes✏ is presented below. INSERT PRICE SCHEDULE ⇥ The prices shown in the table assume a flat output profile. Certain Renewable✏ technologies that can schedule their output and reliably operate during On-Peak Hours (11 am to 7 pm ET) will receive a time differentiated price that will offer a✏ higher return than realized by projects that aren’t capable of shifting their output. Intermittent generation projects are not eligible for this payment option. These✏ prices will be set so that Suppliers with schedulable renewable energy supply✏ projects that don’t produce a higher proportion of their total output during peak⇠ periods will realize lower returns. Specifically, waterpower and biomass projects✏ will be paid on the basis of the following formula: On peak payment = base FIT rate * 1.35 (for the 2000 5 X 8 business days) Off peak payment = base FIT rate * 0.9 (for the 6760 other hours) January 18, 2009 Draft 20 99 This allocation of hours and premiums leaves the develop almost revenue neutral relative✏ to earning the base FIT rate on a 7 X 24 production schedule. ⇥ [An Option] Community-based projects will receive a higher FIT price to✏ compensate them for their inability to utilize the tax benefits realized by for-profit projects. This benefit will vary for the different technologies, but for large wind✏ projects this represents about $10/MWh. This policy preference for community✏ based projects will be realized by only permitting such eligible projects to access✏ the <= 10 MW wind category. ⇥ The contract payments for a generator that is connected to a load will be reduced✏ to account for the portion of the total generation that is consumed by the load. The amount of the reduction will be determined by the product of the amounts of✏ generation consumed by the load and the Hourly Ontario Energy Price for nonRPP customers and the RPP for RPP eligible customers. Where the resulting price✏ is negative, payments shall be made by the generator to the OPA. Implementation✏ of smart meter TOU pricing is assumed to be a form of RPP pricing. 6.6 Price Reviews ⇥ A primary objective of the FIT program is to provide stability that facilitates local✏ investment in renewable energy technology production facilities. As such, FIT✏ prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual contract capacity✏ targets for specific technologies are exceeded. in addition with a large PV (>1✏ MW) target of 100 MW per year, if the OPA contracts for greater than 100 MW of large PV in any 12 month period then the FIT price will automatically be✏ reduced on a pre-determined schedule. 6.7 Alternative Procurement Approaches ⇥ For renewable energy supply technologies where there is limited experience that✏ can be used to estimate the technologies’ costs (e.g., off-shore wind) or where✏ costs and performance can vary widely based on site specific conditions (e.g.,✏ large water power and pumped storage) alternative procurement approaches will be used. These alternative procurement approaches will include RFPs where✏ there are a significant number of prospective suppliers that can satisfy the✏ identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. January 18, 2009 Draft 21 100 Not Responsive 7.1.3 ⇥ Technology defined in FIT Price Schedule Meet one of the categories as defined in the FIT price schedule. The eligible✏ renewable energy supply resource and the gross nameplate capacity for the projects must be specified, consistent and included in both: ⇥ ⇥ ⇥ the associated Connection or System Impact Assessment, the FIT application documentation Renewable energy supply projects that are specifically excluded from✏ participating in the FIT include large on-shore wind projects (greater than 50✏ MW); large hydroelectric projects (greater than 20 MW); off-shore wind projects; and pumped storage hydroelectric projects, and potentially large solar projects,✏ possible PV or CSP.. January 18, 2009 Draft 22 101 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Escalation percentage may be differentiated by technology Means of payment (LDC vs IESO-OPA) will be differentiated by scale for large projects Parameters to be included in schedule 3, referenced from here. 9.16.1 Basis of payment ⇥ ⇥ All primary payments are energy based. Payments for related products, etc may be based on other metrics. 9.16.2 Price escalation ⇥ The energy price paid in any year is based on o Base Price in effect on the Contract Base Date, 20% escalated each✏ calendar year @ CPI ⇥ ⇥ Note that RES III is only 15% escalated Note that RESOP includes a year-on-year price ratchet. I1 would suggest the CPI escalator be always referenced back to1 the base date.1 o All contracts within the same price review period are therefore priced✏ identically (subject to size & technology) ⇥ Contract Base Date for price could be o FIT contract Application Date per applicant (recommended) Provides maximum certainty at time of application; may encourage1 delay or acceleration of application in advance of a price change date1 (with implications for the notice to be given of price changes) o Application acceptance date1 Leaves applicant exposed (positively or negatively) to price changes1 during the application process, and OPA able to adjust acceptance1 date according to price changes it is about to announce o Contract Date Leaves applicant exposed to price changes up to contract execution,1 and gives some applicants flexibility to delay signing past a price1 change date o COD1 Maximum exposure for applicants ⇥ – difficult to finance Recommendation is to use the FIT contract Application Date. Not Responsive 121 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft 49 128 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft Not Responsive Not Responsive January 18, 2009 Draft 61 140 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: February-13-09 9:32 AM To: Jim MacDougall; Robert Cary; Smith, Elliot; Sadikman, Jacob; Jason Chee-Aloy; Patricia Lightburn Cc: Sebastiano, Rocco Subject: Re: HLD update incorporating proposed contract framework for 2-staged connection assessment etc Attachments: FIT HLD Draft 2009 01 18 RC 2009 02 13.doc Not Responsive 141 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⌘ ********************************************************************⌘ ********************************************************************⌘ This e-mail message is privileged, confidential and subject to⌘ copyright. Any unauthorized use or disclosure is prohibited.⌘ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⌘ ********************************************************************⌘ 147 DRAFT FEED-IN TARIFF (FIT) PROGRAM HIGH LEVEL DESIGN ONTARIO POWER AUTHORITY JANUARY 20, 2009 RC markup 2009 01 30& 148 Table of Contents 1.0 INTRODUCTION ................................................................................................... 6✏ 1.1 Background .......................................................................................................... 6 1.1.1 FIT Program Assisting Ontario Government’s Plans for a ‘Green’⇠ Economy 6 1.1.2 FIT Program Definition............................................................................. 6 1.1.3 Green Energy Act, 2009 ............................................................................ 7 1.1.4 Renewable Energy Supply Integration Team (RESIT) ............................. 8 2.0 FIT PROGRAM SCOPE ......................................................................................... 9 2.1 Benefits and Objectives........................................................................................ 9 3.0 HIGH-LEVEL DESIGN OVERVIEW.................................................................. 10 3.1 FIT Program Overview ...................................................................................... 10 3.1 High-Level Design Overview ............................................................................ 11 3.1.1 Qualified Generation Resources.............................................................. 11 3.1.2 Integration with IPSP and Other Resource Developments ..................... 11 3.1.3 FIT Price Schedule .................................................................................. 12 3.1.4 Generation Resource Eligibility Requirements ....................................... 12 3.1.5 Application Process ................................................................................. 13 3.1.6 OPA Procurement Contract..................................................................... 13 4.0 QUALIFIED GENERATION RESOURCES ....................................................... 14 5.0 INTEGRATION WITH IPSP AND OTHER RESOURCE DEVELOPMENTS . 16 5.1 Assessing Conservation and Generation Developments .................................... 17 5.2 Assessing Transmission and Distribution through Resource Integration .......... 18 5.3 Establishing FIT Program Targets ..................................................................... 19 5.4 Re-establishing FIT Program Targets ................................................................ 20 6.0 FIT PRICING SCHEDULE................................................................................... 21 6.1 Introduction ........................................................................................................ 21 6.2 Pricing Methodology........................................................................................ 21 6.3 Degression Rates ................................................................................................ 22 6.4 Tranche Sizes ..................................................................................................... 22 6.5 FIT Price Schedule ............................................................................................. 22 6.6 Price Reviews ..................................................................................................... 23 6.7 Alternative Procurement Approaches ................................................................ 23 7.0 FIT ELIGIBILITY AND REQUIREMENTS ....................................................... 23 7.1 Overview of Generation Resource Eligibility Requirements............................. 23 7.1.1 Renewable Energy Supply Resource ...................................................... 24 7.1.2 Located in Ontario................................................................................... 24 7.1.3 Technology defined in FIT Price Schedule ............................................. 24 7.1.4 New Build, Upgrade or Expansion ......................................................... 24 7.1.5 Program Transmission Availability ........................................................ 25 7.1.6 Metering Requirements ........................................................................... 25 7.1.7 Eligibility of Projects with Existing Contracts........................................ 25 7.1.8 Phased Development ............................................................................... 25 7.1.9 CIA and SIA Requirements .................................................................... 26 January 18,&2009 Draft 2 149 7.2 Contract prerequisites......................................................................................... 26 7.2.1 Environmental Assessment (Class B and C Projects) ............................. 26 7.2.2 Apply for Municipal Approvals (Class B and C projects) ...................... 26 7.2.3 Site Control (all projects) ........................................................................ 26 7.2.4 Resource Plan (all projects 1 MW and greater) ...................................... 26 7.2.5 Financing Plan (all Class C projects) ...................................................... 27 8.0 FIT APPLICATION PROCESS ............................................................................ 27 8.1 Before submitting an application to the OPA .................................................... 27 8.1.1 Responsibility for completeness and eligibility of application ............... 27 8.1.2 Application requirements ........................................................................ 28 8.2 Submitting an application to the OPA................................................................ 28 8.2.1 Content of application form .................................................................... 28 8.2.2 Supporting information attached to application form: ............................ 28 8.2.3 Application fee ........................................................................................ 29 8.2.4 Form of application ................................................................................. 29 8.2.5 Assignment of application number and date ........................................... 29 8.2.6 Application control.................................................................................. 29 8.3 OPA application review ..................................................................................... 30 8.3.1 Initial review for completeness ............................................................... 30 8.3.2 Timeline and sequence of reviews .......................................................... 30 8.3.3 Amendment of application ...................................................................... 30 8.3.4 Withdrawal of application ....................................................................... 31 8.3.5 Requests for clarification or additional information ............................... 31 8.3.6 Review for compliance and target levels ................................................ 31 8.4 Status and OPA notification of application outcome ......................................... 31 8.4.1 Fully accepted applications ..................................................................... 31 8.4.2 Partially accepted applications ................................................................ 31 8.4.3 Applications rejected for exceeding target .............................................. 32 8.4.4 Applications rejected for other reasons ................................................... 32 8.5 Execution of contract ......................................................................................... 32 8.5.1 Timeline .................................................................................................. 32 8.5.2 Process for execution .............................................................................. 33 8.5.3 Failure to execute .................................................................................... 33 8.6 Program initialization provisions ....................................................................... 33 Reference to Appendix 2 or include all initialization provisions here...................... 33 9.0 OPA PROCUREMENT CONTRARCT: STANDARD PROVISIONS ............... 34 9.1 General principles .............................................................................................. 34 9.1.1 Family of contracts.................................................................................. 34 9.1.2 Parties ...................................................................................................... 34 9.1.3 IESO requirements .................................................................................. 35 9.2 Term ................................................................................................................... 35 9.3 Laws, regulations and IESO-Administered Market requirements ..................... 36 9.3.1 Compliance obligations ........................................................................... 36 9.3.2 IESO obligations in respect of distribution-connected and load-connected✏ contract facilities ....................................................................................................... 36 9.3.3 Changes to laws, regulations, Market Rules, etc..................................... 37 January 18, 2009 Draft 3 150 9.4 Development and operation of facility ............................................................... 37 9.4.1 General .................................................................................................... 37 9.4.2 No removal before term .......................................................................... 37 9.5 Connection and transmission/distribution upgrades .......................................... 38 9.5.1 Smallest distribution connected projects................................................. 38 9.5.2 Large projects & transmission connected projects.................................. 38 9.5.3 Connection in advance of distribution or transmission upgrades ........... 38 9.5.4 Commercial operation in advance of distribution or transmission✏ upgrades 38 9.6 Connection cost allocation ................................................................................. 38 9.7 Contract Milestones............................................................................................ 38 9.8 Metering ............................................................................................................. 40 9.8.1 Metering point ......................................................................................... 40 9.8.2 General requirements: ............................................................................. 40 9.8.3 Consolidation of output metering............................................................ 40 9.8.4 Metering provisions for small and medium Contract Facilities .............. 40 9.8.5 IESO Administered Market metering provisions applicable to large Contract Facilities ..................................................................................................... 41 9.9 Commercial operation ........................................................................................ 41 9.9.1 Definition of Commercial Operation Date .............................................. 41 9.9.2 Demonstration of Commercial Operation ............................................... 41 9.9.3 Operations before Commercial Operation Date ...................................... 41 9.10 Operating covenants ....................................................................................... 42 9.11 Dispatch (including constrained off rights for larger projects) ...................... 42 9.11.1 IESO Dispatch rights............................................................................... 42 9.11.2 Compensation for being constrained off ................................................. 42 9.12 Maintenance scheduling coordination rights (for larger projects).................. 42 9.13 Insurance......................................................................................................... 42 9.14 Compliance with laws and regulations ........................................................... 43 9.15 Related products and environmental attributes .............................................. 43 9.16 Settlements and payments .............................................................................. 43 9.16.1 Basis of payment ..................................................................................... 43 9.16.2 Price escalation........................................................................................ 43 9.16.3 WPPI & RPPI .......................................................................................... 44 9.16.4 Taxes ....................................................................................................... 44 9.16.5 Related Products and Future Contract Related Products ........................ 44 9.16.6 Means of payment ................................................................................... 45 9.17 Operating and performance incentives ........................................................... 45 9.18 Credit and security requirements .................................................................... 45 9.18.1 OPA project completion security tranche 1 ............................................ 45 9.18.2 OPA project completion security tranche 2 ............................................ 46 9.18.3 OPA project operations security ............................................................. 46 9.18.4 Events triggering claim on security......................................................... 46 9.18.5 Form of security ...................................................................................... 46 9.19 Representations of the Supplier and the OPA ................................................ 46 9.20 Confidentiality ................................................................................................ 47 January 18, 2009 Draft 4 151 9.21 Termination and default✏ .................................................................................. 47✏ 9.21.1 Events of Supplier default before COD .................................................. 47 9.21.2 Events of Supplier default after COD ..................................................... 47 9.21.3 Notice & remedy provisions ................................................................... 47 9.21.4 OPA rights arising from un-remedied default ......................................... 48 9.22 Force majeure ................................................................................................. 48 9.22.1 Before Commercial Operation Date........................................................ 48 9.22.2 After Commercial Operation Date .......................................................... 48 9.23 Lender’s rights ................................................................................................ 48 9.24 Discriminatory action ..................................................................................... 49 9.25 Liability and indemnification ......................................................................... 49 9.26 Contract operation and administration ........................................................... 49 9.27 Dispute resolution ........................................................................................... 49 9.28 Assignment and change of control ................................................................. 50 Appendix A1, Connections ......................................................................................... 51 A1.1. Purpose of this appendix................................................................................. 51 A2.2. General principles for queue management ..................................................... 51 A2.1 Initial queue position and integration with non-FIT projects.................. 51 A2.2 First-ready, first served ........................................................................... 51 A2.3 Interaction between transmission and distribution.................................. 52 A2.4 Legacy queue projects ............................................................................. 52 A1.3 Queue management, transmission and distribution connected projects ......... 53 A1.3.1 Transmission connected projects ............................................................ 53 A1.3.2 Distribution connected projects without transmission implications ....... 53 A1.3.3 Distribution connected projects with transmission implications............. 53 A1.3.4 Relationship with OPA contract milestones............................................ 53 A1.3.5 Summary table for non-hydraulic FIT projects ....................................... 54 Timeliness for Dx and Tx Connected > 1 MW Non-Waterpower Projects (note 1) ........ 54 A1.3.6 Hydraulic project milestones................................................................... 55 A1.4 Cost allocation, transmission connected projects ........................................... 56 A1.4.1 Connection costs ..................................................................................... 56 A1.4.2 Network upgrades ................................................................................... 57 A1.4.3 Enabler lines ............................................................................................ 57 A1.5 Cost allocation, distribution connected projects ............................................. 57 A1.5.1 Without transmission implications.......................................................... 57 A1.5.2 With transmission implications ............................................................... 57 A1.5.3 Distributors’ cost recovery ...................................................................... 57 Appendix A2.0 FIT program initialization ................................................................... 58 A2.1 Purpose of this appendix................................................................................. 58 A2.2 Initialization concerns to be addressed ........................................................... 58 A2.2.1 Equity among applicants ......................................................................... 58 A2.2.2 OPA Workload and target 60 day timeline ............................................. 58 A2.2.3 Website overload ..................................................................................... 58 A2.2.4 Application controls to resolve (a), (b) and (c). ...................................... 59 A2.2.5 Secondary market concerns? ................................................................... 59 Appendix 3.0 IESO changes identified.......................................................................... 59 January 18,&2009 Draft 5 152 A3.1 Purpose of this appendix................................................................................. 59 A3.2 Connection assessment and queue management ............................................ 60 A3.3 Distribution-connected generation provisions ................................................ 60 A3.3.1 Non-participant generator monitoring..................................................... 60 A3.3.2 Forecasting .............................................................................................. 60 A3.3.3 Maintenance scheduling .......................................................................... 60 A3.3.4 Curtailment.............................................................................................. 60 Not Responsive 1.1.2 ⇥ FIT Program Definition Standardized procurement process to procure renewable energy supply✏ ⇥ Standard prices (i.e., FIT price schedule) By fuel type (e.g., wind, hydro, solar PV, biomass, etc.) 153 By size (e.g., revise to reflect technical price limits, which may differ from contract class limits defined above 0-10 kW, > 500 kW,✏ 0-10 MW, > 10 MW, etc.)✏ By application (e.g., roof-top solar PV, solar PV farm, etc.) Not Responsive 154 Not Responsive ⇥ Main recommendations from the RESIT: Not Responsive o Establish a FIT price schedule that enables development of a broad range✏ of projects but still consider customized procurement processes for large✏ renewable energy supply projects (e.g., solar PV farms, large on- and offshore wind, large hydro, storage) January 18, 2009 Draft 8 155 Not Responsive Not Responsive o For the initial FIT Program rules, contracts, and price schedule, the OPA✏ will prepare drafts of these documents and conduct stakeholder✏ consultation 157 Not Responsive 3.1.3 FIT Price Schedule ⇥ The FIT Price Schedule shall categorize all eligible renewable energy supply✏ resources by size and technology where specific prices will be applied to the✏ respective size/technology category ⇥ Prices may re-calibrate or adjust over the life of a procurement contract based on✏ the applicable Program rules (e.g., degression, etc.)✏ ⇥ The FIT Price Schedule may be amended in accordance with the applicable Program rules (e.g., definition of technologies, changes to size classification,✏ price levels, pricing methodologies, etc.) Not Responsive 159 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft 20 167 6.0 6.1 FIT PRICING SCHEDULE Introduction✏ ⇥ This section outlines the proposed approach for establishing contract prices for✏ each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and✏ proponents (e.g., recognizing the unique circumstances of community-based✏ projects) to promote broad participation in the program. This will allow for✏ development over the full range of cost-effective project sizes and technologies. 6.2 Pricing Methodology ⇥ The proposed FIT pricing model is based on project costs plus a reasonable rate of✏ return. Prices account for the following components: o o o o o ⇥ Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return.✏ Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from✏ reliable sources with transparent assumptions, which can be updated as✏ appropriate and necessary. ⇥ Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index. PV prices are constant and don’t escalate. ⇥ Pricing adders to applicable FITs will be applied to projects that meet specific policy objectives, for example priority proponents (i.e., community-based projects) or domestic content. These pricing adders are discussed below. ⇥ Given that project costs can vary significantly depending on site conditions,✏ proponent experience and the cost and performance characteristics of the various✏ technologies, the FIT prices are based on lower cost projects. This incents the✏ development of the lowest cost projects and mitigates the cost risks to Ontario✏ consumers. As outlined below, under the FIT pricing model rates (prices) will be✏ reassessed if market uptake is well below expectations. To the degree that prices✏ are higher than required by efficient renewable energy supply projects, then✏ supply is likely to exceed near term connection and transmission limits, resulting✏ in increased inefficiencies. January 18, 2009 Draft 21 168 6.3 Degression Rates ⇥ PV projects contract price will decline by 10% per year with the price fixed based✏ on the contract application date. The initial year contract prices for other✏ technologies will escalate with inflation as measured by the consumer price index. The OPA will reserve the right to modify contract prices for future years (but with✏ no impact on any FIT projects that have applied for or executed contracts with the✏ OPA) to reflect major changes in foreign exchange rates and other variables that✏ have a dramatic impact on the cost of FIT projects. 6.4 Tranche Sizes ⇥ The tranche sizes for different technologies will consider the “inflection points” at⇠ which the costs of projects change significantly. However, FIT tranche sizes will be presented only for economically viable project sizes, recognizing that in some✏ instance smaller projects are better suited to specific applications (e.g., residential✏ PV projects are limited by available rooftop space and are sized to serve the loads✏ of participating customers). ⇥ The tranche sizes will be based on the sizes of typical renewable energy supply✏ projects that participated in the RESOP and “cutpoints” that are used in other⇠ renewable energy supply programs. The OPA will monitor the number of projects that are developed for the different size tranches and adjust the✏ “cutpoints” for tranches as necessary to meet program objectives. 6.5 FIT Price Schedule✏ ⇥ The FIT price schedule for each of the applicable technologies and tranche sizes✏ is presented below. INSERT PRICE SCHEDULE ⇥ The prices shown in the table assume a flat output profile. Projects that can schedule their output and reliably operate during On-Peak Hours (11 am to 7 pm✏ ET) will receive a time differentiated price that will offer a higher return than✏ realized by projects that aren’t capable of scheduling their output. Intermittent generation projects are not eligible for this payment option. These prices will be✏ set so that Suppliers with schedulable renewable energy supply projects that don’t⇠ produce a higher proportion of their total output during peak periods will realize✏ lower returns. ⇥ [An Option] Community-based projects will receive a higher FIT price to✏ compensate them for their inability to utilize the tax benefits realized by for-profit projects. This benefit will vary for the different technologies, but for large wind✏ projects this represents about $10/MWh. January 18, 2009 Draft 22 169 ⇥ The contract payments for a generator that is connected to a load will be reduced✏ to account for the portion of the total generation that is consumed by the load. The amount of the reduction will be determined by the product of the amounts of✏ generation consumed by the load and the Hourly Ontario Energy Price for nonRPP customers and the RPP for RPP eligible customers. Where the resulting price✏ is negative, payments shall be made by the generator to the OPA. 6.6 Price Reviews ⇥ A primary objective of the FIT program is to provide stability that facilitates local✏ investment in renewable energy technology production facilities. As such, FIT✏ prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual (application /✏ contract ?) capacity targets for specific technologies are exceeded. For example✏ with a large PV (>1 MW) target of 100 MW per year, if the OPA contracts for✏ greater than 100 MW of large PV in any 12 month period then it will reassess✏ prices for large PV projects. 6.7 Alternative Procurement Approaches ⇥ For renewable energy supply technologies where there is limited experience that✏ can be used to estimate the technologies’ costs (e.g., off-shore wind) or where✏ costs and performance can vary widely based on site specific conditions (e.g.,✏ large water power and pumped storage) alternative procurement approaches will be used. These alternative procurement approaches will include RFPs where✏ there are a significant number of prospective suppliers that can satisfy the✏ identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. Not Responsive 170 7.1.3 ⇥ Technology defined in FIT Price Schedule Meet one of the categories as defined in the FIT price schedule. The eligible✏ renewable energy supply resource and the gross nameplate capacity for the projects must be specified, consistent and included in both: ⇥ ⇥ ⇥ the associated Connection or System Impact Assessment, the FIT application documentation Renewable energy supply projects that are specifically excluded from✏ participating in the FIT include large on-shore wind projects (greater than 50✏ MW); large hydroelectric projects (greater than 20 MW); off-shore wind projects; and pumped storage hydroelectric projects. Not Responsive 171 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive January 18, 2009 Draft Smith, Elliot↵ From: Smith, Elliot↵ Sent: February-18-09 9:23 AM↵ To: 'jdalton@poweradvisoryllc.com'; Jim MacDougall; Robert Cary; Sadikman, Jacob;↵ Jason Chee-Aloy; Patricia Lightburn↵ Subject: RE: HLD update incorporating proposed contract framework for 2-staged connection assessment etc↵ Attachments: FIT HLD - OPA.DOC↵ Please find attached a consolidated version of the High Level Design document, Not Responsive 208 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive ********************************************************************⇤ This e-mail message is privileged, confidential and subject to⇤ copyright. Any unauthorized use or disclosure is prohibited.⇤ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⇤ ********************************************************************⇤ 215 DRAFT FEED-IN TARIFF (FIT) PROGRAM HIGH LEVEL DESIGN ONTARIO POWER AUTHORITY JANUARY 20, 2009 RC markup 2009 01 30& TOR_P2Z:3569798.1 216 Table of Contents 1.0 INTRODUCTION ................................................................................................... 6⇠ 1.1 Background .......................................................................................................... 6 1.1.1 FIT Program Assisting Ontario Government’s Plans for a ‘Green’⇠ Economy 6 1.1.2 FIT Program Definition............................................................................. 6 1.1.3 Green Energy Act, 2009 ............................................................................ 7 2.0 FIT PROGRAM SCOPE ......................................................................................... 8 2.1 Benefits and Objectives........................................................................................ 8 3.0 HIGH-LEVEL DESIGN OVERVIEW.................................................................... 9 3.1 FIT Program Overview ........................................................................................ 9 3.1 High-Level Design Overview ............................................................................ 10 3.1.1 Qualified Generation Resources.............................................................. 10 3.1.2 Integration with IPSP and Other Resource Developments ..................... 10 3.1.3 FIT Price Schedule .................................................................................. 10 3.1.4 Generation Resource Eligibility Requirements ....................................... 11 3.1.5 Application Process ................................................................................. 11 3.1.6 OPA Procurement Contract..................................................................... 12 4.0 QUALIFIED GENERATION RESOURCES ....................................................... 13 5.0 INTEGRATION WITH IPSP AND OTHER RESOURCE DEVELOPMENTS . 15 5.1 Assessing Conservation and Generation Developments .................................... 15 5.2 Assessing Transmission and Distribution through Resource Integration .......... 16 5.3 Establishing FIT Program Targets ..................................................................... 17 5.4 Re-establishing FIT Program Targets ................................................................ 18 6.0 FIT PRICING SCHEDULE................................................................................... 19 6.1 Introduction ........................................................................................................ 19 6.2 Pricing Methodology........................................................................................ 19 6.3 Degression Rates ................................................................................................ 20 6.4 Tranche Sizes ..................................................................................................... 20 6.5 FIT Price Schedule ............................................................................................. 20 6.6 Price Reviews ..................................................................................................... 21 6.7 Alternative Procurement Approaches ................................................................ 21 7.0 FIT ELIGIBILITY AND REQUIREMENTS ....................................................... 22 7.1 Overview of Generation Resource Eligibility Requirements............................. 22 7.1.1 Renewable Energy Supply Resource ...................................................... 22 7.1.2 Located in Ontario................................................................................... 22 7.1.3 Technology defined in FIT Price Schedule ............................................. 22 7.1.4 New Build, Upgrade or Expansion ......................................................... 23 7.1.5 Program Transmission Availability ........................................................ 23 7.1.6 Metering Requirements ........................................................................... 23 7.1.7 Eligibility of Projects with Existing Contracts........................................ 23 7.1.8 Phased Development ............................................................................... 24 7.1.9 CIA and SIA Requirements .................................................................... 24 7.2 Contract prerequisites......................................................................................... 24 January 18,&2009 Draft TOR_P2Z:3569798.1 2 217 7.2.1⇠ Environmental Assessment (Class B and C Projects) ............................. 24⇠ 7.2.2 Apply for Municipal Approvals (Class B and C projects) ...................... 24 7.2.3 Site Control (all projects) ........................................................................ 24 7.2.4 Resource Plan (all projects 1 MW and greater) ...................................... 25 7.2.5 Financing Plan (all Class C projects) ....... Error! Bookmark not defined. 8.0 FIT APPLICATION PROCESS ............................................................................ 25 8.1 Before submitting an application to the OPA .................................................... 25 8.1.1 Responsibility for completeness and eligibility of application ............... 25 8.1.2 Application requirements ........................................................................ 26 8.2 Submitting an application to the OPA................................................................ 26 8.2.1 Content of application form .................................................................... 26 8.2.2 Supporting information attached to application form: ............................ 27 8.2.3 Application fee ........................................................................................ 27 8.2.4 Form of application ................................................................................. 27 8.2.5 Assignment of application number and date ........................................... 27 8.2.6 Application control.................................................................................. 28 8.3 OPA application review ..................................................................................... 28 8.3.1 Initial review for completeness ............................................................... 28 8.3.2 Timeline and sequence of reviews .......................................................... 28 8.3.3 Amendment of application ...................................................................... 29 8.3.4 Withdrawal of application ....................................................................... 29 8.3.5 Requests for clarification or additional information ............................... 29 8.3.6 Review for compliance and target levels ................................................ 29 8.4 Status and OPA notification of application outcome ......................................... 30 8.4.1 Fully accepted applications ..................................................................... 30 8.4.2 Partially accepted applications ................................................................ 30 8.4.3 Applications rejected for exceeding target .............................................. 30 8.4.4 Applications rejected for other reasons ................................................... 31 8.5 Execution of contract ......................................................................................... 31 8.5.1 Timeline .................................................................................................. 31 8.5.2 Process for execution .............................................................................. 31 8.5.3 Failure to execute .................................................................................... 31 8.6 Program initialization provisions ....................................................................... 31 Reference to Appendix 2 or include all initialization provisions here...................... 31 9.0 OPA PROCUREMENT CONTRARCT: STANDARD PROVISIONS ............... 32 9.1 General principles .............................................................................................. 32 9.1.1 Family of contracts.................................................................................. 32 9.1.2 Parties ...................................................................................................... 33 9.1.3 IESO requirements .................................................................................. 33 9.2 Term ................................................................................................................... 34 9.3 Laws, regulations and IESO-Administered Market requirements ..................... 34 9.3.1 Compliance obligations ........................................................................... 34 9.3.2 IESO obligations in respect of distribution-connected and load-connected⇠ contract facilities ....................................................................................................... 35 9.3.3 Changes to laws, regulations, Market Rules, etc..................................... 35 9.4 Development and operation of facility ............................................................... 35 January 18,&2009 Draft TOR_P2Z:3569798.⇠ 1 3 218 9.4.1 General .................................................................................................... 35 9.4.2 No removal before term .......................................................................... 36 9.5 Connection and transmission/distribution upgrades .......................................... 36 9.5.1 Smallest distribution connected projects................................................. 36 9.5.2 Large projects & transmission connected projects.................................. 36 9.5.3 Connection in advance of distribution or transmission upgrades ........... 36 9.5.4 Commercial operation in advance of distribution or transmission⇠ upgrades 37 9.6 Connection cost allocation ................................................................................. 37 9.7 Contract Milestones............................................................................................ 37 9.8 Metering ............................................................................................................. 38 9.8.1 Metering point ......................................................................................... 38 9.8.2 General requirements: ............................................................................. 38 9.8.3 Consolidation of output metering............................................................ 39 9.8.4 Metering provisions for small and medium Contract Facilities .............. 39 9.8.5 IESO Administered Market metering provisions applicable to large⇠ Contract Facilities ..................................................................................................... 39 9.9 Commercial operation ........................................................................................ 39 9.9.1 Definition of Commercial Operation Date .............................................. 39 9.9.2 Demonstration of Commercial Operation ............................................... 40 9.9.3 Operations before Commercial Operation Date ...................................... 40 9.10 Operating covenants ....................................................................................... 40 9.11 Dispatch (including constrained off rights for larger projects) ...................... 40 9.11.1 IESO Dispatch rights............................................................................... 40 9.11.2 Compensation for being constrained off ................................................. 40 9.12 Maintenance scheduling coordination rights (for larger projects).................. 41 9.13 Insurance......................................................................................................... 41 9.14 Compliance with laws and regulations ........................................................... 41 9.15 Related products and environmental attributes .............................................. 41 9.16 Settlements and payments .............................................................................. 41 9.16.1 Basis of payment ..................................................................................... 42 9.16.2 Price escalation........................................................................................ 42 9.16.3 WPPI & RPPI .......................................................................................... 42 9.16.4 Taxes ....................................................................................................... 42 9.16.5 Related Products and Future Contract Related Products ........................ 43 9.16.6 Means of payment ................................................................................... 43 9.17 Operating and performance incentives ........................................................... 43 9.18 Credit and security requirements .................................................................... 44 9.18.1 OPA project completion security tranche 1 ............................................ 44 9.18.2 OPA project completion security tranche 2 ............................................ 44 9.18.3 OPA project operations security ............................................................. 44 9.18.4 Events triggering claim on security......................................................... 44 9.18.5 Form of security ...................................................................................... 45 9.19 Representations of the Supplier and the OPA ................................................ 45 9.20 Confidentiality ................................................................................................ 45 9.21 Termination and default.................................................................................. 45 January 18, 2009 Draft TOR_P2Z:3569798.1 4 219 9.21.1⇠ Events of Supplier default before COD .................................................. 45⇠ 9.21.2 Events of Supplier default after COD ..................................................... 45 9.21.3 Notice & remedy provisions ................................................................... 46 9.21.4 OPA rights arising from un-remedied default ......................................... 46 9.22 Force majeure ................................................................................................. 46 9.22.1 Before Commercial Operation Date........................................................ 46 9.22.2 After Commercial Operation Date .......................................................... 47 9.23 Lender’s rights ................................................................................................ 47 9.24 Discriminatory action ..................................................................................... 47 9.25 Liability and indemnification ......................................................................... 47 9.26 Contract operation and administration ........................................................... 47 9.27 Dispute resolution ........................................................................................... 48 9.28 Assignment and change of control ................................................................. 48 Appendix A1, Connections ......................................................................................... 50 A1.1. Purpose of this appendix................................................................................. 50 A2.2. General principles for queue management ..................................................... 50 A2.1 Initial queue position and integration with non-FIT projects.................. 50 A2.2 First-ready, first served ........................................................................... 50 A2.3 Interaction between transmission and distribution.................................. 51 A2.4 Legacy queue projects ............................................................................. 51 A1.3 Queue management, transmission and distribution connected projects ......... 52 A1.3.1 Transmission connected projects ............................................................ 52 A1.3.2 Distribution connected projects without transmission implications ....... 52 A1.3.3 Distribution connected projects with transmission implications............. 52 A1.3.4 Relationship with OPA contract milestones............................................ 52 A1.3.5 Summary table for non-hydraulic FIT projects ....................................... 53 Timeliness for Dx and Tx Connected > 1 MW Non-Waterpower Projects (note 1) ........ 53 A1.3.6 Hydraulic project milestones................................................................... 54 A1.4 Cost allocation, transmission connected projects ........................................... 55 A1.4.1 Connection costs ..................................................................................... 55 A1.4.2 Network upgrades ................................................................................... 55 A1.4.3 Enabler lines ............................................................................................ 56 A1.5 Cost allocation, distribution connected projects ............................................. 56 A1.5.1 Without transmission implications.......................................................... 56 A1.5.2 With transmission implications ............................................................... 56 Distributors’ cost recovery ...................................................................... 56 A1.5.3 Appendix A2.0 FIT program initialization ................................................................... 57 A2.1 Purpose of this appendix................................................................................. 57 A2.2 Initialization concerns to be addressed ........................................................... 57 A2.2.1 Equity among applicants ......................................................................... 57 A2.2.2 OPA Workload and target 60 day timeline ............................................. 57 A2.2.3 Website overload ..................................................................................... 57 A2.2.4 Application controls to resolve (a), (b) and (c). ...................................... 58 A2.2.5 Secondary market concerns? ................................................................... 58 Appendix 3.0 IESO changes identified.......................................................................... 58 A3.1 Purpose of this appendix................................................................................. 58 January 18,&2009 Draft TOR_P2Z:3569798.1 5 220 A3.2 Connection assessment and queue management ............................................ 59 A3.3 Distribution-connected generation provisions ................................................ 59 A3.3.1 Non-participant generator monitoring..................................................... 59 A3.3.2 Forecasting .............................................................................................. 59 A3.3.3 Maintenance scheduling .......................................................................... 59 A3.3.4 Curtailment.............................................................................................. 59 A4.0 Micro-Scale Generation A5.0 Renewable Energy Supply Integration Team (RESIT) Not Responsive 1.1.2 ⇥ FIT Program Definition Standardized procurement process to procure renewable energy supply ⇥ Standard prices (i.e., FIT price schedule) By fuel type (e.g., wind, hydro, solar PV, biomass, etc.) January 18, 2009 Draft TOR_P2Z:3569798.1 6 221 By size (e.g., revise to reflect technical price limits, which may differ from contract class limits defined above 0-10 kW, > 500 kW,⇠ 0-10 MW, > 10 MW, etc.)⇠ By application (e.g., roof-top solar PV, solar PV farm, etc.) Not Responsive 222 Not Responsive Not Responsive o For the initial FIT Program rules, contracts, and price schedule, the OPA⇠ will prepare drafts of these documents and conduct stakeholder⇠ consultation 224 Not Responsive 3.1.3 FIT Price Schedule ⇥ The FIT Price Schedule shall categorize all eligible renewable energy supply⇠ resources by size and technology where specific prices will be applied to the⇠ respective size/technology category ⇥ Prices may re-calibrate or adjust over time to reflect cost reductions or changes in⇠ techniologies (e.g., degression, etc.) January 18, 2009 Draft TOR_P2Z:3569798.1 10 225 ⇥ The FIT Price Schedule may be amended in accordance with the applicable Program rules (e.g., definition of technologies, changes to size classification,⇠ price levels, pricing methodologies, etc.) Not Responsive 226 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 6.0 6.1 FIT PRICING SCHEDULE Introduction✏ ⇥ This section outlines the proposed approach for establishing contract prices for⇠ each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and⇠ proponents (e.g., recognizing the unique circumstances of community-based⇠ projects) to promote broad participation in the program. This will allow for⇠ development over the full range of cost-effective project sizes and technologies. 6.2 Pricing Methodology ⇥ The proposed FIT pricing model is based on project costs plus a reasonable rate of⇠ return. Prices account for the following components: o o o o o ⇥ Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return.⇠ Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from⇠ reliable sources with transparent assumptions, which can be updated as⇠ appropriate and necessary. ⇥ Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index. PV prices are constant and don’t escalate. ⇥ Pricing and eligibility for price categories may vary for projects that meet⇠ specific policy objectives, for example priority proponents (i.e., community-based projects) or domestic content. .⇠ ⇥ Given that project costs can vary significantly depending on site conditions,⇠ proponent experience and the cost and performance characteristics of the various⇠ technologies, the FIT prices are based on lower cost projects. This incents the⇠ development of the lowest cost projects and mitigates the cost risks to Ontario⇠ consumers. As outlined below, under the FIT pricing model rates (prices) will be⇠ reassessed if market uptake is well below expectations. To the degree that prices⇠ are higher than required by efficient renewable energy supply projects, then⇠ supply is likely to exceed near term connection and transmission limits, resulting⇠ in increased inefficiencies. January 18, 2009 Draft TOR_P2Z:3569798.1 19 234 6.3 Degression Rates ⇥ FIT pricing available to PV projects contract price will decline by 8-10% per⇠ contracted capacity tranche or target. The price fixed based on the contract⇠ execution date. The initial year contract prices for other technologies will⇠ escalate with inflation as measured by the consumer price index. The OPA will reserve the right to modify contract prices for future years (but with no impact on⇠ any FIT projects that have applied for or executed contracts with the OPA) to⇠ reflect major changes in foreign exchange rates and other variables that have a⇠ dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. 6.4 Tranche Sizes ⇥ The tranche sizes for different technologies will consi der the “inflection points” at⇠ which the costs of projects change significantly. However, FIT tranche sizes will be presented only for economically viable project sizes, recognizing that in some⇠ instance smaller projects are better suited to specific applications (e.g., residential⇠ PV projects are limited by available rooftop space and are sized to serve the loads⇠ of participating customers). ⇥ The tranche sizes will be based on the sizes of typical renewable energy supply⇠ projects that participated in the RESOP and “cutpoints” that are used in other⇠ renewable energy supply programs. The OPA will monitor the number of projects that are developed for the different size tranches and adjust the⇠ “cutpoints” for tranches as necessary to meet program objectives. 6.5 FIT Price Schedule✏ ⇥ The FIT price schedule for each of the applicable technologies and tranche sizes⇠ is presented below. INSERT PRICE SCHEDULE ⇥ The prices shown in the table assume a flat output profile. Certain Renewable⇠ technologies that can schedule their output and reliably operate during On-Peak Hours (11 am to 7 pm ET) will receive a time differentiated price that will offer a⇠ higher return than realized by projects that aren’t capable of shifting their output. Intermittent generation projects are not eligible for this payment option. These⇠ prices will be set so that Suppliers with schedulable renewable energy supply⇠ projects that don’t produce a higher proportion of their total output during peak⇠ periods will realize lower returns. Specifically, waterpower and biomass projects⇠ will be paid on the basis of the following formula: On peak payment = base FIT rate * 1.35 (for the 2000 5 X 8 business days) Off peak payment = base FIT rate * 0.9 (for the 6760 other hours) January 18, 2009 Draft TOR_P2Z:3569798.1 20 235 This allocation of hours and premiums leaves the develop almost revenue neutral relative⇠ to earning the base FIT rate on a 7 X 24 production schedule. ⇥ [An Option] Community-based projects will receive a higher FIT price to⇠ compensate them for their inability to utilize the tax benefits realized by for-profit projects. This benefit will vary for the different technologies, but for large wind⇠ projects this represents about $10/MWh. This policy preference for community⇠ based projects will be realized by only permitting such eligible projects to access⇠ the <= 10 MW wind category. ⇥ The contract payments for a generator that is connected to a load will be reduced⇠ to account for the portion of the total generation that is consumed by the load. The amount of the reduction will be determined by the product of the amounts of⇠ generation consumed by the load and the Hourly Ontario Energy Price for nonRPP customers and the RPP for RPP eligible customers. Where the resulting price⇠ is negative, payments shall be made by the generator to the OPA. Implementation⇠ of smart meter TOU pricing is assumed to be a form of RPP pricing. 6.6 Price Reviews ⇥ A primary objective of the FIT program is to provide stability that facilitates local⇠ investment in renewable energy technology production facilities. As such, FIT⇠ prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual contract capacity⇠ targets for specific technologies are exceeded. in addition with a large PV (>1⇠ MW) target of 100 MW per year, if the OPA contracts for greater than 100 MW of large PV in any 12 month period then the FIT price will automatically be⇠ reduced on a pre-determined schedule. 6.7 Alternative Procurement Approaches ⇥ For renewable energy supply technologies where there is limited experience that⇠ can be used to estimate the technologies’ costs (e.g., off-shore wind) or where⇠ costs and performance can vary widely based on site specific conditions (e.g.,⇠ large water power and pumped storage) alternative procurement approaches will be used. These alternative procurement approaches will include RFPs where⇠ there are a significant number of prospective suppliers that can satisfy the⇠ identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. January 18, 2009 Draft TOR_P2Z:3569798.1 21 236 Not Responsive 7.1.3 ⇥ Technology defined in FIT Price Schedule Meet one of the categories as defined in the FIT price schedule. The eligible⇠ renewable energy supply resource and the gross nameplate capacity for the projects must be specified, consistent and included in both: ⇥ ⇥ ⇥ the associated Connection or System Impact Assessment, the FIT application documentation Renewable energy supply projects that are specifically excluded from⇠ participating in the FIT include large on-shore wind projects (greater than 50⇠ MW); large hydroelectric projects (greater than 20 MW); off-shore wind projects; and pumped storage hydroelectric projects, and potentially large solar projects,⇠ possible PV or CSP.. January 18, 2009 Draft TOR_P2Z:3569798.1 22 237 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 9.16.2 Price escalation The energy price paid in any year is based on o Base Price in effect on the Contract Base Date, 20% escalated each⇠ calendar year @ CPI Note that RES III is only 15% escalated Note that RESOP includes a year-on-year price ratchet. I would suggest the CPI escalator be always referenced back to the base date. o All contracts within the same price review period are therefore priced⇠ identically (subject to size & technology) Contract Base Date for price could be o FIT contract Application Date per applicant (recommended) Provides maximum certainty at time of application; may encourage delay or acceleration of application in advance of a price change date (with implications for the notice to be given of price changes) o Application acceptance date Leaves applicant exposed (positively or negatively) to price changes during the application process, and OPA able to adjust acceptance date according to price changes it is about to announce o Contract Date Leaves applicant exposed to price changes up to contract execution, and gives some applicants flexibility to delay signing past a price change date o COD Maximum exposure for applicants – difficult to finance Recommendation is to use the FIT contract Application Date. Not Responsive 257 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive A 49 264 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 1' 4n ⇥ Main recommendations from the RESIT: Not Responsive o ⇥ Establish a FIT price schedule that enables development of a broad range⇠ of projects but still consider customized procurement processes for large⇠ renewable energy supply projects (e.g., solar PV farms, large on- and offshore wind, large hydro, storage) The above recommendations trigger subsequent work to be led by various⇠ members of the RESIT o OPA: develop and consult FIT Program rules, contracts and price⇠ schedule; continue chairing RESIT to ensure effective Program⇠ development and implementation January 18, 2009 Draft TOR_P2Z:3569798.1 60 275 Not Responsive 1' 4n n. 51 276 Jim and Catherine From: Jim and Catherine Sent: March-01-09 10:50 PM To: Jason Chee-Aloy Cc: Patricia Lightburn Subject: FIT Rules Decks, V1 Attachments: FIT Program Rules - Large Projects.PPT; FIT Program Rules - Small Projects.PPT Jason;⌥ Attached are the 2 decks, for the 2 categories of small projects, and the 2 categories of large projects.⌥ They could be orgainzed in a different manner, but I think that would not change the content of the slides, only the⇢ sequencing.⇢ These also assume some outcomes from our discussion tomorow.⌥ 277 ()nlnrin Power Aulhorily . ONTARIO POWER AUTHORITY 278 Not Responsive 279 Not Responsive 280 Not Responsive 281 Not Responsive Not Responsive 283 Not Responsive 284 Not Responsive 285 Not Responsive 286 10 Not Responsive 287 Contract Pricing • Project receives price available at time of Contract issuance⇥ – Any changes to pricing will be prospective only and shall not⇥ affect FIT Contracts already executed⇥ • Contract Price Escalation⇥ – Solar PV price remains constant for the length of the 20-year⇥ contract payment period⇥ – • Other technologies will increase by 20% annually with CPI⇥ Community Projects and First Nations Projects (<10MW) will⇥ receive an additional [1¢/kWh] above the applicable price posted on the Price Schedule. ??? (instead of special wind price or for non-wind?)⇥ • Projects that are capable of scheduling their output⇥ (dispatchable) will receive a time differentiated price⇥ 11⇥ 288 Proposed FIT Pricing Technology Capacity Range Rooftop Solar PV 10 kW 10 – 100 kW 100 Ground-mounted Solar PV – 500kW FIT (cents/kWh)⇡ 71.0⌘ 62.7⌘ 56.4⌘ > 500 kW 51.6⌘ 10 MW 41.4⌘ (with annual degression)⌘ 10 MW 11.1-14.2⌘ Any size 10.9-12.1⌘ Off-shore Wind Any size 14.0 check ???⌘ Waterpower Any size 8.7-13.3⌘ Biomass Any size 10.1-11.4⌘ 5MW 14.1-16.3⌘ >5 MW 10.0-11.6⌘ On-shore⌘ Community Wind⌘ Other Biogas Landfill gas 5 MW >5 MW 9.1-10.2⌘ 8.6-9.7⌘ **Solar PV price remains constant for the length of the 20-year contract payment 12⇥ period. Other technologies will be indexed at 20% of CPI 289 Contract Management and Settlement • Suppliers receive two payments:⇥ – – The IESO will make payments at market prices⇥ The additional payment to reach FIT price will be⇥ paid through the OPA’s internal contract⇠ settlement team⇥ • Payments are made monthly⇥ 13⇥ 290 FIT Program Review FIT prices will be in place for at least two years⇥ • Only Solar PV will be adjusted, on a pre-determined,⇥ transparent basis⇥ • Solar PV farms will have automatic degression every⇥ 100 MW of contract capacity⇥ – Solar PV farms will have FIT contract price⇥ adjusted with a 9% degression rate every⇥ approximately 100 MW⇥ – Large Solar PV roof-top projects will have prices⇥ reduced every [50 MW] installed capacity⇥ 14⇥ 291 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY 292 Not Responsive 293 Not Responsive 294 Not Responsive 295 Not Responsive 6. Receive payment from LDC⇥ • Generator is eligible for the FIT Price current at the time of COD Not Responsive 5⇥ 296 Proposed FIT Pricing⌘ Technology Capacity Range Rooftop Solar PV 10 kW 10 – 100 kW 100 Ground-mounted Solar PV – 500kW FIT (cents/kWh)⇡ 71.0⌘ 62.7⌘ 56.4⌘ > 500 kW 51.6⌘ 10 MW 41.4⌘ (with annual degression)⌘ 10 MW 11.1-14.2⌘ Any size 10.9-12.1⌘ Off-shore Wind Any size 14.0 [check]⌘ Waterpower Any size 8.7-13.3⌘ Biomass Any size 10.1-11.4⌘ 5MW 14.1-16.3⌘ >5 MW 10.0-11.6⌘ On-shore Wind⌘ Biogas Landfill gas Community Other 5 MW >5 MW 9.1-10.2⌘ 8.6-9.7⌘ **Solar PV price remains constant for the length of the 20-year contract payment 6⇥ period. Other technologies will be indexed at 20% of CPI 297 Not Responsive 298 Ongoing FIT program and contract⌘ review⌘ • The OPA may revise FIT Prices for new projects at⇥ any time subject to no less than 12 months notice.⇥ 8⇥ 299 Patricia Lightburn From: Patricia Lightburn Sent: March-02-09 12:19 PM To: Patricia Lightburn Attachments: FIT Program Rules - Large Projects v3.PPT 300 ()nlnrin Power Aulhorily . ONTARIO POWER AUTHORITY 301 Not Responsive 302 Not Responsive 303 Not Responsive 304 Not Responsive Not Responsive 306 Not Responsive 307 Not Responsive 308 Not Responsive 309 10 Not Responsive 310 Contract Pricing • Project receives price available at time of Contract issuance⇥ – Any changes to pricing will be prospective only and shall not⇥ affect FIT Contracts already executed⇥ • Contract Price Escalation⇥ – Solar PV price remains constant for the length of the 20-year⇥ contract payment period⇥ – • Other technologies will increase by 20% annually with CPI⇥ Community Projects and First Nations Projects (<10MW) will⇥ receive a separate, higher price for wind projects⇥ • Projects that are capable of scheduling their output⇥ (dispatchable) will receive a time differentiated price 11⇥ 311 Proposed FIT Pricing Technology Capacity Range Rooftop Solar PV 10 kW 10 – 100 kW 100 Ground-mounted Solar PV – 500kW FIT (cents/kWh)⇡ 71.0⌘ 62.7⌘ 56.4⌘ > 500 kW 51.6⌘ 10 MW 41.4⌘ (with annual degression)⌘ 10 MW 11.1-14.2⌘ Any size 10.9-12.1⌘ Off-shore Wind Any size 14.0 check ???⌘ Waterpower Any size 8.7-13.3⌘ Biomass Any size 10.1-11.4⌘ 5MW 14.1-16.3⌘ >5 MW 10.0-11.6⌘ On-shore⌘ Community Wind⌘ Other Biogas Landfill gas 5 MW >5 MW 9.1-10.2⌘ 8.6-9.7⌘ **Solar PV price remains constant for the length of the 20-year contract payment 12⇥ period. Other technologies will be indexed at 20% of CPI 312 Contract Management and Settlement • Suppliers receive two payments:⇥ – – The IESO will make payments at market prices⇥ The additional payment to reach FIT price will be⇥ paid through the OPA’s internal contract⇠ settlement team⇥ • Payments are made monthly⇥ 13⇥ 313 FIT Program Review FIT prices will be in place for at least two years⇥ • Only Solar PV will be adjusted, on a pre-determined,⇥ transparent basis⇥ • Solar PV farms will have automatic degression every⇥ 100 MW of contract capacity⇥ – Solar PV farms will have FIT contract price⇥ adjusted with a 9% degression rate every⇥ approximately 100 MW⇥ – Large Solar PV roof-top projects will have prices⇥ reduced every [50 MW] installed capacity⇥ 14⇥ 314 Jason Chee-Aloy From: Jason Chee-Aloy Sent: March-02-09 8:03 PM To: Jim MacDougall; 'jdalton@poweradvisoryllc.com'; 'rcary@niagara.com' Cc: Patricia Lightburn; 'ESmith@osler.com'; 'jsadikman@osler.com' Subject: FIT Price Schedule We had a good meeting with the Minister (meaning he was in a chipper mood). Two take aways: 1) Not Responsive ; and, 2) the Minister wants an event at the OPA office next week to roll out the draft FIT Price Schedule. I want to focus on #2. Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks. 315 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: March-02-09 8:50 PM To: Jason Chee-Aloy; Jim MacDougall; rcary@niagara.com Cc: Patricia Lightburn; ESmith@osler.com; jsadikman@osler.com Subject: Re: FIT Price Schedule works for me⌦ ----- Original Message ----- From: Jason Chee- Aloy⌦ To: Jim MacDougall ; jdalton@poweradvisoryllc.com ; rcary@niagara.com⌦ Cc: Patricia Lightburn ; ESmith@osler.com ; jsadikman@osler.com⌦ Sent: Monday, March 02, 2009 8:03 PM⌦ Subject: FIT Price Schedule⌦ We had a good meeting with the Minister (meaning he was in a chipper mood). Two take aways: 1) Not Responsive and, 2) the Minister wants an event at the OPA office next week to roll out the draft FIT Price Schedule. I want to focus on #2. Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks. This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca" 316 Jim MacDougall From: Jim MacDougall⇠ Sent: March-02-09 9:59 PM⇠ To: Patricia Lightburn⇠ Subject: RE: FIT Price Schedule⇠ Attachments: FIT Program Rules - Contract Milestones.ppt⇠ not sure next deck, still some work on it .. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Patricia Lightburn Sent: Mon 02/03/2009 8:15 PM To: Jim MacDougall Subject: FW: FIT Price Schedule when he says 'rolling out' does he mean publicly???!⇠ ----- Original Message ----From: Jason Chee- Aloy⇠ Sent: Mon 3/2/2009 8:03 PM⇠ To: Jim MacDougall; 'jdalton@poweradvisoryllc.com'; 'rcary@niagara.com'⇠ Cc: Patricia Lightburn; 'ESmith@osler.com'; 'jsadikman@osler.com'⇠ Subject: FIT Price Schedule⇠ We had a good meeting with the Minister (meaning he was in a chipper mood).⇠ Two take aways: Not Responsive 2) the Minister wants an event at the OPA office next week to roll out the draft FIT Price Schedule.⇠ I want to focus on #2.⇠ Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks. 317 ()nlnrin Powvr Aulhoriu' . ONTARIO POWER AUTHORITY 318 Not Responsive Not Responsive 320 Not Responsive 321 Contract Pricing • Project receives price available at time of Contract issuance⇥ – Any changes to pricing will be prospective only and shall not⇥ affect FIT Contracts already executed⇥ • Contract Price Escalation⇥ – Solar PV price remains constant for the length of the 20-year⇥ contract payment period⇥ – • Other technologies will increase by 20% annually with CPI⇥ Community Projects and First Nations Projects (<10MW) will⇥ receive an additional [1¢/kWh] above the applicable price posted on the Price Schedule. ??? (instead of special wind price or for non-wind?)⇥ • Projects that are capable of scheduling their output⇥ (dispatchable) will receive a time differentiated price⇥ 5⇥ 322 Proposed FIT Pricing Technology Capacity Range Rooftop Solar PV 10 kW 10 – 100 kW 100 Ground-mounted Solar PV – 500kW FIT (cents/kWh)⇡ 71.0⌘ 62.7⌘ 56.4⌘ > 500 kW 51.6⌘ 10 MW 41.4⌘ (with annual degression)⌘ 10 MW 11.1-14.2⌘ Any size 10.9-12.1⌘ Off-shore Wind Any size 14.0 check ???⌘ Waterpower Any size 8.7-13.3⌘ Biomass Any size 10.1-11.4⌘ 5MW 14.1-16.3⌘ >5 MW 10.0-11.6⌘ On-shore⌘ Community Wind⌘ Other Biogas Landfill gas 5 MW >5 MW 9.1-10.2⌘ 8.6-9.7⌘ **Solar PV price remains constant for the length of the 20-year contract payment⇢ 6⇥ period. Other technologies will be indexed at 20% of CPI⇢ 323 Contract Management and Settlement • Suppliers receive two payments:⇥ – – The IESO will make payments at market prices⇥ The additional payment to reach FIT price will be⇥ paid through the OPA’s internal contract⇠ settlement team⇥ • Payments are made monthly⇥ 7⇥ 324 FIT Program Review FIT prices will be in place for at least two years⇥ • Only Solar PV will be adjusted, on a pre-determined,⇥ transparent basis⇥ • Solar PV farms will have automatic degression every⇥ 100 MW of contract capacity⇥ – Solar PV farms will have FIT contract price⇥ adjusted with a 9% degression rate every⇥ approximately 100 MW⇥ – Large Solar PV roof-top projects will have prices⇥ reduced every [50 MW] installed capacity⇥ 8⇥ 325 Jim MacDougall From: Jim MacDougall⌘ Sent: March-02-09 10:29 PM⌘ To: Patricia Lightburn⌘ Subject: Re: FIT Price Schedule⌘ We have time in the morn to further review...⌘ Jim MacDougall, P.Eng.⌘ Manager, Distributed Generation⌘ Ontario Power Authority⌘ 416 969 6415⌘ Sent from my BB⌘ ----- Original Message ----From: Patricia Lightburn⌘ To: Jim MacDougall⌘ Sent: Mon Mar 02 22:11:27 2009⌘ Subject: RE: FIT Price Schedule⌘ Not Responsive still think it may be too much in one deck, but Im not sure what would be better⌘ ----- Original Message ----From: Jim MacDougall⌘ Sent: Mon 3/2/2009 9:58 PM⌘ To: Patricia Lightburn⌘ Subject: RE: FIT Price Schedule⌘ not sure⌘ next deck, still some work on it ..⌘ Jim MacDougall, P.Eng.⌘ Manager, Distributed Generation⌘ Ontario Power Authority⌘ (416) 969 - 6415⌘ _________________________ _____ __⌘ From: Patricia Lightburn⌘ Sent: Mon 02/03/2009 8:15 PM⌘ To: Jim MacDougall⌘ Subject: FW: FIT Price Schedule⌘ when he says 'rolling out' does he mean publicly???!⌘ ----- Original Message ----From: Jason Chee- Aloy⌘ Sent: Mon 3/2/2009 8:03 PM⌘ 326 To: Jim MacDougall; 'jdalton@poweradvisoryllc.com'; 'rcary@niagara.com'⌘ Cc: Patricia Lightburn; 'ESmith@osler.com'; 'jsadikman@osler.com'⌘ Subject: FIT Price Schedule⌘ We had a good meeting with the Minister (meaning he was in a chipper mood).⌘ Two take aways: Not Responsive , 2) the Minister wants an event at the OPA office next week to roll out the draft FIT Price Schedule.⌘ I want to focus on #2.⌘ Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks. 327 Jim MacDougall From: Jim MacDougall Sent: March-02-09 10:31 PM To: 'jdalton@poweradvisoryllc.com'; Jason Chee-Aloy; 'rcary@niagara.com' Cc: Patricia Lightburn; 'ESmith@osler.com'; 'jsadikman@osler.com' Subject: Re: FIT Price Schedule Ok by me. John, could you send out the last version of the pricing report to all on this distribution? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: jdalton@poweradvisoryllc.com To: Jason Chee- Aloy; Jim MacDougall; rcary@niagara.com CC: Patricia Lightburn; ESmith@osler.com ; jsadikman@osler.com Sent: Mon Mar 02 20:49:55 2009 Subject: Re: FIT Price Schedule works for me ----- Original Message ----- From: Jason Chee - Aloy ✏ To: Jim MacDougall < mailto:Jim.MacDougall@powerauthority.on.ca > ; jdalton@poweradvisoryllc.com ;✏ rcary@niagara.com Cc: Patricia Lightburn < mailto:Patricia.Lightburn@powerauthority.on.ca > ; ESmith@osler.com ; jsadikman@osler.com✏ Sent: Monday, March 02, 2009 8:03 PM✏ Subject: FIT Price Schedule✏ We had a good meeting with the Minister (meaning he was in a chipper mood).✏ Two take aways: Not Responsive , 2) the Minister wants an event at the OPA✏ office next week to roll out the draft FIT Price Schedule. I want to focus on #2.✏ Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please✏ advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks.✏ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. < http://www.energyconservationweek.ca > www.energyconservationweek.ca✏ Say "Count Me In!" to Energy Conservation Week - learn more at: 328 Smith, Elliot↵ From: Smith, Elliot Sent: March-03-09 12:49 AM To: Jim MacDougall; jdalton@poweradvisoryllc.com; Jason Chee-Aloy; rcary@niagara.com Cc: Patricia Lightburn; Sadikman, Jacob Subject: RE: FIT Price Schedule Jim,⇧ While we're on the topic of the Price Schedule, Jake and I are working through the implementation issues associated with automatic price changes based on take - up (outside of the "Scheduled Program Reviews" which⇧ we've drafted a section on). If this is something we want in the FIT Program, it will need more detailed rules. We will need to develop rules around how these automatic increments work and how information will be posted regarding⇧ progress towards the next increment, and where precisely the cut- off between rates will be.⇧ Can you please confirm that this is a feature you'd like to see, and if so how you would use it?⇧ Thanks,⇧ Elliot⇧ Elliot A. Smith Associate⇧ 41 6.862.6435 DIRECT 41 6.862.6666 FACSIMILE esmith@osler.com⇧ Osler, Hoskin & Harcourt LLP⇧ Box 50, 1 First Canadian Place⇧ Toronto, Ontario, Canada M5X 1 B8 osler.com⇧ ******************************************************************** This e-mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il⌧ est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 329 Robert Cary↵ From: Robert Cary↵ Sent: March-03-09 7:49 AM↵ To: Jim MacDougall; jdalton@poweradvisoryllc.com; Jason Chee-Aloy↵ Cc: Patricia Lightburn; ESmith@osler.com; jsadikman@osler.com↵ Subject: RE: FIT Price Schedule↵ I ’ ve got a conflicting meeting then, but my input on this would be limited anyway.⇡ Rob C⇡ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: March 2, 2009 10:31 PM⇢ To: jdalton@poweradvisoryllc.com; Jason Chee-Aloy; rcary@niagara.com⇢ Cc: Patricia Lightburn; ESmith@osler.com; jsadikman@osler.com⇢ Subject: Re: FIT Price Schedule⇢ Ok by me. John, could you send out the last version of the pricing report to all on this distribution? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca ----- Original Message ----From: jdalton@poweradvisoryllc.com To: Jason Chee - Aloy; Jim MacDougall; rcary@niagara.com CC: Patricia Lightburn; ESmith@osler.com ; jsadikman@osler.com Sent: Mon Mar 02 20:49:55 2009 Subject: Re: FIT Price Schedule works for me ----- Original Message ----From: Jason Chee - Aloy ✏ To: Jim MacDougall < mailto:Jim.MacDougall@powerauthority.on.ca > ; jdalton@poweradvisoryllc.com ;✏ rcary@niagara.com Cc: Patricia Lightburn < mailto:Patricia.Lightburn@powerauthority.on.ca > ; ESmith@osler.com ; jsadikman@osler.com✏ 330 Cc: Patricia Lightburn < mailto:Patricia.Lightburn@powerauthority.on.ca > ; ESmith@osler.com ; jsadikman@osler.com✏ Sent: Monday, March 02, 2009 8:03 PM✏ Subject: FIT Price Schedule✏ We had a good meeting with the Minister (meaning he was in a chipper mood).✏ Two take aways: Not Responsive , 2) the Minister wants an event at the OPA✏ office next week to roll out the draft FIT Price Schedule. I want to focus on #2.✏ Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule? Please✏ advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks.✏ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. < http://www.energyconservationweek.ca > www.energyconservationweek.ca✏ Say "Count Me In!" to Energy Conservation Week - learn more at: 331 Jim MacDougall From: Jim MacDougall Sent: March-03-09 9:01 AM To: 'ESmith@osler.com'; 'jdalton@poweradvisoryllc.com'; Jason CheeAloy; 'rcary@niagara.com' Cc: Patricia Lightburn; 'JSadikman@osler.com'; Cindy Roks Subject: Re: FIT Price Schedule Thanks Elliot It is a feature we want to implement and I agree it should be described in the Rules doc. The primary case where FIT contracted capacity triggered price adjustments will appear is on PV Solar Farm uptake. We are proposing that every (100 MW) of contract capacity, we degress the FIT price by 9% automa(ically for the next 100 MW and so on. I want to include a similar provision for the PV rooftops triggered every 50 MW per price category. Small commercial (10 100) large and very large commercial (100 and up) again every 50 MW. I would like to include a similar trigger for big wind, but am unsure it sends the right message, and the capacity level will be challenging. To be contd tonight. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Smith, Elliot To: Jim MacDougall; jdalton@poweradvisoryllc.com ; Jason Chee - Aloy; rcary@niagara.com CC: Patricia Lightburn; Sadikman, Jacob , Sent: Tue Mar 03 00:48:31 2009 Subject: RE: FIT Price Schedule Jim, While we're on the topic of the Price Schedule, Jake and I are working through the implementation issues associated with automatic price changes based on take - up (outside of the "Scheduled Program Reviews" which we've drafted a section on). If this is something we want in the FIT Program, it will need more detailed rules. We will need to develop rules, around how these automatic increments work and how information will be posted regarding progress towards the next increment, and where precisely the cut - off between rates will be. Can you please confirm that this is a feature you'd like to see, and if so how you would use it? Thanks, Elliot Elliot A. Smith Associate 416.862.6435 DIRECT, 416.862.6666 FACSIMILE, esmith@osler.com 332 Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1B8, osler.com , ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié,, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation., ******************************************************************** 333 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: March-03-09 9:33 AM To: Jim MacDougall; Jason Chee-Aloy; rcary@niagara.com Cc: Patricia Lightburn; ESmith@osler.com; jsadikman@osler.com Subject: Re: FIT Price Schedule I will send it out this morning. I am going to update it to reflect yesterday's conversation and the pricing updates made yesterday.⇡ ----- Original Message ----- From: Jim MacDougall⇡ To: jdalton@poweradvisoryllc.com ; Jason Chee- Aloy ; rcary@niagara.com⇡ Cc: Patricia Lightburn ; ESmith@osler.com ; jsadikman@osler.com⇡ Sent: Monday, March 02, 2009 10:30 PM⇡ Subject: Re: FIT Price Schedule⇡ Ok by me. John, could you send out the last version of the pricing report to all on this distribution? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca" ----- Original Message ----From: jdalton@poweradvisoryllc.com To: Jason Chee- Aloy; Jim MacDougall; rcary@niagara.com CC: Patricia Lightburn; ESmith@osler.com ; jsadikman@osler.com Sent: Mon Mar 02 20:49:55 2009 Subject: Re: FIT Price Schedule works for me ----- Original Message ----- From: Jason Chee - Aloy ✏ To: Jim MacDougall < mailto:Jim.MacDougall@powerauthority.on.ca > ; jdalton@poweradvisoryllc.com ;✏ rcary@niagara.com 334 rcary@niagara.com Cc: Patricia Lightburn < mailto:Patricia.Lightburn@powerauthority.on.ca > ; ESmith@osler.com ;✏ jsadikman@osler.com Sent: Monday, March 02, 2009 8:03 PM✏ Subject: FIT Price Schedule✏ We had a good meeting with the Minister (meaning he was in a chipper mood).✏ Two take aways: Not Responsive , 2) the Minister wants an event at the OPA✏ office next week to roll out the draft FIT Price Schedule. I want to focus on #2.✏ Can we schedule a conference call tomorrow evening around 600 pm to discuss the draft FIT Price Schedule?✏ Please advise and I'll have Sylvie set up the logistics tomorrow morning. Thanks.✏ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. < http://www.energyconservationweek.ca > www.energyconservationweek.ca✏ Say "Count Me In!" to Energy Conservation Week - learn more at: 335 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: March-03-09 1:55 PM To: Jim MacDougall; ESmith@osler.com; Jason Chee-Aloy; rcary@niagara.com Cc: Patricia Lightburn; JSadikman@osler.com; Cindy Roks Subject: Draft Report Supporting the FIT Price Schedule Attachments: Derivation of FITs - DRAFT FOR REVIEW ONLY - v3 March 3 09.doc Here's the draft report. There are a number of comments embedded in the document. In addition, there are issues associated with: (1 ) the premium for community - based and First Nations projects; (2) what should be included in the cost/price analysis (e.g., cost of curtailment, cost of security. etc.); (3) prices reflect different assumptions for PV capital costs (i.e., larger projects are based on NCI low capital cost estimate and smaller projects based on the average of the NCI high and low capital cost estimates).' Speak to you at 6 PM.' ----- Original Message ----- From: Jim MacDougall' To: ESmith@osler.com ; jdalton@poweradvisoryllc.com ; Jason Chee- Aloy ; rcary@niagara.com' Cc: Patricia Lightburn ; JSadikman@osler.com ; Cindy Roks' Sent: Tuesday, March 03, 2009 9:00 AM' Subject: Re: FIT Price Schedule' Thanks Elliot It is a feature we want to implement and I agree it should be described in the Rules doc. The primary case where FIT contracted capacity triggered price adjustments will appear is on PV Solar Farm uptake. We are proposing that every (100 MW) of contract capacity, we degress the FIT price by 9% automa(ically for the next 100 MW and so on. I want to include a similar provision for the PV rooftops triggered every 50 MW per price category. Small commercial (10- 100) large and very large commercial (100 and up) again every 50 MW. I would like to include a similar trigger for big wind, but am unsure it sends the right message, and the capacity level will be challenging. To be contd tonight. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 336 Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca" -----Original Message ----From: Smith, Elliot To: Jim MacDougall; jdalton@poweradvisoryllc.com ; Jason Chee - Aloy; rcary@niagara.com CC: Patricia Lightburn; Sadikman, Jacob Sent: Tue Mar 03 00:48:31 2009 Subject: RE: FIT Price Schedule Jim, While we're on the topic of the Price Schedule, Jake and I are working through the implementation issues associated with automatic price changes based on take - up (outside of the "Scheduled Program Reviews" which we've drafted a section on). If this is something we want in the FIT Program, it will need more detailed rules. We will need to develop rules around how these automatic increments work and how information will be posted regarding progress towards the next increment, and where precisely the cut - off between rates will be. Can you please confirm that this is a feature you'd like to see, and if so how you would use it? Thanks, Elliot Elliot A. Smith Associate 416.862.6435 DIRECT 416.862.6666 FACSIMILE esmith@osler.com Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1B8 osler.com ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 337 OPA Derivation of Feed-in Tariffs Last updated: Monday, March 5, 2018 DRAFT FOR INTERNAL REVIEW ONLY 1. Introduction The purpose of this report is to transparently and comprehensively describe the Ontario⇠ Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FITs) for Ontario. This report outlines the approach for establishing contract prices for each of the⇠ renewable energy supply technologies covered under the FIT program. The FIT contract⇠ rate will vary for different technologies, project sizes and proponents (e.g., recognizing⇠ the unique circumstances of community-based and First Nations projects) to promote⇠ broad participation in the program. This will allow for development over the full range⇠ of cost-effective project sizes and technologies. The proposed FIT prices are established to allow the proponent to recover project costs⇠ and earn a reasonable rate of return of the investment. Prices account for the following⇠ components: Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return. Project cost information was developed from a range of sources using best available⇠ information. Preference was given to more recent cost estimates from reliable sources⇠ with transparent assumptions, which can be updated as appropriate and necessary. Given that project costs can vary significantly depending on site conditions, proponent⇠ experience and the cost and performance characteristics of the various technologies,⇠ the FIT prices are based on lower cost projects. This incents the development of the⇠ lowest cost projects and mitigates the cost risks to Ontario consumers. The OPA will⇠ closely monitor market uptake of FIT contracts to assess whether FIT prices are too low.⇠ The FIT is designed to provide participants and associated industries with a high⇠ measure of price stability. As such, by design it is more difficult to decrease than⇠ increase FIT prices. FIT prices will only be revised under specific conditions. First of all, the OPA will perform⇠ a price review every three years or sooner if annual contract capacity targets for specific⇠ 1 338 technologies are exceeded. The OPA will modify contract prices for future years (but⇠ with no impact on any FIT projects that have applied for or executed contracts with the⇠ OPA) to reflect major changes in foreign exchange rates and other variables that have a⇠ dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. PV prices for greater than 100 kW projects will decline at an established rate (i.e.,⇠ percentage reduction in the FIT) after a specific amount of PV contracts have been⇠ approved. The price decline for larger rooftop projects (>100 kW) will be 6% and will⇠ occur after 50 MW of capacity has been awarded for the size tranche. The price⇠ reduction for ground mounted projects will be 9% and will occur after contracts⇠ representing 100 MW of capacity have been awarded. The contract price is fixed based on the contract application date, assuming that the⇠ application is approved. The table below summarizes the FIT schedule for 2009. Other than for PV projects⇠ twenty percent of the FIT contract price for each vintage of contracts escalates by the⇠ rate of change in the consumer price index (CPI). PV prices are constant and do not⇠ escalate over time. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance⇠ Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week,⇠ eight hours per day for all business days) and .9 for all off-peak hours (all other hours). Summary of FIT Schedule for 2009 Technology Rooftop Solar PV Ground mounted Solar PV Capacity Range ⇣ 10 kW > 10 kW ⇣ 100 kW > 100 kW ⇣ 500 kW > 500 kW < 10 MW FIT (cents/kWh) 80.2 71.3 67.3 53.9 44.3 Adjustments 2 339 Community Based Wind 1 On-shore Wind Off-shore Wind Waterpower ⇣ 10 MW Any size Any size <50 MW 14.4 11.6 19.8 12.9 Biomass Biogas Any size ⇣ 5 MW > 5 MW ⇣ 5 MW > 5 MW Any size 10.5 14.7 10.4 9.3 8.7 TBD Landfill gas Other resources: Geothermal,⇠ Concentrated Solar⇠ Power, Solar Thermal⇠ Electric, Storage TBD 2. Model Used to Derive FITs 2.1. Cost of New Entry Model The Cost of New Entry (CONE) model was developed for the OPA by Navigant⇠ Consulting, Inc. (Navigant) in February 2007. The OPA solicited Navigant to assess the⇠ market entry costs for new generators; and develop a methodology for comparing the⇠ costs of various generation technologies. The CONE model allows for comparison of various generation technologies by⇠ calculating the revenue requirement. To estimate the cost of new entry, a number of⇠ parameters are required, including capital cost, fixed operating and maintenance (O&M)⇠ cost, variable O&M cost, heat rate (for thermal generation technologies), capacity⇠ factor, and project life. 1 Also applies to First Nations wind projects. 3 340 2.2. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These⇠ assumptions were applied to all cases. Table 1. Financing Assumptions Input Percent Equity After Tax Return on Equity Percent Debt Cost of Debt Income Tax Rate Assumption 30% 11% 70% 7% 30.5% The CONE model assumes that the majority of costs of the renewable energy technology⇠ qualify for Class 43.2 Capital Cost Allowance treatment, with the exact percentage⇠ varying from 60 to 80% depending on the expected portion of project costs represented⇠ by the specific technology. The remaining depreciable projects costs are assumed to be⇠ subject to an 8% declining balance Capital Cost Allowance treatment. No credit was taken for potential revenues from the participation in the Federal⇠ Government’s ecoEnergy Renewable Initiative program. 3. Solar Photovoltaics 3.1. Input Sources and Assumptions The OPA requested Navigant to assess the costs and performance of solar photovoltaics⇠ in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic⇠ module and balance of system performance characteristics, installed system prices,⇠ supply and demand issues, key market player and job impacts. This report characterized⇠ the typical costs associated with a 5kW Residential project, a 500kW Commercial⇠ Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant⇠ determined costs in consultation with industry players from Ontario, as well as North⇠ America as a whole. The OPA used this report as a basis for all solar photovoltaic cost⇠ and performance assumptions. Table 2. Cost Components for Solar PV from Navigant Consulting Inc. Characteristic 2010 Low cost Estimate⇠ of Installed System Prices⇠ ($/kW) 2010 High Cost Estimate of Installed System Prices⇠ 4 Residential (5kW) Commercial Building Rooftop (500kW) Central Ground3 mounted (20MW),3 Fixed Axis Section 18(1) 341 ($/kW) Capacity Factor Fixed O&M ($/kW/year) 2 Section 18(1) FIT prices were developed for five categories of PV projects based on the anticipated⇠ range of project sizes and project sizes for different applications. Capital costs for the⇠ solar PV systems were derived by taking a simple average of the 2010 high and low cost⇠ estimates of installed system prices for all but the greater than 500kW rooftop projects and the ground mounted PV. For the greater than 500kW rooftop PV projects, the OPA⇠ used the Navigant low capital cost estimates given the potential rate impacts of these⇠ larger PV projects and the recent reported reductions in the costs of PV panels which⇠ will have the greatest cost impact on the larger PV systems. Since Navigant provided⇠ cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated a typical 100⇠ kW system and a 1 MW system were estimated. The costs associated with a 100 kW⇠ system was derived by taking a simple average of the cost of a 5 kW and a 500 kW⇠ system. Similarly, for a 1 MW system, a simple average of the 500 kW and a 20 MW⇠ system was taken. This assumes that the economies of scale are non-linear and the⇠ most significant economies are realized at increases in the scale of smaller projects. The assumptions that were used for PV are shown in Table 3. Table 3. Solar PV Assumptions for FIT derivation Rooftop ⇣10kW Typical Size (kW) 5 Contract year 2009 Construction Lead3 1 Time (yr) Start Year 2010 Capacity Factor 14% Capital Cost3 9,900 ($/kW) Fixed O&M3 10 2 Rooftop 10-100kW 100 2009 1 Rooftop 100-500kW 500 2009 2 Rooftop >500kW 1,000 2009 2 Ground3 mounted 20,000 2009 2 2010 14% 8,775 2011 14% 7,650 2011 14% 6,750 2011 14% 5,850 11 12 13.5 15 Includes inverter replacement costs of $0.20/Watt. 5 342 ($/kW/yr) 3.2. Model Outputs and FIT derivation Table 4 reviews the FITs for PV projects based on the assumptions outlined in Table 3. Table 4. Solar PV FIT derivation Description Typical End-Use Rooftop (⇣ 10 kW) Rooftop (> 10 ⇣ 100 kW) Rooftop (> 100 ⇣ 500 kW) Rooftop (> 500 kW) Ground-mounted (<10MW) Residential Small Commercial Large Commercial Industrial Solar PV farms FIT3 (cents/kWh) 80.2 71.3 67.3 53.9 44.3 4. Wind 4.1. Input Sources and Assumptions The capital and operating costs and performance characteristics for wind projects are⇠ presented below in Table 4. The capital costs for large wind are based on the publicly⇠ reported capital costs for the wind projects contracted under the OPA’s Renewable* Energy Supply III RFP.3 The capital costs for the 10MW community-based and First⇠ Nations wind projects are based on the foregone economies of scale for a smaller wind⇠ project as well as the higher assumed development costs for these projects. As such,⇠ these capital cost assumptions are only appropriate for and apply to community-based and First Nations wind projects. Table 5. Wind Assumptions for FIT derivation 3 http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6791 This press release indicated⇠ total project capital costs of $1.32 billion for 492.1 MW, representing approximately $2,600 per kW. Several wind turbine manufacturers have subsequently announced layoffs and the queue for wind⇠ turbines has disappeared. As expected, this has been accompanied by declines in the prices for wind⇠ turbines. 6 343 Community Based Wind4 (⇣10MW) Typical Size (MW) Contract year Construction Lead Time3 (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) 4.2. On-shore Wind Off-shore Wind Section 18(1) Model Outputs and FIT Derivation As outlined in Table 6, there are three FIT categories for wind projects: (1) communitybased and First Nations wind projects which is projects that are 10MW or less and⇠ satisfy the requirements of a community-owned or First Nations project; (2) on-shore⇠ wind which covers all sizes of on shore wind projects; and (3) off-shore which covers all⇠ sizes of off shore wind projects. Table 6. Wind Derivation of FIT Description Community Based Wind (⇣ 10 MW) On-shore Wind (any size) Off-shore Wind (any size) FIT (cents/kWh) 14.4 11.6 19.8 5. Waterpower 5.1. Input Sources and Assumptions The generation technologies used in waterpower projects are mature, lLeading to⇠ stability in costs. However, project capital costs and capacity factors are very site⇠ specific. 4 Incudes First Nations projects. 7 344 While uptake of waterpower projects has been fairly limited, that is mainly due to⇠ environmental and permitting restrictions, not the inability to finance projects given⇠ RESOP prices. Industry representatives have indicated that the RESOP offers a viable⇠ price. The increase in the FIT price is to adjust for the increase in capital costs that have⇠ occurred since 2007. Table 7. Waterpower Assumptions for FIT derivation Waterpower (<50MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) 5.2. Section 18(1) Model Outputs and FIT derivation Table 8 shows the FIT for Waterpower projects less than 50 MW. Table 8. Waterpower Derivation of FIT Description Waterpower (<50MW) FIT (cents/kWh) 12.9 6. Biomass 6.1. Input Sources and Assumptions The capital and operating cost and performance assumptions for biomass projects are⇠ based on the U.S. Department of Energy’s Energy Information Administration (EIA),⇠ Assumptions to the Annual Energy Outlook 2008. The cost assumptions were⇠ converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. Table 9. Biomass Assumptions for FIT derivation Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor 8 Section 18(1) 345 Capital Costs ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) 6.2. Section 18(1) Model Outputs and FIT Derivation Table 10 shows the FIT for Biomass projects of any size. Table 10. Biomass FIT of derivation Description Biomass (any size) FIT (cents/kWh) 10.5 7. Biogas 7.1. Input Sources and Assumptions The biogas assumptions used were from a Navigant Report (Renewable Energy: Costs,! Performance and Markets – An Outlook to 2015, June 5, 2007). The capital cost⇠ estimates were adjusted to reflect assumed economies of scale. The larger biogas⇠ projects, i.e., 500 kW and greater, were assumed to realize revenues from tipping fees⇠ associated with the disposal of bio-solids and other waste material. Table 11. Biogas assumptions for FIT Derivation Small Biogas (⇣5MW) Typical Size (kW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues($/MMBtu) 7.2. Large Biogas (>5MW) Section 18(1) Model Outputs and FIT Derivation Table 12 shows the FIT for small (⇣ 5MW) and large (>5MW) biogas projects. 9 346 Table 12. Biogas FIT Derivation Description Typical End-Use Biogas (⇣ 5 MW) Biogas (> 5 MW) Farm AD Mixed Waste Digester FIT3 (cents/kWh) 14.7 10.4 8. Landfill gas 8.1. Input Sources and Assumptions The capital and operating cost and performance assumptions for landfill gas projects are⇠ based on the EIA Assumptions to the Annual Energy Outlook 2008. The cost⇠ assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US⇠ exchange rate. These landfill gas capital cost estimates are also consistent with the⇠ reported costs of reciprocating engine gen sets and the estimated costs of landfill gas⇠ cleaning equipment. A 5 MW application was assumed to offer economies of scale⇠ relative to a 2.5 MW project. Table 13. Landfill gas assumptions for FIT Derivation Small Landfill Gas (⇣5MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/year) Variable O&M ($/kWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) 8.2. Large Landfill Gas (>5MW) Section 18(1) Model Outputs and FIT Derivation Table 14 shows the FIT for small (⇣ 5MW) and large (> 5MW) landfill gas projects. Table 14. Landfill gas FIT Derivation Description Landfill gas (⇣ 5 MW) Landfill gas (> 5 MW) FIT (cents/kWh) 9.3 8.7 10 347 9. Customized For renewable energy supply technologies where there is limited experience that can be⇠ used to estimate the technologies’ costs (e.g., off-shore wind) or where costs and⇠ performance can vary widely based on site specific conditions (e.g., large water power⇠ and pumped storage) alternative procurement approaches may be used. These⇠ alternative procurement approaches will include RFPs where there are a significant⇠ number of prospective suppliers that can satisfy the identified requirement and sole⇠ source negotiations where there is one party that is best positioned to satisfy the⇠ requirement. Geothermal Concentrated Solar Power or Thermal Electric Solar Pumped Storage Large Water 11 348 Smith, Elliot↵ From: Smith, Elliot↵ Sent: March-03-09 3:04 PM↵ To: 'jdalton@poweradvisoryllc.com'; Jim MacDougall; Jason Chee-Aloy;↵ rcary@niagara.com↵ Cc: Patricia Lightburn; Sadikman, Jacob; Cindy Roks↵ Subject: RE: Draft Report Supporting the FIT Price Schedule↵ John,⌃ Thanks for this. One suggested revision for your next draft -- to be consistent with the language in the Electricity Act, 1998 (as amended by the Green Energy and Green Economy Act) -- we have changed the FIT Rules to⌃ contemplate Aboriginal Projects, (which includes both First Nations and Métis), rather than just First Nations& Projects⌃ Thanks,⌃ Elliot⌃ Elliot A. Smith Associate⌃ 41 6.862.6435 DIRECT& 41 6.862.6666 FACSIMILE& esmith@osler.com⌃ Osler, Hoskin & Harcourt LLP⌃ Box 50, 1 First Canadian Place⌃ Toronto, Ontario, Canada M5X 1 B8& osler.com⌃ ----- Original Message----From: jdalton@poweradvisoryllc.com [mailto:jdalton@poweradvisoryllc.com]⌧ Sent: Tuesday, March 03, 2009 1:55 PM⌧ To: Jim MacDougall; Smith, Elliot; Jason Chee-Aloy; rcary@niagara.com⌧ Cc: Patricia Lightburn; Sadikman, Jacob; Cindy Roks⌧ Subject: Draft Report Supporting the FIT Price Schedule⌧ Here's the draft report. There are a number of comments embedded in the document.& In addition, there are issues associated with: (1 ) the premium for community - based and First Nations projects; (2) what should be included in the cost/price analysis (e.g., cost of curtailment, cost of security. etc.); (3) prices reflect different assumptions for PV capital costs (i.e., larger projects are based on NCI low capital cost estimate and smaller projects based on the average of the NCI high and low capital cost estimates).⌃ Speak to you at 6 PM.⌃ ----- Original Message ----- From: Jim MacDougall⌃ To: ESmith@osler.com ; jdalton@poweradvisoryllc.com ; Jason Chee- Aloy ; rcary@niagara.com⌃ 349 To: ESmith@osler.com ; jdalton@poweradvisoryllc.com ; Jason Chee- Aloy ; rcary@niagara.com⌃ Cc: Patricia Lightburn ; JSadikman@osler.com ; Cindy Roks⌃ Sent: Tuesday, March 03, 2009 9:00 AM⌃ Subject: Re: FIT Price Schedule⌃ Thanks Elliot↵ It is a feature we want to implement and I agree it should be described in the Rules doc.↵ The primary case where FIT contracted capacity triggered price adjustments will appear is on PV Solar Farm uptake.↵ We are proposing that every (100 MW) of contract capacity, we degress the FIT price by 9% automa(ically for the next 100 MW and so on.↵ I want to include a similar provision for the PV rooftops triggered every 50 MW per price category. Small commercial (10 - 100) large and very large commercial (100 and up) again every 50 MW.↵ I would like to include a similar trigger for big wind, but am unsure it sends the right message, and the capacity level will be challenging.↵ To be contd tonight.↵ Jim MacDougall, P.Eng.↵ Manager, Distributed Generation↵ Ontario Power Authority↵ 416 969 6415↵ Sent from my BB↵ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca ----- Original Message ----From: Smith, Elliot ↵ To: Jim MacDougall; jdalton@poweradvisoryllc.com ; Jason Chee - Aloy;↵ rcary@niagara.com ↵ CC: Patricia Lightburn; Sadikman, Jacob Sent: Tue Mar 03 00:48:31 2009↵ Subject: RE: FIT Price Schedule↵ Jim,↵ While we're on the topic of the Price Schedule, Jake and I are working through the implementation issues associated with automatic price changes based on take - up (outside of the "Scheduled Program Reviews" which we've drafted a section on). If this is something we want in the FIT Program, it will need more detailed rules. We will need to develop rules around how these automatic increments work and how information will be posted regarding progress towards the next increment, and where precisely the cut - off between rates will be.↵ Can you please confirm that this is a feature you'd like to see, and if so how you would use it?↵ Thanks,↵ Elliot↵ Elliot A. Smith↵ Associate↵ 350 416.862.6435 DIRECT 416.862.6666 FACSIMILE esmith@osler.com↵ Osler, Hoskin & Harcourt LLP↵ Box 50, 1 First Canadian Place↵ Toronto, Ontario, Canada M5X 1B8 osler.com ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ********************************************************************↵ ******************************************************************** This e-mail↵ message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 351 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: March-03-09 4:39 PM To: Smith, Elliot; Jim MacDougall; Jason Chee-Aloy; rcary@niagara.com Cc: Patricia Lightburn; Sadikman, Jacob; Cindy Roks Subject: Re: Draft Report Supporting the FIT Price Schedule Thanks, Elliot. I'll make this change. ----- Original Message ----- From: Smith, Elliot To: 'jdalton@poweradvisoryllc.com' ; Jim MacDougall ; Jason Chee- Aloy ; rcary@niagara.com Cc: Patricia Lightburn ; Sadikman, Jacob ; Cindy Roks Sent: Tuesday, March 03, 2009 3:03 PM Subject: RE: Draft Report Supporting the FIT Price Schedule John, Thanks for this. One suggested revision for your next draft -- to be consistent with the language in the Electricity Act, 1998 (as amended by the Green Energy and Green Economy Act) -- we have changed the FIT Rules to contemplate Aboriginal Projects, (which includes both First Nations and Métis), rather than just First Nations Projects Thanks, Elliot Elliot A. Smith⌫ Associate 41 6.862.6435 DIRECT 41 6.862.6666 FACSIMILE esmith@osler.com Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1 B8 osler.com ----- Original Message----From: jdalton@poweradvisoryllc.com [mailto:jdalton@poweradvisoryllc.com]⌧ Sent: Tuesday, March 03, 2009 1:55 PM⌧ To: Jim MacDougall; Smith, Elliot; Jason Chee-Aloy; rcary@niagara.com⌧ Cc: Patricia Lightburn; Sadikman, Jacob; Cindy Roks⌧ Subject: Draft Report Supporting the FIT Price Schedule⌧ Here's the draft report. There are a number of comments embedded in the document. In addition, there are issues associated with: (1 ) the premium for community - based and First Nations projects; (2) what should be included in the cost/price analysis (e.g., cost of curtailment, cost of security. etc.); (3) prices reflect different assumptions for PV capital costs (i.e., larger projects are based on NCI low capital cost estimate and smaller projects based on the average of the NCI high and low capital cost 352 capital cost estimate and smaller projects based on the average of the NCI high and low capital cost estimates). Speak to you at 6 PM. ----- Original Message ----- From: Jim MacDougall To: ESmith@osler.com ; jdalton@poweradvisoryllc.com ; Jason Chee- Aloy ; rcary@niagara.com Cc: Patricia Lightburn ; JSadikman@osler.com ; Cindy Roks Sent: Tuesday, March 03, 2009 9:00 AM Subject: Re: FIT Price Schedule Thanks Elliot It is a feature we want to implement and I agree it should be described in the Rules doc. The primary case where FIT contracted capacity triggered price adjustments will appear is on PV Solar Farm uptake. We are proposing that every (100 MW) of contract capacity, we degress the FIT price by 9% automa(ically for the next 100 MW and so on. I want to include a similar provision for the PV rooftops triggered every 50 MW per price category. Small commercial (10 - 100) large and very large commercial (100 and up) again every 50 MW. I would like to include a similar trigger for big wind, but am unsure it sends the right message, and the capacity level will be challenging. To be contd tonight. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca⌫ ----- Original Message ----From: Smith, Elliot  To: Jim MacDougall; jdalton@poweradvisoryllc.com ; Jason Chee - Aloy; rcary@niagara.com  CC: Patricia Lightburn; Sadikman, Jacob Sent: Tue Mar 03 00:48:31 2009 Subject: RE: FIT Price Schedule Jim, While we're on the topic of the Price Schedule, Jake and I are working through the implementation issues associated with automatic price changes based on take - up (outside of the "Scheduled Program Reviews" which we've drafted a section on). If this is something we want in the FIT Program, it will need more detailed rules. We will need to develop rules around how these automatic increments work and how information will be 353 posted regarding progress towards the next increment, and where precisely the cut - off between rates will be. Can you please confirm that this is a feature you'd like to see, and if so how you would use it? Thanks, Elliot Elliot A. Smith Associate 416.862.6435 DIRECT 416.862.6666 FACSIMILE esmith@osler.com Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1B8 osler.com ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** ******************************************************************** This e-mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 354 Jim MacDougall From: Jim MacDougall⌦ Sent: March-04-09 12:18 PM⌦ To: Tim Taylor; Emay Cowx⌦ Cc: Jason Chee-Aloy; Patricia Lightburn⌦ Subject: FW: Draft FIT Program Pricing⌦ Attachments: FIT Program Rules 4 - Pricing.ppt⌦ As discussed.⌦ Proposed pricing schedule slides⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto, ON M5H 1T1, Canada⌦ tel 416.969.6415⌦ <>⌦ 355 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY 356 Proposed FIT Pricing Schedule Technology Rooftop Solar PV Capacity Range 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW FIT (cents/kWh) 80.2 71.3 63.5 56.7 Ground mounted Solar PV < 10 MW 44.3 Community Based Wind On-shore Wind Off-shore Wind Waterpower Biomass Biogas 10 MW Any size Any size Any size Any size 5 MW > 5 MW 5 MW > 5 MW 14.4 12.9 15.0 – 19.8 12.9 10.5 14.7 10.4 9.3 8.7 Landfill gas Adjustments 6% price reduction triggered when 50 MW reached (in aggregate of these 3 sizes) 9% price reduction triggered when 100 MW reached TBD [NTD: Definition of ‘community based’ and procurement⇡ method for solar PV >10 MW and waterpower > 50 MW to be⇡ 2⇥ discussed with MEI.]⇡ 357 Methodology to Determine Prices • Proposed FIT pricing model (Cost of New Entry Model) is based⇥ on project costs plus a reasonable rate of return on equity⇥ • Prices account for the following components:⇥ – – – – – Capital costs⇥ Operating & maintenance costs⇥ Connection costs⇥ Contract term⇥ Reasonable rate of return on equity⇥ • Project cost information was developed from a range of sources⇥ using best available information⇥ • Preference was given to more recent cost estimates from⇥ reliable sources with transparent assumptions, which can be⇥ updated as appropriate and necessary⇥ 3⇥ 358 Incenting On-peak Production • Technologies that are not intermittent (i.e., dispatchable)⇥ will be encouraged to shift production to on-peak periods when the electricity is most needed⇥ – – • Waterpower⇥ Bio-energy⇥ Projects will earn the posted FIT price multiplied by:⇥ – – – 0.9 for off-peak periods⇥ 1.35 for on-peak periods⇥ On-peak periods are 11:00 am to 7:00 pm on business⇥ days⇥ • Projects that operate 24 X 7 all year will earn the same⇥ total revenue as if they were earning the posted FIT price⇥ 4⇥ 359 Basic Financing Assumptions Input Assumption⇥ Return on Equity 11%⇥ Percent Debt 70%⇥ Cost of Debt 7%⇥ Income Tax Rate 30.5%⇥ These assumptions were applied to all cases⇥ 5⇥ 360 Solar PV Rooftop 10kW Rooftop 10-100kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) FIT Derivation (cents/kWh) • Rooftop 100-500kW Rooftop >500kW Ground mounted < 10 MW Section 18(1) FIT prices were developed for five categories of PV projects⇥ based on the anticipated range of project sizes and project⇥ sizes for different applications⇥ 6⇥ 361 Triggered Price Adjustments for Solar PV • • FIT contracted capacity triggered price adjustments will occur⇥ on ground mounted solar PV⇥ – For every [100 MW] of contract capacity, the FIT price will⇥ degress by 9% automatically for the next 100 MW⇥ – For the next 100 MW, price will degress by another 9%,⇥ and so on⇥ A similar provision for commercial PV rooftops (2 options):⇥ – Option 1⇥ • – Commercial Solar PV roof-top will have FIT contract⇥ price adjusted with a 6% degression rate every 50 MW⇥ of contracted capacity⇥ Option 2⇥ • Commercial Solar PV roof-top projects will have a 12⇥ month notice period prior to the implementation of any⇥ price decrease⇥ [NTD: These pricing dynamics are recommended, as solar⇡ PV costs are projected to decrease over time. This⇡ framework helps protect ratepayers.]⇡ 7⇥ 362 Wind Community Based Wind ( 10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) FIT Derivation (cents/kWh) • On-shore Wind Off-shore Wind Section 18(1) FIT prices were developed for three categories of wind projects⇥ • Community based wind projects assume the foregone⇥ economies of scale for a smaller project as well as the⇥ assumed higher development costs for these types of⇥ projects⇥ 8⇥ 363 Waterpower Waterpower Any size Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) FIT Derivation (cents/kWh) • Section 18(1) Generation technologies used in waterpower projects are⇥ mature, leading to stability in costs⇥ • However, project capital costs and capacity factors are very⇥ site specific⇥ 9⇥ 364 Biomass Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Fit Derivation cents/kWh Section 18(1) •⌅ Capital and operating cost and performance assumptions are⇥ based on the U.S. Department of Energy’s Energy⌅ Information Administration (EIA) Assumptions to the Annual Energy Outlook 2008 10⇥ 365 Biogas Small Biogas ( 5MW) Typical Size (kW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues($/MMBtu) FIT Derivation cents/kWh • Large Biogas (>5MW) Section 18(1) The larger biogas projects were assumed to realize revenues from tipping fees associated with the disposal of bio-solids⇥ and other waste material⇥ 11⇥ 366 Landfill Gas Small Landfill Gas ( 5MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/year) Variable O&M ($/kWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) FIT Derivation cents/kWh • Large Landfill Gas (>5MW) Section 18(1) Capital and operating cost and performance assumptions are⇥ based on the EIA Assumptions to the Annual Energy Outlook 2008 • These landfill gas capital cost estimates are consistent with⇥ the reported costs of reciprocating engine gen sets and the⇥ estimated costs of landfill gas cleaning equipment⇥ 12⇥ 367 Customized Technologies • For renewable energy supply technologies where:⇥ – There is limited experience that can be used to⇥ estimate costs, or⇥ – Where costs and performance can vary widely based⇥ on site specific conditions⇥ • • These include:⇥ – – – – 13 Alternative procurement approaches may be used⇥ Geothermal⇥ Concentrated solar power or thermal electric solar⇥ Pumped storage⇥ Large waterpower⇥ [NTD: It is proposed to not have FIT prices for⇡ these resources and procure them through an⇡ alternate procurement method – to discuss with⇡ MEI.]⇡ 368 Jim MacDougall From: Jim MacDougall Sent: March-04-09 12:20 PM To: Patricia Lightburn Subject: comms is leading the charge on fit pricing, so I suggest focusing on the supporting stuff..⌘ Other jurisdictions⌘ Rationale for tranches⌘ Why cost based⌘ Totally ignore the formatting as JCA suggested, simple content!⌘ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation⌘ Electricity Resources⌘ Ontario Power Authority⌘ 120 Adelaide St W, Suite 1600⌘ Toronto , ON M5H 1T1 , Canada⌘ tel 416.969.6415⌘ 369 Jason Chee-Aloy From: Jason Chee-Aloy Sent: March-05-09 9:15 AM To: Jim MacDougall; Patricia Lightburn Subject: FW: Draft Docs FIT_NEWS RLS_v1_March 4-09.doc; FIT_BKGRNDR for news conf_v1_March 4- Attachments: 09.doc; FIT_Qs and As for news conf_v1_March 4-09.doc High Importance: Can you please review these documents and provide proposed red- lined comments to me ASAP? Thanks. From: Tim Taylor⌦ Sent: Thursday, March 05, 2009 8:57 AM⌦ To: Jason Chee-Aloy; Emay Cowx; D. Brian Hay⌦ Subject: Draft Docs⌦ Importance: High⌦ Here are the draft documents that we propose to send to the Ministry this afternoon. Comments, suggestions? Greg Timothy N. Taylor Manager, Media and Public Relations 416 -969 -6353 www.powerauthority.on.ca tim.taylor@powerauthority.on.ca From: Deb Reid [mailto:deb@reidandassociates.ca]⌦ Sent: March 4, 2009 11:03 PM⌦ To: Tim Taylor⌦ Subject: Draft Docs⌦ Importance: High⌦ Hi Greg: Here are draft docs: 1. News Release 2. Backgrounder (not sure if Jim wants to put full rate table in, but I thought put it in for now, we can always delete or just put in a few 3. Qs and As – – I think the rate for off- shore wind will raise the issue of the bluffs) modified from the ones Tim and I worked on more work, but it ’s – not sure who these are for – Minister? Will need a start. If you need any modifications done in the a.m. just let me know. Or if you want me to come in a bit before the 1 p.m. meeting, I could do that. Ciao! 370 Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 371 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 1 March 4, 2009 Page 1 of 2# BACKGROUNDER North America’s Renewable Energy Leader Should the proposed Green Energy Act (GEA) be passed, it would expedite the growth of# clean, renewable sources of energy, like wind, solar, hydro, biomass and biogas, helping# Ontario become North America’s leader in renewable energy. One of the ways this would be achieved is by creating a Feed-in Tariff Program that guarantees specific rates# for energy generated from renewable sources. What is a Feed-in Tariff Program? A Feed-In Tariff (FIT) Program is a simpler way to contract for generation. It is simpler# because of standardized program rules and standardized contracts, including a# standardized price. In the context of the GEA, a FIT Program will be used to procure# renewable energy supply going forward. This means, developers of renewable energy# supply projects will receive a FIT contract if they meet all requirements in the FIT# Program rules.# What will Ontario’s FIT Program look like? Ontario’s proposed FIT Program would have several key features. It would: be open to various renewable energy supply technologies (i.e., wind, hydro, solar and# biomass technologies); have different prices for different technologies and project sizes; have prices that cover total project costs and provide a reasonable rate of return over a# long-term contract (about 20 years); and provide opportunities for promoting community-based and Aboriginal projects. Proposed prices are outlined in the table below. These will be refined with stakeholder# input during the consultation process. Proposed FIT Pricing Schedule Technology Capacity Range FIT Adjustments (cents/kWh) Rooftop Solar PV > 1 0 kW > 1 00 Ground mounted Solar PV Community Based Wind 80.2 1 0 kW 1 00 kW 500 kW 71.3 6% price reduction⌧ triggered when 50 MW reached (in aggregate of these 3 sizes) 63.5 > 500 kW 56.7 < 10 MW 44.3 1 0 MW 14.4 On-shore Wind Any size 12.9 Off-shore Wind Any size 15.0 Waterpower Any size 12.9 Biomass Any size 10.5 9% price reduction⌧ triggered when 100 MW reached – 19.8 TBD 372 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 1 March 4, 2009 Page 2 of 2# Proposed FIT Pricing Schedule Technology Capacity Range FIT Adjustments (cents/kWh) Biogas Landfill gas 5 MW 14.7 > 5 MW 10.4 5 MW 9.3 > 5 MW 8.7 Energy Agency Involvement Successful implementation of a FIT Program will require changes across the energy# sector that will enable renewable energy supply to be brought into service more quickly# and efficiently. The Ontario Energy Board (OEB), the Independent Electricity System# Operator (IESO), Hydro One and other transmitters and distributors will co-ordinate their# efforts to meet the objective of increasing renewable energy supply in Ontario. Stakeholder Involvement From March 17, 2009 to May 5, 2009, the OPA will host a series of weekly consultation# sessions with renewable energy stakeholders. These consultation sessions will be used to# seek input and feedback from large and small renewable energy suppliers, on proposed# FIT Program Rules and Contracts. Renewable energy suppliers are any person in the province that generates and supplies# renewable energy to the grid ranging from large-scale commercial developers to microscale residential developers or homeowners. The OPA will take into account the varying# levels of experience and expertise among stakeholders and will also let them know about# additional consultation sessions being held by other energy agencies. Full day in-person consultation sessions will be held on a weekly basis with about 200# pre-registered stakeholders and representatives of associations with an interest in# renewable energy. The in-person session will be augmented by web and teleconference# capability to listen in to the entire proceedings and view the presentations. Web-enabled# questions will also be activated for consideration during the Q&A periods. The OPA will establish a FIT web page for general information where all documentation# from the consultation sessions will be publicly available. There will also be Online# Question and Answer capability to answer questions from all potential suppliers. Timing The first consultation session will take place on Tuesday, March 17, 2009. Stakeholders# and potential suppliers have been notified and have begun to submit their registration# requests. The expectation is that should the proposed GEA be passed, the OPA will be in# a position to immediately implement and promote an effective and fair FIT Program that# will make the development of renewable energy easier throughout the province. 373 DRAFT NEWS RELEASE V. 1 March 4, 2009 MAKING RENEWABLE ENERGY EASIER Proposed Feed-in Tariff Program would Guarantee Rates for Large and Small Renewable+ Energy Projects March XX, 2009+ Ontario is preparing to make it easier to bring renewable energy projects to life under the+ proposed Green Energy Act (GEA). If passed, one of the expected policy changes that+ will flow from Bill 150 will be the creation of a new pricing system for renewable+ energy. “An attractive feed-in tariff regime with guaranteed rates will help spark new investment in renewable energy generation and will increase investor confidence and access to+ financing,” said George Smitherman, Ontario’s Minister of Energy and Infrastructure. “Ontario has learned from other jurisdictions that feed-in tariffs provide a fair and+ transparent incentive to encourage the development of all types and sizes of renewable+ energy projects, including community-based and Aboriginal projects.” The Ontario Power Authority (OPA) will lead the implementation of Ontario’s proposed& Feed-in Tariff (FIT) Program. The OPA will co-ordinate with other energy agencies like+ the Ontario Energy Board (OEB), the Independent Electricity System Operator (IESO)+ and Hydro One. It will also consult with stakeholders representing large and small renewable energy suppliers on proposed FIT Program Rules, Contracts and Rates. Proposed rates range from 8.7 cents per kilowatt hour (kWh) for landfill gas projects to+ 80.2 cents per kWh for small [NTD – would this be residential?] rooftop solar+ photovoltaic (PV) projects. These rates and other technical details of the proposed FIT+ Program will be refined through a series of weekly consultation sessions with renewable+ energy stakeholders, hosted by the OPA from March 17, 2009 to May 5, 2009. The OPA will also work with stakeholders to develop and provide information and+ education material to the public, potential suppliers and participants. “The proposed FIT Program will bring significant benefits to the province,” said Minister& Smitherman. “More renewable energy projects in Ontario will mean more transmission+ and distribution development; and more jobs and economic development for Ontario+ communities.” Quick Facts⇠ 1. Ontario has already brought about 1,000 megawatts of new renewable energy online since October 2003. 2. Canada’s two largest wind farms are located in Ontario and by the end of 2009,& nearly 1,200 megawatts of wind capacity will be on-line, enough to power almost+ 325,000 homes. 3. Investments in new renewable energy projects already in place or under+ construction in Ontario total about $4 billion.+ ______________________________ 374 DRAFT KEY MESSAGES AND Qs & As V. 1 March 4, 2009 Page 1 of 3# MAKING RENEWABLE ENERGY EASIER Key Messages The OPA will take the lead in implementing the proposed Feed-in Tariff Program that⇡ will make it easier to bring renewable energy projects to life under the proposed Green Energy Act. Feed-in-tariffs are a key feature associated with the proposed GEA They provide a fair and transparent incentive to encourage the development of renewable energy All types and sizes of renewable energy projects are eligible, including! community-based and Aboriginal projects The OPA will consult with electricity stakeholders to refine proposed FIT Program Rules and Contracts. The OPA will co-ordinate with other energy agencies like the OEB, the IESO and! Hydro One The OPA will consult with stakeholders representing large and small suppliers on! the development of Program Rules and Contracts before the Program is launched The OPA will provide information and education material to potential suppliers! and Program participants. The proposed FIT Program will bring significant benefits to the province. More⇡ renewable energy projects will mean:⇡ more transmission and distribution development; and more jobs and economic development for Ontario communities Questions and Answers Q. A. Does the GEA change the mandate and work of the OPA? The OPA’s three main roles: leading conservation, system planning that reflects# government policy and ensuring that private sector investment has a place in# Ontario’s electricity sector—will not change because of the GEA. The OPA will continue to enable government electricity policy. Q. A. What are the implications of the GEA for the IPSP? Is the IPSP out of date? Is! it still needed? Will it be reconvened before the OEB? Last September, I directed the OPA to plan for more and faster conservation and# renewables within the IPSP. Obviously, the OPA will now have to fully understand# and incorporate the GEA into these deliberations. 375 DRAFT KEY MESSAGES AND Qs & As V. 1 March 4, 2009 Page 2 of 3# Q. A. What is a Feed-In-Tariff (FIT) and how does it work? A Feed-In Tariff (FIT) Program is a simpler way to contract for generation. It is# simpler because of standardized Program rules and standardized contracts,# including a standardized price. In the context of the GEA, a FIT Program will be# used to procure renewable energy supply going forward. This means, developers of# renewable energy supply projects will receive a FIT contract if they meet all# requirements in the FIT Program Rules. Generally, a Feed-in-Tariff has a number of key attributes: Open to all renewable energy supply technologies – transmission and# distribution-connected projects Prices adjusted by technology and project size. Prices designed to cover total project cost and provide a ‘reasonable rate of return’ over a long-term contract (generally about 20 years) Promote community and Aboriginal projects Aggressive/pro-active transmission and distribution expansion to meet# renewable energy growth Streamlined environmental and municipal approvals Q. A. Is the OPA responsible for electricity procurement under the FIT Program? Yes. The OPA is responsible for administering the FIT Program. The OPA will work with the Local Distribution Companies to assess the projects that bring# forward an application for a FIT contract. Q. How can this FIT Program work if the transmission system was constrained/! overloaded as you claimed in the past? A plan to develop additional transmission and distribution will address the# requirements to enable connection of additional renewable energy supply to be# contracted for under the FIT Program. The Bruce-Milton expansion will relieve# transmission constraints in Southern Ontario, therefore permitting additional# contracting for renewable energy supply in that part of the Province. Plans to# expand transmission and distribution will enable additional contracting for# renewable energy supply in Northern Ontario over the next years. A. Q. A. Q. A. If a lot of new renewable generation is proposed, will the province reduce its! reliance on nuclear? This is a long-term strategy that will require co-ordination among all technologies. The objective of the GEA is to bring more renewable energy supply to the province. As new supply becomes available the OPA will be able to determine the best# balance of supply technologies. Is the FIT program ready to go? If not, when will it be? The OPA has the general shape of the proposed program, and will be working with# stakeholders to refine the technical details of the program. We expect that work to# 376 DRAFT KEY MESSAGES AND Qs & As V. 1 March 4, 2009 Page 3 of 3# be complete, and the program to be ready to go should the proposed GEA be passed# by the Legislature. Q. A. What about the old RESOP projects that have been waiting patiently? Projects that have already been approved under RESOP will continue according to# their contracts. The FIT Program will replace RESOP so any new renewable# energy projects will come under the umbrella of the new FIT Program rules. Q. What renewable energy supply projects will be eligible under the FIT Program? Renewable energy projects using wind, hydro, solar and biomass technologies will# be eligible. A. Q. A. Q. A. Q. A. Is there enough transmission and/or distribution capacity to connect all! proposed renewable energy supply projects? A plan to develop additional transmission and distribution will address the# requirements to enable connection of additional renewable energy supply to be# contracted for under the proposed FIT Program. The Bruce-Milton expansion will relieve transmission constraints in Southern Ontario, therefore permitting additional# contracting for renewable energy supply in that part of the Province. Plans to# expand transmission and distribution will enable additional contracting for# renewable energy supply in Northern Ontario over the next years. Are small projects, such as community-based projects or projects supported by! First Nations, disadvantaged by larger projects connected or proposing to! connect to the transmission system? The OPA will work with the Ministry on the needs of community-based and First# Nation projects to provide the support they might need to bring a project forward# and be successful for that community. What is the most significant aspect of the GEA and how will it affect the OPA’s⇡ role in the energy sector? There is no doubt we are moving in a direction that will see dramatic changes to# Ontario’s energy sector. A streamlined approvals process and the proposed Feedin-Tariff Program will mean there will be more renewable energy in Ontario sooner. The OPA will continue in its role to leading conservation, system planning and# ensuring that private sector investment has a place in Ontario’s electricity sector— these will not change because of the GEA. The OPA will continue to enable government electricity policy. Q. How do the proposed FIT Program prices compare to RESOP prices? A. 377 Cindy Roks↵ From: Cindy Roks↵ Sent: March-05-09 5:12 PM↵ To: jdalton@poweradvisoryllc.com; Sardar Shokatayev↵ Cc: Patricia Lightburn; Jim MacDougall; Sarah Simmons↵ Subject: FIT Derivative Report↵ Attachments: Derivation of FITs - DRAFT FOR REVIEW ONLY - v4 March 6 09.doc↵ Please find the latest FIT report. John – there were a few capital cost/price updates.⇡ I didn ’ t address your comments yet but I wanted all of us to be aware of the most up - to - date numbers.⇡ - Cindy⇡ Cindy Roks↵ Business Analyst⇡ 416 - 969 - 6099⇡ P please consider the environment before printing this email _________________________ _________⇤ 378 OPA Derivation of Feed-in Tariffs Last updated: Friday, March 6, 2009 DRAFT FOR INTERNAL REVIEW ONLY Introduction The purpose of this report is to transparently and comprehensively describe the Ontario⇠ Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FITs) for Ontario. This report outlines the approach for establishing contract prices for each of the⇠ renewable energy supply technologies covered under the FIT program. The FIT contract⇠ rate will vary for different technologies, project sizes and proponents (e.g., recognizing⇠ the unique circumstances of community-based and Aboriginal projects) to promote⇠ broad participation in the program. This will allow for development over the full range⇠ of cost-effective project sizes and technologies. The proposed FIT prices are established to allow the proponent to recover project costs⇠ and earn a reasonable rate of return of the investment. Prices account for the following⇠ components: Project capital costs; Operating and maintenance costs; Connection costs; Contract term; and Reasonable rate of return. Project cost information was developed from a range of sources using best available⇠ information. Preference was given to more recent cost estimates from reliable sources⇠ with transparent assumptions, which can be updated as appropriate and necessary. Given that project costs can vary significantly depending on site conditions, proponent⇠ experience and the cost and performance characteristics of the various technologies,⇠ the FIT prices are based on lower cost projects. This incents the development of the⇠ lowest cost projects and mitigates the cost risks to Ontario consumers. The OPA will⇠ closely monitor market uptake of FIT contracts to assess whether FIT prices are too low.⇠ The FIT is designed to provide participants and associated industries with a high⇠ measure of price stability. As such, by design it is more difficult to decrease than⇠ increase FIT prices. 1 379 FIT prices will only be revised under specific conditions. First of all, the OPA will perform⇠ a price review every three years or sooner if annual contract capacity targets for specific⇠ technologies are exceeded. The OPA will modify contract prices for future years (but⇠ with no impact on any FIT projects that have applied for or executed contracts with the⇠ OPA) to reflect major changes in foreign exchange rates and other variables that have a⇠ dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. PV prices for greater than 100 kW projects will decline at an established rate (i.e.,⇠ percentage reduction in the FIT) after a specific amount of PV contracts have been⇠ approved. The price decline for larger rooftop projects (>100 kW) will be 6% and will⇠ occur after 50 MW of capacity has been awarded for the size tranche. The price⇠ reduction for ground mounted projects will be 9% and will occur after contracts⇠ representing 100 MW of capacity have been awarded. The contract price is fixed based on the contract application date, assuming that the⇠ application is approved. The table below summarizes the FIT schedule for 2009. Other than for PV projects⇠ twenty percent of the FIT contract price for each vintage of contracts escalates by the⇠ rate of change in the consumer price index (CPI). PV prices are constant and do not⇠ escalate over time. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance⇠ Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week,⇠ eight hours per day for all business days) and .9 for all off-peak hours (all other hours). Summary of FIT Schedule for 2009 Technology Rooftop Solar PV Capacity Range ✓ 10 kW > 10 kW ✓ 100 kW FIT (cents/kWh) 80.2 71.3 Adjustments 6% price reduction⇠ 2 380 > 100 kW ✓ 500 kW > 500 kW 63.5 56.7 Ground mounted Solar PV < 10 MW 44.3 Community Based Wind 1 On-shore Wind Off-shore Wind Waterpower Biomass Biogas ✓ 10 MW Any size Any size <50 MW Any size ✓ 5 MW > 5 MW ✓ 5 MW > 5 MW Any size 14.4 12.9 15.0-19.8 12.9 10.5 14.7 10.4 9.3 8.7 TBD Landfill gas Other resources: Geothermal,⇠ Concentrated Solar⇠ Power, Solar Thermal⇠ Electric, Storage triggered when 50⇠ MW reached (in⇠ aggregate of these⇠ 3 sizes) 9% price reduction⇠ triggered when⇠ 100 MW reached TBD Model Used to Derive FITs Cost of New Entry Model The Cost of New Entry (CONE) model was developed for the OPA by Navigant⇠ Consulting, Inc. (Navigant) in February 2007. The OPA solicited Navigant to assess the⇠ market entry costs for new generators; and develop a methodology for comparing the costs of various generation technologies. 1 Also applies to Aboriginal wind projects. 3 381 The CONE model allows for comparison of various generation technologies by⇠ calculating the revenue requirement. To estimate the cost of new entry, a number of⇠ parameters are required, including capital cost, fixed operating and maintenance (O&M)⇠ cost, variable O&M cost, heat rate (for thermal generation technologies), capacity⇠ factor, and project life. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These⇠ assumptions were applied to all cases. Table 1. Financing Assumptions Input Percent Equity After Tax Return on Equity Percent Debt Cost of Debt Income Tax Rate Assumption 30% 11% 70% 7% 30.5% The CONE model assumes that the majority of costs of the renewable energy technology⇠ qualify for Class 43.2 Capital Cost Allowance treatment, with the exact percentage⇠ varying from 60 to 80% depending on the expected portion of project costs represented⇠ by the specific technology. The remaining depreciable projects costs are assumed to be⇠ subject to an 8% declining balance Capital Cost Allowance treatment. No credit was taken for potential revenues from the participation in the Federal⇠ Government’s ecoEnergy Renewable Initiative program. Solar Photovoltaics Input Sources and Assumptions The OPA requested Navigant to assess the costs and performance of solar photovoltaics⇠ in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic⇠ module and balance of system performance characteristics, installed system prices,⇠ supply and demand issues, key market player and job impacts. This report characterized⇠ the typical costs associated with a 5kW Residential project, a 500kW Commercial⇠ Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant⇠ determined costs in consultation with industry players from Ontario, as well as North⇠ America as a whole. The OPA used this report as a basis for all solar photovoltaic cost⇠ and performance assumptions. 4 382 Table 2. Cost Components for Solar PV from Navigant Consulting Inc. Characteristic Residential (5kW) 2010 Low cost Estimate⇠ 9,000 of Installed System Prices⇠ ($/kW) 2010 High Cost Estimate 10,800 of Installed System Prices⇠ ($/kW) Capacity Factor 14% 2 Fixed O&M ($/kW/year) 10 Commercial⇠ Building Rooftop⇠ (500kW) 7,200 Central Ground⇠ mounted (20MW),⇠ Fixed Axis 4,950 8,100 6,750 14% 12 14% 15 FIT prices were developed for five categories of PV projects based on the anticipated⇠ range of project sizes and project sizes for different applications. Capital costs for the rooftop ✓10kW were derived by taking a simple average of the 2010⇠ high and low cost estimates of 5kW installed system prices. Since Navigant provided⇠ cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated with a typical⇠ 100 kW system and a 1 MW system were estimated. The costs associated with a 100 kW system was derived by taking a simple average of the cost of a 5 kW and a 500 kW⇠ system. Similarly, for a 1 MW system, an average of the low capital costs for a 500 kW⇠ and a 20 MW system was taken. This assumes that the economies of scale are nonlinear and the most significant economies are realized at increases in the scale of⇠ smaller projects. For the greater than 500kW rooftop PV projects and the ground⇠ mounted projects, the OPA used the Navigant low capital cost estimates given the⇠ potential rate impacts of these larger PV projects and the recent reported reductions in⇠ the costs of PV panels which will have the greatest cost impact on the larger PV systems. 2 Includes inverter replacement costs of $0.20/Watt. 5 383 The assumptions that were used for PV are shown in Table 3. Table 3. Solar PV Assumptions for FIT derivation Rooftop ✓10kW Rooftop 10-100kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Rooftop Rooftop 100-500kW >500kW Ground⇠ mounted Section 18(1) Model Outputs and FIT derivation Table 4 reviews the FITs for PV projects based on the assumptions outlined in Table 3. Table 4. Solar PV FIT derivation Description Rooftop (✓ 10 kW) Rooftop (> 10 ✓ 100 kW) Rooftop (> 100 ✓ 500 kW) Rooftop (> 500 kW) Ground-mounted (<10MW) Typical End-Use Residential Small Commercial Large Commercial Industrial Solar PV farms FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 6 384 Wind Input Sources and Assumptions The capital and operating costs and performance characteristics for wind projects are⇠ presented below in Table 4. The capital costs for large wind are based on the publicly⇠ reported capital costs for the wind projects contracted under the OPA’s Renewable* Energy Supply III RFP.3 The capital costs for the 10MW community-based and Aboriginal⇠ wind projects are based on the foregone economies of scale for a smaller wind project⇠ as well as the higher assumed development costs for these projects. As such, these⇠ capital cost assumptions are only appropriate for and apply to community-based and⇠ Aboriginal wind projects. Table 5. Wind Assumptions for FIT derivation Community Based Wind4 (✓10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) On-shore Wind Off-shore Wind Section 18(1) 3 http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6791 This press release indicated⇠ total project capital costs of $1.32 billion for 492.1 MW, representing approximately $2,600 per kW.⇠ Several wind turbine manufacturers have subsequently announced layoffs and the queue for wind⇠ turbines has disappeared. As expected, this has been accompanied by declines in the prices for wind⇠ turbines. 4 Includes Aboriginal projects. 7 385 Fixed O&M ($/kW/yr) Section 18(1) Model Outputs and FIT Derivation As outlined in Table 6, there are three FIT categories for wind projects: (1) communitybased and Aboriginal wind projects which is projects that are 10MW or less and satisfy⇠ the requirements of a community-owned or Aboriginal project; (2) on-shore wind which⇠ covers all sizes of on shore wind projects; and (3) off-shore which covers all sizes of off⇠ shore wind projects. Table 6. Wind Derivation of FIT Description Community Based Wind (✓ 10 MW) On-shore Wind (any size) Off-shore Wind (any size) FIT (cents/kWh) 14.4 12.9 15.0 - 19.8 Waterpower Input Sources and Assumptions The generation technologies used in waterpower projects are mature, leading to⇠ stability in costs. However, project capital costs and capacity factors are very site⇠ specific. While uptake of waterpower projects has been fairly limited, that is mainly due to⇠ environmental and permitting restrictions, not the inability to finance projects given⇠ RESOP prices. Industry representatives have indicated that the RESOP offers a viable⇠ price. The increase in the FIT price is to adjust for the increase in capital costs that have⇠ occurred since 2007. 5 Capital costs are a rough estimate: these numbers yield 19.8; need to determine whether these capital⇠ costs are too high. 8 386 Table 7. Waterpower Assumptions for FIT derivation Waterpower (<50MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Section 18(1) Model Outputs and FIT derivation Table 8 shows the FIT for Waterpower projects less than 50 MW. Table 8. Waterpower Derivation of FIT Description Waterpower (<50MW) FIT (cents/kWh) 12.9 Biomass Input Sources and Assumptions The capital and operating cost and performance assumptions for biomass projects are⇠ based on the U.S. Department of Energy’s Energy Information Administration (EIA),⇠ Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted⇠ to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. Table 9. Biomass Assumptions for FIT derivation Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) 9 Section 18(1) 387 Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Section 18(1) Model Outputs and FIT Derivation Table 10 shows the FIT for Biomass projects of any size. Table 10. Biomass FIT of derivation Description Biomass (any size) FIT (cents/kWh) 10.5 Biogas Input Sources and Assumptions The biogas assumptions used were from a Navigant Report (Renewable Energy: Costs,! Performance and Markets – An Outlook to 2015, June 5, 2007). The capital cost⇠ estimates were adjusted to reflect assumed economies of scale. The larger biogas⇠ projects, i.e., 500 kW and greater, were assumed to realize revenues from tipping fees⇠ associated with the disposal of bio-solids and other waste material. Table 11. Biogas assumptions for FIT Derivation Small Biogas (✓5MW) Typical Size (kW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues($/MMBtu) Large Biogas (>5MW) Section 18(1) Model Outputs and FIT Derivation Table 12 shows the FIT for small (✓ 5MW) and large (>5MW) biogas projects. Table 12. Biogas FIT Derivation Description Typical End-Use FIT⇠ 10 388 Biogas (✓ 5 MW) Biogas (> 5 MW) Farm AD Mixed Waste Digester (cents/kWh) 14.7 10.4 Landfill gas Input Sources and Assumptions The capital and operating cost and performance assumptions for landfill gas projects are⇠ based on the EIA Assumptions to the Annual Energy Outlook 2008. The cost⇠ assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US⇠ exchange rate. These landfill gas capital cost estimates are also consistent with the⇠ reported costs of reciprocating engine gen sets and the estimated costs of landfill gas⇠ cleaning equipment. A 5 MW application was assumed to offer economies of scale⇠ relative to a 2.5 MW project. Table 13. Landfill gas assumptions for FIT Derivation Small Landfill Gas (✓5MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/year) Variable O&M ($/kWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Large Landfill Gas (>5MW) Section 18(1) Model Outputs and FIT Derivation Table 14 shows the FIT for small (✓ 5MW) and large (> 5MW) landfill gas projects. Table 14. Landfill gas FIT Derivation Description Landfill gas (✓ 5 MW) Landfill gas (> 5 MW) FIT (cents/kWh) 9.3 8.7 11 389 Customized For renewable energy supply technologies where there is limited experience that can be⇠ used to estimate the technologies’ costs (e.g., off-shore wind) or where costs and⇠ performance can vary widely based on site specific conditions (e.g., large water power⇠ and pumped storage) alternative procurement approaches may be used. These⇠ alternative procurement approaches will include RFPs where there are a significant⇠ number of prospective suppliers that can satisfy the identified requirement and sole⇠ source negotiations where there is one party that is best positioned to satisfy the⇠ requirement. Geothermal Concentrated Solar Power or Thermal Electric Solar Pumped Storage Large Water 12 390 Cindy Roks↵ From: Cindy Roks↵ Sent: March-05-09 5:20 PM↵ To: Jim MacDougall; Kevin Devitt; Patricia Lightburn; Sarah Simmons; Manyu Liang;↵ Amanda Gohm↵ Cc: jdalton@poweradvisoryllc.com; Jason Chee-Aloy↵ Subject: Latest FIT pricing↵ Attachments: FIT Results_20090305cr.xls↵ Please find attached the latest spreadsheet with the most up - to - date pricing schedule, including financial⌫ assumptions and capital costs.⌫ Note: the correct price for >500 kW is 53.9. In the slide deck that Jim sent earlier this week, it was noted as 56.7.⌫ If you have any questions, please let me know.⌫ Cindy Roks↵ Business Analyst⌫ 416 - 969 - 6099⌫ P please consider the environment before printing this email _________________________ _________⇤ 391 Feed-In Tariff (c/KWh) Schedule⌫ Rooftop Rooftop Rooftop Rooftop Ground Community# Solar PV Solar PV Solar PV Solar PV Solar PV Wind# Technology Type 1 0kW 10-100kW 100-500kW >500kW <10MW 1 0MW Base Year for Costs 2009 2009 2009 2009 2009 2009# Section 18 Contract Term (years) Inflation (%) Indexing Factor (%) 20 20 20 20 20 20# 2.25% 2.25% 2.25% 2.25% 2.25% 2.25%# 0% 0% 0% 0% 0% 20%# 70%# Section 18 Debt % 70% 70% 70% 70% 70% Debt Term (years) 18 18 18 18 18 18# Debt Cost (%) 7% 7% 7% 7% 7% 7%# Return on Equity (%) 11% 11% 11% 11% 11% 11%# Class 43.2 Rate (%) 50% 50% 50% 50% 50% 50%# 8% 8% 8% 8% 8% 8%# Class 43.2 Share (%) 80% 80% 80% 80% 80% 60%# Non-Class 43.2 Share 20% 20% 20% 20% 20% 40%# Feed-in Tariff (c/KWh) 80.2 71.3 63.5 53.9 44.3 14.4⌫ Non-Class 43.2 Rate (%) 392 On-shore# Off-shore Landfill Landfill# Wind# Wind Waterpower Biomass Biogas Biogas Gas Gas# <100MW# Any Size <50MW Any Size 5MW >5MW 5MW >5MW# 2009 2009 2009 2009 2009 2009# 2009 2009 Section 18 20 20 20 20 20 20 20 20# 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25%# 20% 20% 20% 20% 20% 20% 20% 20%# 70%# Section 18 70% 70% 70% 70% 70% 70% 70% 18 18 18 18 18 18 18 18# 7% 7% 7% 7% 7% 7% 7% 7%# 11% 11% 11% 11% 11% 11% 11% 11%# 50% 50% 50% 50% 50% 50% 50% 50%# 8% 8% 8% 8% 8% 8% 8% 8%# 60% 60% 60% 60% 60% 60% 70% 70%# 40% 40% 40% 40% 40% 40% 30% 30%# 12.9 19.8 12.9 10.5 14.7 10.4 9.3 8.7⌫ 393 Jason Chee-Aloy From: Jason Chee-Aloy Sent: March-05-09 5:51 PM To: Tim Taylor; D. Brian Hay; Emay Cowx Cc: Jim MacDougall; Patricia Lightburn Subject: Fw: updated pricing Q&A Attachments: Pricing QA 2009-03-05 v4.doc Attached are additional Q and As dealong directly with prices - thanks to Patricia for a quick turnaround. I do not have Deb's email address, so please send these to her as well. ----- Original Message ----From: Patricia Lightburn To: Jason Chee- Aloy CC: Jim MacDougall Sent: Thu Mar 05 17:42:26 2009 Subject: updated pricing Q&A <> Patricia Lightburn Analyst, Distributed Generation Ontario Power Authority 120 Adelaide Street West Suite 1600 Toronto ON M5H 1T1 416 - 969 - 6267 patricia.lightburn@powerauthority.on.ca < mailto:patricia.lightburn@powerauthority.on.ca > 394 Feed-in Tariff Program: Derivation of Prices 1. What is a Feed-in Tariff program? Feed-in Tariff programs are the most common form of purchasing electricity from" renewable energy supplies in Europe, through multi-year commitments." Feed-in Tariffs refer to the specific prices paid to renewable energy suppliers for the" electricity produced by the generating facility. 2. Why are prices different for small and large projects, and for each technology? The prices are differentiated by renewable technology and project size, to reflect the" different project costs associated with different technologies and project sizes. 3. How were the prices derived? Prices were calculated based on the typical costs for developing renewable energy" projects. The price also allows the generator to earn a reasonable rate of return on" investment. 4. Are the prices guaranteed? For how long? The generator will receive the posted FIT prices at the time the contract is signed." Contracts will typically be guaranteed for 20 years. 5. Can the OPA revisit these prices? Prices will change over time in order to reflect technological advances and other factors" that may lead to generation cost decreases. Changes in prices will only apply to new" projects (not to projects with contracts that have already been signed). Due notice will be" provided before price changes occur, as conveyed in the FIT Program Rules. 6. How do these prices compare to other jurisdictions? Experience from other jurisdictions served as input to the derivation of prices. While the" proposed prices take into account how much is being offered to renewable energy" generators in other jurisdictions such as Germany and Spain, they also reflect the" economic and resource conditions unique to Ontario. (see attached slide deck for prices" from other jurisdictions). 7. Why are solar PV prices so high? Solar PV prices are higher than the prices for other technologies because of the high costs to purchase solar PV systems. Technologies associated with solar PV are still relatively" immature and the current market is small. The draft FIT prices are designed to kick-start" the solar PV industry in Ontario. With regular price reductions over the coming years, the" FIT price will decrease to reflect technological advances and growing market supply. Confidential Page 1 05/03/2018 395 Generation cost-based Pricing 8. What is a cost-based price? The proposed FIT prices are designed to allow a renewable energy project to recover the" cost of building and maintaining the projects and earn a reasonable rate of return on the" investment over the duration of the applicable contract. Prices account for the following components: o o o o Capital costs; Operating and maintenance costs; Connection costs; and" Reasonable rate of return. Technology and size differentiation 9. How were the generation project sizes selected?" The project sizes were selected based on the different costs associated with different size" projects. OPA experience with contracting for small and large generators also served as" input. Setting technology-specific FIT prices helps ensure development across a range of" technologies and project sizes. Almost all existing European and proposed US FIT programs set specific rates for a" particular technology in relation to project size in order to account for variations in" generation costs depending on project size. Projects are separated into size category by capacity, and the rate is set at different levels" for the smaller and larger projects. Confidential Page 2 05/03/2018 396 Jim MacDougall From: Jim MacDougall⌥ Sent: March-06-09 3:58 PM⌥ To: Jason Chee-Aloy⌥ Cc: Patricia Lightburn⌥ Subject: RE: updated pricing Q&A⌥ Attachments: Pricing QA 2009-03-06 v5.doc⌥ Jason;⌥ I have added a new 7. to reflect the connection cost assumptions and issues that the OEB will have to address.⌥ Patricia sent some documents to Deb dealing with other jurisdictions and pricing, and she doesn't have access to it right now.⌥ Over the weekend, we will consolidate that information and make sure it is in a format that can be used as a Backgrounder - Appendix. FIT pricing in other Jurisdictions. We will also add a few details on Ontario RESOP, RES I II and! III to that appendix.⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto, ON M5H 1T1, Canada⌥ tel 416.969.6415⌥ ----- Original Message ----From: Jason Chee- Aloy⌥ Sent: March 5, 2009 5:51 PM⌥ To: Tim Taylor; D. Brian Hay; Emay Cowx⌥ Cc: Jim MacDougall; Patricia Lightburn⌥ Subject: Fw: updated pricing Q&A⌥ Attached are additional Q and As dealong directly with prices - thanks to Patricia for a quick turnaround.⌥ I do not have Deb's email address, so please send these to her as well.⌥ ----- Original Message ----From: Patricia Lightburn⌥ To: Jason Chee- Aloy⌥ CC: Jim MacDougall⌥ Sent: Thu Mar 05 17:42:26 2009⌥ Subject: updated pricing Q&A⌥ Patricia Lightburn⌥ Analyst, Distributed Generation⌥ 397 Ontario Power Authority⌥ 120 Adelaide Street West⌥ Suite 1600⌥ Toronto ON M5H 1T1⌥ 416 - 969 - 6267⌥ patricia.lightburn@powerauthority.on.ca < mailto:patricia.lightburn@powerauthority.on.ca >⌥ 398 Feed-in Tariff Program: Derivation of Prices 1. What is a Feed-in Tariff program? Feed-in Tariff programs are the most common form of purchasing electricity from" renewable energy supplies in Europe, through multi-year commitments." Feed-in Tariffs refer to the specific prices paid to renewable energy suppliers for the" electricity produced by the generating facility. 2. Why are prices different for small and large projects, and for each technology? The prices are differentiated by renewable technology and project size, to reflect the" different project costs associated with different technologies and project sizes. 3. How were the prices derived? Prices were calculated based on the typical costs for developing renewable energy" projects. The price also allows the generator to earn a reasonable rate of return on" investment. 4. Are the prices guaranteed? For how long? The generator will receive the posted FIT prices at the time the contract is signed." Contracts will typically be guaranteed for 20 years. 5. Can the OPA revisit these prices? Prices will change over time in order to reflect technological advances and other factors" that may lead to generation cost decreases. Changes in prices will only apply to new" projects (not to projects with contracts that have already been signed). Due notice will be" provided before price changes occur, as conveyed in the FIT Program Rules. 6. How do these prices compare to other jurisdictions? Experience from other jurisdictions served as input to the derivation of prices. While the" proposed prices take into account how much is being offered to renewable energy" generators in other jurisdictions such as Germany and Spain, they also reflect the" economic and resource conditions unique to Ontario. (see attached slide deck for prices" from other jurisdictions). 7. How are generator connection costs considered in development of these prices? Will" that change under the proposed GEA? Connection costs for the renewable energy generation projects in the FIT price schedule" are based on typical and simple connection requirements, where there are no significant" system upgrades required to be paid by the generator. The FIT prices assume that the" generator has to pay for a relatively short line to the gird, along with the associated" metering and protection systems that are commonly used today. Confidential Page 1 05/03/2018 399 The OEB will be looking at connection costs in considering how to encourage" distributors and transmitters to invest in grid capacity to encourage more renewable" energy. 8. Why are solar PV prices so high? Solar PV prices are higher than the prices for other technologies because of the high costs to purchase solar PV systems. Technologies associated with solar PV are still relatively" immature and the current market is small. The draft FIT prices are designed to kick-start" the solar PV industry in Ontario. With regular price reductions over the coming years, the" FIT price will decrease to reflect technological advances and growing market supply. Generation cost-based Pricing 8. What is a cost-based price? The proposed FIT prices are designed to allow a renewable energy project to recover the" cost of building and maintaining the projects and earn a reasonable rate of return on the" investment over the duration of the applicable contract. Prices account for the following components: o o o o Capital costs; Operating and maintenance costs; Connection costs; and" Reasonable rate of return. Technology and size differentiation 9. How were the generation project sizes selected? The project sizes were selected based on the different costs associated with different size" projects. OPA experience with contracting for small and large generators also served as" input. Setting technology-specific FIT prices helps ensure development across a range of" technologies and project sizes. Almost all existing European and proposed US FIT programs set specific rates for a" particular technology in relation to project size in order to account for variations in" generation costs depending on project size. Projects are separated into size category by capacity, and the rate is set at different levels" for the smaller and larger projects. Confidential Page 2 05/03/2018 400 Jim MacDougall From: Jim MacDougall⌥ Sent: March-06-09 3:58 PM⌥ To: Jason Chee-Aloy⌥ Cc: Patricia Lightburn⌥ Subject: RE: updated pricing Q&A⌥ Jason;⌥ I have added a new 7. to reflect the connection cost assumptions and issues that the OEB will have to address.⌥ Patricia sent some documents to Deb dealing with other jurisdictions and pricing, and she doesn't have access to it right now.⌥ Over the weekend, we will consolidate that information and make sure it is in a format that can be used as a Backgrounder - Appendix. FIT pricing in other Jurisdictions. We will also add a few details on Ontario RESOP, RES I II and! III to that appendix.⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto, ON M5H 1T1, Canada⌥ tel 416.969.6415⌥ ----- Original Message ----From: Jason Chee- Aloy⌥ Sent: March 5, 2009 5:51 PM⌥ To: Tim Taylor; D. Brian Hay; Emay Cowx⌥ Cc: Jim MacDougall; Patricia Lightburn⌥ Subject: Fw: updated pricing Q&A⌥ Attached are additional Q and As dealong directly with prices - thanks to Patricia for a quick turnaround.⌥ I do not have Deb's email address, so please send these to her as well.⌥ ----- Original Message ----From: Patricia Lightburn⌥ To: Jason Chee- Aloy⌥ CC: Jim MacDougall⌥ Sent: Thu Mar 05 17:42:26 2009⌥ Subject: updated pricing Q&A⌥ Patricia Lightburn⌥ Analyst, Distributed Generation⌥ Ontario Power Authority⌥ 401 120 Adelaide Street West⌥ Suite 1600⌥ Toronto ON M5H 1T1⌥ 416 - 969 - 6267⌥ patricia.lightburn@powerauthority.on.ca < mailto:patricia.lightburn@powerauthority.on.ca >⌥ 402 Jim MacDougall From: Jim MacDougall Sent: March-09-09 9:27 AM To: Patricia Lightburn Subject: FW: Revised draft docs for News conference Attachments: FIT_NEWS RLS_v4_March 6-09.doc; FIT_BKGRNDR for news conf_v3_March 609.doc; FIT_FAQs for news conf V1_March 6-09.doc Importance: High Jim MacDougall, P.Eng.✓ Manager, Distributed Generation✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto , ON M5H 1T1 , Canada✓ tel 416.969.6415✓ From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: March 6, 2009 5:27 PM To: Jim MacDougall; Tim Taylor Cc: Emay Cowx Subject: Revised draft docs for News conference Importance: High Hi Greg & Jim:✓ Here are the revised News Release, Backgrounder and FAQs.✓ The Backgrounder needs to have the table fixed up by adding the Michigan numbers – I tried but got bogged down✓ as tranches are different; and the Germany and Spain numbers need to be converted to proper cents/kWh as per✓ the ppt doc. If Patricia could do that over the weekend or on Monday that would be cool. In the meantime if we tell the Ministry the table stills needs to be populated with the Michigan numbers and other countries normalized you✓ can send as is and at least they have something for the weekend. I will be available Monday to do any more changes. Regards✓ Deb✓ Deb@ReidandAssociates.ca✓ Tel: 41 6 - 698 - 5459✓ Fax: 41 6 - 698 - 0377✓ Cell: 41 6 - 729 - 0240✓ 403 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 3 March 6, 2009 Page 1 of 4% BACKGROUNDER North America’s Renewable Energy Leader The proposed Green Energy Act (GEA) would boost the growth of clean, renewable% sources of energy, like wind, solar, hydro, biomass and biogas, helping Ontario become% North America’s leader in renewable energy. One of the ways this would be achieved is% by creating a Feed-in Tariff Program that guarantees specific prices for energy generated% from renewable sources. What is a Feed-in Tariff Program? A Feed-In Tariff (FIT) Program is a simpler way to contract for renewable energy% generation. It is simpler because of standardized program rules and standardized% contracts, including standardized prices. In the context of the proposed GEA, a FIT% Program will be used to procure new renewable energy projects. This means, developers% of renewable energy projects will receive a FIT contract if they meet all requirements in% the FIT Program rules. What will Ontario’s FIT Program look like? Ontario’s proposed FIT Program would have several key features. It would: be open to various renewable energy technologies (i.e., wind, hydro, solar and bioenergy technologies); have different prices for different technologies and project sizes; have prices that cover total project costs and provide a reasonable rate of return over a% long-term contract (about 20 years); and provide opportunities for promoting First Nation, Métis and community-based projects. Proposed prices are outlined in the table below. These will be refined with renewable% energy stakeholder input during the consultation process. Size ranges in other jurisdictions Spain Germany Michigan ¢/kWh ¢/kWh Proposed Ontario proposed ¢/kWh ¢/kWh Ontario proposed size tranches Biomass 0 – 2 MW 0.26 0.19 > 2 MW 0.24 0.13 0 0.22 0.19 0. 16 0.13 10.5 Any size 14.7 < 5 MW 10.4 > 5 MW 12.9 Any size Biogas – 500 kW >500 kW Hydro 0 – 500 kW 0.12 0.20 404 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 3 March 6, 2009 Page 2 of 4% 500 kW 10 – 10 MW – 50 MW 0.12 0.14 0.03 --------- (on top of market price) Landfill gas 0 – 500 kW 0.13 0.14 500 kW – 5 MW 0.13 0.10 9.3 > 5 MW 0.13 --------- 8.7 0 0.54 0.69 – 200 kW 0.52 200 kW – 1 MW 0.51 0 – 5MW > 5 MW Solar PV rooftop Ground Mounted – 30 kW 30 82.99 80.2 0 – 10 kW 0.65 71.3 10 0.63 63.5 100 – 100 kW – 500 kW 56.7 > 500 kW Any size 0.51 0.51 44.3 < 10 MW Onshore Any size 0.12 0.15 12.9 Any size Offshore Any size 0.13 0.21 15.0 19.8 n/a 14.4 Wind (on top of market price) Community Based n/a n/a – Any size Any size The proposed FIT prices for solar photovoltaic (PV) projects are designed to kick-start% the solar PV industry in Ontario. Solar PV is a rapidly developing and growing industry% that promises continued price reductions in the coming years. Solar PV prices are higher% than the prices for other technologies because of the current high costs to purchase solar% PV systems today. Ontario FIT prices for Solar PV will decrease rapidly through regular,% transparent price reductions for new projects to reflect expected rapid technological% advances.% Typical Projects and Typical Project Costs A typical homeowner in Ontario would be looking at a residential scale Solar PV project% of about 3 kilowatts, which costs around $30,000. That would provide enough electricity% to meet one third of their own consumption, and would generate about $12 per day in% revenue for the other two thirds which would be sold to the grid, resulting in a 12 year% payback. 405 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 3 March 6, 2009 Page 3 of 4% A farm-based 250 kW bio-digester would cost around $1.7 million to install, and could% earn back this investment in approximately the same timeframe, depending on its% operation. A 10 MW community owned wind farm in Ontario would cost around $32 million to% construct, and is expected to have a 10 year payback. Realizing the Potential for Renewable Energy Since 2003, Ontario has facilitated almost 4,000 MW of new renewable supply. The% proposed FIT Program will encourage further investment in generation, transmission and% distribution to facilitate greater incorporation and use of renewable energy sources. Ontario’s system could incorporate over 8,000 MW of additional renewable supply over⌧ the next five years. The FIT Program will not limit the amount of energy from any% particular renewable fuel source. How much electricity will be generated from each type of renewable fuel source is% uncertain. However, it is expected that the majority of projects within the next five years% will come from wind and solar power. Hydroelectric and bio-energy projects are also% expected to be added to the system. Energy Agency Involvement Successful implementation of a FIT Program will require changes across the energy% sector that will enable renewable energy to be brought into service more quickly and% efficiently. The Ontario Energy Board (OEB), the Independent Electricity System% Operator (IESO) and other transmitters and distributors will co-ordinate their efforts to% meet the objective of increasing renewable energy in Ontario. A special effort will go% into making the process as simple as possible for residential micro-scale projects. Stakeholder Involvement From March 17, 2009 to May 5, 2009, the OPA will host a series of weekly consultation% sessions with renewable energy stakeholders. These consultation sessions will be used to% seek input and feedback from large and small renewable energy suppliers, on proposed% FIT Program Rules and Contracts. Renewable energy suppliers include any person in the% province that generates and supplies renewable energy to the grid ranging from largescale commercial developers to micro-scale residential developers or homeowners. Full day in-person consultation sessions will be held on a weekly basis with about 200% pre-registered stakeholders. These will be augmented by web and teleconference% capability so those who cannot attend can participate remotely. The OPA will establish a FIT web page for general information where all documentation% from the consultation sessions will be publicly available. There will also be Online% Question and Answer capability to answer questions from interested parties. 406 DRAFT BACKGROUND FOR NEWS CONFERENCE V. 3 March 6, 2009 Page 4 of 4% Timing The first consultation session will take place on Tuesday, March 17, 2009 from 9:00 a.m.% to 4:00 p.m. The expectation is that should the proposed GEA be passed, the OPA will be in a position to immediately implement and promote an effective and fair FIT% Program that will make the development of renewable energy easier throughout the% province.% 407 DRAFT FAQs FOR NEWS CONFERENCE V. 1 March 6, 2009 Page 1 of 2! FAQs What is a Feed-in Tariff program? Feed-in Tariff programs are the most common form of purchasing electricity from! renewable energy supplies in Europe, through multi-year commitments. Feed-in Tariffs! refer to the specific prices paid to renewable energy suppliers for the electricity produced! by the generating facility. Why are prices different for small and large projects, and for each technology? The prices are differentiated by renewable technology and project size, to reflect the! different project costs associated with different technologies and project sizes. How were the prices derived? Prices were calculated based on the typical costs for developing renewable energy! projects. The price also allows the generator to earn a reasonable rate of return on! investment. Are the prices guaranteed? For how long? The generator will receive the posted FIT prices at the time the contract is signed.! Contracts will typically be guaranteed for 20 years. Can the OPA revisit these prices? Prices will change over time in order to reflect technological advances and other factors! that may lead to generation cost decreases. Changes in prices will only apply to new! projects (not to projects with contracts that have already been signed). Due notice will be! provided before price changes occur, as conveyed in the FIT Program Rules. How do these prices compare to other jurisdictions? Experience from other jurisdictions served as input to the derivation of prices. While the! proposed prices take into account how much is being offered to renewable energy! generators in other jurisdictions such as Germany and Spain, they also reflect the! economic and resource conditions unique to Ontario. (see Backgrounder for prices from! other jurisdictions). Why are solar PV prices so high? Solar photovoltaic (PV) prices are higher than the prices for other technologies because! of the high costs to purchase solar PV systems. Technologies associated with solar PV! are still rapidly advancing and the current market is small. The draft FIT prices are! designed to kick-start the solar PV industry in Ontario. With regular price reductions! Confidential Page 1 05/03/2018 408 DRAFT FAQs FOR NEWS CONFERENCE V. 1 March 6, 2009 Page 2 of 2! over the coming years, the FIT price will decrease to reflect technological advances and! growing market supply. What is a cost-based price? The proposed FIT prices are designed to allow a renewable energy project to recover the! cost of building and maintaining the projects and earn a reasonable rate of return on the! investment over the duration of the applicable contract. Prices account for the following! components: Capital costs; Operating and maintenance costs; Connection costs; and! Reasonable rate of return. How were the generation project sizes selected? The project sizes were selected based on the different costs associated with different size! projects. OPA experience with contracting for small and large generators also served as! input. Setting technology-specific FIT prices helps ensure development across a range of! technologies and project sizes. Almost all existing European and proposed US FIT programs set specific rates for a! particular technology in relation to project size in order to account for variations in! generation costs depending on project size. Projects are separated into size category by! capacity, and the rate is set at different levels for the smaller and larger projects. Confidential Page 2 05/03/2018 409 DRAFT NEWS RELEASE V. 4 March 6, 2009 Page 1 of 2 MAKING RENEWABLE ENERGY EASIER Proposed Feed-in Tariff Program would Guarantee Prices for Large and Small⇢ Renewable Energy Projects March XX, 2009 Ontario is preparing to make it easier to bring renewable energy projects to life under the proposed Green Energy Act (GEA). One of the expected policy changes that will flow from Bill 150, if passed, will be the creation of a new pricing system for renewable energy. “An attractive Feed-In Tariff regime with guaranteed prices will help spark new investment in renewable energy generation and will increase investor confidence and access to financing,” said George Smitherman, Ontario’s Minister of Energy and⇡ Infrastructure. “Ontario has learned from other jurisdictions that Feed-In Tariffs provide a fair and transparent incentive to encourage the development of all types and sizes of renewable energy projects, including First Nation, Métis and community-based projects.” The Ontario Power Authority (OPA) will lead the implementation of Ontario’s proposed⇡ Feed-in Tariff (FIT) Program. The OPA will co-ordinate with other energy agencies like the Ontario Energy Board (OEB) and the Independent Electricity System Operator (IESO). It will also consult with stakeholders, including large and small renewable energy suppliers, on proposed FIT Program Rules, Contracts and Prices. Proposed prices were developed based on experience here in Ontario and in other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover building and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period. OPA’s proposed price schedule, which will be refined through an eight-week consultation process with renewable energy stakeholders, ranges from 8.7 cents per kilowatt hour (kWh) for landfill gas projects to 14.4 cents per kWh for community based wind projects. Proposed prices for the rapidly advancing solar photovoltaic (PV) technologies range from 44.3 cents per kWh for large ground-mounted projects to 80.2 cents per kWh for residential rooftop projects. OPA is committed to delivering cost-effective renewable electricity for Ontario consumers. That’s why there will be a built in pricing review process. Thus, prices will⇡ change over time to reflect technological advances and other factors, such as market growth, that could lead to generation cost decreases. “The Renewable Energy Standard Offer Program was so successful and the response so⇡ overwhelming that steps had to be taken to make the program more efficient, viable and fair so that more contracts turn into concrete projects sooner,” said Colin Andersen, Chief⇡ Executive Officer of the OPA. 410 DRAFT NEWS RELEASE V. 4 March 6, 2009 Page 2 of 2 Consultation on the proposed FIT Program Rules and Contracts and the proposed pricing regime will be hosted by the OPA from March 17, 2009 to May 5, 2009. The OPA will also work with stakeholders to develop and provide information and education material to potential suppliers, participants and the general public. “A FIT Program will bring significant benefits to the province,” said Minister⇡ Smitherman. “More renewable energy projects in Ontario will mean more jobs and economic development for Ontario communities.” Quick Facts⇠ 1. Ontario has already brought about 1,000 megawatts of new renewable energy online since October 2003. 2. Canada’s two largest wind farms are located in Ontario and by the end of 2009,⇡ nearly 1,200 megawatts of wind capacity will be on-line, enough to power almost 325,000 homes. 3. Investments in new renewable energy projects already in place or under construction in Ontario total about $4 billion. ______________________________ 411 Jim MacDougall From: Jim MacDougall Sent: March-10-09 10:22 AM To: 'Deb Reid'; Jason Chee-Aloy Cc: Tim Taylor; Emay Cowx; Patricia Lightburn; Richard Duffy Subject: RE: FIT docs Attachments: Pricing additional QA 2009-03-11 v6.doc Additional Q ’ s and A ’ s as per last night ’ s emails.◆ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: March 9, 2009 10:28 PM To: Jim MacDougall; Jason Chee-Aloy Cc: Tim Taylor; Emay Cowx Subject: RE: FIT docs Great thanks. If you have any thoughts on what Colin should focus on in his remarks, please send to me as I will be working on them in the morning. Deb◆ Deb@ReidandAssociates.ca◆ Tel: 41 6 - 698 - 5459◆ Fax: 41 6 - 698 - 0377◆ Cell: 41 6 - 729 - 0240◆ ----- Original Message----From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: Monday, March 09, 2009 10:22 PM To: Jason Chee-Aloy; deb@reidandassociates.ca Cc: Tim Taylor; Emay Cowx Subject: RE: FIT docs I will prepare information on these points - as additional Qs and As, tomorrow by 10 am.◆ Jim MacDougall, P.Eng.◆ Manager, Distributed Generation◆ Ontario Power Authority◆ (416) 969 - 6415◆ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 412 Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca✓ From: Jason Chee-Aloy Sent: Mon 09/03/2009 10:16 PM To: 'deb@reidandassociates.ca'; Jim MacDougall Cc: Tim Taylor; Emay Cowx Subject: Re: FIT docs I think we will still get questions on the range. Let's discuss further tomorrow.⇡ Some other general points to consider:◆ - domestic content: need answers here, as the draft price schedule does not factor this in (and will need to in the future if adopted)◆ - comparison to RESOP pricing and RES III pricing◆ - the biomass, biogas, landfill gas prices are lower than RESOP pricing -- need a good answer why◆ ----- Original Message ----From: Deb Reid ◆ To: Jason Chee - Aloy; Jim MacDougall◆ CC: Tim Taylor; Emay Cowx◆ Sent: Mon Mar 09 21:19:35 2009◆ Subject: RE: FIT docs◆ Hi Jason:◆ I ’ m not suggesting we pull the language, just have a sort of definition in our back pocket – it doesn ’ t have to go in the public Qs and As. Could we use the range as the definition, but put the lower value in the public table?⇡ Deb◆ Deb@ReidandAssociates.ca◆ Tel: 416 - 698 - 5459◆ Fax: 416 - 698 - 0377◆ Cell: 416 - 729 - 0240◆ ----- Original Message ----From: Jason Chee- Aloy [mailto:Jason.Chee - Aloy@powerauthority.on.ca ]◆ Sent: Monday, March 09, 2009 9:13 PM◆ To: Deb Reid; Jim MacDougall◆ Cc: Tim Taylor; Emay Cowx◆ Subject: RE: FIT docs◆ It seems to me that we are far down the road with ‘ community based ’ . If MEI has raised no concerns, I do not feel we should pull the language.◆ 413 Regarding the range for off- shore wind, we strongly believe we should use only the lowest price.◆ _________________________ _____ __◆ From: Deb Reid [ mailto:deb@reidandassociates.ca ]◆ Sent: Monday, March 09, 2009 9:09 PM◆ To: Jason Chee - Aloy; Jim MacDougall◆ Cc: Tim Taylor; Emay Cowx◆ Subject: RE: FIT docs◆ Thanks Jason:◆ Both good points.◆ 1. Whether to use a range or specific number for community based wind I would think is up to your group to⇡ – Please let us know asap so we can make sure the table is accurate for the Ministry.◆ decide as a policy decision 2. Also, I agree, that we will need a definition of “ community based ” at hand. Jim, could Patricia draft something⇡ up for our Qs and As document based on what you are thinking here?⇡ Thanks◆ Deb◆ Deb@ReidandAssociates.ca◆ Tel: 416 - 698 - 5459◆ Fax: 416 - 698 - 0377◆ Cell: 416 - 729 - 0240◆ ----- Original Message ----From: Jason Chee- Aloy [mailto:Jason.Chee - Aloy@powerauthority.on.ca ]◆ Sent: Monday, March 09, 2009 9:00 PM◆ To: Deb Reid; Jim MacDougall◆ Cc: Tim Taylor◆ Subject: RE: FIT docs◆ Attached are my comments.◆ 414 I did not have comments on anything else.◆ _________________________ _____ __◆ From: Deb Reid [ mailto:deb@reidandassociates.ca ]◆ Sent: Monday, March 09, 2009 12:55 PM◆ To: Jim MacDougall◆ Cc: Tim Taylor; Jason Chee - Aloy◆ Subject: RE: FIT docs◆ Here are the most recent versions the Ministry has:◆ 1. News release – V4 March 6th◆ 2. Backgrounder – V4 March 9th◆ 3. FAQs – V1 March 6th◆ I just made the changes you sent to the Backgrounder (i.e. changed the $12 to $7) and that is in:◆ 4. Backgrounder – V4A March 9th◆ Greg – not sure if you ’ ve sent the new Backgrounder to the Ministry yet with the table completed, but if not, please send V4A as it has Jim ’ s last change in it.◆ Jason – please review Items 1, 3 and 4 for approval please and thanks.⇡ Deb◆ Deb@ReidandAssociates.ca◆ Tel: 416 - 698 - 5459◆ Fax: 416 - 698 - 0377◆ Cell: 416 - 729 - 0240◆ ----- Original Message ----From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca ]◆ Sent: Monday, March 09, 2009 12:48 PM◆ To: Deb Reid◆ Cc: Tim Taylor◆ Subject: FIT docs◆ 415 Deb◆ Can you please send Jason the current version of the docs that are at the Ministry for approval?◆ I think he needs the current versions for his comment and approval. There have been too many versions circulating.⇡ Jim MacDougall, P.Eng.◆ Manager, Distributed Generation◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted◆ with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.◆ < http://www.energyconservationweek.ca >◆ Say "Count Me In!" to Energy Conservation Week - learn more at:◆ www.energyconservationweek.ca ◆ 416 Feed-in Tariff Program: Additional Q’s and A’s Additional Q’s and A’s Technology and size differentiation Q. How were the generation project sizes selected? The project sizes were selected based on the different costs associated with different size$ projects. OPA experience with contracting for small and large generators also served as$ input. Setting technology-specific FIT prices helps ensure development across a range of$ technologies and project sizes. Almost all existing European and proposed US FIT programs set specific rates for a$ particular technology in relation to project size in order to account for variations in$ generation costs depending on project size. Projects are separated into size category by capacity, and the rate is set at different levels$ for the smaller and larger projects. Q. How will the proposed Domestic Content requirements work? Who will set the$ requirements and how will they impact the FIT Program? A. The proposed GEA would give the Minister of Energy and Infrastructure the$ authority to set goals for establishing domestic content requirements under a FIT. The OPA will work with the Ministry and stakeholders to ensure that the$ requirements are well understood, the methodology is clear and that the goals are$ met. The OPA would then revisit the approach to the FIT Program to ensure that$ the draft Rules capture the government’s goals for domestic content. Q. How do the FIT prices compare to the results of prior renewable energy supply$ procurements in Ontario? A. Prices for all electricity supply technologies have been on the rise over the$ past few years. The prices from the recent RES III procurement in late 2008$ resulted in weighted average contract prices at 12.1 c/kWh and all the winning$ projects were large wind farms. This is slightly lower than the 12.9 c/kWh$ proposed for large wind under the FIT program. B. The RESOP was launched in late 2006 and offered prices at 11.08 c/kWh for$ wind projects under 10 MW. At the time of launch, this price seemed$ reasonable, but recently the OPA understands that many proposed wind$ projects may be abandoned due to delays and the inability to purchase wind turbines at this price. Confidential Page 1 05/03/2018 417 C. The results of RES I in 2004 and RES II in 2005 were weighted average$ prices of 7.9 c/kWh and 8.6 c/kWh respectively. As noted, prices for$ equipment and labour have risen significantly since that time. Q. Why are the proposed prices for biomass, biogas and landfill gas lower in the FIT$ Program than in RESOP? We saw little uptake in RESOP at 11 c/kWh, how will$ these prices drive any investment? A. The RESOP proposed a single price to account for a broad range of$ technologies and project sizes. The proposed FIT prices for these bio-energy$ technologies come from the costs of the technologies and their ongoing$ operational costs. These technologies will also benefit from the on-peak$ production incentive of prices 35% higher during business days from 11 am to 7$ pm. The proposed GEA also intends to stimulate expansion of distribution and$ transmission grids, to better enable the development of these kinds of renewable$ energy projects. Confidential Page 2 05/03/2018 418 Jim MacDougall From: Jim MacDougall Sent: March-10-09 10:26 AM To: Patricia Lightburn Subject: FW: MEI Questions on Draft FIT Program Design Jim MacDougall, P.Eng.✓ Manager, Distributed Generation✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ From: Jim MacDougall Sent: March 9, 2009 10:21 PM To: Jason Chee-Aloy Subject: RE: MEI Questions on Draft FIT Program Design you can disregard my simultaneous email ...✓ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation✓ Ontario Power Authority✓ (416) 969 - 6415✓ From: Jason Chee-Aloy Sent: Mon 09/03/2009 10:13 PM To: JoAnne Butler; Colin Andersen Cc: Irene Mauricette; Richard Duffy; Jim MacDougall Subject: Re: MEI Questions on Draft FIT Program Design I strongly agree with JoAnne, re: LDCs, RFO, and CHP. Concerning #12, the issue is we have a category < 10 MW for 'community based' on - shore wind. We only have one price, any size, for waterpower and biomass. I suggested earlier that we may want to consider one price, any size, for on - shore wind and drop 'community based' words for now (as we have not reached consensus on a definition). However, I noticed earlier that the communications materials stitches in 'community based' in the next (in addition to the FIT Pricing Schedule). Therefore, if MEI has not raised this issue, maybe we can leave things as is, and just explain that we are working to finalize the definition. ----- Original Message ----From: JoAnne Butler To: Jason Chee - Aloy; Colin Andersen CC: Irene Mauricette; Richard Duffy; Jim MacDougall Sent: Mon Mar 09 21:24:25 2009 Subject: Re: MEI Questions on Draft FIT Program Design Jason, 419 I have printed and reviewed - a lot in there, just a couple of high level observations. We need to get LDC's involved sooner rather than later and I know that you are working on that. We definitely do not want to add another layer of complexity by having it go through the Renewables office. We definitely do not want CHP under a FIT regime - we need to find a better mechanism for that product and it is not a FIT. I am not sure that I understand your answer for #12 but we can talk tomorrow. JCB ----- Original Message ----From: Jason Chee- Aloy To: Colin Andersen; JoAnne Butler CC: Irene Mauricette; Richard Duffy; Jim MacDougall Sent: Mon Mar 09 20:02:15 2009 Subject: MEI Questions on Draft FIT Program Design Colin and JoAnne, Based on my conversation with Jordan Penic earlier today, listed below are some of the questions/points the Minister and Aaron Dobbin had regarding the presentations we sent them conveying the main points from the draft FIT Program Rules. There are answers to all questions. I see no major showstoppers. 1. Home REFIT Program – what is it? [Suggested Answer: Simpler program that is better tailored to residential participants the details still need to be worked out with LDCs] – 2. Is there LDC capacity to handle uptake of residential applicants under the Home REFIT Program (e.g., proprietors buying up panels and creating a surge of applicants? [Suggested Answer: Because of the simpler program, the assessment process to be done by LDCs should not be onerous – details still to be discussed with LDCs] 3. What will be the role of LDCs under the Home REFIT Program? [Suggested Answer: It is more efficient for the LDCs to administer the application process and manage these relationships with residential customers] 4. Are there any gaming opportunities where the Program Rules allow participation from existing generators that have been – existing facilities that go out of service forego revenue opportunities in out of service for 3 - years? [Suggested Answer: No the existing marketplace] 5. Shouldn’ t the FIT application requirements be reviewed by the Renewable Facilitation Officer? [Suggested Answer: No – they need to be reviewed by the entity that executes and manages the FIT contract] 6. Why are the application fees non - refundable? [Suggested Answer: Application fees are simply one of the low costs to doing business when developing generation – they go to offset the administration costs on the OPA and LDCs (if they are to administer contracts with micro - generation projects)] 7. In addition to completion security, shouldn’ t there be other milestones? [Suggested Answer: FIT contracts will have – the timing of these things to be worked out with other milestones such as equipment orders, completion of REA, etc. stakeholders] 420 8. What is the actual size of the roofs under each category of rooftop solar PV? [Suggested Answer: < 10 kW – homes; 10 – larger commercial buildings; 500 kW+ - very large kW to 100 kW – small commercial buildings; 100 kW to 500 kW commercial warehouse] 9. Why were specific % and MW breakpoints used for degression of solar FITS? [Suggested Answer: Round numbers similar used in other jurisdictions] What is the definition of ‘ community - based ’ ? [ Suggested Answer: Based on HQ and Ontario transit, the hybrid working definition the Team is loosely using for ‘ community group ’ – in relation to a project (i) any Local Municipal government where generating equipment is to be located, (ii) a renewable energy co - op (as defined in the Co - operative Corporations Act) or other Person, either of which is controlled by individuals all of whom [own or rent residential property] in the local municipality (ies) where generating equipment is to be located, or (iii) any Person that is controlled by a community group] 10. 11. How does FIT biomass relate to Atikokan? [Suggested Answer: Atikokan is a project of significantly larger scale and should not be compared to small biomass projects that typically would be farm - based projects] 12. Should there be < 10 MW categories for waterpower and biomass? [Suggested Answer: on - shore wind should have one – typically done in other jurisdictions and the term ‘ community based wind ’ is category, similar to waterpower and biomass not defined, therefore shouldn ’ t publish] 13. Will information be published on how FITs were dereived? [Suggested Answer: will be disclosed and consulted on with stakeholders during March consultation sessions] Why are biomass and peaking waterpower afforded additional revenues for on - peak production? [Suggested Answer: these resources can control their output, therefore incentives should be given to better ensure they produce energy when the system most needs it; other resources without such abilities and potential additional revenue are still guaranteed their FIT based on output] 14. How are FIT prices adjusted going forward? What are the triggers? [Suggested Answer: Program rules will define a 2 year review period, including review of prices; under extreme circumstances (e.g., untenable uptake, zero uptake), prices could be revised ahead of the 2 - year review period] 15. 16. For ‘ customized ’ procurements (outside of FIT Program), thoughts are to have a plan for CHP [Suggested Answer: CESOP rules ready to go; based on experience with CHP II and CHP III, extreme caution in developing a standard program at this time – for a bunch of reasons, now is not the right time to procure large CHP] 17. Biomass, biogas, land fill gas prices < RESOP price of 11 cents/kWh [Suggested Answer: Costs are projected to – we will revisit these prices] decrease 18. Are RESOP contracts eligible for FIT contracts? [Suggested Answer: From the outset of FIT Program launch – no] 421 19. tx/dx What are the wait times in the FIT Production Line? [Suggested Answer: This will depend on the timelines to approve – under the proposed GEA framework, this can be expedited by: Ministerial Directives, OEB orders, etc.] Jason Chee - Aloy Director, Generation Procurement Ontario Power Authority 120 Adelaide Street West, Ste. 1600 Toronto, Ontario M5H 1T1 Work: 416 - 969 - 6356 Cell: 416 - 303 - 8667 Fax: 416 - 969 - 6071 Email: jason.chee- aloy@powerauthority.on.ca 422 Sadikman, Jacob From: Sadikman, Jacob⇥ Sent: March-10-09 11:12 AM⇥ To: Jason Chee-Aloy; jdalton@poweradvisoryllc.com; Jim MacDougall;⇥ rcary@niagara.com; Patricia Lightburn; Richard Duffy⇥ Cc: Sebastiano, Rocco; Smith, Elliot⇥ Subject: FIT Pricing - incremental water projects⇥ Folks,⌥ As much as we at Osler would like to stay out of the analysis on the development of the FIT Pricing Schedule, we can't help but ask the question as to why there is a no distinction in price as between waterpower projects that are Incremental Projects vs those that are complete new build. Just based on our work with the OPG HESA projects,! we know first hand that the price of an expansion or upgrade to an existing hydro station is significantly lower than a complete new build (given shared civil works and other hydroelectric infrastructure). I'm quite sure OPG would be⌥ thrilled to take $129/MWh for the incremental piece of their current hydro expansion/upgrade projects. In fact, this could potentially prejudice our current negotiations with OPG on the lower Mattagami projects. Just wanted to flag this and see if this is being considered. cheers,⌥ - Jake⌥ Jacob A. Sadikman✏ Associate⌥ 416.862.4931 DIRECT⌥ 41 6.862.6666 FACSIMILE! jsadikman@osler.com⌥ Osler, Hoskin & Harcourt LLP⌥ Box 50, 1 First Canadian Place⌥ Toronto, Ontario, Canada M5X 1 B8! osler.com⌥ ********************************************************************⇥ This e-mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited.⇥ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⇥ ********************************************************************⇥ 423 Jim MacDougall From: Jim MacDougall Sent: March-10-09 1:09 PM To: 'Sadikman, Jacob'; Jason Chee-Aloy; jdalton@poweradvisoryllc.com; rcary@niagara.com; Patricia Lightburn; Richard Duffy Cc: Sebastiano, Rocco; Smith, Elliot Subject: RE: FIT Pricing - incremental water projects Good point Jake; I agree with your noted concern. We have been moving so quickly that we have glossed over a few details … ⌧ The other are waterpower issues include:⌧ 1 . What is the requirements for an incremental water power project to be considered reasonable ? Is there an⌧ energy increase requirement? Under RESOP we noted (and ignored) the fact that the rules allowed you to plunk in⌧ an additional generator unit, receive revenue for the % of incremental capacity even if the unit was never actually used ! I mentioned this was done for the purposed of expediency, and administrative efficiency rather than⌧ prudency … ⌧ 2. the other issue that we have to address is “ under what conditions will we accept a redeveloped waterpower facility as eligible under FIT and at what price. ” We have been talking to the OWA about applying the Min of Finance GRC reg for tax holiday status as a reasonable test for eligibility. My concern has been – but do we want to pay them 1 1 c? and now – do we want to pay them 1 2.9 c? I suggest not, and that a % of this value⌧ may make sense, such as 75 - 80% of the FIT rate for redevelopment projects. I would look to you or Richard⌧ for some HESA principles to reach this conclusion. At this late stage, we will not be able to resolve these issues by Friday, but I suggest we should be prepared to address them in the consultations, and likely in one on ones with OWA reps … . Jim MacDougall, P.Eng.✓ Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Sadikman, Jacob [mailto:JSadikman@osler.com]⇠ Sent: March 10, 2009 11:12 AM⇠ To: Jason Chee-Aloy; jdalton@poweradvisoryllc.com; Jim MacDougall; rcary@niagara.com; Patricia Lightburn;⇠ Richard Duffy⇠ Cc: Sebastiano, Rocco; Smith, Elliot⇠ Subject: FIT Pricing - incremental water projects⇠ Folks, As much as we at Osler would like to stay out of the analysis on the development of the FIT Pricing Schedule, we can't help but ask the question as to why there is a no distinction in price as between waterpower projects that are Incremental Projects vs those that are complete new build. Just based on our work with the OPG HESA projects,⌧ 424 Incremental Projects vs those that are complete new build. Just based on our work with the OPG HESA projects,⌧ we know first hand that the price of an expansion or upgrade to an existing hydro station is significantly lower than a complete new build (given shared civil works and other hydroelectric infrastructure). I'm quite sure OPG would be thrilled to take $129/MWh for the incremental piece of their current hydro expansion/upgrade projects. In fact, this could potentially prejudice our current negotiations with OPG on the lower Mattagami projects. Just wanted to flag this and see if this is being considered. cheers, - Jake Jacob A. Sadikman✓ Associate 416.862.4931 DIRECT 41 6.862.6666 FACSIMILE⌧ jsadikman@osler.com Osler, Hoskin & Harcourt LLP Box 50 , 1 First Canadian Place Toronto , Ontario, Canada M5X 1 B8⌧ osler.com ******************************************************************** This e-mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 425 Cindy Roks↵ From: Cindy Roks↵ Sent: March-10-09 3:56 PM↵ To: Jim MacDougall↵ Cc: Patricia Lightburn; Sarah Simmons↵ Subject: Latest pricing table slide as of 3:53 March 10↵ Attachments: FIT pricing table_with inputs_20090310cr.ppt; FIT pricing table_20090310cr.ppt↵ Jim,⇧ I ’ ve attached 2 slide decks. One is just the pricing table and the other includes the input assumptions.⇧ Cindy Roks↵ Business Analyst⇧ 416 - 969 - 6099⇧ P please consider the environment before printing this email _________________________ _________⇤ 426 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 56.7 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 427 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 56.7 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 428 Input Assumptions – Solar PV Rooftop Rooftop Rooftop Rooftop Ground⇥ Solar PV Solar PV Solar PV Solar PV Solar PV⇥ 10-100kW 100-500kW >500kW <10MW⇥ Technology Type 10kW Base Year for Costs 2009 2009 2009 2009 2009⇥ 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 0% 0% 0% 0% 0%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0⇥ 70%⇥ Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 70% 70% 70% 70% Debt Term (years) 18 18 18 18 18⇥ Debt Cost (%) 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50%⇥ 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 80% 80% 80% 80% 80%⇥ Non-Class 43.2 Share 20% 20% 20% 20% 20%⇥ Feed-in Tariff (c/KWh) 80.2 71.3 63.5 53.9 44.3 Non-Class 43.2 Rate (%) 2⇥ 429 Input Assumptions – Other Technologies Community On-shore Off-shore Wind Wind Wind Any Size Any Size Landfill Waterpower Waterpower >2MW Biomass Biogas Biogas Gas Any Size 5MW >5MW 5MW Landfill⇥ Gas⇥ >5MW⇥ 2MW 50MW 2009 2009 2009 2009 2009 2009 2009 2009⇥ 20 20 20 20 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0 9 11.5 11.5 13.5 13.5⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0 3 0 -1 2 2⇥ 70%⇥ Technology Type 10MW Base Year for Costs 2009 2009 20 Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 70% 70% 70% 70% 70% 70% 70% 70% 70% Debt Term (years) 18 18 18 18 18 18 18 18 18 18⇥ Debt Cost (%) 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11% 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%⇥ 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 60% 60% 60% 60% 60% 60% 60% 60% 70% 70%⇥ Non-Class 43.2 Share 40% 40% 40% 40% 40% 40% 40% 40% 30% 30%⇥ Feed-in Tariff (c/KWh) 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 Non-Class 43.2 Rate (%) 8.7 3⇥ 430 Jim MacDougall From: Jim MacDougall Sent: March-10-09 4:27 PM To: 'Deb Reid'; Tim Taylor; Jason Chee-Aloy; Patricia Lightburn Cc: Emay Cowx Subject: RE: Revised news release and backgrounder Attachments: FIT_BG_March 10_09_Draft5(MEIedits).doc; FIT press release_March10_draft9 (MEIedits).doc Changes attached. One note – can you check with Mike Lyle the use of “First Nations and Métis” We use the former but I thought the latter is now the preferred term as opposed to “ Aboriginal ’✓ …. Jim MacDougall, P.Eng.✓ Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: March 10, 2009 2:16 PM To: Tim Taylor; Jim MacDougall; Jason Chee-Aloy; Patricia Lightburn Cc: Emay Cowx Subject: FW: Revised news release and backgrounder Importance: High The Ministry has asked to have all the outstanding material back to them by end of today to give to the Minister for his review. Can you give me a time check on when you will have the material back to Greg and I so I can✓ incorporate into the media docs and get them to the Ministry by 4:30 p.m.? Thanks Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 -----Original Message----From: Lewyckyj, Maryanna (MEI) [mailto:Maryanna.Lewyckyj@ontario.ca] Sent: Tuesday, March 10, 2009 2:02 PM To: Tim Taylor; deb@reidandassociates.ca Cc: Arnold, Tom (MEI); Greenberg, Martha (MEI) Subject: RE: Revised news release and backgrounder Importance: High Greg & Deb: 431 Here are revised copies of the news release and backgrounder. We ’ re waiting for our policy department to put together a chart showing producer prices for various types of fuel sources (peaking gas, renewables, nuclear, water, coal) to drop into the news release. We ’ re also need the OPA to supply figures for the technical specifications below so we can get an agency to do a chart showing different types of solar installations. This was requested earlier today. As well, the earlier version of the news release we sent across yesterday requested some further information on the different types of renewable areas and how it will benefit (ie. Biogas, rural; solar, urban; etc.) Maryanna Lewyckyj Communications Officer Ministry of Energy and Infrastructure 416 - 327 - 0390 Solar specifications needed: o Typical size of installation (square feet) o Typical capacity o Typical annual generation o Typical equipment price For the following facilities: o Home o School o Commercial building o Strip mall✓ o Hockey arena We need this info as soon as possible so we can get the agency working on diagrams. Maryanna Lewyckyj Communications Officer Ministry of Energy and Infrastructure 416 - 327 - 0390 432 DRAFT NEWS RELEASE V. 1 March 4, 2009 Page 1 of 2 ONTARIO’S FEED-IN TARIFF: PROPOSED PRICING PROGRAM UNVEILED Price Guarantees for Large and Small Renewable Energy Projects will Grow Green Energy March XX, 2009 Ontario is poised to introduce a new electricity pricing system to encourage the development of renewable energy from a diverse range of producers including homeowners, communitybased projects as well as industrial users. If the Green Energy Act becomes law, Ontario would launch a new guaranteed pricing structure – called a feed-in tariff -- for a variety of projects from community wind projects and First Nations and Métis projects to farm-based biogas operations, from rooftop solar on homes in urban centres to large wind farms. Prices announced today will form the basis of an eight-week consultation process with renewable energy stakeholders. A feed-in tariff (FIT) is a standard, long-term price to help encourage the development of community-based and large commercial renewable energy projects. It provides a guarantee of market-viable prices for energy generated from renewable energy sources, such as on-shore and off-shore wind as well as water, solar, biogas, biomass and landfill gas. The Green Energy Act, if passed, would establish Ontario as North America’s leader in" renewable energy, drive green investment in the province and create 50,000 jobs in the first three years. Other countries -- particularly Germany, Spain and Denmark – have also successfully used feed-in tariffs to encourage the development of renewable energy projects. “The proposed feed-in tariff program will help spark new investment in renewable energy generation, help jump start the economy and create a new generation of green jobs,” said" George Smitherman, Deputy Premier and Minister of Energy and Infrastructure. “It will give communities and homeowners the power and tools they need to create a brighter, more sustainable future. We’re taking the lessons from other countries to develop a program" designed to make Ontario a leading jurisdiction for renewable electricity generation.” “Ontario has made great progress in procuring renewables, becoming Canada’s leading" province for wind power,” added Colin Andersen, CEO of the Ontario Power Authority (OPA). “The proposed FIT program would build on our success and ensure that more contracts turn into contracts projects sooner.” Changes proposed under the Green Energy Act would also make it easier and faster for projects to get connected to the grid. The OPA’s proposed feed-in tariff price schedule ranges from 8.7 cents per kilowatt hour (kWh) for landfill gas projects to 14.4 cents per kWh for community based wind projects. Proposed prices for solar photovoltaic (PV) technologies range from 44.3 cents per kWh for large ground-mounted projects to 80.2 cents per kWh for residential rooftop projects. 433 DRAFT NEWS RELEASE V. 1 March 4, 2009 Page 2 of 2 The OPA predicts the proposed FIT program could lead to 100,000 solar rooftop installations by 2022, adding 540 MW of new generation capacity. The proposed FIT prices were developed based on experience here in Ontario and in other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover building and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period. OPA is committed to maximizing the developing of renewable energy sources in a costeffective way to ensure that electricity prices remain affordable for Ontario consumers. The OPA will begin consulting with renewable energy stakeholders on the proposed design of a FIT program, including eligibility criteria and proposed pricing next week. Weekly sessions run from Mar. 17, 2009 to May 5. Quick Facts↵ 1. Since October 2003, Ontario has brought about 1,000 megawatts of new renewable energy on-line. 2. In 2008, 25% of Ontario’ s electricity generation came from renewable energy sources. 3. Canada’s two largest wind farms are located in Ontario and by the end of 2009, nearly" 1,200 megawatts of wind capacity will be on-line, enough to power almost 325,000 homes. 4. Investments in new renewable energy projects already in place or under construction in Ontario total about $4 billion. 5. Farm-based biogas projects will benefit from a reasonable FIT price and an on-peak production incentive. 6. The roof-top PV prices should drive installations in urban centres, matching areas with high summer air conditioning demand. 7. Methane capture at land-fill sites will provide significant greenhouse gas emission reductions. 8. We expect many waterpower projects and partnerships in the north with First Nations and Métis involvement. Media Contact XXXXXXX Ontario Power Authority: 416-XXX-XXXX Mobile XXX-XXX-XXXX/ Toll Free: 1-800-797-9604 ______________________________ 434 BACKGROUNDER Proposed Green Energy Act sparks changes The Green Energy Act, if passed, would establish Ontario as North America’s leader in renewable energy, drive green investment in the province and create 50,000 jobs in the first three years. The proposed GEA was introduced in the Ontario Legislature on February 23, 2009. The proposed legislation, and the expected regulatory changes and policies that would flow from it, include a range of measures intended to foster a culture of conservation and encourage the development of renewable energy projects. The measures include a proposed feed-in tariff program (FIT) that would guarantee specific prices for energy generated from renewable sources. What is a feed-in tariff program?" A Feed-In Tariff (FIT) Program is a simpler way to contract for renewable energy generation. It is simpler because of standardized program rules and standardized contracts, including standardized prices. If the Green Energy Act becomes law, a FIT Program will be used to procure new renewable energy projects. Developers of renewable energy projects would receive a FIT contract if they meet all program requirements. Benefits of Ontario’ s proposed FIT program Ontario’s proposed FIT Program would have several key features. It would: provide a simpler way to contract for generation be open to various renewable energy technologies (e.g., wind, waterpower, solar and bio-energy technologies) allow all types of generators, from homeowners to private developers, to participate have different prices for different technologies and project sizes have prices that cover total project costs and provide a reasonable rate of return over a long-term contract (about 20 years) provide incentives for First Nation, Métis and community-based projects offer long-term price guarantees to increase investor confidence and access to financing 435 Proposed FIT prices Proposed prices are outlined in the table below. These will be refined with renewable energy stakeholder input during eight weeks of consultations from March 17 to May 5. Size ranges in other jurisdictions Spain Germany Michigan ¢/kWh ¢/kWh Proposed Ontario" proposed ¢/kWh ¢/kWh Ontario" proposed size ranges Biomass 0 – 2 MW 0.26 0.19 > 2 MW 0.24 0.13 0 0.22 0.19 0. 16 0.13 10.5 Any size 14.7 < 5 MW 10.4 > 5 MW Biogas – 500 kW >500 kW Waterpower 0 Community Based Waterpower – 500 kW 500 kW 10 – 10 MW – 50 MW 0.12 0.20 12.9 Any size 0.12 0.14 13.4 ⇥ 2 MW 0.03 --------- (on top of% market% price) Landfill gas 0 – 500 kW 0.13 0.14 500 kW – 5 MW 0.13 0.10 9.3 > 5 MW 0.13 --------- 8.7 0 0.54 0.69 – 200 kW 0.52 200 kW – 1 MW 0.51 0 – 5MW > 5 MW Solar PV rooftop Ground Mounted – 30 kW 30 82.99 80.2 0 – 10 kW 0.65 71.3 10 0.63 63.5 100 – 100 kW – 500 kW 56.7 > 500 kW Any size 0.51 0.51 44.3 ⇥ 10 MW Onshore Any size 0.12 0.15 13.5 Any size Offshore Any size 0.13 0.21 16.1 Any size Wind (on top of% 436 market% price) Community Based Wind n/a n/a n/a 14.4 ⇥ 10 MW Waterpower and bio-energy will receive a higher price on-peak hours - 35% higher from 11am to 7pm on business days - and a 10% lower price during off-peak hours The proposed FIT prices for solar photovoltaic (PV) projects are designed to kick-start the solar PV industry in Ontario. Solar PV is a rapidly developing and growing industry with potential for price reductions in the coming years. There are just over 100 rooftop installations in operation in Ontario for a total of approximately 0.5 megawatts. The proposed FIT prices were derived from a range of sources using best available and most recent information. Prices were developed based on experience here in Ontario and in other jurisdictions. They cover building and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period, and the basic connection costs for typical projects. Sample projects and typical project costs" For example, A typical homeowner in Ontario would be looking at a residential scale Solar PV project of about 3 kilowatts, which costs around $30,000. That would provide enough electricity to meet one third of their consumption, and would generate about $7 per day. This payment would result in approximately $2,500 in revenue per year for the homeowner, resulting in about a 12 year payback. A farm-based 250 kW bio-digester would cost around $1.7 million to install, and could earn back this investment in approximately the same timeframe, depending on its operation. A 10 MW, community-owned wind farm in Ontario would cost around $32 million to construct, and is expected to have a 10-year payback. Realizing the Potential for Renewable Energy Over 1,000 MW have reached commercial operation and are generating clean, green electricity from wind, water, sun and bio-based resources. The proposed FIT Program will encourage further investment in generation, transmission and distribution to facilitate greater incorporation and use of renewable energy sources. Ontario’s system could incorporate many more thousands of MW of additional renewable supply over the next five years as the FIT Program will not limit the amount of energy from any particular renewable fuel source. How much electricity will be generated from each type of renewable fuel source is uncertain. 437 Energy Agency Involvement Successful implementation of a FIT Program will require changes across the energy sector that enable renewable energy could be brought into service more quickly and efficiently. The Ontario Energy Board (OEB), the Independent Electricity System Operator (IESO) and transmitters and distributors would work together to bring more renewable electricity generation online in Ontario. The OPA will implement a simplified process for residential micro-scale projects. Stakeholder Involvement From March 17, 2009 to May 5, 2009, the OPA will host a series of weekly consultation sessions with renewable energy stakeholders. These consultation sessions will be used to seek input and feedback from large and small renewable energy suppliers, on proposed FIT program rules and contracts. Renewable energy suppliers include any person in the province that generates and supplies renewable energy to the grid ranging from largescale commercial developers to micro-scale residential developers or homeowners. Full day consultation sessions will be held on a weekly basis with about 200 preregistered stakeholders. Stakeholders are invited to listen-in by webcast or by teleconference. The OPA will establish a FIT web page on its website (www.powerauthority.on.ca) for general information where all documentation from the consultation sessions will be publicly available. People will also be able to get questions answered online. Launch of new pricing system If the Green Energy Act is passed, the OPA would expect to be in a position to quickly implement the FIT program later this year. 438 Cindy Roks↵ From: Cindy Roks↵ Sent: March-10-09 4:53 PM↵ To: Jim MacDougall↵ Cc: Patricia Lightburn; Sarah Simmons↵ Subject: Latest slide deck for pricing table as of March 10 4:50↵ Attachments: FIT pricing table_with inputs_20090310cr.ppt; FIT pricing table_20090310cr.ppt↵ Slides are updated. For the pricing table slide only – use the second attachment.⌫ Cindy Roks↵ Business Analyst⌫ 416 - 969 - 6099⌫ P please consider the environment before printing this email _________________________ _________⇤ 439 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 440 Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 441 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 442 Input Assumptions – Solar PV Rooftop Rooftop Rooftop Rooftop Ground⇥ Solar PV Solar PV Solar PV Solar PV Solar PV⇥ 10-100kW 100-500kW >500kW <10MW⇥ Technology Type 10kW Base Year for Costs 2009 2009 2009 2009 2009⇥ 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 0% 0% 0% 0% 0%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0⇥ 70%⇥ Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 70% 70% 70% 70% Debt Term (years) 18 18 18 18 18⇥ Debt Cost (%) 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50%⇥ 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 80% 80% 80% 80% 80%⇥ Non-Class 43.2 Share 20% 20% 20% 20% 20%⇥ Feed-in Tariff (c/KWh) 80.2 71.3 63.5 53.9 44.3 Non-Class 43.2 Rate (%) 2⇥ 443 Input Assumptions – Other Technologies Community On-shore Off-shore Wind Wind Wind Any Size Any Size Landfill Waterpower Waterpower >2MW Biomass Biogas Biogas Gas Any Size 5MW >5MW 5MW Landfill⇥ Gas⇥ >5MW⇥ 2MW 50MW 2009 2009 2009 2009 2009 2009 2009 2009⇥ 20 20 20 20 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0 9 11.5 11.5 13.5 13.5⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0 3 0 -1 2 2⇥ 70%⇥ Technology Type 10MW Base Year for Costs 2009 2009 20 Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 70% 70% 70% 70% 70% 70% 70% 70% 70% Debt Term (years) 18 18 18 18 18 18 18 18 18 18⇥ Debt Cost (%) 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11% 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%⇥ 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 60% 60% 60% 60% 60% 60% 60% 60% 70% 70%⇥ Non-Class 43.2 Share 40% 40% 40% 40% 40% 40% 40% 40% 30% 30%⇥ Feed-in Tariff (c/KWh) 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 Non-Class 43.2 Rate (%) 8.7 3⇥ 444 Jim MacDougall From: Jim MacDougall Sent: March-11-09 10:17 AM To: Jason Chee-Aloy Cc: Patricia Lightburn Subject: FW: FIT price comparisons Attachments: FIT_BG_March 10_09_Draft 5 (OPA edits) v2.doc; Comments on FIT Comparisons.doc; Pricing in SpainGermanMichigan 2009-03-11 (2).doc Jason;⌥ The short answer to most of the attached questions is that the table aimed to provide simplified answers for the purpose of providing a simple communications document.⌥ There are a number of generalizations that are made to convey a reasonable level of detail.⌥ Attached is a more complete summary of the pricing approach in Germany, Spain and Michigan. Even these tables⌥ do not capture everything, but other details have been noted. PV prices in Spain were lowered starting in 2009.⌥ The Backgrounder does need to be changed to reflect the <= 50 MW for waterpower in Ontario.⌥ .⌥ From: Jason Chee-Aloy Sent: Wed 11/03/2009 6:11 AM To: Jim MacDougall Cc: Richard Duffy Subject: Fw: FIT price comparisons Please see Jordan 's email below.✓ Can you and whoever else from your team work on this? I will check on progress by mid- morning today.✓ Let's get our answer straight before sending this over to OPA Communications.✓ Thanks.✓ ----- Original Message ----From: Penic, Jordan (MEI) ✓ To: Jason Chee - Aloy✓ Sent: Tue Mar 10 20:34:54 2009✓ Subject: FIT price comparisons✓ <>✓ Hi Jason,✓ Can you also try to reconcile these numbers with MEI staff. These were the comments we received back today on the comparison chart. I think it’ s important to ensure that we ’ re all on the same page.✓ Again, thanks for the work on all this!✓ 445 Much appreciated! Jordan 446 Comments on FIT Comparisons⇣ March 10th, 2009⇣ all prices in cents Canadian at March 10, 2009 exchange rate General The table simplifies the FITs in other jurisdictions. Biomass has 4 size tranches in Germany and Michigan, Hydro has 8 in Germany, rooftop PV has$ 4 in Germany, ground based PV has 3 in Spain, and onshore wind has 2 in$ Michigan. Michigan has wording stating that the FIT is the minimum prices. They$ guarantee the "rate needed for development plus a reasonable profit" (10% to 30%) in their bill. The column on the right "Ontario proposed size tranches" complicates the table. It would be clearer if the same size tranches as other jurisdictions were$ used. Some numbers would have to be repeated such as biomass. The time limits are not stated. Germany's wind FITs decrease after 5 years,$ and most Spanish ones decrease after 20. On peak incentives are not stated. In Ontario waterpower and bioenergy$ incentives are eligible for these. Biomass The Michigan biomass price is too high. It is 18.5 under 150 kW, 16.0 up to$ 500 kW, 14.7 up to 5 MW, and 13.4 up to 20 MW. I'm not sure what is meant by biogas. Most jurisdictions have FITs for landfill$ gas and sewage gas. Anything else would probably be covered by biomass. Sewage gas is 11.6 under 500 kW and 10.1 up to 5 MW in Germany, and 10 and 8.5 for the same tranches in Michigan. Hydro The German hydro price for 500 kW to 10 MW should be 10.3. The higher$ price (14.1) applies to 500 kW to 2 MW, but only if the plant is under 5 MW in$ size. Once it is over 5 MW different tranches apply. Hydro will have a maximum size in Ontario which is not listed in the table. Landfill Gas I can't find the landfill gas tariff for Spain, but the value listed may be a bit$ high. It may be at the low end of their "biomass" tariff at 10.6. 447 PV I still need to check the Spanish PV numbers but they may be higher than what is listed. Wind The Spanish wind price is 12.0. I couldn't find any distinction between onshore and offshore. The German price is only 15.0 for the first 5 years, and then it goes down to 8.2. The Michigan price goes down to 10.2 after 5 years. 448 BACKGROUNDER Proposed Green Energy Act sparks changes The Green Energy Act, if passed, would establish Ontario as North America’s leader in renewable energy, drive green investment in the province and create 50,000 jobs in the first three years. The proposed GEA was introduced in the Ontario Legislature on February 23, 2009. The proposed legislation, and the expected regulatory changes and policies that would flow from it, include a range of measures intended to foster a culture of conservation and encourage the development of renewable energy projects. The measures include a proposed feed-in tariff program (FIT) that would guarantee specific prices for energy generated from renewable sources. What is a feed-in tariff program?" A feed-in tariff (FIT) program is a simpler way to contract for renewable energy generation. It is simpler because of standardized program rules and standardized contracts, including standardized prices. If the Green Energy Act becomes law, a FIT Program will be used to procure new renewable energy projects. Developers of renewable energy projects would receive a FIT contract if they meet all program requirements. Benefits of Ontario’s proposed FIT program Ontario’s proposed FIT program would have several key features. It would: provide a simpler way to contract for generation be open to various renewable energy technologies (e.g., wind, waterpower, solar and bio-energy technologies) allow all types of generators, from homeowners to private developers, to participate have different prices for different technologies and project sizes have prices that cover total project costs and provide a reasonable rate of return over a long-term contract (about 20 years) provide incentives for First Nation, Métis and community-based projects offer long-term price guarantees to increase investor confidence and access to financing Proposed FIT prices Proposed prices are outlined in the table below. These will be refined with renewable energy stakeholder input during eight weeks of consultations from March 17 to May 5. 449 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Ontario proposed size tranches Ontario proposed Any size 10.5 ¢/kWh Size ranges in other jurisdictions (approx. ranges) Spain Germany ¢/kWh ¢/kWh Michigan proposed ¢/kWh Biomass" * *on/off peak pricing applies 0 – 2 MW > 2 MW 20.9-26.4 18.8 15.9 17.3-24.4 14.8 13.4 21.7 18.8 15.9 16.1 13.8 13.4 12.5 20.4 12.77 12.5 13.9 10.85 0.03 --------- 8.3 13.3 14.5 12.7 10.8 Biogas* 0 – 500 kW ⇥ 5 MW 14.7 >500 kW > 5 MW 10.4 ⇥ 50 MW 12.9 0 ⇥ 2 MW 13.4 500 kW Waterpower* Community Based – 500 kW 10 – 10 MW – 50 MW (on top of* market price) Landfill gas* 0 – 500 kW ⇥ 5MW 9.3 500 kW – 5 MW 13.3 9.9 > 5 MW 8.7 > 5 MW 13.3 --------- ⇥10 kW 80.2 0 – 30 kW 54.7 69.2 82.9 71.3 30 – 200 kW 53.1 65.8 79.2 200 kW – 1 MW 51.5 63.7 77.9 Solar PV rooftop 10 100 – 100 kW – 500 kW 63.5 > 500 kW 53.9 ⇥ 10 MW 44.3 Any size 51.5 51.4 63.8 Onshore Any size 13.5 Any size 12.8 14.8 13.4 Offshore Any size 16.1 Any size 13.0 20.9 n/a n/a n/a Ground Mounted Wind (on top of* market* price) Community Based* ⇥ 1 0 MW 14.4 n/a n/a Waterpower and bio-energy will receive a higher price on-peak hours – 35% higher from 11am to 7pm on business days – and a 10% lower price during off-peak hours 450 The proposed FIT prices for solar photovoltaic (PV) projects are designed to kick-start the solar PV industry in Ontario. Solar PV is a rapidly developing and growing industry with potential for price reductions in the coming years. There are just over 100 rooftop installations in operation in Ontario for a total of approximately 0.5 megawatts. The proposed FIT prices were derived from a range of sources using best available and most recent information. Prices were developed based on experience here in Ontario and in other jurisdictions. They cover building and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period, and the basic connection costs for typical projects. Sample projects and typical project costs" For example, A typical homeowner in Ontario would be looking at a residential scale Solar PV project of about 3 kilowatts, which costs around $30,000. That would provide enough electricity to meet one third of their consumption, and would generate about $7 per day. This payment would result in approximately $2,500 in revenue per year for the homeowner, resulting in about a 12 year payback. A farm-based 250 kW bio-digester would cost around $1.7 million to install, and could earn back this investment in approximately the same timeframe, depending on its operation. A 10 MW, community-owned wind farm in Ontario would cost around $32 million to construct, and is expected to have a 10-year payback. Realizing the Potential for Renewable Energy Over 1,000 MW have reached commercial operation and are generating clean, green electricity from wind, water, sun and bio-based resources. The proposed FIT Program will encourage further investment in generation, transmission and distribution to facilitate greater incorporation and use of renewable energy sources. Ontario’s system could incorporate many more thousands of MW of additional renewable supply over the next five years as the FIT Program will not limit the amount of energy from any particular renewable fuel source. How much electricity will be generated from each type of renewable fuel source is uncertain. Energy Agency Involvement Successful implementation of a FIT Program will require changes across the energy sector that enable renewable energy to be brought into service more quickly and efficiently. The Ontario Energy Board (OEB), the Independent Electricity System Operator (IESO) and transmitters and distributors would work together to bring more renewable electricity generation online in Ontario. The OPA will implement a simplified process for residential micro-scale projects. 451 Stakeholder Involvement From March 17, 2009 to May 5, 2009, the OPA will host a series of weekly consultation sessions with renewable energy stakeholders. These consultation sessions will be used to seek input and feedback from large and small renewable energy suppliers, on proposed FIT program rules and contracts. Renewable energy suppliers include any person in the province that generates and supplies renewable energy to the grid ranging from largescale commercial developers to micro-scale residential developers or homeowners. Full day consultation sessions will be held on a weekly basis with about 200 preregistered stakeholders. Stakeholders are invited to listen-in by webcast or by teleconference. The OPA will establish a FIT web page on its website (www.powerauthority.on.ca) for general information where all documentation from the consultation sessions will be publicly available. People will also be able to get questions answered online. Launch of new pricing system If the Green Energy Act is passed, the OPA would expect to be in a position to quickly implement the FIT program later this year. 452 Spain⌃ Solar PV Size Price drop Price Euro cent/kWh Cdn cent/kWh cent/kWh1 (1.60953412) (1.60953412)1 <20 kW1 kW 25 251 34.001 34.00 54.72 54.721 <200 kW1 kW 25 251 33.001 33.00 53.11 53.111 >200 kW1 kW 25 251 32.001 32.00 51.51 51.511 32.001 32.00 51.51 51.511 Ground-mounted1 Ground-mounted Systems- Any size1 size Wind Onshore – Any size size1 20 201 7.581 7.58 12.18 12.181 Hydro <10 MW1 MW 25 yrs1 yrs 7.801 7.80 12.55 12.551 <50 MW1 MW 25 yrs1 yrs 2.101 2.10 (on top of market price)1 price) 3.38 3.381 <500 kW1 kW 15 yrs yrs1 13.501 13.50 21.74 21.741 >500 kW1 kW 15yrs 15yrs1 10.001 10.00 16.10 16.101 Biomass (energy <2 MW1 MW 15yrs 15yrs1 12.99-16.42 (depending1 (depending on technology)1 technology) 20.91 – 26.43 26.431 Crops, forestry forestry1 waste,1 waste, agriculture1 agriculture waste >2 MW1 MW 15yrs 15yrs1 10.75-15.151 10.75-15.15 17.31 – 24.38 24.381 Landfill gas Any size 15yrs 15yrs1 8.26 13.29 13.291 Biogas (biodigester gas)1 gas) Germany⌃ Technology Capacity Range FIT (EU cents/kWh) FIT Cdn cents/kWh (1.60953412) Rooftop Solar PV 43.01 30 kW 69.23 69.231 > 30 kW 100 kW 40.36 65.85 65.851 > 100 kW 1000 kW 39.90 63.71 63.711 > 1000 kW 33.00 53.11 53.111 Ground mounted Solar PV Any size 25.01 51.41 51.411 On-shore Wind Any size (*based on resource differentiated tariffs) tariffs)1 9.22 5.02 14.81 8.08 8.081 Off-shore Wind Any size (*based on resource differentiated tariffs) tariffs)1 13.00 3.50 20.92 5.63 5.631 Waterpower (*new facilities) 500 kW > 500 kW > 2 MW Biomass/ biogas 5 MW 150 kW 20.39 20.391 8.65 13.92 13.921 7.65 12.31 12.311 11.67 18.78 18.781 > 150 kW 500 kW 9.18 14.78 14.781 > 500 kW 5 MW 8.25 13.28 13.281 20 MW 7.79 12.54 12.541 9.00 14.49 14.491 6.16 9.91 9.911 > 5 MW Landfill gas 2 MW 12.67 500 kW > 500 kW 5 MW 453 Proposed Michigan (HOUSE BILL No. 5218) Technology Rooftop Solar PV Capacity Range (US cents/kWh) FIT Cdn cents/kWh (1.27680003) 65 82.99 82.991 62 79.16 79.161 > 100 kW1 kW 61 77.881 77.88 Ground mounted Solar PV Any size1 size 50 63.841 63.84 On-shore Wind Any size (*based on1 on 10.5 resource differentiated tariffs)1 tariffs) 30 kW kW1 > 30 kW Waterpower 100 kW1 kW 500 kW1 kW > 500 kW 10 MW1 MW > 10 MW Biomass/ biogas 150 kW1 kW 13.41 10.2 10.21 10.001 10.00 12.771 12.77 8.501 8.50 10.851 10.85 6.501 6.50 8.301 8.30 14.501 14.50 18.511 18.51 > 150 kW 500 kW1 kW 12.501 12.50 15.961 15.96 > 500 kW 5 MW1 MW 11.50 11.501 14.68 14.681 20 MW1 MW 10.50 10.501 13.41 13.411 500 kW1 kW 10.001 10.00 12.771 12.77 > 500 kW1 kW 8.501 8.50 10.851 10.85 > 5 MW Landfill gas 20 MW1 MW 8.00 454 Cindy Roks↵ From: Cindy Roks↵ Sent: March-11-09 2:56 PM↵ To: Jim MacDougall; Sarah Simmons; jdalton@poweradvisoryllc.com; Patricia↵ Lightburn↵ Subject: Please delete all versions of pricing table slides...↵ Attachments: FIT pricing table_20090310cr.ppt; FIT pricing table_with inputs_20090310cr.ppt↵ These are the latest and most accurate …⇥ 455 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 456 Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 457 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1⇥ 458 Input Assumptions – Solar PV Rooftop⇥ Solar PV⇥ Rooftop⇥ Rooftop⇥ Solar PV⇥ Solar PV⇥ Rooftop⇥ Ground⇥ Solar PV⇥ Solar PV⇥ 10-100kW⇥100-500kW⇥ >500kW⇥ <10MW⇥ Technology Type⇥ 1 0kW⌃ Base Year for Costs 2009 2009 2009 2009 2009⇥ 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 0% 0% 0% 0% 0%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0⇥ 70%⇥ Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 2⇥ 70% 70% 70% 70% Debt Term (years) 20 20 20 20 20⇥ Debt Cost (% ) 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50%⇥ Non-Class 43.2 Rate (%) 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 80% 80% 80% 80% 80%⇥ Non-Class 43.2 Share 20% 20% 20% 20% 20%⇥ Feed-in Tariff (c/KWh) 80.2 71.3 63.5 53.9 44.3 459 Input Assumptions – Other Technologies Community Wind⇥ On-shore⇥ Off-shore⇥ Wind⇥ Technology Type⇥ 1 0MW⌃ Base Year for Costs 2009 2009 20 Wind Any Size⇥ Any Size Waterpower⇥ Waterpower⇥ >2MW Landfill Biomass⇥ Biogas⇥ Biogas⇥ Gas⇥ Any Size⇥ 5MW⌃ >5MW⇥ 5MW⌃ Landfill Gas⇥ >5MW⇥ 2MW⌃ 50MW⌃ 2009 2009 2009 2009 2009 2009 2009 2009⇥ 20 20 20 20 20 20 20 20 20⇥ 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25%⇥ 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%⇥ Heat Rate (MMBTU/MWh) 0 0 0 0 0 9 11.5 11.5 13.5 13.5⇥ Fuel Cost ($/MMBTU) 0 0 0 0 0 3 0 -1 2 2⇥ 70%⇥ Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) Debt % 70% 70% 70% 70% 70% 70% 70% 70% 70% Debt Term (years) 20 20 20 20 20 20 20 20 20 20⇥ Debt Cost (% ) 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%⇥ Return on Equity (%) 11% 11% 11% 11% 11% 11% 11% 11% 11% 11%⇥ Class 43.2 Rate (%) 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%⇥ Non-Class 43.2 Rate (%) 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%⇥ Class 43.2 Share (%) 60% 60% 60% 60% 60% 60% 60% 60% 70% 70%⇥ Non-Class 43.2 Share 40% 40% 40% 40% 40% 40% 40% 40% 30% 30%⇥ Feed-in Tariff (c/KWh) 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 3⇥ 460 Richard Duffy From: Richard Duffy Sent: March-11-09 8:08 PM To: 'Deb Reid'; Jason Chee-Aloy; Jim MacDougall; Patricia Lightburn Cc: Tim Taylor; Emay Cowx Subject: RE: Consolidated Q&As Attachments: MEI_Feed in Tariff - QA - March 11 09_Main_613pm_RDaddition.doc I ’ ve added details to the document for Item #3 below, Item #48 in the document. From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: Wednesday, March 11, 2009 6:54 PM To: Jason Chee-Aloy; Jim MacDougall; Patricia Lightburn; Richard Duffy Cc: Tim Taylor; Emay Cowx Subject: FW: Consolidated Q&As Importance: High Jim: Here is the consolidated Q and A document as promised. Please review it for accuracy as per Maryanna’ s request below and please include responses to the questions below. Track changes is on in the document, so please do the changes right on the document and send back to me as soon as possible (later tonight – sorry about this, but seems the only alternative since the press conference is tomorrow). 1. What is the average cost per MW for: Solar Wind Water Biogas Biomass Landfill gas (OPA to provide figures) 2. When will the IPSP response be made public? (OPA to respond) 3. What is the total cost for the milestones on an average project? (OPA to respond) 4. How will you ensure that people won ’ t ‘ game ’ the system? (OPA to answer) Thanks Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 461 Cell: 41 6 - 729 - 0240 ----- Original Message----From: Lewyckyj, Maryanna (MEI) [mailto:Maryanna.Lewyckyj@ontario.ca] Sent: Wednesday, March 11, 2009 6:32 PM To: Tim Taylor; Deb Reid Subject: RE: Consolidated Q&As Tim/Deb: Here is the latest version (from our end) of consolidated Q&As. They are not final. There are still some answers that would be better addressed by the OPA. Can you review the document and make sure the information is accurate. Maryanna Lewyckyj Communications Officer Ministry of Energy and Infrastructure 416 - 327 - 0390 5. What is the average cost per MW for: Solar Wind Water Biogas Biomass Landfill gas (OPA to provide figures) 6. When will the IPSP response be made public? (OPA to respond) 7. What is the total cost for the milestones on an average project? (OPA to respond) 8. How will you ensure that people won ’ t ‘ game ’ the system? (OPA to answer) 462 1 Feed-In-Tariff Program – Q&A PRICING 1. What is a Feed-In-Tariff (FIT) and how does it work? A feed-in-tariff is a standard price to promote the development of community-based⇠ and large commercial renewable energy projects. It guarantees market-viable prices for energy generated from renewable energy sources, such as solar, wind, water, biogas, biomass, and landfill gas, and it provides⇠ a reasonable rate of return for projects of different types and sizes. A feed-in-tariff helps spark new investment in renewable energy generation by⇠ offering proponents easier access to financing and easier access to the energy grid, and a streamlined approvals process.⇠ 2. What is the proposed FIT pricing schedule? The OPA’s proposed price schedule, which will be refined through an eight-week⇠ consultation process with renewable energy stakeholders, ranges from 8.7 cents per⇠ kilowatt hour (kWh) for landfill gas projects to 14.4 cents per kWh for community⇠ based wind projects. Proposed prices for the rapidly advancing solar photovoltaic⇠ (PV) technologies range from 44.3 cents per kWh for large ground-mounted projects⇠ to 80.2 cents per kWh for residential rooftop projects. 3. How did you come up with these prices? The proposed FIT prices were developed based on experience here in Ontario and⇠ in other jurisdictions. Prices differ based on project size and type of renewable⇠ energy technology. They cover facility construction and operating and maintenance⇠ costs and allow for a reasonable return on investment over the 20-year contract term. 4. How can you justify these prices at a time when Ontario is in economic downturn? Energy prices are under pressure to rise. The Green Energy Act would, if passed, create more than 50,000 jobs over the next three years and would facilitate substantial investment at a time when it is most⇠ needed. A diversified energy supply mix, along with a combination of regulated and market⇠ prices would help maintain stability in electricity pricing. However, North American leaders (Obama) are signaling a move to a North⇠ American carbon pricing system. Those jurisdictions that invest early in anticipation⇠ of this will stand to benefit in the future. Ontario is well positioned, by its commitment to get off coal, and by moving aggressively to implement new renewable energy⇠ 463 2 technologies. Creating a culture of conservation is an equally important thrust behind the proposed⇠ GEA which would create initiatives to provide people and industry with the tools and⇠ means to use less energy in their daily lives. 5. Did you include these proposed FIT prices in your calculations when you came with a price impact for residential customers as about one per cent over 15 years? Yes, the price impacts we projected are consistent with these proposed fit prices. I would like to note that the actual rate impacts will be dependent on the final prices⇠ that come out of the consultation process and take up of the program. We expect that Ontario’s supply mix – with a solid endowment of legacy hydroelectric, and low⇠ cost established nuclear power, as well as a mixture of regulated and market rates – will continue to help to ensure fair prices for the province’s energy users. 6. Why don’t you have different prices for different regions? These are proposed prices and we are looking for feedback from industry and other stakeholders. We will also be moving quickly to build transmission to regions such as⇠ northern Ontario where the grid is currently constrained. 7. What factors are being considered in setting a tariff rate? The proposed FIT pricing model is based on project costs plus a reasonable rate of return on equity. Prices account for the following components: o Capital costs⇠ o Operating and maintenance costs⇠ o Connection costs⇠ o Reasonable rate of return on equity Project cost information was developed from a broad range of sources, with a⇠ preference to recent cost estimates from reliable sources with transparent⇠ assumptions. These can be updated when necessary. 8. How long will projects receive the tariff rate? The contract term for the feed-in tariff will be approximately 20 years. 9. Are prices firm, or is there room for negotiation? The proposed prices will be reviewed through a consultation process. Once that consultation process is completed and the prices are finalized, they are firm. 10. How frequently will FIT prices be reviewed, and who will administer the review process? There will be regular two-year reviews of the program. However, the OPA reserves⇠ the right to revise prices if there are significant changes to market conditions. 464 3 11. How do the proposed tariffs (cents/kWh) compare to RES III? What's the reason for the higher price? The proposed FIT price is consistent with the average price obtained under the RES⇠ III RFP. 12. How do proposed FIT program prices compare to RESOP prices? The RESOP program was not as comprehensive as this program. FIT program⇠ prices are differentiated by a range of technologies and sizes and are designed to⇠ allow a variety of renewable energy project to recover the cost of building and⇠ maintaining the projects and earn a reasonable rate of return on the investment. 13. What impact will FIT have on existing producers that have been approved under RESOP? The OPA will honour all contracts signed under RESOP and we expect the parties⇠ who signed these agreements to also honour them.. The FIT program will replace RESOP so any new renewable energy projects will⇠ come under the umbrella of the new FIT Program rules. These are consultations and we will be listening to various ideas. 14. Will current renewable projects be able to back out and reapply under FIT? No. 15. Can LDCs and municipalities qualify for the FIT prices? Yes, eligible LDC and municipal projects can receive FIT pricing. 16. Who pays for the connection cost on transmission and distribution? Direct connection costs are the responsibility of the generator and the costs of a⇠ typical connection are reflected in the feed-in tariff price. The ratepayer will be⇠ responsible for the costs of upgrading the distribution connected projects, based on⇠ an economic test. 17. Who is responsible for electricity procurement under a FIT program? The Ontario Power Authority (OPA) will lead the implementation of Ontario’s! proposed Feed-in Tariff (FIT) Program. The OPA will co-ordinate with other energy agencies like the Ontario Energy Board (OEB) and the Independent Electricity System Operator (IESO). 18. What renewable energy projects will be eligible under the FIT program? Renewable energy projects such as solar, wind, water, biogas, biomass, and landfill⇠ gas will be eligible. 19. What happens to RESOP? 465 4 Eligibility for the proposed Feed-in Tariff program will include the proposed projects⇠ that would have previously been covered by the RESOP program. As a result, if the⇠ FIT program is implemented, RESOP would be discontinued. 20. How do proposed FIT program prices compare to the RESOP prices? The proposed feed-in tariff Program would be much more comprehensive than the⇠ RESOP it will replace. The feed-in tariff, for example, will apply both to large⇠ transmission connected projects as well as to the small distribution-connected⇠ projects that occurred under RESOP. Also, unlike the RESOP, the Feed-in Tariff program will establish prices for a large number of renewable energy categories — differentiated by generation type, and size. FIT program prices are differentiated by a range of technologies and sizes and are⇠ designed to allow a variety of renewable energy project to recover the cost of building and maintaining the projects and earn a reasonable rate of return on the⇠ investment. 21. Will current renewable projects be able to back out and reapply under FIT? The OPA will continue to honour all contracts signed and we expect the parties who⇠ signed them to also honour them. 22. What happens if a proponent does not honour a contract with the OPA? RES contracts are required to provide performance security and if they are unable to⇠ honour their commit, that security could be at risk. Not Responsive 466 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 11 Not Responsive 473 Jim MacDougall From: Jim MacDougall Sent: March-11-09 11:29 PM To: Richard Duffy; 'Deb Reid'; Jason Chee-Aloy; Patricia Lightburn Cc: Tim Taylor; Emay Cowx Subject: RE: Consolidated Q&As Attachments: MEI_Feed in Tariff - QA - March 11 09_Main_613pm_RDaddition v2.doc Deb⌅ I have no info on the basis for Q5 1 % rate impact over 1 5 years. I asked the Ministry for details on this a while ago and never heard back ..⌅ Q 6 seems fine.⌅ Some of the Qs and As are statements by hte Minister. Are these his As? Q 24. I don't have an answer for 47 - status of IPSP.⌅ Jim MacDougall, P.Eng.⌅ Manager, Distributed Generation⌅ Ontario Power Authority⌅ (416) 969 - 6415⌅ From: Richard Duffy Sent: Wed 11/03/2009 8:08 PM To: 'Deb Reid'; Jason Chee-Aloy; Jim MacDougall; Patricia Lightburn Cc: Tim Taylor; Emay Cowx Subject: RE: Consolidated Q&As I ’ ve added details to the document for Item #3 below, Item #48 in the document.⌅ From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: Wednesday, March 11, 2009 6:54 PM To: Jason Chee-Aloy; Jim MacDougall; Patricia Lightburn; Richard Duffy Cc: Tim Taylor; Emay Cowx Subject: FW: Consolidated Q&As Importance: High Jim:⌅ Here is the consolidated Q and A document as promised. Please review it for accuracy as per Maryanna’ s request⌅ below and please include responses to the questions below. Track changes is on in the document, so please do the changes right on the document and send back to me as soon as possible (later tonight – sorry about this, but seems the only alternative since the press conference is tomorrow). 474 1. What is the average cost per MW for: Solar⌅ Wind⌅ Water⌅ Biogas⌅ Biomass⌅ Landfill gas⌅ (OPA to provide figures)⌅ 2. When will the IPSP response be made public? (OPA to respond)⌅ 3. What is the total cost for the milestones on an average project? (OPA to respond)⌅ 4. How will you ensure that people won ’ t ‘ game ’ the system? (OPA to answer)⌅ Thanks⌅ Deb⌅ Deb@ReidandAssociates.ca⌅ Tel: 41 6 - 698 - 5459⌅ Fax: 41 6 - 698 - 0377⌅ Cell: 41 6 - 729 - 0240⌅ ----- Original Message----From: Lewyckyj, Maryanna (MEI) [mailto:Maryanna.Lewyckyj@ontario.ca] Sent: Wednesday, March 11, 2009 6:32 PM To: Tim Taylor; Deb Reid Subject: RE: Consolidated Q&As Tim/Deb:⌅ Here is the latest version (from our end) of consolidated Q&As. They are not final.⌅ There are still some answers that would be better addressed by the OPA. Can you review the document and make sure the information is accurate.⌅ Maryanna Lewyckyj⌅ Communications Officer⌅ Ministry of Energy and Infrastructure⌅ 416 - 327 - 0390⌅ 5. What is the average cost per MW for: Solar⌅ Wind⌅ Water⌅ Biogas⌅ Biomass⌅ 475 Biomass⌅ Landfill gas⌅ (OPA to provide figures)⌅ 6. When will the IPSP response be made public? (OPA to respond)⌅ 7. What is the total cost for the milestones on an average project? (OPA to respond)⌅ 8. How will you ensure that people won ’ t ‘ game ’ the system? (OPA to answer)⌅ 476 1 Feed-In-Tariff Program – Q&A PRICING 1. What is a Feed-In-Tariff (FIT) and how does it work? A feed-in-tariff is a standard price to promote the development of community-based⇠ and large commercial renewable energy projects. It guarantees market-viable prices for energy generated from renewable energy sources, such as solar, wind, water, biogas, biomass, and landfill gas, and it provides⇠ a reasonable rate of return for projects of different types and sizes. A feed-in-tariff helps spark new investment in renewable energy generation by⇠ offering proponents easier access to financing and easier access to the energy grid, and a streamlined approvals process.⇠ 2. What is the proposed FIT pricing schedule? The OPA’s proposed price schedule, which will be refined through an eight-week⇠ consultation process with renewable energy stakeholders, ranges from 8.7 cents per⇠ kilowatt hour (kWh) for landfill gas projects to 14.4 cents per kWh for community⇠ based wind projects. Proposed prices for the rapidly advancing solar photovoltaic⇠ (PV) technologies range from 44.3 cents per kWh for large ground-mounted projects⇠ to 80.2 cents per kWh for residential rooftop projects. 3. How did you come up with these prices? The proposed FIT prices were developed based on experience here in Ontario and⇠ in other jurisdictions. Prices differ based on project size and type of renewable⇠ energy technology. They cover facility construction and operating and maintenance⇠ costs and allow for a reasonable return on investment over the 20-year contract term. 4. How can you justify these prices at a time when Ontario is in economic downturn? Energy prices are under pressure to rise. The Green Energy Act would, if passed, create more than 50,000 jobs over the next three years and would facilitate substantial investment at a time when it is most⇠ needed. A diversified energy supply mix, along with a combination of regulated and market⇠ prices would help maintain stability in electricity pricing. However, North American leaders (Obama) are signaling a move to a North⇠ American carbon pricing system. Those jurisdictions that invest early in anticipation⇠ of this will stand to benefit in the future. Ontario is well positioned, by its commitment to get off coal, and by moving aggressively to implement new renewable energy⇠ 477 2 technologies. Creating a culture of conservation is an equally important thrust behind the proposed⇠ GEA which would create initiatives to provide people and industry with the tools and⇠ means to use less energy in their daily lives. 5. Did you include these proposed FIT prices in your calculations when you came with a price impact for residential customers as about one per cent over 15 years? Yes, the price impacts we projected are consistent with these proposed fit prices. I would like to note that the actual rate impacts will be dependent on the final prices⇠ that come out of the consultation process and take up of the program. We expect that Ontario’s supply mix – with a solid endowment of legacy hydroelectric, and low⇠ cost established nuclear power, as well as a mixture of regulated and market rates – will continue to help to ensure fair prices for the province’s energy users. 6. Why don’t you have different prices for different regions? These are proposed prices and we are looking for feedback from industry and other stakeholders. We will also be moving quickly to build transmission to regions such as⇠ northern Ontario where the grid is currently constrained. 7. What factors are being considered in setting a tariff rate? The proposed FIT pricing model is based on project costs plus a reasonable rate of return on equity. Prices account for the following components: o Capital costs⇠ o Operating and maintenance costs⇠ o Any fuel costs⇠ o Connection costs⇠ o Reasonable rate of return on equity Project cost information was developed from a broad range of sources, with a⇠ preference to recent cost estimates from reliable sources with transparent⇠ assumptions. These can be updated when necessary. 8. How long will projects receive the tariff rate? The contract term for the feed-in tariff will be approximately 20 years. 9. Are prices firm, or is there room for negotiation? The proposed prices will be reviewed through a consultation process. Once that consultation process is completed and the prices are finalized, they are firm. 10. How frequently will FIT prices be reviewed, and who will administer the review process? There will be regular two-year reviews of the program. However, the OPA reserves⇠ the right to revise prices if there are significant changes to market conditions.⇠ 478 3 11. How do the proposed tariffs (cents/kWh) compare to RES III? What's the reason for the higher price? The proposed FIT price is consistent with the average price obtained under the RES⇠ III RFP. 12. How do proposed FIT program prices compare to RESOP prices? The RESOP program was not as comprehensive as this program. FIT program⇠ prices are differentiated by a range of technologies and sizes and are designed to⇠ allow a variety of renewable energy project to recover the cost of building and⇠ maintaining the projects and earn a reasonable rate of return on the investment. 13. What impact will FIT have on existing producers that have been approved under RESOP? The OPA will honour all contracts signed under RESOP and we expect the parties⇠ who signed these agreements to also honour them.. The FIT program will replace RESOP so any new renewable energy projects will⇠ come under the umbrella of the new FIT Program rules. These are consultations and we will be listening to various ideas. 14. Will current renewable projects be able to back out and reapply under FIT? No. 15. Can LDCs and municipalities qualify for the FIT prices? Yes, eligible LDC and municipal projects can receive FIT pricing. 16. Who pays for the connection cost on transmission and distribution? Direct connection costs are the responsibility of the generator and the costs of a⇠ typical connection are reflected in the feed-in tariff price. The OPA expects that the⇠ proposed GEA will move to a system where ratepayers will be responsible for the⇠ costs of upgrading the distribution connected projects, based on an criteria to be⇠ developed by the Ministry of Energy and Infrastructure, the OEB and the OPA. 17. Who is responsible for electricity procurement under a FIT program? The Ontario Power Authority (OPA) will proposed Feed-in Tariff (FIT) Program. lead the implementation of Ontario’s The OPA will co-ordinate with other energy agencies like the Ontario Energy Board⇠ (OEB) and the Independent Electricity System Operator (IESO). 18. What renewable energy projects will be eligible under the FIT program? Renewable energy projects such as solar, wind, water, biogas, biomass, and landfill⇠ gas will be eligible. 19. What happens to RESOP? 479 4 Eligibility for the proposed Feed-in Tariff program will include the proposed projects⇠ that would have previously been covered by the RESOP program. As a result, if the⇠ FIT program is implemented, RESOP would be discontinued. 20. How do proposed FIT program prices compare to the RESOP prices? The proposed feed-in tariff Program would be much more comprehensive than the⇠ RESOP it will replace. The feed-in tariff, for example, will apply both to large⇠ transmission connected projects as well as to the small distribution-connected⇠ projects that occurred under RESOP. Also, unlike the RESOP, the Feed-in Tariff program will establish prices for a large number of renewable energy categories — differentiated by generation type, and size. FIT program prices are differentiated by a range of technologies and sizes and are⇠ designed to allow a variety of renewable energy project to recover the cost of building and maintaining the projects and earn a reasonable rate of return on the⇠ investment. 21. Will current renewable projects be able to back out and reapply under FIT? The OPA will continue to honour all contracts signed and we expect the parties who⇠ signed them to also honour them. 22. What happens if a proponent does not honour a contract with the OPA? RES contracts are required to provide performance security and if they are unable to⇠ honour their commit, that security could be at risk. Not Responsive 480 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 11 Not Responsive 487 Cindy Roks↵ From: Cindy Roks↵ Sent: March-12-09 10:21 AM↵ To: Jim MacDougall; Patricia Lightburn↵ Cc: Sarah Simmons↵ Subject: Pricing Slide↵ Attachments: FIT pricing table_20090312cr.ppt↵ Please find attached the slide that incorporates the new pricing for biomass, landfill and offshore wind.⌫ Cindy Roks↵ Business Analyst⌫ 416 - 969 - 6099⌫ P please consider the environment before printing this email _________________________ _________⇤ 488 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV 10 kW > 10 kW 100 kW > 100 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas 10 MW Any size Any size 2 MW 50 MW Any size 5 MW > 5 MW 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction& triggered when& 100 MW reached 14.4 13.5 19.0 13.4 12.9 12.2 14.7 10.4 11.1 10.3 1⇥ 489 Jim MacDougall From: Jim MacDougall⇣ Sent: March-12-09 10:54 PM⇣ To: Patricia Lightburn⇣ Subject: RE: Session 1 Deck⇣ Attachments: Session 1 - Inaugural Session v4.ppt⇣ Good work, I made some very minor chagnes. Not Responsive From: Patricia Lightburn Sent: Thu 12/03/2009 7:38 PM To: Jim MacDougall; Richard Duffy Subject: Session 1 Deck See attached for the new Deck. enjoy Patricia Lightburn Analyst, Distributed Generation Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 490 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY March 17, 2009 491 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Section 2.0 Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 492 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ •⇥ To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule •⇥ To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood •⇥ To identify areas for further OPA consideration •⇥ To identify implementation issues that need to be addressed to ensure success 3 493 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • – – – – – March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm Registration required Agenda and presentations to be posted in advance Webcast and teleconference available Audio recording available from OPA website Sessions address the different technical elements underpinning the proposed FIT Program Rules • Online Q&A Tool 4 494 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 13 or 16 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Price Early May – May 5 Schedule posted Final Draft Program Rules posted Late May FIT Training and Promotion Late May Program Launch (subject to approval of GEA) Early June (projected) 5 495 Stakeholder Sessions - Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Section 2 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (e.g., technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones April 14 Program Initialization Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments April 28 Additional Issues, further discussion and questions May 5 6 496 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – – • Questions and responses posted publicly on OPA website Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 497 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – – – OPA to visit various communities across Ontario Objective is provide training to potential program applicants Expected to run during late May 8 498 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Section 2.0 Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 499 Presentation Overview⇠ • • • • • • • • Vision Legislative Changes First Nations and Métis participation in Electricity Sector Feed-in-Tariffs Smart Grid System Connection Approvals Other Changes 10 500 Vision⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid”⇥ 11 501 Vision⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water,⇥ biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...”⇥ • Next Steps – – Legislative process and hearings Development of regulations 12 502 Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 13 503 Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 504 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’⇥ partnership and participation in development of renewable resources, transmission and distribution 15 505 Feed-in-Tariffs⇠ • Minister may direct OPA to develop Feed-in-Tariff program for renewable resources – – – – – – Standard rules Standard contracts Standard pricing Differentiated by energy source, fuel type, capacity, etc. Provision for aboriginal and community involvement Provisions for domestic content 16 506 Smart Grid⇠ •⇥Smart grid involves “advanced information exchange systems⇥ and equipment” enabling the increased use of renewable⇥ resources, demand response and conservation •⇥ Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: –⇥Timeframes for smart grid development –⇥Roles and responsibilities –⇥Communications standards 17 507 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – • Make a written request for connection; and Meet all technical, economic and other relevant requirements Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 508 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 509 Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval –⇥One approval process under the Environmental Protection Act to replace some processes under various legislation 20 510 Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 511 Other Changes⇠ • Distributors and municipalities may own some types of generation ((10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 512 Other Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • CECO and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 513 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Section 2.0 Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 514 I ntroduction to the Feed-In Tariff Program⇠ •⇥ What is a Feed-in Tariff (FIT) Program? •⇥ Objectives of FIT Program •⇥ Experience in other jurisdictions •⇥ Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 515 Introduction to Feed-In Tariff Program⇠ What is a FIT Program?✓ • Generators of renewable energy – from homeowners with a solar PV rooftop to wind-farm developers – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate or return A FIT Program provides a simple, standardized procurement method to contract for renewable energy supply technologies 26 516 I ntroduction to Feed-In Tariff Program⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies (i.e., wind, hydro, solar and biomass technologies) • • • Different prices for different technologies and project sizes • Opportunities for promoting community-based and Aboriginal projects. Long-term contracts Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term 27 517 I ntroduction to Feed⇠ -In Tariff program⇠ Objectives of the FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop renewable energy supply •⇥ Stimulate growth in the renewable energy sector •⇥ Provide incentives for investment in renewable energy technologies 28 518 Experience in Other Jurisdictions⇠ •⇥ At least 37 countries and 9 states/provinces have adopted or proposed FIT programs •⇥ More than half have been enacted since 2002 •⇥ 19 EU Countries have adopted FIT program 29 519 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (under PURPA – no longer in place)⇧ 1990 2 Germany⇧ 1991 3 Switzerland⇧ 1992 4 Italy⇧ 1993 6 India Denmark⇧ 1994 8 Greece Spain⇧ 1997 9 Sri Lanka⇧ 1998 10 Sweden⇧ 1999 13 Portugal, Norway, Slovenia⇧ 2000 13 --- 2001 15 France, Latvia⇧ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⇧ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⇧ 2004 34⇧ Italy, Israel, Nicaragua, Prince Edward Island (Canada), Andhra Pradesh and⇧ Madhya Pradesh (India)⇧ 2005 41⇧ China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh⇧ (India)⇧ 2006 44 Ontario (RESOP), Argentina, Thailand⇧ 2007 46 South Australia (Australia), Croatia⇧ Source: REN21 2006⇣ 520 US proposed legislation⇠ • By mid-2006, several US states had established limited policies that shared some FIT design features, but no state had yet introduced FIT legislation • Two years later, six states have introduced feed-in tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California. – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 521 US proposed legislation⇠ • • • • A Federal Bill has also been introduced (May 2008) ‘US Renewable Energy Jobs and Security Act’⇥ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge Pricing –⇥Bill proposes minimum prices –⇥Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 522 International Energy Agency Report, 2008 • “The group of countries with the highest effectiveness⇥ (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.”⇥ • “Their success in deploying onshore wind stems from high✓ investment stability guaranteed by the long term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.”⇥ 33 523 Germany⇠ Renewable Energy Sources Act 2004✓ • • Guarantee of purchase at a fixed rate for 20 years Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy)⇥ – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity ratepayers across regions of the country • Prices and rules set by national law 34 524 Germany⇠ 30,893 MW renewable electricity capacity installed • • 20,622 MW wind capacity installed; 2,831 MW solar PV About 20% of total installed capacity 35 (Source: Renewable Energy Sources Act - Progress Report 2007) 525 Germany⇠ Composition of Electricity Price (average)✓ 14%⌅ 3%⌅ Generation, transmission 2%⌅ Concession charge Electricity tax (eco-tax) 11%⌅ Heat-Power Cogeneration Act Renewable Energy Sources Act 60%⌅ Value-added tax 10%⌅ 36 526 German FIT prices⇠ Technology Capacity Range EU cents/kWh Cdn cents/kWh⇠ (1.60953412)⇠ Rooftop Solar PV ⇤ 30 kW 43.01 69.23⇧ > 30 kW ⇤ 100 kW 40.36 65.85⇧ > 100 kW ⇤ 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ Ground mounted Solar PV Any size 25.01 51.41⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs)⇧ 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities) ⇤ 500 kW 12.67 20.39⇧ > 500 kW ⇤ 2 MW 8.65 13.92⇧ 2 MW ⇤ 5 MW 7.65 12.31⇧ ⇤ 150 kW 11.67 18.78⇧ > 150 kW ⇤ 500 kW 9.18 14.78⇧ > 500 kW ⇤ 5 MW 8.25 13.28⇧ > 5 MW ⇤ 20 MW 7.79 12.54⇧ ⇤ 500 kW 9.00 14.49⇧ > 500 kW ⇤ 5 MW 6.16 9.91⇧ Biomass/ biogas Landfill gas 37 527 Spain⇠ • • Liberalized market 2 guaranteed options to sell renewable energy to the grid 1. Sale to the distributor at a regulated price 2. Sale on the open market through the bidding system managed by the market operator, the bilateral contracting system or the forward contracting system (or both). – The price is set by the market or negotiated by the parties in the case of a bilateral contract, plus an incentive and a premium for the power guarantee, like other producers under the Ordinary System. • Both the regulated price and the premium were calculated as percentage of the yearly average price as defined in regulation • Generators can choose, for periods of not less than one year, the option that suits them best. After one year it is possible to switch • Revision of prices every four years 38 528 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • • • FIT grants priority access to the grid and priority dispatch • National Commission of Energy performs settlement of costs incurred Special Regime Control Centre (SRCC) oversees reliability Federal ‘Administrative Registry of Production of Electricity under⇥ Special System’⇥ under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network • Renewable energy share of capacity: – – 19% in 2006 29.4% by 2010 (target) 39 529 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be included in the Within 6 months Special System ⇥ 2. Apply to the distribution company for the connection point and Within 1 month technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’⇥ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 40 530 Spanish FIT prices⇠ Technology Capacity Range Price drop Euro cent/kWh Cdn cent/kWh⇠ (1.61)⇧ Solar PV <20 kW 25 34.00 54.72⇧ <200 kW 25 33.00 53.11⇧ >200 kW 25 32.00 51.51⇧ 32.00 51.51⇧ 20 7.58 12.18⇧ 7.80 12.55⇧ Ground-mounted Systems- Any size⇧ Wind Onshore – Any size Hydro <10 MW 25 yrs <50 MW 25 yrs <500 kW 15 yrs 13.50 21.74⇧ >500 kW 15yrs 10.00 16.10⇧ <2 MW 15yrs 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ >2 MW 15yrs 10.75-15.15 17.31 – 24.38⇧ Any size 15yrs 8.26 13.29⇧ Biogas 2.10 (on top of market price)⇧ 3.38⇧ (biodigester gas)⇧ Biomass (energy Crops, forestry waste,⇧ agriculture waste⇧ Landfill gas 41 531 Michigan proposed FIT prices⇠ Technology Capacity Range US cents/kWh) FIT Cdn cents/kWh⇠ (1.28)⇠ Rooftop Solar PV ⇤ 30 kW 65 82.99⇧ > 30 kW ⇤ 100 kW 62 79.16⇧ > 100 kW 61 77.88⇧ Ground mounted Solar PV Any size 50 63.84⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ Waterpower ⇤ 500 kW 10.00 12.77⇧ > 500 kW ⇤ 10 MW 8.50 10.85⇧ > 10 MW ⇤ 20 MW 6.50 8.30⇧ ⇤ 150 kW 14.50 18.51⇧ > 150 kW ⇤ 500 kW 12.50 15.96⇧ > 500 kW ⇤ 5 MW 11.50 14.68⇧ > 5 MW ⇤ 20 MW 10.50 13.41⇧ ⇤ 500 kW 10.00 12.77⇧ > 500 kW 8.50 10.85⇧ Biomass/ biogas Landfill gas 10.5 8.00 13.41 10.2⇧ 42 532 Price Ranges for Rooftop Solar PV⇠ Price Summary for Solar PV Rates Worldwide⇠ Jurisdiction Application Years CAD cents/kWh⇠ 20 80⇠ Ontario proposed rooftop (<10kW) Italy Rooftop South Korea <3 kW 15 91⇠ France Building Integrated 20 89⇠ Germany 2008 Rooftop 20 75⇠ 15 74⇠ Czech Republic 88⇠ Spain (2007 RD) <100 kW 25 73⇠ Austria <5 kW 12 74⇠ 8 62⇠ Washington State* California* Commercial 5 67⇠ South Australia* Residential 5 43⇠ *Form of net-metering⇧ 43 Draft: Highly Confidential – For Discussion Purposes Only 533 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Over-view of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Section 2.0 Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 44 534 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 45 535 I ntroduction to the FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process 46 536 Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes ( 500 kW? End No 2.✓ Is connection capacity available? 3.✓ Yes OPA✓ FIT Contract with full security 4.✓ LDC/IESO✓ CIA/SIA completed 5.✓ Commercial OPA✓ operation within Contract required time milestones applied No See next slide 47 537 Economic Test⇠ See previous slide OPA✓ Is connection capacity available See previous slide Yes in a reasonable time? 2.✓ Is connection capacity No Yes available? No 8.✓ 6.✓ MEI, OPA,✓ LDC, IESO✓ “FIT Production Line”⇥ input into plans, prioritization Meets Yes Economic Connection Test? No 7.✓ FIT Reserve for next planning 48 cycle 538 Introduction to the FIT Program⇠ Project Eligibility and Application Requirements✓ • • • • • • Eligibility requirements based on technology and size Limits on existing projects with previous OPA contracts Incremental Projects Application fee Resource plan Application Security Presentation and discussion on Eligibility Requirements at 2:30 (March 17) 49 539 Introduction to the FIT Program⇠ Application Review and Acceptance✓ • • • Review of application and connection capacity Time stamp based on time of application Contracts awarded immediately to projects that can connect easily (no grid upgrades required) Initialization Period✓ • • Initial 60 day period to submit FIT applications Different application process to manage legacy projects and manage the potential ‘flood’ of applications⇥ • Use initial window to allow developers to gather FIT contract prerequisites and in order to reduce the rush to apply Presentation and discussion on FIT application process, connection assessments, and application review – Part I on March 24, 2009 50 540 Introduction to the FIT Program⇠ Economic Connection Test: Are the shared connection costs required to connect project to the grid within a reasonable threshold? • Results of the Economic Connection Test provide input to transmission and distribution grid expansions through: • Large transmission projects (i.e., network investments) triggered through IPSP and/or Ministerial Directives Presentation and discussion on FIT application process, connection assessments, and application review – Part II on March 31, 2009 51 541 Introduction to the FIT Program⇠ Pricing✓ • • Pricing by technology and size Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing on April 7, 2009 52 542 Introduction to the FIT Program⇠ Contract Milestones✓ • • Completion and Performance Security Requirement to reach commercial operation within a certain time (years) Presentation and discussion on Contract Milestones on April 14, 2009 53 543 Introduction to the FIT Program⇠ Contract Management, Metering Requirements & Settlement✓ • • OPA responsible for ongoing contract management Distribution connected projects paid by LDCs on behalf of the OPA • • Transmission connected projects paid by IESO/OPA Monthly payments Presentation and discussion on Contract Management and Settlement on April 21, 2009 54 544 Introduction to the FIT Program⇠ Program Review & Amendments✓ • • Review of program and prices on a regular basis Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on April 28, 2009 55 545 March 1 7 – Agenda⇠ 8:00 – 9:00 a.m. Registration and Breakfast✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Section 2.0 Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 56 546 Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects properties – – (10 kW on residential simplified process for micro-scale OPA to work with LDC to streamline customer experience 57 547 Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • • Geographically and electrically located in Ontario A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind-the-meter) 58 548 Eligibility Requirements⇠ • Must not have had a NUG contract or an OPA contract in the past 18 months • Previously operating facilities must have been out of service for 3 years – • e.g., abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects • OPG eligible 59 549 Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc…⇥ Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 60 550 Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • $500 minimum Application Fee 61 551 Eligibility Requirements⇠ Application Requirements✓ • Application Security – • Exceptions: – – – • $10,000/MW of proposed Contract Capacity refundable upon execution of FIT Contract Solar PV: $20,000/MW Community-Based or Aboriginal Projects: $5,000/MW Both refundable upon execution of FIT Contract Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – – Application Fee is non-refundable Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 62 552 Richard Duffy From: Richard Duffy Sent: March-13-09 2:07 PM To: Richard Duffy; Heidi Parish Cc: Patricia Lightburn Subject: RE: Slide Deck for March 17 SES Attachments: Session 1 - Inaugural Session v5.ppt This time with attachment. From: Richard Duffy Sent: Friday, March 13, 2009 2:06 PM To: Heidi Parish Cc: Patricia Lightburn Subject: Slide Deck for March 17 SES Hi Heidi, Attached is the slide deck for the March 17 SES for your review. Please let me know if you have any questions regarding.⇠ Thanks Richard 553 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY March 17, 2009 554 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 555 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ •⇥ To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule •⇥ To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood •⇥ To identify areas for further OPA consideration •⇥ To identify implementation issues that need to be addressed to ensure success 3 556 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • – – – – – March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm Registration required Agenda and presentations to be posted in advance Webcast and teleconference available Audio recording available from OPA website Sessions address the different technical elements underpinning the proposed FIT Program Rules • Online Q&A Tool 4 557 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 13 or 16 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Price Mid May – May 5 Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 558 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones April 14 Program Initialization Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments April 28 Program Initialization Additional Issues, further discussion and questions May 5 6 559 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – – • Questions and responses posted publicly on OPA website Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 560 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – – – OPA to visit various communities across Ontario Objective is provide training to potential program applicants Expected to run during late May 8 561 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 562 Overview of Proposed Green Energy Act⇠ • • • • • • • • Framework Legislative Changes First Nations and Métis participation in Electricity Sector Feed-in-Tariffs Smart Grid System Connection Approvals Other Changes 10 563 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid”⇥ 11 564 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water,⇥ biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...”⇥ • Next Steps – – Legislative process and hearings Development of regulations 12 565 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 13 566 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 567 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’⇥ partnership and participation in development of renewable resources, transmission and distribution 15 568 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – – – – – – Standard rules Standard contracts Standard pricing Differentiated by energy source, fuel type, capacity, etc. Provision for aboriginal and community involvement Provisions for domestic content 16 569 Smart Grid⇠ •⇥Smart grid involves “advanced information exchange systems⇥ and equipment” enabling the increased use of renewable⇥ resources, demand response and conservation •⇥ Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: –⇥Timeframes for smart grid development –⇥Roles and responsibilities –⇥Communications standards 17 570 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – • Make a written request for connection; and Meet all technical, economic and other relevant requirements Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 571 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 572 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval –⇥One approval process under the Environmental Protection Act to replace some processes under various legislation 20 573 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 574 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ((10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 575 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 576 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 577 I ntroduction to FIT Programs⇠ •⇥ What is a Feed-in Tariff (FIT) Program? •⇥ Objectives of FIT Program •⇥ Experience in other jurisdictions •⇥ Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 578 Introduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy developers – from homeowners to large – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate or return A FIT Program provides a simple, standardized procurement⇡ method to contract for renewable energy supply technologies⇡ 26 579 I ntroduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies) •⇥ Different prices for different technologies and project sizes •⇥ Long-term contracts •⇥ Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term •⇥ Opportunities for promoting community-based and Aboriginal projects 27 580 I ntroduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 581 Experience in Other Jurisdictions⇠ •⇥ At least 37 countries and 9 states/provinces have adopted or proposed FIT programs •⇥ More than half have been enacted since 2002 •⇥ 19 EU Countries have adopted FIT program 29 582 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (under PURPA – no longer in place)⇧ 1990 2 Germany⇧ 1991 3 Switzerland⇧ 1992 4 Italy⇧ 1993 6 India Denmark⇧ 1994 8 Greece Spain⇧ 1997 9 Sri Lanka⇧ 1998 10 Sweden⇧ 1999 13 Portugal, Norway, Slovenia⇧ 2000 13 --- 2001 15 France, Latvia⇧ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⇧ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⇧ 2004 34⇧ Italy, Israel, Nicaragua, Prince Edward Island (Canada), Andhra Pradesh and⇧ Madhya Pradesh (India)⇧ 2005 41⇧ China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh⇧ (India)⇧ 2006 44 Ontario (RESOP), Argentina, Thailand⇧ 2007 46 South Australia (Australia), Croatia⇧ Source: REN21 2006⇣ 583 US Proposed Legislation⇠ • By mid-2006, several US states had established limited policies that shared some FIT design features, but no state had yet introduced FIT legislation • Two years later, six states have introduced Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California. – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 584 US Proposed Legislation⇠ • • • • A Federal Bill has also been introduced (May 2008) ‘US Renewable Energy Jobs and Security Act’⇥ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge Pricing –⇥Bill proposes minimum prices –⇥Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 585 International Energy Agency Report, 2008 • “The group of countries with the highest effectiveness⇥ (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.”⇥ • “Their success in deploying onshore wind stems from high✓ investment stability guaranteed by the long term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.”⇥ 33 586 Germany⇠ Renewable Energy Sources Act 2004✓ • • Guarantee of purchase at a fixed rate for 20 years Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy)⇥ – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity ratepayers across regions of the country • Prices and rules set by national law 34 587 Germany⇠ •⇥ 30,893 MW renewable electricity capacity installed •⇥ 20,622 MW wind capacity installed; 2,831 MW solar PV •⇥ About 20% of total installed capacity 35 (Source: Renewable Energy Sources Act - Progress Report 2007) 588 German FIT prices⇠ Technology Capacity Range EU cents/kWh Cdn cents/kWh⇠ (1.60953412)⇠ Rooftop Solar PV ⇤ 30 kW 43.01 69.23⇧ > 30 kW ⇤ 100 kW 40.36 65.85⇧ > 100 kW ⇤ 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ Ground mounted Solar PV Any size 25.01 51.41⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs)⇧ 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities) ⇤ 500 kW 12.67 20.39⇧ > 500 kW ⇤ 2 MW 8.65 13.92⇧ 2 MW ⇤ 5 MW 7.65 12.31⇧ ⇤ 150 kW 11.67 18.78⇧ > 150 kW ⇤ 500 kW 9.18 14.78⇧ > 500 kW ⇤ 5 MW 8.25 13.28⇧ > 5 MW ⇤ 20 MW 7.79 12.54⇧ ⇤ 500 kW 9.00 14.49⇧ > 500 kW ⇤ 5 MW 6.16 9.91⇧ Biomass/ biogas Landfill gas 36 589 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • • • FIT grants priority access to the grid and priority dispatch • National Commission of Energy performs settlement of costs incurred Special Regime Control Centre (SRCC) oversees reliability Federal ‘Administrative Registry of Production of Electricity under⇥ Special System’⇥ under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 37 590 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be included in the Within 6 months Special System ⇥ 2. Apply to the distribution company for the connection point and Within 1 month technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’⇥ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 38 591 Spanish FIT prices⇠ Technology Capacity Range Price drop Euro cent/kWh Cdn cent/kWh⇠ (1.61)⇧ Solar PV <20 kW 25 34.00 54.72⇧ <200 kW 25 33.00 53.11⇧ >200 kW 25 32.00 51.51⇧ 32.00 51.51⇧ 20 7.58 12.18⇧ 7.80 12.55⇧ Ground-mounted Systems- Any size⇧ Wind Onshore – Any size Hydro <10 MW 25 yrs <50 MW 25 yrs <500 kW 15 yrs 13.50 21.74⇧ >500 kW 15yrs 10.00 16.10⇧ <2 MW 15yrs 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ >2 MW 15yrs 10.75-15.15 17.31 – 24.38⇧ Any size 15yrs 8.26 13.29⇧ Biogas 2.10 (on top of market price)⇧ 3.38⇧ (biodigester gas)⇧ Biomass (energy Crops, forestry waste,⇧ agriculture waste⇧ Landfill gas 39 592 Michigan FIT Prices (2007 Proposed)⇠ Technology Capacity Range US cents/kWh) FIT Cdn cents/kWh⇠ (1.28)⇠ Rooftop Solar PV ⇤ 30 kW 65 82.99⇧ > 30 kW ⇤ 100 kW 62 79.16⇧ > 100 kW 61 77.88⇧ Ground mounted Solar PV Any size 50 63.84⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ Waterpower ⇤ 500 kW 10.00 12.77⇧ > 500 kW ⇤ 10 MW 8.50 10.85⇧ > 10 MW ⇤ 20 MW 6.50 8.30⇧ ⇤ 150 kW 14.50 18.51⇧ > 150 kW ⇤ 500 kW 12.50 15.96⇧ > 500 kW ⇤ 5 MW 11.50 14.68⇧ > 5 MW ⇤ 20 MW 10.50 13.41⇧ ⇤ 500 kW 10.00 12.77⇧ > 500 kW 8.50 10.85⇧ Biomass/ biogas Landfill gas 10.5 8.00 13.41 10.2⇧ 40 593 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 41 594 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 42 595 I ntroduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administor and implement the Renewable (RESOP) 43 596 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes ( 500 kW? End No 2.✓ Is connection capacity available or plans Yes 3.✓ 4.✓ OPA✓ LDC/IESO✓ FIT Contract CIA/SIA completed 5.✓ Commercial OPA✓ operation within Contract required time milestones applied approved? No See next slide 44 597 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • • • • • • Eligibility requirements based on technology and size Limits on existing projects with previous OPA contracts Incremental Projects Application fee Resource plan Application Security Presentation and discussion on Eligibility⇡ Requirements at 2:30 (March 17)⇡ 45 598 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • • • Review of application Application time stamped Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⇡ process, connection assessments, and⇡ application review – Part I on March 24, 2009⇡ 46 599 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⇡ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process,⇡ connection assessments, and application review – Part II on⇡ March 31, 2009⇡ 47 600 Introduction to the Proposed FIT Program⇠ Pricing✓ • • Pricing by technology and size Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing on April 7, 2009⇡ 48 601 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • • • • Security Completion of all Permits and Approvals Equipment Orders Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract Milestones on April⇡ 14, 2009⇡ 49 602 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration, Metering✓ Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Integrated Electricity System Operator (IESO) to effectively integrate renewable energy supply resources regarding operations and compensation • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – – Transmission connected projects paid by IESO/OPA Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract Management and⇡ Settlement on April 21, 2009⇡ 50 603 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and Future✓ Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. ever two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on April 28,⇡ 2009⇡ 51 604 I ntroduction to the Proposed FIT Program⇠ Initialization Period✓ •⇥ Initial 60 day period to submit FIT applications •⇥ Different application process to manage legacy projects and manage the potential ‘flood’ of applications⇥ •⇥ Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 52 605 March 1 7 – Agenda⇠ 8:00 – 9:00 a.m. Registration and Breakfast✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 53 606 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects properties – – (10 kW on residential simplified process for micro-scale OPA to work with LDC to streamline customer experience 54 607 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • • Geographically and electrically located in Ontario A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind-the-meter) 55 608 Proposed Eligibility Requirements⇠ • Must not have had a NUG contract or an OPA contract in the past 18 months • Previously operating facilities must have been out of service for 3 years – • e.g. abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects 56 609 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc…⇥ Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 57 610 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • – – Name of feeder, transformer station or high-voltage circuit Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW $10,000/MW of proposed Contract Capacity Community-Based or Aboriginal Projects: $5,000/MW 58 611 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – – Application Fee is non-refundable Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 59 612 Richard Duffy From: Richard Duffy# Sent: March-13-09 3:25 PM# To: 'Sadikman, Jacob'; Smith, Elliot# Subject: FIT Pricing Schedule w adjustments_2009 03 12 (2).doc# Attachments: FIT Pricing Schedule w adjustments_2009 03 12 (2).doc# <># 613 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments Biomass* Biogas* Waterpower* 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Community Based or Aboriginal Landfill gas* Solar PV Rooftop 10 100 – 100 kW – 500 kW 71.3 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction triggered when 100 MW contracted Wind Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 614 Richard Duffy From: Richard Duffy⌘ Sent: March-13-09 4:59 PM⌘ To: Irene Mauricette⌘ Subject: Fw: Slide Deck for March 17 SES⌘ Attachments: Session 1 - Inaugural Session v5.ppt⌘ Could you print this off for Colin?⌘ ----- Original Message ----From: Richard Duffy⌘ To: Richard Duffy; Heidi Parish⌘ CC: Patricia Lightburn⌘ Sent: Fri Mar 13 14:06:53 2009⌘ Subject: RE: Slide Deck for March 17 SES⌘ <> This time with attachment.⌘ _________________________ _____ __⌘ From: Richard Duffy⌘ Sent: Friday, March 13, 2009 2:06 PM⌘ To: Heidi Parish⌘ Cc: Patricia Lightburn⌘ Subject: Slide Deck for March 17 SES⌘ Hi Heidi,⌘ Attached is the slide deck for the March 17 SES for your review.⌘ Please let me know if you have any questions regarding.⇠ Thanks⌘ Richard⌘ 615 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY March 17, 2009 616 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 617 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ •⇥ To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule •⇥ To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood •⇥ To identify areas for further OPA consideration •⇥ To identify implementation issues that need to be addressed to ensure success 3 618 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • – – – – – March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm Registration required Agenda and presentations to be posted in advance Webcast and teleconference available Audio recording available from OPA website Sessions address the different technical elements underpinning the proposed FIT Program Rules • Online Q&A Tool 4 619 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 13 or 16 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Price Mid May – May 5 Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 620 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones April 14 Program Initialization Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments April 28 Program Initialization Additional Issues, further discussion and questions May 5 6 621 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – – • Questions and responses posted publicly on OPA website Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 622 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – – – OPA to visit various communities across Ontario Objective is provide training to potential program applicants Expected to run during late May 8 623 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 624 Overview of Proposed Green Energy Act⇠ • • • • • • • • Framework Legislative Changes First Nations and Métis participation in Electricity Sector Feed-in-Tariffs Smart Grid System Connection Approvals Other Changes 10 625 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid”⇥ 11 626 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water,⇥ biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...”⇥ • Next Steps – – Legislative process and hearings Development of regulations 12 627 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 13 628 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 629 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’⇥ partnership and participation in development of renewable resources, transmission and distribution 15 630 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – – – – – – Standard rules Standard contracts Standard pricing Differentiated by energy source, fuel type, capacity, etc. Provision for aboriginal and community involvement Provisions for domestic content 16 631 Smart Grid⇠ •⇥Smart grid involves “advanced information exchange systems⇥ and equipment” enabling the increased use of renewable⇥ resources, demand response and conservation •⇥ Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: –⇥Timeframes for smart grid development –⇥Roles and responsibilities –⇥Communications standards 17 632 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – • Make a written request for connection; and Meet all technical, economic and other relevant requirements Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 633 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 634 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval –⇥One approval process under the Environmental Protection Act to replace some processes under various legislation 20 635 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 636 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ((10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 637 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 638 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 639 I ntroduction to FIT Programs⇠ •⇥ What is a Feed-in Tariff (FIT) Program? •⇥ Objectives of FIT Program •⇥ Experience in other jurisdictions •⇥ Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 640 Introduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy developers – from homeowners to large – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate or return A FIT Program provides a simple, standardized procurement⇡ method to contract for renewable energy supply technologies⇡ 26 641 I ntroduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies) •⇥ Different prices for different technologies and project sizes •⇥ Long-term contracts •⇥ Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term •⇥ Opportunities for promoting community-based and Aboriginal projects 27 642 I ntroduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 643 Experience in Other Jurisdictions⇠ •⇥ At least 37 countries and 9 states/provinces have adopted or proposed FIT programs •⇥ More than half have been enacted since 2002 •⇥ 19 EU Countries have adopted FIT program 29 644 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (under PURPA – no longer in place)⇧ 1990 2 Germany⇧ 1991 3 Switzerland⇧ 1992 4 Italy⇧ 1993 6 India Denmark⇧ 1994 8 Greece Spain⇧ 1997 9 Sri Lanka⇧ 1998 10 Sweden⇧ 1999 13 Portugal, Norway, Slovenia⇧ 2000 13 --- 2001 15 France, Latvia⇧ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⇧ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⇧ 2004 34⇧ Italy, Israel, Nicaragua, Prince Edward Island (Canada), Andhra Pradesh and⇧ Madhya Pradesh (India)⇧ 2005 41⇧ China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh⇧ (India)⇧ 2006 44 Ontario (RESOP), Argentina, Thailand⇧ 2007 46 South Australia (Australia), Croatia⇧ Source: REN21 2006⇣ 645 US Proposed Legislation⇠ • By mid-2006, several US states had established limited policies that shared some FIT design features, but no state had yet introduced FIT legislation • Two years later, six states have introduced Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California. – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 646 US Proposed Legislation⇠ • • • • A Federal Bill has also been introduced (May 2008) ‘US Renewable Energy Jobs and Security Act’⇥ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge Pricing –⇥Bill proposes minimum prices –⇥Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 647 International Energy Agency Report, 2008 • “The group of countries with the highest effectiveness⇥ (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.”⇥ • “Their success in deploying onshore wind stems from high✓ investment stability guaranteed by the long term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.”⇥ 33 648 Germany⇠ Renewable Energy Sources Act 2004✓ • • Guarantee of purchase at a fixed rate for 20 years Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy)⇥ – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity ratepayers across regions of the country • Prices and rules set by national law 34 649 Germany⇠ •⇥ 30,893 MW renewable electricity capacity installed •⇥ 20,622 MW wind capacity installed; 2,831 MW solar PV •⇥ About 20% of total installed capacity 35 (Source: Renewable Energy Sources Act - Progress Report 2007) 650 German FIT prices⇠ Technology Capacity Range EU cents/kWh Cdn cents/kWh⇠ (1.60953412)⇠ Rooftop Solar PV ⇤ 30 kW 43.01 69.23⇧ > 30 kW ⇤ 100 kW 40.36 65.85⇧ > 100 kW ⇤ 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ Ground mounted Solar PV Any size 25.01 51.41⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs)⇧ 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities) ⇤ 500 kW 12.67 20.39⇧ > 500 kW ⇤ 2 MW 8.65 13.92⇧ 2 MW ⇤ 5 MW 7.65 12.31⇧ ⇤ 150 kW 11.67 18.78⇧ > 150 kW ⇤ 500 kW 9.18 14.78⇧ > 500 kW ⇤ 5 MW 8.25 13.28⇧ > 5 MW ⇤ 20 MW 7.79 12.54⇧ ⇤ 500 kW 9.00 14.49⇧ > 500 kW ⇤ 5 MW 6.16 9.91⇧ Biomass/ biogas Landfill gas 36 651 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • • • FIT grants priority access to the grid and priority dispatch • National Commission of Energy performs settlement of costs incurred Special Regime Control Centre (SRCC) oversees reliability Federal ‘Administrative Registry of Production of Electricity under⇥ Special System’⇥ under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 37 652 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be included in the Within 6 months Special System ⇥ 2. Apply to the distribution company for the connection point and Within 1 month technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’⇥ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 38 653 Spanish FIT prices⇠ Technology Capacity Range Price drop Euro cent/kWh Cdn cent/kWh⇠ (1.61)⇧ Solar PV <20 kW 25 34.00 54.72⇧ <200 kW 25 33.00 53.11⇧ >200 kW 25 32.00 51.51⇧ 32.00 51.51⇧ 20 7.58 12.18⇧ 7.80 12.55⇧ Ground-mounted Systems- Any size⇧ Wind Onshore – Any size Hydro <10 MW 25 yrs <50 MW 25 yrs <500 kW 15 yrs 13.50 21.74⇧ >500 kW 15yrs 10.00 16.10⇧ <2 MW 15yrs 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ >2 MW 15yrs 10.75-15.15 17.31 – 24.38⇧ Any size 15yrs 8.26 13.29⇧ Biogas 2.10 (on top of market price)⇧ 3.38⇧ (biodigester gas)⇧ Biomass (energy Crops, forestry waste,⇧ agriculture waste⇧ Landfill gas 39 654 Michigan FIT Prices (2007 Proposed)⇠ Technology Capacity Range US cents/kWh) FIT Cdn cents/kWh⇠ (1.28)⇠ Rooftop Solar PV ⇤ 30 kW 65 82.99⇧ > 30 kW ⇤ 100 kW 62 79.16⇧ > 100 kW 61 77.88⇧ Ground mounted Solar PV Any size 50 63.84⇧ On-shore Wind Any size (*based on resource differentiated tariffs)⇧ Waterpower ⇤ 500 kW 10.00 12.77⇧ > 500 kW ⇤ 10 MW 8.50 10.85⇧ > 10 MW ⇤ 20 MW 6.50 8.30⇧ ⇤ 150 kW 14.50 18.51⇧ > 150 kW ⇤ 500 kW 12.50 15.96⇧ > 500 kW ⇤ 5 MW 11.50 14.68⇧ > 5 MW ⇤ 20 MW 10.50 13.41⇧ ⇤ 500 kW 10.00 12.77⇧ > 500 kW 8.50 10.85⇧ Biomass/ biogas Landfill gas 10.5 8.00 13.41 10.2⇧ 40 655 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 41 656 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 42 657 I ntroduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administor and implement the Renewable (RESOP) 43 658 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes ( 500 kW? End No 2.✓ Is connection capacity available or plans Yes 3.✓ 4.✓ OPA✓ LDC/IESO✓ FIT Contract CIA/SIA completed 5.✓ Commercial OPA✓ operation within Contract required time milestones applied approved? No See next slide 44 659 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • • • • • • Eligibility requirements based on technology and size Limits on existing projects with previous OPA contracts Incremental Projects Application fee Resource plan Application Security Presentation and discussion on Eligibility⇡ Requirements at 2:30 (March 17)⇡ 45 660 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • • • Review of application Application time stamped Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⇡ process, connection assessments, and⇡ application review – Part I on March 24, 2009⇡ 46 661 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⇡ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process,⇡ connection assessments, and application review – Part II on⇡ March 31, 2009⇡ 47 662 Introduction to the Proposed FIT Program⇠ Pricing✓ • • Pricing by technology and size Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing on April 7, 2009⇡ 48 663 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • • • • Security Completion of all Permits and Approvals Equipment Orders Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract Milestones on April⇡ 14, 2009⇡ 49 664 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration, Metering✓ Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Integrated Electricity System Operator (IESO) to effectively integrate renewable energy supply resources regarding operations and compensation • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – – Transmission connected projects paid by IESO/OPA Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract Management and⇡ Settlement on April 21, 2009⇡ 50 665 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and Future✓ Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. ever two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on April 28,⇡ 2009⇡ 51 666 I ntroduction to the Proposed FIT Program⇠ Initialization Period✓ •⇥ Initial 60 day period to submit FIT applications •⇥ Different application process to manage legacy projects and manage the potential ‘flood’ of applications⇥ •⇥ Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 52 667 March 1 7 – Agenda⇠ 8:00 – 9:00 a.m. Registration and Breakfast✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 53 668 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects properties – – (10 kW on residential simplified process for micro-scale OPA to work with LDC to streamline customer experience 54 669 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • • Geographically and electrically located in Ontario A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind-the-meter) 55 670 Proposed Eligibility Requirements⇠ • Must not have had a NUG contract or an OPA contract in the past 18 months • Previously operating facilities must have been out of service for 3 years – • e.g. abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects 56 671 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc…⇥ Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 57 672 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • – – Name of feeder, transformer station or high-voltage circuit Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW $10,000/MW of proposed Contract Capacity Community-Based or Aboriginal Projects: $5,000/MW 58 673 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – – Application Fee is non-refundable Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 59 674 Richard Duffy From: Richard Duffy Sent: March-13-09 5:59 PM To: Jim MacDougall; Jason Chee-Aloy; Patricia Lightburn Cc: Smith, Elliot; 'Sadikman, Jacob' Subject: FW: FIT Presentation Attachments: Session 1 - Inaugural Session FINAL.pdf Hi All,⌥ Attached is a copy of the final presentation for posting. Richard⌥ Not Responsive 675 Not Responsive Not Responsive Not Responsive 678 Ontario Power Authority . Proposed Feed-in Tariff Program Stakeholder Engagement Session 1 679 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 680 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ • To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule • To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood • To identify areas for further OPA consideration • To identify implementation issues that need to be addressed to ensure success 3 681 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • March 1 7, 2009 – May 5, 2009 • From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 • Online Q&A Tool 682 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 1 2 First Draft Program Rules posted March 1 3 or 1 6 Stakeholder Engagement Sessions March 1 7 – May 5 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Price Schedule posted Mid May Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 683 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program Project Eligibility Requirements March 1 7 Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 1 4 Resource Integration, Metering Requirements and Settlement Incremental Projects April 21 Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 684 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – Option to submit comments or recommendations • Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 685 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 686 March 17 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 687 Overview of Proposed Green Energy Act⇠ • Framework • Legislative Changes • First Nations and Métis participation in Electricity Sector • Feed-in-Tariffs • Smart Grid • System Connection • Approvals • Other Changes 10 688 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid” 11 689 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” • Next Steps – Legislative process and hearings – Development of regulations 12 690 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – New Green Energy Act – Amendments to many other Acts: • • • • • • • • • • • • • • • Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act – Repeals Energy Efficiency Act and Energy Conservation 13 Leadership Act 691 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 692 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 693 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for aboriginal and community involvement – Provisions for domestic content 16 694 Smart Grid⇠ • Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation • Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: – Timeframes for smart grid development – Roles and responsibilities – Communications standards 17 695 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – Make a written request for connection; and – Meet all technical, economic and other relevant requirements • Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 696 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 697 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub • Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 698 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 699 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ( 1 0MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 700 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 701 March 17 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 702 Introduction to FIT Programs⇠ • What is a Feed-in Tariff (FIT) Program? • Objectives of FIT Program • Experience in other jurisdictions • Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 703 Introduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy – from homeowners to large developers – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate or return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 26 704 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies) • Different prices for different technologies and project sizes • Long-term contracts • Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects 27 705 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 706 Experience in Other Jurisdictions⇠ • At least 37 countries and 9 states/provinces have adopted or proposed FIT programs • More than half have been enacted since 2002 • 1 9 EU Countries have adopted FIT program 29 707 Experience in Other Jurisdictions⇠ Year 30 Cumulative⌫ Number Countries/States/Provinces Added That Year 1978 1 United States (under PURPA – no longer in place)⇣ 1990 2 Germany 1991 3 Switzerland 1992 4 Italy 1993 6 India Denmark⇣ 1994 8 Greece Spain⇣ 1997 9 Sri Lanka 1998 10 Sweden 1999 13 Portugal, Norway, Slovenia 2000 13 ⇥⇥⇥⇤ 2001 15 France, Latvia 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India) 2004 34 Italy, Israel, Nicaragua, Prince Edward Island (Canada), Andhra Pradesh and Madhya Pradesh (India) 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India) 2006 44 Ontario (RESOP), Argentina, Thailand⇣ 2007 46⇣ South Australia (Australia), Croatia⇣ Source: REN21 2006⇣ 708 US Proposed Legislation⇠ • By mid-2006, several US states had established limited policies that shared some FIT design features, but no state had yet introduced FIT legislation • Two years later, six states have introduced Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California. – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 709 US Proposed Legislation⇠ • A Federal Bill has also been introduced (May 2008) • ‘US Renewable Energy Jobs and Security Act’ – Congressman Jay Inslee (WA-1 st-D) • The Bill includes three main FIT design elements: 1 . guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20-year contracts 3. rate recovery through a regionally partitioned national system benefits charge 32 710 US Proposed Legislation⇠ • Pricing – Bill proposes minimum prices – Prices must be designed to cover generation costs, plus a 1 0% rate of return on investment 33 711 International Energy Agency Report, 2008⇠ • “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” • “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 34 712 Germany⇠ Renewable Energy Sources Act 2004✓ • Guarantee of purchase at a fixed rate for 20 years • Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 35 713 Germany⇠ • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country • Prices and rules set by national law 36 714 Germany⇠ • 30,893 MW renewable electricity capacity installed • 20,622 MW wind capacity installed; 2,831 MW solar PV • About 20% of total installed capacity 37 (Source: Renewable Energy Sources Act - Progress Report 2007) 715 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range 30 kW EU cents/kWh Cdn cents/kWh⌫ (1.60953412)⌫ 43.01 69.23⌫ > 30 kW 100 kW 40.36 65.85⌫ > 100 kW 1000 kW 39.90 63.71⌫ 33.00 53.11⌫ 25.01 51.41⌫ > 1000 kW Ground mounted Solar PV Any size On⇥shore Wind Any size (*based on resource differentiated tariffs) 9.22 5.02 14.81 8.08⌫ Off⇥shore Wind Any size (*based on resource differentiated tariffs) 13.00 3.50 20.92 5.63⌫ Waterpower (*new facilities)⇣ 500 kW > 500 kW 2 MW Biomass/ biogas 5 MW 150 kW 20.39⌫ 8.65 13.92⌫ 7.65 12.31⌫ 11.67 18.78⌫ > 150 kW 500 kW 9.18 14.78⌫ > 500 kW 5 MW 8.25 13.28⌫ 20 MW 7.79 12.54⌫ 9.00 14.49⌫ 6.16 9.91⌫ > 5 MW Landfill gas 2 MW 12.67 500 kW > 500 kW 5 MW 38 716 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • FIT grants priority access to the grid and priority dispatch • Special Regime Control Centre (SRCC) oversees reliability • Federal ‘Administrative Registry of Production of Electricity under Special System’ 39 717 Spain⇠ • National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 1 9% in 2006 and 29.4% by 201 0 (target) – 1 4,000 MW renewable capacity 40 718 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ 1 . Apply to the federal or regional authority to be included in the Special System Within 6 months 2. Apply to the distribution company for the connection point and technical conditions necessary to undertake the project. Within 1 month 3. Pre-register the installation in the federal Within 1 month ‘Administrative Registry of Production of Electricity under Special System’ 4. Request a contract from the local distributor Within 1 month 5. Definitive registration in the national Register Within 1 month 41 719 Spanish FIT prices⇠ Technology Solar PV Price drop Euro cent/kWh <20 kW 25 34.00 54.72⌫ <200 kW 25 33.00 53.11⌫ >200 kW 25 32.00 51.51⌫ 32.00 51.51⌫ 20 7.58 12.18⌫ Capacity Range Ground⇥mounted Systems⇥ Any size⇣ Cdn cent/kWh (1.61)⌫ Wind Onshore – Any size Hydro <10 MW 25 yrs 7.80 12.55⌫ <50 MW 25 yrs 2.10 (on top of market price) 3.38⌫ Biogas (biodigester gas)⇣ <500 kW 15 yrs 13.50 21.74⌫ >500 kW 15yrs 10.00 16.10⌫ Biomass (energy Crops, forestry, waste, Agriculture, waste⇣ <2 MW 15yrs 12.99⇥16.42 (depending on technology)⌫ 20.91 – 26.43 >2 MW 15yrs 10.75⇥15.15 17.31 – 24.38 Landfill gas Any size 15yrs 8.26 13.29⌫ 42 720 Michigan FIT Prices (2007 Proposed)⇠ Technology US cents/kWh) FIT Cdn cents/kWh⌫ (1.28)⌫ 65 82.99⌫ 62 79.16⌫ > 100 kW⇣ 61 77.88⌫ Ground mounted Solar PV Any size⇣ 50 63.84⌫ On⇥shore Wind Any size (*based on resource differentiated tariffs)⇣ Rooftop Solar PV Capacity Range⌫ 30 kW⇣ > 30 kW Waterpower 100 kW⇣ 500 kW⇣ > 500 kW > 10 MW Biomass/ biogas 20 MW⇣ 150 kW⇣ 8.00 13.41 10.2⌫ 10.00⌫ 12.77⌫ 8.50⌫ 10.85⌫ 6.50⌫ 8.30⌫ 14.50⌫ 18.51⌫ > 150 kW 500 kW⇣ 12.50⌫ 15.96⌫ > 500 kW 5 MW⇣ 11.50⌫ 14.68⌫ 20 MW⇣ 10.50⌫ 13.41⌫ 500 kW⇣ 10.00⌫ 12.77⌫ > 500 kW⇣ 8.50⌫ 10.85⌫ > 5 MW Landfill gas 10 MW⇣ 10.5 43 721 March 17 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 44 722 Structure of Draft Program Rules⇠ High level review of:✓ 1 . Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 45 723 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable (RESOP) 46 724 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites May re-submit with complete application No Is application complete and meet all mandatory requirements? Yes Is this project 500 kW? Yes End No 2.✓ Is connection capacity available or plans approved? Yes 3.✓ 4.✓ OPA✓ LDC/IESO✓ FIT Contract CIA/SIA completed 5.✓ Commercial operation within required time OPA✓ Contract milestones applied No See next slide 47 725 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • Eligibility requirements based on technology and size • Limits on existing projects with previous OPA contracts • Incremental Projects • Application fee • Resource plan • Application Security Presentation and discussion on Eligibility⌫ 48 Requirements at 2:30 (March 17)⌫ 726 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • Review of application • Application time stamped • Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⌫ process, connection assessments, and⌫ application review –⌫ Part I on March 24, 2009⌫ 49 727 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⌫ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process, connection assessments, and application review –⌫ 50 Part II on March 31, 2009⌫ 728 Introduction to the Proposed FIT Program⇠ Pricing✓ • Pricing by technology and size • Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing⌫ 51 April 7, 2009⌫ 729 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • Security • Completion of all Permits and Approvals • Equipment Orders • Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract⌫ Milestones on April 14, 2009⌫ 52 730 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration,✓ Metering Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Integrated Electricity System Operator (IESO) to effectively integrate renewable energy supply resources regarding operations and compensation 53 731 Introduction to the Proposed FIT Program⇠ • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – Transmission connected projects paid by IESO/OPA – Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract⌫ Management and Settlement on April 21, 2009⌫ 54 732 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and✓ Future Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. ever two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 1 00 MW Presentation and discussion on Program Review on⌫ April 28, 2009⌫ 55 733 Introduction to the Proposed FIT Program⇠ Initialization Period✓ • Initial 60 day period to submit FIT applications • Different application process to manage legacy projects and manage the potential ‘flood’ of applications • Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 56 734 March 17 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 57 735 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower • Separate rules apply to projects 1 0 kW on residential properties – simplified process for micro-scale – OPA to work with LDC to streamline customer experience 58 736 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • Geographically and electrically located in Ontario • A new project or an addition of incremental capacity to an existing project – Only the incremental capacity is eligible • Connected to a distribution system, the transmission system or connected through a customer (i.e., behindthe-meter) 59 737 Proposed Eligibility Requirements⇠ • Must not have had a NUG contract or an OPA contract in the past 1 8 months • Previously operating facilities must have been out of service for 3 years – e.g. abandoned waterpower sites • May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and Community-Based projects 60 738 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Resource Data or Renewable Resource Supply Plan • – Land ownership, land lease, option agreement, etc… e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 61 739 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • – Non-refundable Application Fee • • – Name of feeder, transformer station or high-voltage circuit $500 per MW of proposed Contract Capacity (maximum $5,000) $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW Other technologies: $1 0,000/MW Community-Based or Aboriginal Projects: $5,000/MW 62 740 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 63 741 Richard Duffy From: Richard Duffy Sent: March-13-09 8:20 PM To: 'chawkins@mna.ca' Subject: Fw: FIT Program Rules and Price Schedule for Posting Attachments: FIT Price Schedule - Draft March 13, 2009.pdf; FIT Program Rules - Draft March 13, 2009.pdf Hi Cameron, Attached are the two documents that we require posted to the FIT Website. As suggested by the subject line, the documents are the draft of the Program Rules and Price Schedule. They can be posted as is. Please let me know if you require any additional information. Thank you for your assitance. Richard Cell: (416) 930 - 2723 ----- Original Message ----From: Smith, Elliot To: Richard Duffy CC: Jason Chee- Aloy; Sadikman, Jacob ; Colin Andersen; Sebastiano, Rocco ; Wong, Richard Sent: Fri Mar 13 19:23:16 2009 Subject: FIT Program Rules and Price Schedule for Posting <> <> Richard, Please find enclosed the FIT Program Rules and FIT Price Schedule, both PDF'd for posting. Thanks, Elliot Elliot A. Smith Associate 416.862.6435 DIRECT 416.862.6666 FACSIMILE esmith@osler.com Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1B8 osler.com ******************************************************************** This e- mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. 742 Draft: March 13, 2009 Proposed Feed-In Tariff Prices✓ for Renewable Energy Projects in Ontario✓ Technology Proposed size tranches✓ Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments✓ Biomass* Biogas* Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Landfill gas* Solar PV Rooftop 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction+ triggered when 100+ MW contracted+ Wind Draft Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 743 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Richard Duffy From: Richard Duffy Sent: March-13-09 8:24 PM To: Patricia Lightburn Subject: Fw: FIT Program Rules and Price Schedule for Posting Attachments: FIT Price Schedule - Draft March 13, 2009.pdf; FIT Program Rules - Draft March 13, 2009.pdf Please forward to cameron with instructions for posting. ----- Original Message ----From: Smith, Elliot To: Richard Duffy CC: Jason Chee- Aloy; Sadikman, Jacob ; Colin Andersen; Sebastiano, Rocco ; Wong, Richard Sent: Fri Mar 13 19:23:16 2009 Subject: FIT Program Rules and Price Schedule for Posting <> <> Richard, Please find enclosed the FIT Program Rules and FIT Price Schedule, both PDF'd for posting. Thanks, Elliot Elliot A. Smith Associate 416.862.6435 DIRECT 416.862.6666 FACSIMILE esmith@osler.com Osler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place Toronto, Ontario, Canada M5X 1B8 osler.com ******************************************************************** This e- mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 789 Draft: March 13, 2009 Proposed Feed-In Tariff Prices✓ for Renewable Energy Projects in Ontario✓ Technology Proposed size tranches✓ Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments✓ Biomass* Biogas* Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Landfill gas* Solar PV Rooftop 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction+ triggered when 100+ MW contracted+ Wind Draft Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 790 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Richard Duffy From: Richard Duffy⇣ Sent: March-16-09 2:41 PM⇣ To: Ziyaad Mia⇣ Subject: FW: Session 1 Deck for posting⇣ Attachments: Session 1 Presentation - March 17.pdf; Session 1 - Inaugural Session FINAL v2.ppt⇣ Let ’ s try this one! From: Patricia Lightburn Sent: Monday, March 16, 2009 12:14 PM To: Claire Willison; webmaster Cc: 'Cameron Hawkins'; Richard Duffy Subject: RE: Session 1 Deck for posting Ppt attached as well From: Patricia Lightburn Sent: Monday, March 16, 2009 12:12 PM To: Claire Willison; webmaster Cc: 'Cameron Hawkins'; Richard Duffy Subject: RE: Session 1 Deck for posting See attached for the final deck for tomorrow. Ready for posting! Patricia Lightburn Analyst, Distributed Generation Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 836 ()nlurin Power Aulhorily . ONTARIO POWER AUTHORITY March 17, 2009 837 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 838 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ • To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule • To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood • To identify areas for further OPA consideration • To identify implementation issues that need to be addressed to ensure success 3 839 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 • Online Q&A Tool 840 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May – May 5 Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 841 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 842 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – • Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 843 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 844 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 845 Overview of Proposed Green Energy Act⇠ • Framework • Legislative Changes • First Nations and Métis participation in Electricity Sector • Feed-in Tariffs • Smart Grid • System Connection • Approvals • Other Changes 10 846 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid” 11 847 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” • Next Steps – Legislative process and hearings – Development of regulations 12 848 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – 13 Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 849 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 850 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 851 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 852 Smart Grid⇠ • Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation • Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: – – – Timeframes for smart grid development Roles and responsibilities Communications standards 17 853 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – Make a written request for connection; and Meet all technical, economic and other relevant requirements • Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 854 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 855 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 856 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 857 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ($10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 858 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 859 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 860 Introduction to FIT Programs⇠ • What is a Feed-in Tariff (FIT) Program? • Objectives of FIT Program • Experience in other jurisdictions • Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 861 I ntroduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy to large developers – from homeowners – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 26 862 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies • Different prices for different technologies and project sizes • Long-term contracts • Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects 27 863 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 864 Experience in Other Jurisdictions⇠ • 46 jurisdictions have adopted some form of a FIT Program • More than half have been enacted since 2002 • 19 EU Countries have adopted FIT program 29 865 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (no longer in place)⌫ 1990 2 Germany⌫ 1991 3 Switzerland⌫ 1992 4 Italy⌫ 1993 6 India Denmark⌫ 1994 8 Greece Spain⌫ 1997 9 Sri Lanka⌫ 1998 10 Sweden⌫ 1999 13 Portugal, Norway, Slovenia⌫ 2000 13 --- 2001 15 France, Latvia⌫ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌫ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌫ 2004 34 Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh (India)⌫ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌫ 2006 44 Ontario (RESOP), Argentina, Thailand⌫ 2007 46 South Australia (Australia), Croatia⌫ Source: REN21 2006⇣ 866 US Proposed Legislation⇠ • Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program • Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 867 US Proposed Legislation⇠ • • • A Federal Bill was introduced in May 2008 ‘US Renewable Energy Jobs and Security Act’ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20- year contracts 3. rate recovery through a regionally partitioned national system benefits charge • Pricing – – Bill proposes minimum prices Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 868 International Energy Agency Report, 2008⇠ • “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” • “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 869 Germany⇠ Renewable Energy Sources Act 2004✓ • Guarantee of purchase at a fixed rate for 20 years • Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 870 Germany⇠ • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country • Prices and rules set by national law 35 871 Germany⇠ • • • 36 30,893 MW renewable electricity capacity installed 20,622 MW wind capacity installed; 2,831 MW solar PV About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 872 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range EU cents/kWh Cdn cents/kWh⇧ (1.61)⇧ 43.01 69.23⇧ 40.36 65.85⇧ > 100 kW 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ 25.01 51.41⇧ 30 kW > 30 kW 100 kW Ground mounted Solar PV Any size On-shore Wind Any size (*based on resource differentiated tariffs) 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs) 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities)⌫ 12.67 20.39⇧ 8.65 13.92⇧ 7.65 12.31⇧ 11.67 18.78⇧ 9.18 14.78⇧ > 500 kW 5 MW 8.25 13.28⇧ > 5 MW 20 MW 7.79 12.54⇧ 9.00 14.49⇧ 6.16 9.91⇧ 500 kW > 500 kW 2 MW Biomass/ biogas 5 MW 150 kW > 150 kW Landfill gas 2 MW 500 kW 500 kW > 500 kW 5 MW 37 873 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • FIT grants priority access to the grid and priority dispatch • Special Regime Control Centre (SRCC) oversees reliability • Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 874 Spain⇠ • National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 875 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System ⇥ 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 40 876 Spanish FIT prices⇠ Euro cent/kWh Cdn cent/kWh⇧ (1.61)⇧ <20 kW 34.00 54.72⇧ <200 kW 33.00 53.11⇧ >200 kW 32.00 51.51⇧ Ground-mounted Systems- Any size⌫ 32.00 51.51⇧ Wind Onshore – Any size 7.58 12.18⇧ Hydro⇧ <10 MW⌫ 7.80 12.55⇧ Technology Solar PV Capacity Range <50 MW⌫ Biogas⇧ (biodigester gas)⌫ 3.38⇧ <500 kW⌫ 13.50 21.74⇧ >500 kW⌫ 10.00 16.10⇧ 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ 10.75-15.15 17.31 – 24.38⇧ 8.26 13.29⇧ <2 MW⌫ Biomass (energy⌫ Crops, forestry, waste,⌫ Agriculture, waste⌫ >2 MW⌫ Landfill gas 2.10 (on top of market price)⇧ Any size⌫ 41 877 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 878 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 879 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 880 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes $ 500 kW? No 2.✓ Is connection capacity available? 3.✓ Yes OPA✓ FIT Contract with full security 4.✓ LDC/IESO✓ CIA/SIA completed 5.✓ OPA✓ Contract milestones applied Commercial operation within required time No Reserve / Production Line 45 881 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • Eligibility requirements based on technology and size • Limits on existing projects with previous OPA contracts • Incremental Projects • Application fee • Resource plan • Application Security Presentation and discussion on Eligibility⌫ 46 Requirements at 2:30 (March 17)⌫ 882 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • Application time stamped • Review of application • Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⌫ process, connection assessments, and⌫ application review 47 –⇥ Part I on March 24, 2009⌫ 883 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⌫ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process, connection assessments, and application review 48 Part II on March 31, 2009⌫ 884 –⇥ Introduction to the Proposed FIT Program⇠ Pricing✓ • Pricing by technology and size • Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing⌫ 49 April 7, 2009⌫ 885 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • Security • Completion of all Permits and Approvals – Renewable Energy Approval • Equipment Orders • Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract⌫ Milestones on April 14, 2009⌫ 50 886 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration, Metering Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Independent Electricity System Operator (IESO) to effectively integrate renewable energy supply resources 51 887 Introduction to the Proposed FIT Program⇠ • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – Transmission connected projects paid by IESO/OPA – Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract⌫ Management and Settlement on April 21, 2009⌫ 52 888 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and✓ Future Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. every two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on⌫ April 28, 2009⌫ 53 889 Introduction to the Proposed FIT Program⇠ Initialization Period✓ • Initial 60 day period to submit FIT applications • Different application process to manage legacy projects and manage the potential “intake” of applications • Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 54 890 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 55 891 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects $10 kW on residential properties – – simplified process for micro-scale OPA to work with LDC to streamline customer experience 56 892 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • Geographically and electrically located in Ontario • A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind- 57 the-meter) 893 Proposed Eligibility Requirements⇠ • Must not have had, or have, a NUG contract, an OPA contract • Previously operating facilities must have been out of service for 3 years – • e.g. abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects – Special provisions for solar PV (>10 MW) and waterpower (> 50MW) 58 894 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 59 895 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • – $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW Other technologies: $10,000/MW Community-Based or Aboriginal Projects: $5,000/MW 60 896 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 897 Proposed Feed-in Tariff Program Stakeholder Engagement Session 1 898 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 899 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ · To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule · To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood · To identify areas for further OPA consideration · To identify implementation issues that need to be addressed to ensure success 3 900 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ · OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks · March 17, 2009 – May 5, 2009 · From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 · Online Q&A Tool 901 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 – May 5 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 902 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 903 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ · On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – Option to submit comments or recommendations · Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 904 FIT Training⇠ · On-line Training Module – OPA to develop an online FIT Program training resource · To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) · OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 905 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 906 Overview of Proposed Green Energy Act⇠ · Framework · Legislative Changes · First Nations and Métis participation in Electricity Sector · Feed-in Tariffs · Smart Grid · System Connection · Approvals · Other Changes 10 907 Proposed Framework⇠ · Facilitating renewable energy development and use · Enabling First Nations and Métis partnership and participation in electricity sector · Supporting capacity development in First Nations and Métis communities · Increasing conservation and culture of conservation · Creating green jobs · Developing “smart grid” 11 908 Proposed Framework⇠ · Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” · Next Steps – Legislative process and hearings – Development of regulations 12 909 Proposed Legislative Changes⇠ · Green Energy and Green Economy Act, 2009 – New Green Energy Act – Amendments to many other Acts: · Electricity Act · Ministry of Energy Act · Ontario Energy Board Act · Environmental Protection Act · Clean Water Act · Environmental Bill of Rights · Ontario Water Resources Act · Co-operative Corporations Act · Building Code Act · Planning Act · Ministry of Natural Resources Act · Conservation Authorities Act · Niagara Escarpment Planning and Development Act · Provincial Parks and Conservation Reserves Act · Public Lands Act – Repeals Energy Efficiency Act and Energy Conservation 13 Leadership Act 910 Proposed Legislative Changes⇠ · Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 911 First Nations and Métis Participation in Electricity Sector⇠ · Act to be interpreted consistent with s. 35 of Constitution Act · Minister may direct consultation in relation to Ontario Power Authority activities · Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 912 Feed-in Tariffs⇠ · Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 913 Smart Grid⇠ · Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation · Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid · Government may make regulations on: – Timeframes for smart grid development – Roles and responsibilities – Communications standards 17 914 System Connection⇠ · Transmitters and distributors must connect renewable energy facilities that – Make a written request for connection; and – Meet all technical, economic and other relevant requirements · Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements · Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 915 System Connection⇠ · Regulations may require timelines for connection assessments · Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 916 Proposed Approvals⇠ · Renewable Energy Facilitation Office – Ministry of Energy and Infrastructure office – Led by Renewable Energy Facilitator – Facilitate renewable energy development – Information and resource hub · Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 917 Proposed Approvals⇠ · Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation · Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 918 Other Proposed Changes⇠ · Distributors and municipalities may own some types of generation ( 10MW) · Provides for renewable energy co-operatives · Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees · Distributors can choose between conservation program they develop with OEB approval and OPA program 22 919 Other Proposed Changes⇠ · Cost of distributor conservation program to be recovered through global adjustment · Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner · Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 920 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 921 Introduction to FIT Programs⇠ · What is a Feed-in Tariff (FIT) Program? · Objectives of FIT Program · Experience in other jurisdictions · Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 922 Introduction to FIT Programs⇠ What is a FIT Program?✓ · Generators of renewable energy – from homeowners to large developers – are paid a reasonable price for the electricity they produce over the term of the contract · Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable energy supply technologies⌫ 26 923 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ · Open to various renewable energy supply technologies – Wind – Waterpower – Solar PV – Biomass technologies · Different prices for different technologies and project sizes · Long-term contracts · Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term · Opportunities for promoting community-based and Aboriginal projects 27 924 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ · Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions · Simpler method to procure and develop generation · Create new green industries through new investment and job creation · Provide incentives for investment in renewable energy technologies 28 925 Experience in Other Jurisdictions⇠ · 46 jurisdictions have adopted some form of a FIT Program · More than half have been enacted since 2002 · 19 EU Countries have adopted FIT program 29 926 Experience in Other Jurisdictions⇠ 30 Year Cumulative Number 1978 1 United States (no longer in place)⌘ 1990 2 Germany⌘ 1991 3 Switzerland⌘ 1992 4 Italy⌘ 1993 6 India Denmark⌘ 1994 8 Greece Spain⌘ 1997 9 Sri Lanka⌘ 1998 10 Sweden⌘ 1999 13 Portugal, Norway, Slovenia⌘ 2000 13 --- 2001 15 France, Latvia⌘ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌘ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌘ 2004 34⌘ Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh⌘ (India)⌘ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌘ 2006 44 Ontario (RESOP), Argentina, Thailand⌘ 2007 46 South Australia (Australia), Croatia⌘ Countries/States/Provinces Added That Year Source: REN21 2006⇣ 927 US Proposed Legislation⇠ · Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program · Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 928 US Proposed Legislation⇠ · A Federal Bill was introduced in May 2008 · ‘US Renewable Energy Jobs and Security Act’ – · Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge · Pricing – Bill proposes minimum prices – Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 929 International Energy Agency Report, 2008⇠ · “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” · “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 930 Germany⇠ Renewable Energy Sources Act 2004✓ · Guarantee of purchase at a fixed rate for 20 years · Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 931 Germany⇠ · Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country · Prices and rules set by national law 35 932 Germany⇠ 36 · 30,893 MW renewable electricity capacity installed · 20,622 MW wind capacity installed; 2,831 MW solar PV · About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 933 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range 30 kW⌘ EU cents/kWh Cdn cents/kWh (1.61) 43.01 69.23 > 30 kW 100 kW⌘ 40.36 65.85 > 100 kW 1000 kW⌘ 39.90 63.71 33.00 53.11 25.01 51.41 > 1000 kW⌘ Ground mounted Solar PV Any size⌘ On-shore Wind Any size (*based on resource differentiated tariffs)⌘ 9.22 5.02 14.81 8.08 Off-shore Wind Any size (*based on resource differentiated tariffs)⌘ 13.00 3.50 20.92 5.63 Waterpower (*new facilities)⌘ 500 kW⌘ > 500 kW 2 MW Biomass/ biogas 5 MW⌘ 150 kW⌘ 20.39 8.65 13.92 7.65 12.31 11.67 18.78 > 150 kW 500 kW⌘ 9.18 14.78 > 500 kW 5 MW⌘ 8.25 13.28 20 MW⌘ 7.79 12.54 9.00 14.49 6.16 9.91 > 5 MW Landfill gas 2 MW⌘ 12.67 500 kW⌘ > 500 kW 5 MW⌘ 37 934 Spain⇠ · Framework set out in law and details set out in Royal Decree (regulation) · FIT grants priority access to the grid and priority dispatch · Special Regime Control Centre (SRCC) oversees reliability · Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 935 Spain⇠ · National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives · Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 936 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. 3. Pre-register the installation in the federal Within 1 month ‘Administrative Registry of Production of Electricity under Special System’ 4. Request a contract from the local distributor Within 1 month 5. Definitive registration in the national Register Within 1 month 40 937 Spanish FIT prices⇠ Technology Euro cent/kWh Cdn cent/kWh (1.61) <20 kW 34.00 54.72 <200 kW 33.00 53.11 >200 kW 32.00 51.51 Ground-mounted Systems- Any size⌘ 32.00 51.51 Wind Onshore – Any size 7.58 12.18 Hydro <10 MW 7.80 12.55 <50 MW 2.10 (on top of market price) 3.38 Biogas (biodigester gas)⌘ <500 kW 13.50 21.74 >500 kW 10.00 16.10 Biomass (energy Crops, forestry, waste, Agriculture, waste⌘ <2 MW 12.99-16.42 (depending on technology) 20.91 – 26.43 >2 MW 10.75-15.15 17.31 – 24.38 Landfill gas Any size 8.26 13.29 Solar PV Capacity Range 41 938 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 939 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 940 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ · Projects < 500kW will be subject to a simpler, streamlined process · The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 941 Proposed Application Process 1. Submit OPA FIT Application with pre-requisites May re-submit with complete 10 MW) and waterpower (> 50MW) 58 955 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Evidence of Site Access · – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan · e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval · Requirement is subject to details of Renewable Energy Approval process 59 956 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Details of proposed project connection point · Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee · $500 per MW of proposed Contract Capacity (maximum $5,000) · – $500 minimum Application Fee Application Security · Solar PV: $20,000/MW · Other technologies: $10,000/MW · Community-Based or Aboriginal Projects: $5,000/MW 60 957 Proposed Eligibility Requirements⇠ Application Requirements✓ · Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 958 Richard Duffy From: Richard Duffy Sent: March-16-09 4:43 PM To: Irene Mauricette Subject: RE: Richard - Stakeholder Engagement Session - CA would like: slides; rules; location - any other relevant to this event - thanks so much - Irene Attachments: Session 1 Presentation - March 17_v2.pdf; FIT Price Schedule - Draft March 13 2009.pdf; FIT Program Rules - Draft March 13, 2009.pdf Hi Irene, Here are the documents and the locations of the documents on the website: Feed-in Tariff Program - March 17 Session Info FIT Program Rules and Price Schedule - Draft March 13, 2009" The location for the session is: 1 First Canadian Place Osler, Hoskin & Harcourt LLP 63rd Floor (elevator to uneven numbered floors is from the lower level) Let me know if there are any questions or you need additional information. Richard From: Irene Mauricette Sent: Monday, March 16, 2009 3:43 PM To: Richard Duffy Cc: Emay Cowx; Claire Willison Subject: Richard - Stakeholder Engagement Session - CA would like: slides; rules; location - any other relevant to this event - thanks so much - Irene Irene Mauricette Executive Assistant to The Chief Executive Officer Ontario Power Authority⇣ 120 Adelaide Street West, Suite 1600 Toronto ON M5H 1T1 Direct: FAX: Email: 41 6 969 601 0 41 6 969 6380 Web: www.powerauthority.on.ca irene.mauricette@powerauthority.on.ca 959 Draft: March 13, 2009 Proposed Feed-In Tariff Prices✓ for Renewable Energy Projects in Ontario✓ Technology Proposed size tranches✓ Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments✓ Biomass* Biogas* Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Landfill gas* Solar PV Rooftop 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction+ triggered when 100+ MW contracted+ Wind Draft Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 960 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Proposed Feed-in Tariff Program Stakeholder Engagement Session 1 1006 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 1007 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ · To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule · To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood · To identify areas for further OPA consideration · To identify implementation issues that need to be addressed to ensure success 3 1008 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ · OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks · March 17, 2009 – May 5, 2009 · From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 · Online Q&A Tool 1009 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 – May 5 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 1010 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 1011 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ · On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – Option to submit comments or recommendations · Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 1012 FIT Training⇠ · On-line Training Module – OPA to develop an online FIT Program training resource · To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) · OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 1013 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 1014 Overview of Proposed Green Energy Act⇠ · Framework · Legislative Changes · First Nations and Métis participation in Electricity Sector · Feed-in Tariffs · Smart Grid · System Connection · Approvals · Other Changes 10 1015 Proposed Framework⇠ · Facilitating renewable energy development and use · Enabling First Nations and Métis partnership and participation in electricity sector · Supporting capacity development in First Nations and Métis communities · Increasing conservation and culture of conservation · Creating green jobs · Developing “smart grid” 11 1016 Proposed Framework⇠ · Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” · Next Steps – Legislative process and hearings – Development of regulations 12 1017 Proposed Legislative Changes⇠ · Green Energy and Green Economy Act, 2009 – New Green Energy Act – Amendments to many other Acts: · Electricity Act · Ministry of Energy Act · Ontario Energy Board Act · Environmental Protection Act · Clean Water Act · Environmental Bill of Rights · Ontario Water Resources Act · Co-operative Corporations Act · Building Code Act · Planning Act · Ministry of Natural Resources Act · Conservation Authorities Act · Niagara Escarpment Planning and Development Act · Provincial Parks and Conservation Reserves Act · Public Lands Act – Repeals Energy Efficiency Act and Energy Conservation 13 Leadership Act 1018 Proposed Legislative Changes⇠ · Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 1019 First Nations and Métis Participation in Electricity Sector⇠ · Act to be interpreted consistent with s. 35 of Constitution Act · Minister may direct consultation in relation to Ontario Power Authority activities · Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 1020 Feed-in Tariffs⇠ · Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 1021 Smart Grid⇠ · Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation · Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid · Government may make regulations on: – Timeframes for smart grid development – Roles and responsibilities – Communications standards 17 1022 System Connection⇠ · Transmitters and distributors must connect renewable energy facilities that – Make a written request for connection; and – Meet all technical, economic and other relevant requirements · Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements · Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 1023 System Connection⇠ · Regulations may require timelines for connection assessments · Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 1024 Proposed Approvals⇠ · Renewable Energy Facilitation Office – Ministry of Energy and Infrastructure office – Led by Renewable Energy Facilitator – Facilitate renewable energy development – Information and resource hub · Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 1025 Proposed Approvals⇠ · Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation · Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 1026 Other Proposed Changes⇠ · Distributors and municipalities may own some types of generation ( 10MW) · Provides for renewable energy co-operatives · Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees · Distributors can choose between conservation program they develop with OEB approval and OPA program 22 1027 Other Proposed Changes⇠ · Cost of distributor conservation program to be recovered through global adjustment · Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner · Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 1028 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 1029 Introduction to FIT Programs⇠ · What is a Feed-in Tariff (FIT) Program? · Objectives of FIT Program · Experience in other jurisdictions · Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 1030 Introduction to FIT Programs⇠ What is a FIT Program?✓ · Generators of renewable energy – from homeowners to large developers – are paid a reasonable price for the electricity they produce over the term of the contract · Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable energy supply technologies⌫ 26 1031 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ · Open to various renewable energy supply technologies – Wind – Waterpower – Solar PV – Biomass technologies · Different prices for different technologies and project sizes · Long-term contracts · Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term · Opportunities for promoting community-based and Aboriginal projects 27 1032 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ · Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions · Simpler method to procure and develop generation · Create new green industries through new investment and job creation · Provide incentives for investment in renewable energy technologies 28 1033 Experience in Other Jurisdictions⇠ · 46 jurisdictions have adopted some form of a FIT Program · More than half have been enacted since 2002 · 19 EU Countries have adopted FIT program 29 1034 Experience in Other Jurisdictions⇠ 30 Year Cumulative Number 1978 1 United States (no longer in place)⌘ 1990 2 Germany⌘ 1991 3 Switzerland⌘ 1992 4 Italy⌘ 1993 6 India Denmark⌘ 1994 8 Greece Spain⌘ 1997 9 Sri Lanka⌘ 1998 10 Sweden⌘ 1999 13 Portugal, Norway, Slovenia⌘ 2000 13 --- 2001 15 France, Latvia⌘ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌘ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌘ 2004 34⌘ Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh⌘ (India)⌘ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌘ 2006 44 Ontario (RESOP), Argentina, Thailand⌘ 2007 46 South Australia (Australia), Croatia⌘ Countries/States/Provinces Added That Year Source: REN21 2006⇣ 1035 US Proposed Legislation⇠ · Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program · Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 1036 US Proposed Legislation⇠ · A Federal Bill was introduced in May 2008 · ‘US Renewable Energy Jobs and Security Act’ – · Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge · Pricing – Bill proposes minimum prices – Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 1037 International Energy Agency Report, 2008⇠ · “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” · “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 1038 Germany⇠ Renewable Energy Sources Act 2004✓ · Guarantee of purchase at a fixed rate for 20 years · Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 1039 Germany⇠ · Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country · Prices and rules set by national law 35 1040 Germany⇠ 36 · 30,893 MW renewable electricity capacity installed · 20,622 MW wind capacity installed; 2,831 MW solar PV · About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 1041 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range 30 kW⌘ EU cents/kWh Cdn cents/kWh (1.61) 43.01 69.23 > 30 kW 100 kW⌘ 40.36 65.85 > 100 kW 1000 kW⌘ 39.90 63.71 33.00 53.11 25.01 51.41 > 1000 kW⌘ Ground mounted Solar PV Any size⌘ On-shore Wind Any size (*based on resource differentiated tariffs)⌘ 9.22 5.02 14.81 8.08 Off-shore Wind Any size (*based on resource differentiated tariffs)⌘ 13.00 3.50 20.92 5.63 Waterpower (*new facilities)⌘ 500 kW⌘ > 500 kW 2 MW Biomass/ biogas 5 MW⌘ 150 kW⌘ 20.39 8.65 13.92 7.65 12.31 11.67 18.78 > 150 kW 500 kW⌘ 9.18 14.78 > 500 kW 5 MW⌘ 8.25 13.28 20 MW⌘ 7.79 12.54 9.00 14.49 6.16 9.91 > 5 MW Landfill gas 2 MW⌘ 12.67 500 kW⌘ > 500 kW 5 MW⌘ 37 1042 Spain⇠ · Framework set out in law and details set out in Royal Decree (regulation) · FIT grants priority access to the grid and priority dispatch · Special Regime Control Centre (SRCC) oversees reliability · Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 1043 Spain⇠ · National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives · Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 1044 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. 3. Pre-register the installation in the federal Within 1 month ‘Administrative Registry of Production of Electricity under Special System’ 4. Request a contract from the local distributor Within 1 month 5. Definitive registration in the national Register Within 1 month 40 1045 Spanish FIT prices⇠ Technology Euro cent/kWh Cdn cent/kWh (1.61) <20 kW 34.00 54.72 <200 kW 33.00 53.11 >200 kW 32.00 51.51 Ground-mounted Systems- Any size⌘ 32.00 51.51 Wind Onshore – Any size 7.58 12.18 Hydro <10 MW 7.80 12.55 <50 MW 2.10 (on top of market price) 3.38 Biogas (biodigester gas)⌘ <500 kW 13.50 21.74 >500 kW 10.00 16.10 Biomass (energy Crops, forestry, waste, Agriculture, waste⌘ <2 MW 12.99-16.42 (depending on technology) 20.91 – 26.43 >2 MW 10.75-15.15 17.31 – 24.38 Landfill gas Any size 8.26 13.29 Solar PV Capacity Range 41 1046 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 1047 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 1048 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ · Projects < 500kW will be subject to a simpler, streamlined process · The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 1049 Proposed Application Process 1. Submit OPA FIT Application with pre-requisites May re-submit with complete 10 MW) and waterpower (> 50MW) 58 1063 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Evidence of Site Access · – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan · e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval · Requirement is subject to details of Renewable Energy Approval process 59 1064 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Details of proposed project connection point · Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee · $500 per MW of proposed Contract Capacity (maximum $5,000) · – $500 minimum Application Fee Application Security · Solar PV: $20,000/MW · Other technologies: $10,000/MW · Community-Based or Aboriginal Projects: $5,000/MW 60 1065 Proposed Eligibility Requirements⇠ Application Requirements✓ · Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 1066 Richard Duffy From: Richard Duffy✏ Sent: March-16-09 4:51 PM✏ To: Bing Young; Bob Chow✏ Subject: Fw: Richard - Stakeholder Engagement Session - CA would like: slides; rules; location - any other relevant to this event - thanks so much - Irene✏ Attachments: Session 1 Presentation - March 17_v2.pdf; FIT Price Schedule - Draft March 13✏ 2009.pdf; FIT Program Rules - Draft March 13, 2009.pdf✏ Updated documents.✏ ----- Original Message ----From: Richard Duffy✏ To: Irene Mauricette✏ Sent: Mon Mar 16 16:43:00 2009✏ Subject: RE: Richard - Stakeholder Engagement Session - CA would like: slides; rules; location - any other relevant to this event - thanks so much - Irene✏ <> <> <> Hi Irene,✏ Here are the documents and the locations of the documents on the website:✏ Feed - in Tariff Program - March 17 Session Info < http://www.powerauthority.on.ca/FIT/Page.asp?✏ PageID=122&ContentID=10102&SiteNodeID=1041 >✏ FIT Program Rules and Price Schedule - Draft March 13, 2009 < http://www.powerauthority.on.ca/fit/Page.asp?✏ PageID=122&ContentID=10101&SiteNodeID=1039 >✏ The location for the session is:✏ 1 First Canadian Place✏ Osler, Hoskin & Harcourt LLP✏ 63rd Floor✏ (elevator to uneven numbered floors is from the lower level)✏ Let me know if there are any questions or you need additional information.✏ 1067 Richard✏ _________________________ _____ __✏ From: Irene Mauricette✏ Sent: Monday, March 16, 2009 3:43 PM✏ To: Richard Duffy✏ Cc: Emay Cowx; Claire Willison✏ Subject: Richard - Stakeholder Engagement Session - CA would like: slides; rules; location - any other relevant to this event thanks so much - Irene✏ Irene Mauricette✏ Executive Assistant to✏ The Chief Executive Officer✏ Ontario Power Authority✏ 120 Adelaide Street West, Suite 1600✏ Toronto ON M5H 1T1 Direct: 416 969 6010 FAX: 416 969 6380 Email: irene.mauricette@powerauthority.on.ca Web: www.powerauthority.on.ca 1068 Draft: March 13, 2009 Proposed Feed-In Tariff Prices✓ for Renewable Energy Projects in Ontario✓ Technology Proposed size tranches✓ Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments✓ Biomass* Biogas* Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Landfill gas* Solar PV Rooftop 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction+ triggered when 100+ MW contracted+ Wind Draft Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 1069 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Proposed Feed-in Tariff Program Stakeholder Engagement Session 1 1115 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 1116 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ · To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule · To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood · To identify areas for further OPA consideration · To identify implementation issues that need to be addressed to ensure success 3 1117 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ · OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks · March 17, 2009 – May 5, 2009 · From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 · Online Q&A Tool 1118 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 – May 5 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 1119 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 1120 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ · On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – Option to submit comments or recommendations · Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 1121 FIT Training⇠ · On-line Training Module – OPA to develop an online FIT Program training resource · To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) · OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 1122 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 1123 Overview of Proposed Green Energy Act⇠ · Framework · Legislative Changes · First Nations and Métis participation in Electricity Sector · Feed-in Tariffs · Smart Grid · System Connection · Approvals · Other Changes 10 1124 Proposed Framework⇠ · Facilitating renewable energy development and use · Enabling First Nations and Métis partnership and participation in electricity sector · Supporting capacity development in First Nations and Métis communities · Increasing conservation and culture of conservation · Creating green jobs · Developing “smart grid” 11 1125 Proposed Framework⇠ · Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” · Next Steps – Legislative process and hearings – Development of regulations 12 1126 Proposed Legislative Changes⇠ · Green Energy and Green Economy Act, 2009 – New Green Energy Act – Amendments to many other Acts: · Electricity Act · Ministry of Energy Act · Ontario Energy Board Act · Environmental Protection Act · Clean Water Act · Environmental Bill of Rights · Ontario Water Resources Act · Co-operative Corporations Act · Building Code Act · Planning Act · Ministry of Natural Resources Act · Conservation Authorities Act · Niagara Escarpment Planning and Development Act · Provincial Parks and Conservation Reserves Act · Public Lands Act – Repeals Energy Efficiency Act and Energy Conservation 13 Leadership Act 1127 Proposed Legislative Changes⇠ · Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 1128 First Nations and Métis Participation in Electricity Sector⇠ · Act to be interpreted consistent with s. 35 of Constitution Act · Minister may direct consultation in relation to Ontario Power Authority activities · Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 1129 Feed-in Tariffs⇠ · Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 1130 Smart Grid⇠ · Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation · Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid · Government may make regulations on: – Timeframes for smart grid development – Roles and responsibilities – Communications standards 17 1131 System Connection⇠ · Transmitters and distributors must connect renewable energy facilities that – Make a written request for connection; and – Meet all technical, economic and other relevant requirements · Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements · Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 1132 System Connection⇠ · Regulations may require timelines for connection assessments · Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 1133 Proposed Approvals⇠ · Renewable Energy Facilitation Office – Ministry of Energy and Infrastructure office – Led by Renewable Energy Facilitator – Facilitate renewable energy development – Information and resource hub · Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 1134 Proposed Approvals⇠ · Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation · Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 1135 Other Proposed Changes⇠ · Distributors and municipalities may own some types of generation ( 10MW) · Provides for renewable energy co-operatives · Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees · Distributors can choose between conservation program they develop with OEB approval and OPA program 22 1136 Other Proposed Changes⇠ · Cost of distributor conservation program to be recovered through global adjustment · Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner · Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 1137 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 1138 Introduction to FIT Programs⇠ · What is a Feed-in Tariff (FIT) Program? · Objectives of FIT Program · Experience in other jurisdictions · Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 1139 Introduction to FIT Programs⇠ What is a FIT Program?✓ · Generators of renewable energy – from homeowners to large developers – are paid a reasonable price for the electricity they produce over the term of the contract · Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable energy supply technologies⌫ 26 1140 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ · Open to various renewable energy supply technologies – Wind – Waterpower – Solar PV – Biomass technologies · Different prices for different technologies and project sizes · Long-term contracts · Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term · Opportunities for promoting community-based and Aboriginal projects 27 1141 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ · Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions · Simpler method to procure and develop generation · Create new green industries through new investment and job creation · Provide incentives for investment in renewable energy technologies 28 1142 Experience in Other Jurisdictions⇠ · 46 jurisdictions have adopted some form of a FIT Program · More than half have been enacted since 2002 · 19 EU Countries have adopted FIT program 29 1143 Experience in Other Jurisdictions⇠ 30 Year Cumulative Number 1978 1 United States (no longer in place)⌘ 1990 2 Germany⌘ 1991 3 Switzerland⌘ 1992 4 Italy⌘ 1993 6 India Denmark⌘ 1994 8 Greece Spain⌘ 1997 9 Sri Lanka⌘ 1998 10 Sweden⌘ 1999 13 Portugal, Norway, Slovenia⌘ 2000 13 --- 2001 15 France, Latvia⌘ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌘ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌘ 2004 34⌘ Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh⌘ (India)⌘ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌘ 2006 44 Ontario (RESOP), Argentina, Thailand⌘ 2007 46 South Australia (Australia), Croatia⌘ Countries/States/Provinces Added That Year Source: REN21 2006⇣ 1144 US Proposed Legislation⇠ · Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program · Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 1145 US Proposed Legislation⇠ · A Federal Bill was introduced in May 2008 · ‘US Renewable Energy Jobs and Security Act’ – · Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20year contracts 3. rate recovery through a regionally partitioned national system benefits charge · Pricing – Bill proposes minimum prices – Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 1146 International Energy Agency Report, 2008⇠ · “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” · “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 1147 Germany⇠ Renewable Energy Sources Act 2004✓ · Guarantee of purchase at a fixed rate for 20 years · Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 1148 Germany⇠ · Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country · Prices and rules set by national law 35 1149 Germany⇠ 36 · 30,893 MW renewable electricity capacity installed · 20,622 MW wind capacity installed; 2,831 MW solar PV · About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 1150 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range 30 kW⌘ EU cents/kWh Cdn cents/kWh (1.61) 43.01 69.23 > 30 kW 100 kW⌘ 40.36 65.85 > 100 kW 1000 kW⌘ 39.90 63.71 33.00 53.11 25.01 51.41 > 1000 kW⌘ Ground mounted Solar PV Any size⌘ On-shore Wind Any size (*based on resource differentiated tariffs)⌘ 9.22 5.02 14.81 8.08 Off-shore Wind Any size (*based on resource differentiated tariffs)⌘ 13.00 3.50 20.92 5.63 Waterpower (*new facilities)⌘ 500 kW⌘ > 500 kW 2 MW Biomass/ biogas 5 MW⌘ 150 kW⌘ 20.39 8.65 13.92 7.65 12.31 11.67 18.78 > 150 kW 500 kW⌘ 9.18 14.78 > 500 kW 5 MW⌘ 8.25 13.28 20 MW⌘ 7.79 12.54 9.00 14.49 6.16 9.91 > 5 MW Landfill gas 2 MW⌘ 12.67 500 kW⌘ > 500 kW 5 MW⌘ 37 1151 Spain⇠ · Framework set out in law and details set out in Royal Decree (regulation) · FIT grants priority access to the grid and priority dispatch · Special Regime Control Centre (SRCC) oversees reliability · Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 1152 Spain⇠ · National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives · Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 1153 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. 3. Pre-register the installation in the federal Within 1 month ‘Administrative Registry of Production of Electricity under Special System’ 4. Request a contract from the local distributor Within 1 month 5. Definitive registration in the national Register Within 1 month 40 1154 Spanish FIT prices⇠ Technology Euro cent/kWh Cdn cent/kWh (1.61) <20 kW 34.00 54.72 <200 kW 33.00 53.11 >200 kW 32.00 51.51 Ground-mounted Systems- Any size⌘ 32.00 51.51 Wind Onshore – Any size 7.58 12.18 Hydro <10 MW 7.80 12.55 <50 MW 2.10 (on top of market price) 3.38 Biogas (biodigester gas)⌘ <500 kW 13.50 21.74 >500 kW 10.00 16.10 Biomass (energy Crops, forestry, waste, Agriculture, waste⌘ <2 MW 12.99-16.42 (depending on technology) 20.91 – 26.43 >2 MW 10.75-15.15 17.31 – 24.38 Landfill gas Any size 8.26 13.29 Solar PV Capacity Range 41 1155 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 1156 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 1157 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ · Projects < 500kW will be subject to a simpler, streamlined process · The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 1158 Proposed Application Process 1. Submit OPA FIT Application with pre-requisites May re-submit with complete 10 MW) and waterpower (> 50MW) 58 1172 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Evidence of Site Access · – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan · e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval · Requirement is subject to details of Renewable Energy Approval process 59 1173 Proposed Eligibility Requirements⇠ Application Requirements✓ · FIT project developers must provide to the OPA: – Details of proposed project connection point · Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee · $500 per MW of proposed Contract Capacity (maximum $5,000) · – $500 minimum Application Fee Application Security · Solar PV: $20,000/MW · Other technologies: $10,000/MW · Community-Based or Aboriginal Projects: $5,000/MW 60 1174 Proposed Eligibility Requirements⇠ Application Requirements✓ · Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 1175 Sarah Simmons↵ From: Sarah Simmons Sent: March-17-09 5:59 PM To: Jason Chee-Aloy Cc: Richard Duffy; Cindy Roks; Sheri Bizarro; Kevin Devitt; Patricia Lightburn Subject: QA for LDC Event March 23 - v1.doc Attachments: QA for LDC Event March 23 - v1.doc <> Pls see attached. The original doc is saved here: N:\Procurement\Domestic Supply\Feed In Tariff (FIT)\Communications\FAQs, Q&As Cheers, Sarah Simmons Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email 1176 1 Q&A for LDC Event – March 23rd 1. What is the procurement process to ensure renewable energy supply uptake? The proposed Feed-in Tariff program will be the primary method for procuring⇢ renewable energy supply in Ontario. 2. What is a Feed-In-Tariff (FIT) and how does it work?, A feed-in-tariff is a standard price to promote the development of community-based⇢ and large commercial renewable energy projects. It guarantees market-viable prices for energy generated from renewable energy sources, such as solar, wind, water, biogas, biomass, and landfill gas, and it provides⇢ a reasonable rate of return for projects of different types and sizes. A feed-in-tariff helps spark new investment in renewable energy generation by⇢ offering proponents easier access to financing and easier access to the energy grid, and a streamlined approvals process.⇢ 3. What prices will be paid to future constructed renewable energy supply? If the proposed Green Energy Act is passed, future renewable energy projects will be⇢ eligible to receive an applicable feed-in tariff. The OPA’s proposed FIT regime was⇢ recently released by the OPA. The proposed FIT payment schedule is expected to⇢ be refined through the OPA’s Stakeholder Engagement Session. 4. What factors are being considered in setting a tariff rate?, The proposed FIT pricing model is based on project costs plus a reasonable rate of return on equity. Prices account for the following components: o Capital costs⇢ o Operating and maintenance costs⇢ o Connection costs⇢ o Reasonable rate of return on equity⇢ Project cost information was developed from a broad range of sources, with a⇢ preference to recent cost estimates from reliable sources with transparent⇢ assumptions. These can be updated when necessary. 5. Can LDCs and municipalities qualify for the FIT prices?, Yes, eligible LDC and municipal projects can receive FIT pricing for projects of up to⇢ 10 MW in capacity. 6. Who pays for the connection cost on transmission and distribution? Direct connection costs are the responsibility of the generator and the costs of a⇢ typical connection are reflected in the feed-in tariff price. The ratepayer will be⇢ 1177 2 responsible for the costs of upgrading the distribution connected projects, based on⇢ an economic test. 7. Who is responsible for electricity procurement under a FIT program?, The Ontario Power Authority (OPA) will lead the implementation of Ontario’s proposed Feed-in Tariff (FIT) Program. The OPA will co-ordinate with other energy agencies like the Ontario Energy Board⇢ (OEB) and the Independent Electricity System Operator (IESO). The OPA is starting to engage LDCs regarding the implementation and⇢ administration of certain aspects of the proposed FIT program. 8. What renewable energy projects will be eligible under the FIT program? Renewable energy projects such as solar, wind, waterpower, biogas, biomass, and⇢ landfill gas will be eligible. 9. What roles are proposed for the LDCs under the proposed Green Energy Act? LDCs will have the opportunity to own projects up to 10MW in size. The LDCs will have responsibilities with respect to the development of distribution⇢ system to enable uptake of renewable energy supply. 10. Do the proposed FIT program rules specifically address micro-generation, procurement?, The draft program rules anticipate a streamlined process developed for residential⇢ projects of 10kW and under. This proposed program will is referred to as the Home⇢ FIT program. 11. What will the Home REFIT program entail? The Home REFIT program will be available to for renewable projects that are both 10⇢ kW and under and that are located on a residential property. Further, we expect that eligibility for the Home REFIT program will be limited to Residential Generators that are the same as the LDC load customer. We expect that the contracting process will⇢ align closely with the LDC current connection process for micro-generators.⇢ 12. Will the LDCs be expected to take on more responsibility with respect to, “queue exempt” generators and to micro-generators?, The OPA will be asking the LDCs to have a greater involvement in the contracting⇢ process for the Home REFIT program, and will be potentially asking for greater⇢ involvement in the development of a contracting process for all queue exempted⇢ projects, and for micro-generators not eligible for the Home REFIT program. The⇢ level of responsibility will be negotiated in consultation with the LDCs. 1178 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: March-18-09 8:51 AM↵ To: Richard Duffy↵ Subject: FOR APPROVAL: 10026↵ FOR APPROVAL TO POST: SUBJECT: 9% Degression of Solar PV - Clarification QUESTION: With regard to the automatic degression of Solar PV Tariff prices by 9% every 100MW; could you please clarify this? Specifically: 1. Does the tariff decrease once 100MW of solar FIT contracts have been signed, or commissioned? 2. Does the tariff decrease across all differentiated categories simultaneously, or each individually? RESPONSE: Under the draft FIT price schedule, the 9% automatic price degression is only applicable for Ground Mounted Solar PV. The intent is for that every 1 00 MW of contracts awarded to Ground' Mounted Solar PV, the FIT price will decrease by 9%. All other PV prices will be subject to' regular review, but will not be subject to an automatic degression based on capacity. 1179 Cindy Roks↵ From: Cindy Roks Sent: March-18-09 11:35 AM To: Richard Duffy Subject: ID: 10066 / March 17 webinar Q Q: Are the FIT prices for the types of renewable electricity fixed in stone or are there ways to provide input to get an adjustment to these rates? A: The FIT prices that are posted are proposed prices. Input would be welcomed through theses Stakeholder⌧ Engagement Sessions. According to the draft schedule, the session for FIT pricing will be held on April 7, 2009.⌧ Participants are welcome to participate via the web conferencing tool or by telephone. Proponents can also make a⌧ submission using the online tool.✏ 1180 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-18-09 2:50 PM↵ To: Jason Chee-Aloy↵ Cc: Patricia Lightburn↵ Subject: QA for LDC Event March 23 - v1.doc↵ Attachments: QA for LDC Event March 23 - v1.doc↵ See the last three questions added - Q13, Q14, Q15.⇠ Thoughts?⇠ Sarah Simmons↵ Analyst⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St. W. Suite 1600⇠ Toronto , ON , M5H 1T1⇠ Tel 416.969.6213⇠ Fax 416.967.1947⇠ www.powerauthority.on.ca⇠ P please consider the environment before printing this email↵ 1181 1 Q&A for LDC Event – March 23rd 1. What is the procurement process to ensure renewable energy supply uptake? The proposed Feed-in Tariff program will be the primary method for procuring⇢ renewable energy supply in Ontario. 2. What is a Feed-In-Tariff (FIT) and how does it work?, A feed-in-tariff is a standard price to promote the development of community-based⇢ and large commercial renewable energy projects. It guarantees market-viable prices for energy generated from renewable energy sources, such as solar, wind, water, biogas, biomass, and landfill gas, and it provides⇢ a reasonable rate of return for projects of different types and sizes. A feed-in-tariff helps spark new investment in renewable energy generation by⇢ offering proponents easier access to financing and easier access to the energy grid, and a streamlined approvals process.⇢ 3. What prices will be paid to future constructed renewable energy supply? If the proposed Green Energy Act is passed, future renewable energy projects will be⇢ eligible to receive an applicable feed-in tariff. The OPA’s proposed FIT regime was⇢ recently released by the OPA. The proposed FIT payment schedule is expected to⇢ be refined through the OPA’s Stakeholder Engagement Session. 4. What factors are being considered in setting a tariff rate?, The proposed FIT pricing model is based on project costs plus a reasonable rate of return on equity. Prices account for the following components: o Capital costs⇢ o Operating and maintenance costs⇢ o Connection costs⇢ o Reasonable rate of return on equity⇢ Project cost information was developed from a broad range of sources, with a⇢ preference to recent cost estimates from reliable sources with transparent⇢ assumptions. These can be updated when necessary. 5. Can LDCs and municipalities qualify for the FIT prices?, Yes, eligible LDC and municipal projects can receive FIT pricing for projects of up to⇢ 10 MW in capacity. 6. Who pays for the connection cost on transmission and distribution? Direct connection costs are the responsibility of the generator and the costs of a⇢ typical connection are reflected in the feed-in tariff price. The ratepayer will be⇢ 1182 2 responsible for the costs of upgrading the distribution connected projects, based on⇢ an economic test. 7. Who is responsible for electricity procurement under a FIT program?, The Ontario Power Authority (OPA) will lead the implementation of Ontario’s proposed Feed-in Tariff (FIT) Program. The OPA will co-ordinate with other energy agencies like the Ontario Energy Board⇢ (OEB) and the Independent Electricity System Operator (IESO). The OPA is starting to engage LDCs regarding the implementation and⇢ administration of certain aspects of the proposed FIT program. 8. What renewable energy projects will be eligible under the FIT program? Renewable energy projects such as solar, wind, waterpower, biogas, biomass, and⇢ landfill gas will be eligible. 9. What roles are proposed for the LDCs under the proposed Green Energy Act? LDCs will have the opportunity to own projects up to 10MW in size. The LDCs will have responsibilities with respect to the development of distribution⇢ system to enable uptake of renewable energy supply. 10. Do the proposed FIT program rules specifically address micro-generation, procurement?, The draft program rules anticipate a streamlined process developed for residential⇢ projects of 10kW and under. This proposed program will is referred to as the Home⇢ FIT program. 11. What will the Home REFIT program entail? The Home REFIT program will be available to for renewable projects that are both 10⇢ kW and under and that are located on a residential property. Further, we expect that eligibility for the Home REFIT program will be limited to Residential Generators that are the same as the LDC load customer. We expect that the contracting process will⇢ align closely with the LDC current connection process for micro-generators.⇢ 12. Will the LDCs be expected to take on more responsibility with respect to, “queue exempt” generators and to micro-generators?, The OPA will be asking the LDCs to have a greater involvement in the contracting⇢ process for the Home REFIT program, and will be potentially asking for greater⇢ involvement in the development of a contracting process for all queue exempted⇢ projects, and for micro-generators not eligible for the Home REFIT program. The⇢ level of responsibility will be negotiated in consultation with the LDCs. 1183 3 13. What is expected in terms of uptake for roof-top solar PV?, We are anticipating gradual, but significant, uptake for roof-top solar PV. The⇢ number of roof-top installations could reach 1 00,000 by the early 2020’s. The majority of these installations would likely be micro-scale projects (e.g. 10 kW). 14. Why are solar PV prices so high?, Solar PV prices are higher than the prices for other technologies because of the high⇢ costs to purchase solar PV systems. Technologies associated with solar PV are still⇢ rapidly advancing and the current market is small. The draft FIT prices are designed⇢ to kick-start the solar PV industry in Ontario. With regular price reductions over the⇢ coming years, the FIT price will decrease to reflect technological advances and⇢ growing market supply. 15. Why is an automatic price reduction for Ground Mounted Solar PV? The costs associated with solar PV are still high compared to other technologies,⇢ therefore the FIT that would be required is relatively high compared to other⇢ technologies. The ‘capacity triggered’ automatic price reduction is designed help reduce customer rate impact. 1184 Cindy Roks↵ From: Cindy Roks↵ Sent: March-19-09 12:58 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10066 / March 17 webinar Q↵ Q: Are the FIT prices for the types of renewable electricity fixed in stone or are there ways to provide input to get an adjustment to these rates? A: The FIT prices that are posted are proposed prices. Input would be welcomed through the Stakeholder⇠ Engagement Sessions. According to the draft schedule, the session for FIT pricing will be held on April 7, 2009.⇠ Participants are welcome to participate via the web conferencing tool or by telephone. Proponents can also make a⇠ submission using the online tool. 1185 Cindy Roks↵ From: Cindy Roks↵ Sent: March-19-09 4:06 PM↵ To: Richard Duffy↵ Subject: FW: 10075 / Tuesday, March 17↵ Q: It seems likely that there will be more than 1 00 MW of solar applications during the Initialization Period. How will" it be handled to decide who gets the 44.3 cents for the first 1 00 MW, and so forth with each 9% reduction?" Presumably there will be several hundred MW of solar applications of Legacy Projects, let alone new applications." Also, there was some talk during the March 17th Stakeholder session that RESOP contracts might be able to apply program. This seems unfair particularly in the case of solar, where they could apply to get the 44.3 cent" subsidy, but then fall back on a 42 cent subsidy under RESOP if they were not in the first 1 00 MW of applications." for the FIT Therefore, even ignoring all new applications and all RESOP applications, there will presumably be an issue with the% sheer volume of Legacy projects applying. It seems unfair that some Legacy projects will receive 44.3 cents, while" some could receive 3 or 4 iterations down on the 9% decrease. I think it's pretty safe to say that solar will not be" economical once 1 or 2 iterations are reached. Perhaps decreasing the size from 1 0 MW would be in order to allow" more Legacy projects to connect. Another suggestion is to put a reduction on solar projects on a per developer" basis. For each subsequent 1 0 MW project a developer contracts, the rate is 9% lower. This would allow wider" industry participation and contribute towards making Ontario a hotbed for solar. Ultimately though, I don't think" there should be a reduction whatsoever. Solar is going to become an enormous industry with huge manufacturing" implications, and I think RE FIT is really missing the boat on this one. When you look at what Germany has done in% becoming the world solar leader in terms of innovation and manufacturing, I am wondering why Ontario is shying away from this. I think it is unwise to skip out on becoming an industry leader in a booming manufacturing industry" just to save some money on subsidies now. A: Please refer to slide #45 of Session 1: http://www.powerauthority.on.ca/fit/Storage/29/10117_Session_1_Presentation_- _March_17.pdf. describes at a high level the proposed process for awarding FIT contracts. Under the draft This slide" FIT pricing schedule, an automatic 9% degression would occur for every 100 MW of ground mounted solar PV that enters into a FIT contract.% Existing OPA contracts are expected to continue with the terms and conditions of their contracts, and as described in the draft rules of the proposed FIT program, would not be eligible for a FIT contract.% With respect to your comment regarding a degression on a “ per developer basis ” , we will consider this suggestion." Due to rapid advancements in solar technology, the OPA is cautious about pricing ground- mounted PV too high, due to potential impacts on customer rates.% 1186 Richard Duffy From: Richard Duffy Sent: March-19-09 6:36 PM To: Sheri Bizarro Subject: RE: FOR APPROVAL: ID: 10024 Hi Sheri, OK to post as edited below. Richard From: Sheri Bizarro↵ Sent: Wednesday, March 18, 2009 8:47 AM↵ To: Richard Duffy↵ Subject: FOR APPROVAL: ID: 10024↵ FOR APPROVAL TO POST: SUBJECT: Parking lot structure PV mounts⇢ QUESTION: Will we be able to consider a parking structure - either existing or purpose built, that allow for mounting of PV panels or technologies on top as other than a ground mount as the structure is covering an already used area of land, i.e., parking of vehicles.⇠ These structures become part of the parking lot and cover otherwise under used real estate and very often with good solar exposure. What rate would apply?⇠ Although the terms “ Rooftop ” and “ Ground Mounted ” are not yet defined in RESPONSE: the OPA ’s draft FIT Program Rules that were released March 1 3, 2009, the intent of the draft FIT⇢ Price Schedule is that all non-rooftop mounted Solar PV will receive the rate for Ground Mounted Solar PV. Given the short description of the project, it can be assured that this project would be⇢ eligible to receive the rate for Ground Mounted Solar PV. Should the manner of installation as you⇢ have described be included in the subsequent definition for “ Rooftop ” Solar PV, the applicable “ Rooftop ” Solar PV rate will apply.⇢ 1187 Richard Duffy From: Richard Duffy Sent: March-19-09 6:39 PM To: Sheri Bizarro Subject: RE: FOR APPROVAL: 10026 OK to post. From: Sheri Bizarro↵ Sent: Wednesday, March 18, 2009 8:51 AM↵ To: Richard Duffy↵ Subject: FOR APPROVAL: 10026↵ FOR APPROVAL TO POST: SUBJECT: 9% Degression of Solar PV - Clarification QUESTION: With regard to the automatic degression of Solar PV Tariff prices by 9% every 100MW; could you please clarify this? Specifically: 1. Does the tariff decrease once 100MW of solar FIT contracts have been signed, or commissioned? 2. Does the tariff decrease across all differentiated categories simultaneously, or each individually? RESPONSE: Under the draft FIT price schedule, the 9% automatic price degression is only applicable for Ground Mounted Solar PV. The intent is for that every 1 00 MW of contracts awarded to Ground' Mounted Solar PV, the FIT price will decrease by 9%. All other PV prices will be subject to' regular review, but will not be subject to an automatic degression based on capacity. 1188 Richard Duffy From: Richard Duffy Sent: March-19-09 6:59 PM To: Sheri Bizarro Subject: RE: FOR APPROVAL: ID: 10034 Hi Sheri, OK to post as edited below. Richard From: Sheri Bizarro↵ Sent: Wednesday, March 18, 2009 9:19 AM↵ To: Richard Duffy↵ Subject: FOR APPROVAL: ID: 10034↵ FOR APPROVAL TO POST: SUBJECT: Solar < 1 0 kW◆ QUESTION: Will a pole mounted solar system that is attached to the meter of a house be considered to be roof mounted (therefore $0.80/ kWh), as it is located on the residential property and the resident finds this the only way to get solar on their property? A large number of roofs do not face south. Although the terms “ Rooftop ” and “ Ground Mounted ” are not yet defined in the ANSWER: OPA ’s draft FIT Program Rules that were released March 1 3, 2009, the intent of the draft FIT◆ Price Schedule is that all non-rooftop mounted Solar PV will receive the rate for Ground Mounted Solar PV. Given the short description of the project, it can be assured that this project would be◆ eligible to receive the rate for Ground Mounted Solar PV. Should the manner of installation as you◆ have described be included in the subsequent definition for “ Rooftop ” Solar PV, the applicable “ Rooftop ” Solar PV rate will apply.◆ 1189 Richard Duffy From: Richard Duffy Sent: March-19-09 7:32 PM To: Cindy Roks Subject: RE: 10066 / March 17 webinar Q OK to post as edited below.⇣ From: Cindy Roks↵ Sent: Wednesday, March 18, 2009 11:35 AM↵ To: Richard Duffy↵ Subject: ID: 10066 / March 17 webinar Q↵ Q: Are the FIT prices for the types of renewable electricity fixed in stone or are there ways to provide input to get an adjustment to these rates? A: The draft FIT Price Schedule posted is proposed pricing only. Input would be welcomed through the Stakeholder Engagement Sessions (SES). According to the draft SES schedule, the session for FIT pricing will be held on April 7, 2009. Participants are welcome to participate via the web conferencing tool or by telephone. Proponents can also make a submission using the online tool.⇣ 1190 Richard Duffy From: Richard Duffy Sent: March-19-09 9:10 PM To: Cindy Roks Subject: RE: ID: 10025 / Monday, March 16 OK to post. From: Cindy Roks↵ Sent: Thursday, March 19, 2009 12:58 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10025 / Monday, March 16↵ Q: How are the FIT prices determined for small wind turbine installations? What assumptions have been made when calculating the 13.5 ¢ / kWh for onshore? Is there any consideration of the type of wind turbine since Vertical Axis (VAWT) and Horizontal Axis Wind turbines differ in cost and efficiency? A: The draft FIT prices were derived based on costs plus a reasonable rate of return. The OPA will post a report that th describes the cost assumptions prior to the stakeholder engagement session on FIT pricing (expected April 7 ). As for VAWT, this technology was not explicitly considered due to limited available of data with respect to expected costs. 1191 Richard Duffy From: Richard Duffy Sent: March-19-09 9:26 PM To: Cindy Roks Subject: RE: 10075 / Tuesday, March 17 OK to post. From: Cindy Roks↵ Sent: Thursday, March 19, 2009 4:06 PM↵ To: Richard Duffy↵ Subject: FW: 10075 / Tuesday, March 17↵ Q: It seems likely that there will be more than 1 00 MW of solar applications during the Initialization Period. How will" it be handled to decide who gets the 44.3 cents for the first 1 00 MW, and so forth with each 9% reduction?" Presumably there will be several hundred MW of solar applications of Legacy Projects, let alone new applications." Also, there was some talk during the March 17th Stakeholder session that RESOP contracts might be able to apply for the FIT program. This seems unfair particularly in the case of solar, where they could apply to get the 44.3 cent" subsidy, but then fall back on a 42 cent subsidy under RESOP if they were not in the first 1 00 MW of applications." Therefore, even ignoring all new applications and all RESOP applications, there will presumably be an issue with the sheer volume of Legacy projects applying. It seems unfair that some Legacy projects will receive 44.3 cents, while" some could receive 3 or 4 iterations down on the 9% decrease. I think it's pretty safe to say that solar will not be" economical once 1 or 2 iterations are reached. Perhaps decreasing the size from 1 0 MW would be in order to allow" more Legacy projects to connect. Another suggestion is to put a reduction on solar projects on a per developer" basis. For each subsequent 1 0 MW project a developer contracts, the rate is 9% lower. This would allow wider" industry participation and contribute towards making Ontario a hotbed for solar. Ultimately though, I don't think" there should be a reduction whatsoever. Solar is going to become an enormous industry with huge manufacturing" implications, and I think RE FIT is really missing the boat on this one. When you look at what Germany has done in becoming the world solar leader in terms of innovation and manufacturing, I am wondering why Ontario is shying away from this. I think it is unwise to skip out on becoming an industry leader in a booming manufacturing industry" just to save some money on subsidies now. A: Please refer to slide #45 of Session 1: http://www.powerauthority.on.ca/fit/Storage/29/10117_Session_1_Presentation_- _March_17.pdf. describes at a high level the proposed process for awarding FIT contracts. Under the draft This slide" FIT pricing schedule, an automatic 9% degression would occur for every 100 MW of ground mounted solar PV that enters into a FIT contract. Existing OPA contracts are expected to continue with the terms and conditions of their contracts, and as described in the draft rules of the proposed FIT program, would not be eligible for a FIT contract. With respect to your comment regarding a degression on a “ per developer basis ” , we will consider this suggestion." Due to rapid advancements in solar technology, the OPA is cautious about pricing ground- mounted PV too high, due to potential impacts on customer rates. 1192 Jason Chee-Aloy From: Jason Chee-Aloy Sent: March-20-09 8:16 AM To: Emay Cowx; Jim MacDougall; Richard Duffy; Sadikman, Jacob; 'Smith, Elliot'; 'rcary@niagara.com'; 'jdalton@poweradvisoryllc.com'; Susan Kennedy; Michael Lyle; Patricia Lightburn; Bob Chow; Bing Young; Loretta Jackman Cc: Claire Willison Subject: Final FIT Presentation for March 24 Attachments: FIT Stakeholder Engagement - Session 2 (Final).PPT Folks,⌥ Attached is the final presentation for the March 24 stakeholder consultation session.⌥ Emay, we ’ re good to have Heidi do ‘ pretty ’ and then post before the RESIT receives the presentation before we post.⌥ the end of today. Patricia, please ensure⇠ Loretta, this presentation will help highlight the key actions the OPA will need to undertake from a business process point of view.⌥ Mike and Susan, this presentation should help clarify some coordination points between assessments within the FIT Program and LDC/transmitter requirements within OEB codes. It should also help clarify⇠ areas we need to discuss with the OEB.⌥ Thanks,⌥ Jason 1193 March 24, 2009 Proposed Feed-in Tariff Project Eligibility, Application⇢ Requirements, and Application Review⇢ Stakeholder Engagement – Session 2⇢ 1194 March 24 – Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA)⇢ 9:10 – 10:30 Project Eligibility and Application Requirements⇢ 10:30 – 10:40 Coffee Break⇢ 10:40 – 12:00 Application Review and FIT Contract Execution⇢ 12:00 –1:00 Lunch⇢ 1:00 – 2:20 Economic Test Overview, FIT Production Line and⇢ FIT Reserve⇢ 2:20 – 2:30 Coffee Break⇢ 2:30 – 3:10 Program Rules and Price Schedule Change⇢ Management⇢ 3:10 – 3:50 Initialization Period⇢ 3:50 – 4:00 Adjourn⇢ 2⇥ 1195 Part I: Application Process to FIT Contract • Project Eligibility Requirements – – s. 2 Basic Eligibility Requirements s. 2.1⇥ Incremental Projects s. 2.2⇥ • Application Requirements s. 3⇥ • Application Review and Acceptance s. 4.1⇥ – – • Review of Mandatory Requirements s. 4.2⇥ Connection Availability Management s. 4.3⇥ FIT Contract Offer and Acceptance s. 4.6⇥ 3⇥ 1196 Basic Eligibility Requirements Proposed generating facility must be:⇥ • Renewable Generating Facility⇥ –⌅ Wind⇥ –⌅ Waterpower⇥ –⌅ Solar PV⇥ –⌅ Bio-energy (i.e., biomass, bio-gas, or landfill gas)⇥ • • • Geographically located in Ontario⇥ Electrically connected to the Ontario grid⇥ No more than 10 MW for solar PV or 50 MW for⇥ waterpower⇥ • • • New or Incremental Projects⇥ Metered appropriately (to be discussed April 21)◆ Must not have (or had) a prior contract⇥ 4⇥ 1197 Renewable Generating Facility (#1 31 ) • Owned or leased, and operated for the Term by the⇥ Supplier⇥ • Uses one or more Renewable Fuels (#130)⇥ – If uses more than one Renewable Fuel, lowest⇥ Feed-in Tariff (FIT) price applies⇥ – Certain Renewable Fuels permit a small amount⇥ of non-renewable fuel to be used:⇥ • e.g., Renewable Biomass (#128) permits 510% of non-renewable fuel for start-up,⇥ stabilization, etc.⇥ 5⇥ 1198 Incremental Projects (s. 2.2) • Two types of Incremental Projects:⇥ – Expansions (#58)⇥ • – An addition of generating unit(s) which (i) is not a◆ replacement of existing Generating Equipment; (ii)◆ generates incremental Electricity; and (iii) does not◆ include any of the capacity available from the Existing◆ Generating Facility◆ Upgrades (#161)⇥ • “The refurbishment or replacement of Generating Equipment at an Existing Generating Facility with◆ equipment which provides better or improved◆ performance” • Must be owned or operated by an Applicant Related Person (#5) with respect to the owner of the Existing Generating Facility⇥ • • • Must share connection and metering with existing facility⇥ Only increase in capacity is eligible for FIT Contract⇥ Settlement is based on Incremental Project Ratio (#85)⇥ =⇥ increase in capacity⇥ total facility capacity⇥ 6⇥ 1199 Connected to the Ontario Grid • Projects must be connected to⇥ – – Distribution System,⇥ Independent Electricity System Operator (IESO)Controlled Grid, or⇥ – Host Facility (#77)⇥ • • May be a generator or a load⇥ Must be⇥ – Directly connected to Distribution System, or⇥ – Directly or indirectly connected to IESOControlled Grid⇥ • Certain parts of Ontario are not connected to the IESOControlled Grid and are therefore ineligible⇥ 7⇥ 1200 Application Materials (s. 3.1 ) • Application Fee⇥ – $500 per MW of proposed Contract Capacity⇥ (maximum $5,000) – $500 minimum Application Fee⇥ • Application Security⇥ – Solar PV: $20,000/MW⇥ – Other technologies: $10,000/MW⇥ – Eligible Community-Based or Aboriginal Projects:⇥ $5,000/MW⇥ • • • • IESO/Local Distribution Company (LDC) Authorization Letter⇥ Connection Details⇥ Email Address⇥ Must not have applied for Connection Impact⇥ Assessment/System Impact Assessment/Customer Impact⇥ Assessment (unless application was before March 14, 2009)⇥ 8⇥ 1201 Required Information (s. 3.2) • Renewable Energy Approval (REA)⇥ – • Pending finalization of REA application process⇥ Location (#96) access⇥ – Access Rights (#1)⇥ • • Must own or lease the Location, or⇥ Agreement conditional only on entering into FIT⇥ Contract⇥ – – Crown land⇥ Reserve land⇥ 9⇥ 1202 Required Information • Resource Assessment⇥ – Wind data (if • • • – Meteorological tower within 5 km of Project⇥ 6 months of data⇥ Meteorologist⇥ Water data⇥ • • – ⇤1 MW)⇥ 1 year of stream flow data related to Project⇥ 10 years of highly correlated stream flow data⇥ Bio-resource Supply Plan⇥ • Types, supplier(s) and thermal properties of⇥ proposed Renewable Fuel(s)⇥ – No requirement for solar PV⇥ 10⇥ 1203 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120 days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 11⇥ 1204 Application Process (s. 4.1 ) • • Applicant submits required forms electronically⇥ Application is issued a Time Stamp (#157)⇥ – Time Stamp establishes relative priority of the⇥ Application⇥ • Hard copy materials (e.g., Application Fee,⇥ Application Security) must be received by OPA within⇥ 3 Business Days⇥ – – Application Fee: certified cheque or bank draft⇥ Application Security: certified cheque, bank draft or letter of credit in specified form⇥ • If hard copy materials are not received in time, Application is rejected⇥ 12⇥ 1205 March 24 – Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA)⇢ 9:10 – 10:30 Project Eligibility and Application Requirements⇢ 10:30 – 10:40 Coffee Break⇢ 10:40 – 12:00 Application Review and FIT Contract Execution⇢ 12:00 –1:00 Lunch⇢ 1:00 – 2:20 Economic Test Overview, FIT Production Line⇢ and FIT Reserve⇢ 2:20 – 2:30 Coffee Break⇢ 2:30 – 3:10 Program Rules and Price Schedule Change⇢ Management⇢ 3:10 – 3:50 Initialization Period⇢ 3:50 – 4:00 Adjourn⇢ 13⇥ 1206 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 14⇥ 1207 Application Review and Acceptance Review of mandatory requirements (s. 4.2)⇥ • If rejected:⇥ – – – Application Security is returned⇥ Application Fee is forfeited⇥ Applications may be revised and re-submitted with new⇥ Application Fee⇥ • If accepted:⇥ – Queue Exempt Facilities (#123) proceed to Contract⇥ • As defined by Distribution System Code (DSC):⇥ – – • 500 kW if connected above 1 5 kV⌅ 250 kW if connected below 1 5 kV⌅ Other facilities proceed to Connection Availability⇥ Management⇥ • OPA may request clarification or additional information⇥ 15⇥ 1208 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 16⇥ 1209 Connection Resource Database (#33) • Connection Resource Database is a tool to evaluate available connection resources⇥ – • • Other uses⇥ • Provides guiding data and information to⇥ prospective applicants • Input to Economic Connection Test⇥ The Connection Resource Database takes into account⇥ – Existing ability to connect to transformer stations and⇥ feeders⇥ – – Confirmed Transmission Developments (#26)⇥ Facilities that have applied for Connection Impact Assessment (CIA) or System Impact Assessment (SIA)⇥ Will be available on OPA FIT website so Applicants can check connection resources before applying⇥ 17⇥ 1210 Transmission Developments • Confirmed Transmission Developments (#26)⇥ – Has all regulatory approvals necessary to⇥ commence construction, e.g.,⇥ • • • • OEB Leave to Construct, Environmental Assessment, or⇥ Other approvals as applicable⇥ Planned In-Service Transmission Developments⇥ (#114) means:⇥ – Confirmed Transmission Development, and⇥ – “Planned” to be in-service before the corresponding⇥ Commercial Operation Milestone Date⇥ 18⇥ 1211 Connection Availability Management (s. 4.3) • Applications that meet mandatory requirements are⇥ subject to the Connection Availability Management⇥ process⇥ • Ability to connect Projects is evaluated, considering:⇥ – – – • Connection Resource Database⇥ Planned In-Service Transmission Developments⇥ Prior Applications⇥ If assessment determines connection capacity is⇥ available or will be made available, Project is offered⇥ a FIT Contract⇥ 19⇥ 1212 Connection Alteration Proposals (s. 4.3(c)(ii)) • When assessing availability of connection capacity,⇥ OPA may suggest modifications to:⇥ – – – – • Contract Capacity,⇥ Connection Point,⇥ Distribution vs. transmission connection, and⇥ Other features as appropriate⇥ If Applicant accepts, OPA will offer FIT Contract for revised Project⇥ – Can submit an Application for an Incremental⇥ Project relating to any capacity that was forgone⇥ • If Applicant rejects Connection Alteration Proposal,⇥ Project will go to Economic Connection Test⇥ 20⇥ 1213 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 21⇥ 1214 Contract Offer and Acceptance (s. 4.6) • Applicant is sent an electronic Offer Notice⇥ – Applicant must print, execute and return FIT Contract⇥ along with Completion and Performance Security⇥ within 10 Business Days⇥ – OPA will return full Application Security within 5⇥ Business Days of receipt⇥ – If Applicant does not sign FIT Contract or provide Completion and Performance Security⇥ • Where the application did not go through the Economic Connection Test (i.e., connection⇥ capacity was immediately available), 25% of⇥ Application Security is drawn by the OPA for failing⇥ to sign contract⇥ • Otherwise, full Application Security is drawn by the OPA⇥ 22⇥ 1215 March 24 – Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA)⇢ 9:10 – 10:30 Project Eligibility and Application Requirements⇢ 10:30 – 10:40 Coffee Break⇢ 10:40 – 12:00 Application Review and FIT Contract Execution⇢ 12:00 –1:00 Lunch⇢ 1:00 – 2:20 Economic Test Overview, FIT Production Line⇢ and FIT Reserve⇢ 2:20 – 2:30 Coffee Break⇢ 2:30 – 3:10 Program Rules and Price Schedule Change⇢ Management⇢ 3:10 – 3:50 Initialization Period⇢ 3:50 – 4:00 Adjourn⇢ 23⇥ 1216 Part II: Deferred Contract Application Process • • • Overview of the Economic Connection Test s. 4.3⇥ FIT Production Line s. 4.4⇥ FIT Reserve s. 4.5⇥ Change Management⇥ • • Automatic Price Adjustments s. 5.2⇥ Amendments s. 8⇥ – – • Significant Program Amendments⇥ Threshold Price Amendments⇥ Initialization Period s. 11⇥ 24⇥ 1217 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 25⇥ 1218 Overview of Economic Connection Test • Economic Connection Test models the shared costs⇥ that result from the investments necessary to⇥ connect a Project⇥ • Three possible outcomes:⇥ i. Project can be immediately contracted (FIT⇥ Contract)⇥ ii. Cost of connecting Project is within economic⇥ threshold (FIT Production Line)⇥ iii. Cost of connecting Project exceeds economic⇥ threshold (FIT Reserve)⇥ 26⇥ 1219 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 27⇥ 1220 FIT Production Line (s. 4.4) Overview⇢ • FIT Production Line is a process to handle Projects whose⇥ shared connection costs are within the economic⇥ threshold of the Economic Connection Test⇥ • Projects in the FIT Production Line⇥ – Are intended to provide a meaningful input to⇥ transmission and distribution planning processes⇥ – Are relied upon by the OPA in planning (e.g., Integrated Power System Plan), therefore expected to⇥ be developed should connection capacity become⇥ available⇥ – Are checked every six months to see if they can be⇥ issued contracts⇥ – Preserve their Time Stamp⇥ 28⇥ 1221 FIT Production Line (s. 4.4) Procedure⇢ • Applicants are sent an “Economic Test Notice”, with two⌅ options:⇥ – Exit process with full return of Application Security⇥ – Return a signed “Production Line Confirmation”, with⌅ 10% of Application Security immediately becoming atrisk⇥ • Application Security mechanism necessary to⇥ ensure that ‘serious’ projects keep moving forward⌅ • Every time the Economic Connection Test is run, an⇥ additional 5% of the Application Security becomes at-risk⇥ • After 10 years, Applicant may leave or OPA may remove⇥ Applicant, with a full refund in either case⇥ 29⇥ 1222 FIT Production Line (s. 4.4) Possible Outcomes⇢ • As a result of newly available connection capacity,⇥ Applicant is offered a FIT Contract⇥ • Applicant withdraws, and OPA retains at-risk portion⇥ of Application Security⇥ • Applicant withdraws pursuant to one of the⇥ prescribed circumstances, and OPA returns full⇥ Application Security (discussed below in “Change⌅ Management” section)⌅ 30⇥ 1223 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · – w/in 60 days⇥ SIA – w/in 120⇥ days · Second Completion Security Payment $20,000/MW⇥ CIA Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities · · Renewable Energy Approval⇥ Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 31⇥ 1224 FIT Reserve (s. 4.5) • FIT Reserve is a process to handle Projects that⇥ exceed the economic threshold of the Economic⇥ Connection Test⇥ • Projects in the FIT Reserve⇥ – Are checked every six months to see if they can⇥ be moved to the FIT Production Line⇥ – • Preserve their Time Stamp⇥ OPA retains Application Security, but Applicant may⇥ withdraw at any time with full refund, but would forfeit⇥ Time Stamp⇥ • OPA can remove Projects after 10 years⇥ 32⇥ 1225 FIT Production Line vs. FIT Reserve FIT Production Line FIT Reserve⇢ Within Exceeds⇥ Time Stamp Preserved Preserved⇥ Entry Voluntary Voluntary⇥ Increasingly At-Risk Always Fully Refundable⇥ Applies Applies⇥ Input into Tx and Dx⇥ Preserve Time Stamp until⇥ Planning⇥ Economics Change⇥ Economic⇢ Threshold⇢ Application⇢ Security⇢ 10-Year Option Purpose⇢ 33⇥ 1226 Proposed Application Process 1.⇢ Submit OPA FIT⇥ Application with pre-requisites⇥ OPA to respond w/in 60 days whether FIT⇥ Contract is offered⇥ Application Fee: May re-submit with complete Target:⇥ No⇥ application⇥ Is application complete?⇥ 50¢/kW, up to a maximum of $5,000⇥ AND⇥ Application Security: (i) $20,000/MW for Solar PV⇥ (ii) $10,000/MW for Others⇥ (iii) $5,000/MW Community/Aboriginal Projects⇥ Yes⇥ Is this project⇥ Queue Exempt Facilities⇥ · · < 500 kW connected at > 15 kV⇥ < 250 kW connected at < 15 kV⇥ a queue Yes⇥ exempt facility⇥ ?⇥ No⇥ 2.⇢ OEB⇢ capacity available applications /⇥ or regulatory tx/dx approvals⇥ No⇥ 6.⇢ MEI, OPA,⇢ LDC, IESO⇢ input into plans,⇥ prioritization⇥ 10% of Application Security becomes non-refundable Meets Yes⇥ (i) $50,000/MW for Solar PV⇥ (iii) $5,000/MW Community/ Aboriginal Projects⇥ · · · Second Completion Security · · Renewable Energy Approval⇥ Payment $20,000/MW⇥ CIA – w/in 60 days⇥ SIA – w/in 120 days⇥ Economic required time⇥ milestones applied⇥ At 15 Months:⇥ Target:⇥ operation within Contract⇥ CIA/SIA completed⇥ applicable security⇥ Commercial OPA⇢ LDC/IESO⇢ FIT Contract with (ii) $20,000/MW for Others⇥ 5.⇢ 4.⇢ OPA⇢ Yes⇥ approved?⇥ 8.⇢ “FIT Production Line”⌅ 3.⇢ Is connection Facilities Equipment Supplier Agreement⇥ COD:⇥ · · · 2 years for Solar PV⇥ 3 years for Bioenergy and Wind 8 years for waterpower⇥ Connection Test?⇥ Application Security Returned Completion Security Returned⇥ No⇥ and increases over time⇥ 7.⇢ FIT Reserve for next planning cycle⇥ 34⇥ 1227 March 24 – Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA)⇢ 9:10 – 10:30 Project Eligibility and Application Requirements⇢ 10:30 – 10:40 Coffee Break⇢ 10:40 – 12:00 Application Review and FIT Contract Execution⇢ 12:00 –1:00 Lunch⇢ 1:00 – 2:20 Economic Test Overview, FIT Production Line⇢ and FIT Reserve⇢ 2:20 – 2:30 Coffee Break⇢ 2:30 – 3:10 Program Rules and Price Schedule Change⇢ Management⇢ 3:10 – 3:50 Initialization Period⇢ 3:50 – 4:00 Adjourn⇢ 35⇥ 1228 Change Management • With respect to Applications in the FIT Production Line⇥ and FIT Reserve, OPA is holding Application Security,⇥ which in some cases is partially non-refundable⇥ • FIT Program and Price Schedule expected to evolve over⇥ time based on Program Rules⇥ • As a result of Amendments (#2), Applicants may no longer⇥ want to participate in the FIT Program⇥ – Amendment means a change, revision or addition to⇥ the FIT Program, FIT Rules, form of FIT Contract or Price Schedule⇥ – • Amendments never affect executed FIT Contracts⇥ OPA recognizes that in some cases as a result of⇥ Amendments, Applicants withdrawing should be returned⇥ their full security⇥ 36⇥ 1229 Automatic Price Adjustment (s. 5.2) • For ground mounted solar PV, price is automatically⇥ adjusted once a certain aggregate capacity has been⇥ contracted (an “Automatic Price Adjustment”)⌅ – In the future, prices for other technologies may also be⇥ adjusted in this manner⇥ • • Does not affect any executed FIT Contracts⇥ An Automatic Price Adjustment can affect Applications that⇥ were submitted prior to its occurrence, either:⇥ – As a result of time spent in the FIT Production Line and⇥ FIT Reserve, or⇥ – If the adjustment occurred after the Time Stamp but before the Offer Notice⇥ • Mechanism provides relief to affected Applicants⇥ 37⇥ 1230 Automatic Price Adjustment (cont’d) • Upon the occurrence of an Automatic Price⇥ Adjustment, the OPA will:⇥ – – – Post notice on the FIT website⇥ Notify affected Applicants by email⇥ Refrain from sending out any Offer Notices⇥ affected by the adjustment for 10 Business Days⇥ – Provide 10 Business Days for Applicants to⇥ withdraw from the FIT Program with a full return of Application Security (including any amount that⇥ was previously at-risk)⇥ 38⇥ 1231 Program Amendments (s. 8) • The OPA will review the FIT Program every 2 years⇥ (a “Scheduled Program Review”)⌅ • Amendments may occur⇥ – – As a result of a Scheduled Program Review⇥ Outside of a Scheduled Program Review if critical⇥ • • • e.g., changes in laws, codes, etc.⇥ Amendments do not affect executed FIT Contracts⇥ The OPA may determine that an Amendment is a⇥ “Significant Program Amendment” for a class of⌅ Applicants⇥ – This automatically triggers certain relief⇥ 39⇥ 1232 Significant Program Amendments (s. 8.2) Notice⇢ • • Posted on FIT website⇥ Emailed to affected Applicants⇥ Within 30 days of the posting of a Significant⇢ Program Amendment, affected Applicants⇢ – May withdraw an Application from FIT Production⇥ Line,⇥ – – Decline to execute an offer of a FIT Contract, or⇥ Otherwise withdraw from FIT Program,⇥ and in all such cases OPA will return full Application⇥ Security⇥ 40⇥ 1233 Threshold Price Amendment (s 8.2(b)) • A reduction (or series of reductions) in applicable⇥ Contract Price >5% is a “Threshold Price⌅ Amendment”⌅ • A Threshold Price Amendment is automatically a⇥ Significant Program Amendment in relation to⇥ affected Applicants⇥ • If an Applicant does not take advantage of the relief⇥ offered, the lowered price becomes the baseline for calculating the next Threshold Price Amendment (if⇥ any)⇥ 41⇥ 1234 Special Relief (s. 8.2(d)) • In response to an Amendment that the OPA has not⇥ declared to be a Significant Program Amendment for an Applicant, such Applicant may apply for special⇥ relief within 10 Business Days⇥ • Must demonstrate to satisfaction of OPA that the⇥ Amendment causes a Material Adverse Effect (#98)⇥ • On this basis, OPA may grant relief to the Applicant,⇥ permitting it to withdraw with a full return of⇥ Application Security⇥ 42⇥ 1235 March 24 – Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA)⇢ 9:10 – 10:30 Project Eligibility and Application Requirements⇢ 10:30 – 10:40 Coffee Break⇢ 10:40 – 12:00 Application Review and FIT Contract Execution⇢ 12:00 –1:00 Lunch⇢ 1:00 – 2:20 Economic Test Overview, FIT Production Line⇢ and FIT Reserve⇢ 2:20 – 2:30 Coffee Break⇢ 2:30 – 3:10 Program Rules and Price Schedule Change⇢ Management⇢ 3:10 – 3:50 Initialization Period⇢ 3:50 – 4:00 Adjourn⇢ 43⇥ 1236 Program Initialization (s. 1 1 ) Guiding Principles⇢ • Respecting the expectations associated with the⇥ Distribution System Code “queue” process⌅ – OPA still considering approach for projects that⇥ were under development that had proposed to be⇥ connected to the transmission system (e.g., RES⇥ III participant projects)⇥ • Controlling a potential flood of Applications on⇥ program launch⇥ • Giving all interested parties a fair chance at⇥ accessing available connection resources⇥ – In certain regions of the province, demand for connection resources exceeds what is currently⇥ available 44⇥ 1237 Program Initialization • Initial Applications (i.e., Applications submitted during the⇥ Initialization Period) must meet all mandatory requirements or will be rejected⇥ – Rejected Initial Applications may be re-submitted following⇥ the end of the Initialization Period⇥ Categories of Initial Applications⇢ 1. Those with Legacy Connection Queue Positions (#94)⇥ – Projects for which an Application for a CIA was submitted⇥ to the applicable LDC prior to February 23, 2009 and was⇥ completed prior to the start of the Initialization Period⇥ – 2. Preserve their historical CIA-assigned time stamp⇥ All other Initial Applications⇥ – Assigned a Time Stamp through a random lottery⇥ 45⇥ 1238 Special Rules for Program Initialization (s. 1 1 .2) To give all interested parties a fair chance at accessing◆ available connection resources:◆ – Full Application Security at-risk if Applicant fails to⇥ execute a FIT Contract offered in the Initialization⇥ Period⇥ – – Each Project can only be submitted once⇥ Each Applicant Related Person may only submit one Project per transformer station⇥ – OPA may not achieve target processing times, but will⇥ advise Applicants of estimated timeline on the FIT⇥ website⇥ OPA still considering approach for projects that were⇥ under development that had proposed to be⇥ connected to the transmission system (e.g., RES III⇥ participant projects)⇥ 46⇥ 1239 Cindy Roks↵ From: Cindy Roks↵ Sent: March-20-09 11:42 AM↵ To: Richard Duffy↵ Subject: ID: 10120 / Tuesday, March 17 Webinar Q↵ Q: In comparison to Europe and their FIT . Would it not make sense for Ontario to follow with a higher price in order to attract more investers and solar manufacturers? asnd thereby reduce the cost in the long run. A: In many cases, the renewable energy resources in Ontario are better than in Europe . The best wind, solar and bioenergy resources in Ontario are largely untapped, whereas in Europe , the FIT pricing reflects that many of the best resources have already been contracted for. This means that the FIT price necessary to cover the generation costs while providing a reasonable rate of return is lower in Ontario than in Europe . Because the renewable resources are still widely available in Ontario, as compared to Europe , there is great potential for growth in this industry and this will help to attract investors and manufacturers. 1240 Cindy Roks↵ From: Cindy Roks↵ Sent: March-23-09 10:11 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10057 / Tuesday, March 17↵ Q: Is there any write up/report/summary on the assumptions and methods used to establish the price schedule⇠ A: The report will be made available shortly. We will ensure that it is posted prior to the Stakeholder Session on th April 7 , 2009, which is the session dedicated to the FIT pricing schedule.⇠ 1241 Sarah Simmons↵ From: Sarah Simmons' Sent: March-23-09 2:08 PM' To: Patricia Lightburn' Subject: FIT Pricing in Germany and Spain 2008-11-03.ppt' Attachments: FIT Pricing in Germany and Spain 2008-11-03.ppt' <> In this doc, the last slide shows the German Fit for free standing solar PV declines by 8 - 10% per year. Do you know where I can find the reference for that?⇡ If no, don't worry.' Cheers,' Sarah' 1242 ONTARIO POWER AUTHORITY Date: November 3, 2008 1243 Spain Germany Price Ranges⌘ Price ranges – Spain and Germany⌘ Wind **exchange Spain⌘ rate of 1.6 CAD/kWh Germany⌘ CAD/kWh Onshore Onshore 0.12 First five years Last 15 years – 0.15 – 0.08 Offshore First five years Last 15 years Solar PV 0.54 – 0.72 Hydro 0.51 – 0.69 0.06 – 0.20 Biogas 0.17 – 0.26 0.10 – 0.26 Biomass 0.17 – 0.26 0.12 – 0.19 Landfill gas 0.13 0.10 – 0.14 Geothermal 0.17 – 0.26 Sewage gas 0.10 – 0.43 – 0.21 – 0.06 2✓ 1244 Price ranges for solar PV⌘ Price Summary for Solar PV Rates Worldwide⌘ Ranked by Rate and Years Offered Jurisdiction Application Years CAD/kWh⌘ 20 Ontario 0.42 Italy Rooftop South Korea >3 kW 15 0.91 France Building Integrated 20 0.89 Germany 2008 Rooftop 20 0.75 15 0.74 Czech Republic 0.88 Spain (2007 RD) <100 kW 25 0.73 Austria <5 kW 12 0.74 8 0.62 Washington State* California* Commercial 5 0.67 South Australia* Residential 5 0.43 *Form of net-metering 3✓ 1245 FIT prices in Spain⌘ Spain⌘ Size Price CAD/kWh⌘ **exchange rate of 1.6 Wind Onshore – Any size 0.12 Offshore – Any size 0.13 (on top of market price) <20 kW 0.54 <200 kW 0.52 >200 kW 0.51 Ground-mounted systems Any size 0.51 Solar thermal electric 0.45 <10 MW 0.12 <50 MW 0.03 on top of market price <500 kW 0.22 >500 kW 0.16 <2 MW 0.26 >2 MW 0.24 Landfill gas Any size 0.13 Geothermal Any size 0.11 Solar PV Hydro Biogas Biomass Sewage gas⌘ 4✓ 1246 FIT prices in Germany⌘ Germany⌘ Wind Application Size Onshore Any size Offshore Any size Roof-mounted <30 kW Yrs 1-5 Yrs 5-20 Yrs 1-5 Yrs 5-20 Solar PV <100 kW Hydro Biomass/ Biogas Landfill gas Geothermal Price CAD/kWh 0.15 0.08 0.21 0.06 0.69 0.65 Annual degression of price⌘ 1.0% 9-10% >100 kW 0.63 >1 MW 0.53 Free-standing Any size 0.51 8-10% New facilities <500 kW 0.20 1.0% <2 MW 0.14 <5 MW 0.12 <150 kW 0.19 <500 kW 0.15 <5 MW 0.13 <20 MW 0.12 <500 kW 0.14 <5 MW 0.10 <5 MW 0.26 <10 MW 0.26 <20 MW 0.17 >20 MW 0.17 1.0% 1.5% 1.0% 5✓ 1247 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-23-09 5:46 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT Pricing in Germany and Spain 2008-11-03.ppt↵ Thanks! Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email↵ From: Patricia Lightburn Sent: March 23, 2009 5:46 PM To: Sarah Simmons Subject: RE: FIT Pricing in Germany and Spain 2008-11-03.ppt N:\Procurement\Domestic Supply\Feed In Tariff (FIT)\Data Analysis - Research Reference\EEG2009.pdf' -----Original Message----From: Sarah Simmons' Sent: Monday, March 23, 2009 2:08 PM' To: Patricia Lightburn' Subject: FIT Pricing in Germany and Spain 2008-11-03.ppt' In this doc, the last slide shows the German Fit for free standing solar PV declines by 8- 10% per year. Do you know where I can find the reference for that?⇢ If no, don't worry.' Cheers,' Sarah' 1248 Richard Duffy From: Richard Duffy Sent: March-23-09 7:04 PM To: Cindy Roks Subject: RE: ID: 10120 / Tuesday, March 17 Webinar Q Hi Cindy, I think we should stick with the standard answer of return, blah, blah, … .” … . the prices reflect a cost based plus a reasonable rate of instead of trying to debate the Ontario vs EU resource availability. Richard From: Cindy Roks↵ Sent: Friday, March 20, 2009 11:42 AM↵ To: Richard Duffy↵ Subject: ID: 10120 / Tuesday, March 17 Webinar Q↵ Q: In comparison to Europe and their FIT . Would it not make sense for Ontario to follow with a higher price in order to attract more investers and solar manufacturers? asnd thereby reduce the cost in the long run. A: In many cases, the renewable energy resources in Ontario are better than in Europe . The best wind, solar and bioenergy resources in Ontario are largely untapped, whereas in Europe , the FIT pricing reflects that many of the best resources have already been contracted for. This means that the FIT price necessary to cover the generation costs while providing a reasonable rate of return is lower in Ontario than in Europe . Because the renewable resources are still widely available in Ontario, as compared to Europe , there is great potential for growth in this industry and this will help to attract investors and manufacturers. 1249 Richard Duffy From: Richard Duffy Sent: March-23-09 7:19 PM To: Cindy Roks Subject: RE: ID: 10115 / Tuesday, March 17 Webinar Q Hi Cindy, the initial question asked is not really something we can answer. It is a policy decision for not one for us to speculate about. Can we just post the second question edited as: Germany and⌦ Q. How is Ontario going to reduce any of our greenhouse gases when we will require significant fossil fuel backup for⌦ our intermittent and non schedulable renewables?⌦ A. Ontario will be able to reduce greenhouse gases through our commitment to phase- out the coal fired generation⌦ plants. Ontario ’ s supply mix of generation resources provides a significant level of dispatchable generators that⌦ work in conjunction with the intermittent resources. The FIT Program also provides an incentive for renewable resources that are capable of scheduling their operation to reflect the on- peak / off- peak price periods. See the draft FIT Pricing schedule for more details. (http://www.powerauthority.on.ca/fit/Page.asp?⌦ PageID=122&ContentID=10101&SiteNodeID=1039 &BL_ExpandID )⌦ Let me know any comments regarding the above.⌦ Richard⌦ From: Cindy Roks↵ Sent: Friday, March 20, 2009 11:42 AM↵ To: Richard Duffy↵ Subject: ID: 10115 / Tuesday, March 17 Webinar Q↵ Q: How is it that Germany, Spain, Denmark, the 3 largest European countries with installed wind are not meeting Kyoto guidelines and Germany is building approx. 20 new coal fired plants? How then is Ontario going to reduce any⌦ of our greenhouse gases when we will require significant fossil fuel backup for our intermittent and non schedulable⌦ renewables.⌦ A: Ontario is committed to the phase - out of coal fired plants, which Ontario is able to accomplish (unlike Germany)⌦ because of our significant waterpower resources. This means that our supply mix is much cleaner than Germany ’ s⌦ to begin with.⌦ The intermittent renewable resources will be complimented by natural gas fired stations – which are much cleaner⌦ than coal fired stations. In addition, under the FIT Program, renewable resources that are schedulable are incented⌦ through on peak/off peak pricing. See the draft FIT Pricing schedule for more details http://www.powerauthority.on.ca/fit/Page.asp?PageID=122&ContentID=10101&SiteNodeID=1039 &BL_ExpandID=)⇣ 1250 Richard Duffy From: Richard Duffy Sent: March-23-09 7:54 PM To: Cindy Roks Subject: RE: ID: 10057 / Tuesday, March 17 OK to post. From: Cindy Roks↵ Sent: Monday, March 23, 2009 10:11 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10057 / Tuesday, March 17↵ Q: Is there any write up/report/summary on the assumptions and methods used to establish the price schedule A: The report will be made available shortly. We will ensure that it is posted prior to the Stakeholder Session on th April 7 , 2009, which is the session dedicated to the FIT pricing schedule. 1251 Cindy Roks↵ From: Cindy Roks↵ Sent: March-24-09 11:36 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10136 / Tuesday, March 17 Webinar Q↵ Q: How will residential and commercial scale (less than 500 kW) hybrid systems, i.e. solar pv and wind combination, be treated? Will separate contracts and permits be required? If not, how will the pricing be determined?% A: If the solar PV and the wind systems were separately metered and had different Connection Points then they would be eligible for separate contracts and separate contract prices. Otherwise, if they were metered together and⇡ shared the same connection point, they could apply for one contract, but would be given the lower FIT price.% 1252 Cindy Roks↵ From: Cindy Roks↵ Sent: March-24-09 11:36 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10137 / Tuesday, March 17 Webinar Q↵ Q: How will the 9% degression actually work? Once a solar developer has contracted for 100 MW, the new price is simply 40.3 cents/kWh on any new contracts?' A: The draft FIT price schedule includes an automatic 9% price reduction for Ground Mounted Solar PV. The reduction will be applied after each 100 MW of FIT Contracts that have been executed by the OPA in' aggregate. Therefore, the first 1 00MW of Contracts executed would receive 44.3cents/kWh, the second 1 00MW of Contracts executed would receive 40.3cents/kWh, the third 100MW of Contracts executed would receive 36.7cent/kWh, etc. For greater clarification, please refer to Section 5.2 of the draft REFIT rules. The draft price schedule will be the topic of discussion for the April 7 th Stakeholder Engagement Session.' 1253 Cindy Roks↵ From: Cindy Roks↵ Sent: March-24-09 11:36 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10140 / Tuesday, March 17 Webinar Q↵ Q: Is it possible to have a sliding scale on rates, (it could be up or down) on cost matching similar to cost of living. In other words, if inflation forces our costs up, the rate should be reviewed and revised 10 years out to allow us to pay down our debt. The scale should follow the realistic cost recovery being contemplated at least today. A: The proposed FIT prices included an assumption that accounts for inflation over the course of the contract payment period. Further, for certain renewable fuels, the price schedule will include an annual escalation of a⇠ specified percentage of the contract price based on relative increases to the Consumer Price Index. For greater⇠ clarity, please refer to Section 5.3 of the draft REFIT rules. The proposed FIT price schedule will be the topic of discussion during the April 7 th Stakeholder Engagement Sessions. Greater clarification on contract prices is expected at that time. 1254 Cindy Roks↵ From: Cindy Roks Sent: March-24-09 11:37 AM To: Richard Duffy Subject: FW: ID: 10149 / Tuesday, March 17 Webinar Q Q: Regarding the rate paid for large- scale solar, it notes a reduction of 9% after 100 MW is contracted. Is this referring to 100 MW per developer, or 100 MW for REFIT in aggregate? If it is referring to REFIT in aggregrate, how% will this be handled in a fair manner assuming that over 100 MW of solar applications with CIAs prior to March 13, 2009 will be submitted during the Initialization Period?% A. The draft FIT price schedule includes an automatic 9% price reduction for Ground Mounted Solar PV. The⌫ reduction will be applied after each 100 MW of FIT Contracts that have been executed by the OPA in% aggregate. For greater clarification, please refer to Section 5.2 of the draft REFIT rules.⌫ The FIT contracts will be awarded fairly in a method that is outlined in Section 1 1 of the draft REFIT rules. During⌫ the Initialization Period, Applicants will be give a Time Stamp that is based on the time and date that they applied for their Legacy Connection Queue Position. For Applicants that meet eligibility requirements, FIT Contracts will be⌫ awarded based on their Time Stamp. The OPA will issue Economic Test Notices simultaneously to all Applicants⌫ whose Applications were submitted to the Economic Connection Test during the Initialization Period.% 1255 Jason Chee-Aloy From: Jason Chee-Aloy⌃ Sent: March-25-09 5:20 AM⌃ To: 'jdalton@poweradvisoryllc.com'⌃ Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons; Cindy Roks⌃ Subject: FIT Price Schedule⌃ John,⌃ Sorry for not getting this to you earlier.⌃ Listed in the email below are just my thoughts and suggestions to consider for the content of the April 7 stakeholder session.⌃ Please continue to work through the content and materials with the others cc'd this email.⌃ Thanks,⌃ Jason⌃ ----- Original Message ----From: Jason Chee- Aloy ⌃ To: Jason Chee- Aloy⌃ Sent: Wed Mar 25 05:14:40 2009⌃ Subject: FIT Price Schedule⌃ Suggested topic areas to discuss at April 7 stakeholder consultation:⌃ · Technologies · Size tranches · FIT prices · Incentive payments · Community based and Aboriginal 1. Technologies⌃ · List the technologies and where applicable explain factors warranting specific consideration (e.g., ground - mounted⌃ solar PV and rationale for price degression, contract term and waterpower pricing, etc.)⌃ · Why other technologies were not included in the price schedule (e.g., storage, solar thermal, etc.) and what other procurement methods might be better suited⌃ 2. Size Tranches⌃ · Explanation for the proposed size tranches by each technology · Where applicable, provide options that were considered and rationale why these options were not used 3. FIT Prices⌃ 1256 · Provide rationale why cost - based pricing was used⌃ · Provide alternate options that were considered (e.g., resource intensity) and why these options were not used · Provide rationale why locational pricing was not used · Explain each component: o Capital costs o Operating and maintenance costs o Connection costs o Contract term o Rate of return · Discuss sources for cost components (by technology where applicable) · Discuss the Discounted Cash Flow (DCF) model and why it was used to derive the proposed FIT prices · Discuss general steps or methodology to run the DCF model · Discuss basic finance assumptions and applicable options around these assumptions including why these options were not used⌃ · Breakdown of each technology by size (as applicable tables have done so in the Derivation of FITs paper) 4. Incentive Payments⌃ · Provide rationale why on - peak and off - peak incentive pricing is proposed to apply to specific technologies⌃ · Discuss any options for incentive pricing and rationale why these options were not used 5. Community based and Aboriginal⌃ · Provide rationale why higher costs apply · Link this rationale to why the specific size tranches were proposed (NOTE: this is of particular interest for waterpower projects)⌃ 6. FIT Pricing Literature Review (to be considered for inclusion for April 7 session)⌃ · Note that most jurisdictions calculate FIT prices using the above proposed approach · Make point as more jurisdictions adopt FIT prices, the methodologies to calculate these prices may evolve (to better integrate respective technologies into specific power systems)⌃ · List selected literature 1257 Jim MacDougall From: Jim MacDougall⌃ Sent: March-25-09 7:39 AM⌃ To: Jason Chee-Aloy; 'jdalton@poweradvisoryllc.com'⌃ Cc: Patricia Lightburn; Sarah Simmons; Cindy Roks; Sardar Shokatayev⌃ Subject: Re: FIT Price Schedule⌃ John,⌃ We plan on having a revised set of numbers to you later today.⌃ Jim MacDougall, P.Eng.⌃ Manager, Distributed Generation⌃ Ontario Power Authority⌃ 416 969 6415⌃ Sent from my BB⌃ ----- Original Message ----From: Jason Chee- Aloy⌃ To: 'jdalton@poweradvisoryllc.com' ⌃ CC: Jim MacDougall; Patricia Lightburn; Sarah Simmons; Cindy Roks⌃ Sent: Wed Mar 25 05:20:18 2009⌃ Subject: FIT Price Schedule⌃ John,⌃ Sorry for not getting this to you earlier.⌃ Listed in the email below are just my thoughts and suggestions to consider for the content of the April 7 stakeholder session.⌃ Please continue to work through the content and materials with the others cc'd this email.⌃ Thanks,⌃ Jason⌃ ----- Original Message ----From: Jason Chee- Aloy ⌃ To: Jason Chee- Aloy⌃ Sent: Wed Mar 25 05:14:40 2009⌃ Subject: FIT Price Schedule⌃ Suggested topic areas to discuss at April 7 stakeholder consultation:⌃ · Technologies · Size tranches · FIT prices · Incentive payments 1258 · Community based and Aboriginal 1. Technologies⌃ · List the technologies and where applicable explain factors warranting specific consideration (e.g., ground - mounted⌃ solar PV and rationale for price degression, contract term and waterpower pricing, etc.)⌃ · Why other technologies were not included in the price schedule (e.g., storage, solar thermal, etc.) and what other procurement methods might be better suited⌃ 2. Size Tranches⌃ · Explanation for the proposed size tranches by each technology · Where applicable, provide options that were considered and rationale why these options were not used 3. FIT Prices⌃ · Provide rationale why cost - based pricing was used⌃ · Provide alternate options that were considered (e.g., resource intensity) and why these options were not used · Provide rationale why locational pricing was not used · Explain each component: o Capital costs o Operating and maintenance costs o Connection costs o Contract term o Rate of return · Discuss sources for cost components (by technology where applicable) · Discuss the Discounted Cash Flow (DCF) model and why it was used to derive the proposed FIT prices · Discuss general steps or methodology to run the DCF model · Discuss basic finance assumptions and applicable options around these assumptions including why these options were not used⌃ · Breakdown of each technology by size (as applicable tables have done so in the Derivation of FITs paper) 4. Incentive Payments⌃ · Provide rationale why on - peak and off - peak incentive pricing is proposed to apply to specific technologies⌃ · Discuss any options for incentive pricing and rationale why these options were not used 5. Community based and Aboriginal⌃ · Provide rationale why higher costs apply · Link this rationale to why the specific size tranches were proposed (NOTE: this is of particular interest for waterpower projects)⌃ 6. FIT Pricing Literature Review (to be considered for inclusion for April 7 session)⌃ · Note that most jurisdictions calculate FIT prices using the above proposed approach 1259 · Make point as more jurisdictions adopt FIT prices, the methodologies to calculate these prices may evolve (to better integrate respective technologies into specific power systems)⌃ · List selected literature 1260 Jim MacDougall From: Jim MacDougall⌃ Sent: March-25-09 11:14 AM⌃ To: Cindy Roks⌃ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌃ Subject: pricing schedule⌃ Cindy⌃ The wording of groundmounted PV is found at:⌃ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule__Draft_March_13__2009.pdf⌃ and says:⌃ 9% price reduction triggered when 100 MW contracted Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW. what do you think about "9% price reductions triggered each 100MW contracted" other ideas? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 1261 Cindy Roks↵ From: Cindy Roks Sent: March-25-09 6:41 PM To: Richard Duffy Subject: FW: Webinar Q March 24 / Owsiak Q: A 9% reduction in feed -in tariffs at 100 MW without a cost of living increase will kill our business in Canada. OPA mentions a 9% decrease after 100 MW. Does that 100 MW include existing SOCs or is it limited to the new FITs? What happens after the first 100 MW? What about the cost of living index adjustment? Can they define it and does it apply to solar PV? OPA writes 45 pages of rules, but doesn ’ t address adequately the most important component of a feed -in tariff....the price!!!!! A: An Automatic Price Adjustment would not effect executed FIT Contracts, and would not have any impact on existing SOCs. For greater clarity on Automatic Price Adjustments, please refer to section 5.2 of the draft FIT rules." For certain Renewable Fuels, the Price Schedule would include an annual escalation of a specified percentage of" the Contract Price, which would be based on the Consumer Price Index. For greater clarity, please refer to section" 5.3 of the draft FIT rules." The OPA ’ s proposed FIT price schedule will be the topic of discussion during the April 7 th Stakeholder Engagement" Session. The rationale for the automatic price trigger will be explained during this session." 1262 Cindy Roks↵ From: Cindy Roks↵ Sent: March-25-09 6:45 PM↵ To: Richard Duffy↵ Subject: FW: Webinar Q March 24 / Vesel↵ I'm not sure the answer is appropriate?✓ Q: according to the feed-in tariff schedule, you propose to reduce the solar ground mount feed-in tariff by 9%✓ after reaching 100MW. there are already 100s of MW of projects with CIAs. By redcuing it by 9% you✓ effectively reduce the feed -in tariff before the program starts. how will you determine which 100 MW comes in✓ first? Why are you penalizing subsequent projects since the costs in Ontario at .40 do not make solar PV✓ financially feaible?✓ A: The draft FIT price schedule includes an automatic 9% price reduction for Ground Mounted Solar PV. The reduction would be applied after each 100 MW of FIT Contracts that have been executed by the OPA in! aggregate. For greater clarification, please refer to Section 5.2 of the draft REFIT rules. During the Initialization Period, FIT contracts will be awarded in a method that is outlined in Section 11 of the draft REFIT rules. As outlined in this section, Applicants would be given a Time Stamp that is based on the time and date that they applied for their Legacy Connection Queue Position. For Applicants that meet eligibility requirements, FIT Contracts would be awarded based on their Time Stamp. The OPA would issue Economic Test Notices simultaneously to all Applicants whose Applications were submitted to the Economic Connection Test during the Initialization Period.! 1263 Cindy Roks↵ From: Cindy Roks↵ Sent: March-25-09 6:45 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10125 / Saturday, March 21↵ Q: Large developers have advantages of economies of scale unavailable to smaller developers, and it only takes 10 max size projects to incur the 9% price drop. This could very quickly crowd out smaller developers and prevent them from being able to compete. Could the price degression be applied on a "per developer" basis (after 1 0MW is installed), rather than globally? This would spread the most economically preferable contracts more evenly, allowing smaller developers to compete on a more equal footing. If the global limit of 100MW per price rung is still desired, it would be nice if at least 20MW of each price rung was reserved for smaller developers (<=2MW). IMO, the price for smaller developers shouldn't be subject to these automatic price adjustments; instead, they should be updated every one or two years as needed. A: Thank you for your question/comment. The OPA expects to use an Automatic Price Adjustment mechanism for certain technologies as proposed in section 5.2 of the draft FIT rules. At this time, the OPA has not considered alternative mechanisms to trigger an automatic price adjustment. If you disagree with the OPA ’ s proposed approach, we welcome submissions from stakeholders through the online “ Make a Submission ” tool. Submissions should include recommendations for an alternative approach, as well as a justification for the alternative approach. The OPA ’ s proposed FIT price schedule will be the topic of discussion during the April 7 th Stakeholder Engagement Session. The rationale for the automatic price trigger will be explained during this session. 1264 Cindy Roks↵ From: Cindy Roks↵ Sent: March-25-09 6:45 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10123 / Friday, March 20↵ Q: Is the 80.2 cent/Kwh only for residential customers or does it apply to all rooftop installations regardless of the building purpose? A: The draft FIT price schedule proposes 80.2 cent/kWh for rooftop installations that are less than 1 0kW. The building type (e.g. residential, commercial, industrial, institutional) does not matter. 1265 Richard Duffy From: Richard Duffy Sent: March-26-09 7:45 AM To: Jason Chee-Aloy Subject: March 17 - Presentation Attachments: Session 1 - Inaugural Session FINAL.ppt 1266 ONTARIO POWER AUTHORITY March 17, 2009 1267 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 1268 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ • To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule • To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood • To identify areas for further OPA consideration • To identify implementation issues that need to be addressed to ensure success 3 1269 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 • Online Q&A Tool 1270 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May – May 5 Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 1271 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 1272 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – • Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 1273 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 1274 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 1275 Overview of Proposed Green Energy Act⇠ • Framework • Legislative Changes • First Nations and Métis participation in Electricity Sector • Feed-in Tariffs • Smart Grid • System Connection • Approvals • Other Changes 10 1276 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid” 11 1277 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” • Next Steps – Legislative process and hearings – Development of regulations 12 1278 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – 13 Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 1279 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 1280 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 1281 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 1282 Smart Grid⇠ • Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation • Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: – – – Timeframes for smart grid development Roles and responsibilities Communications standards 17 1283 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – Make a written request for connection; and Meet all technical, economic and other relevant requirements • Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 1284 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 1285 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 1286 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 1287 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ($10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 1288 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 1289 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 1290 Introduction to FIT Programs⇠ • What is a Feed-in Tariff (FIT) Program? • Objectives of FIT Program • Experience in other jurisdictions • Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 1291 I ntroduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy to large developers – from homeowners – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 26 1292 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies • Different prices for different technologies and project sizes • Long-term contracts • Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects 27 1293 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 1294 Experience in Other Jurisdictions⇠ • 46 jurisdictions have adopted some form of a FIT Program • More than half have been enacted since 2002 • 19 EU Countries have adopted FIT program 29 1295 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (no longer in place)⌫ 1990 2 Germany⌫ 1991 3 Switzerland⌫ 1992 4 Italy⌫ 1993 6 India Denmark⌫ 1994 8 Greece Spain⌫ 1997 9 Sri Lanka⌫ 1998 10 Sweden⌫ 1999 13 Portugal, Norway, Slovenia⌫ 2000 13 --- 2001 15 France, Latvia⌫ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌫ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌫ 2004 34 Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh (India)⌫ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌫ 2006 44 Ontario (RESOP), Argentina, Thailand⌫ 2007 46 South Australia (Australia), Croatia⌫ Source: REN21 2006⇣ 1296 US Proposed Legislation⇠ • Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program • Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 1297 US Proposed Legislation⇠ • • • A Federal Bill was introduced in May 2008 ‘US Renewable Energy Jobs and Security Act’ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20- year contracts 3. rate recovery through a regionally partitioned national system benefits charge • Pricing – – Bill proposes minimum prices Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 1298 International Energy Agency Report, 2008⇠ • “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” • “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 1299 Germany⇠ Renewable Energy Sources Act 2004✓ • Guarantee of purchase at a fixed rate for 20 years • Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 1300 Germany⇠ • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country • Prices and rules set by national law 35 1301 Germany⇠ • • • 36 30,893 MW renewable electricity capacity installed 20,622 MW wind capacity installed; 2,831 MW solar PV About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 1302 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range EU cents/kWh Cdn cents/kWh⇧ (1.61)⇧ 43.01 69.23⇧ 40.36 65.85⇧ > 100 kW 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ 31.94 51.41⇧ 30 kW > 30 kW 100 kW Ground mounted Solar PV Any size On-shore Wind Any size (*based on resource differentiated tariffs) 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs) 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities)⌫ 12.67 20.39⇧ 8.65 13.92⇧ 7.65 12.31⇧ 11.67 18.78⇧ 9.18 14.78⇧ > 500 kW 5 MW 8.25 13.28⇧ > 5 MW 20 MW 7.79 12.54⇧ 9.00 14.49⇧ 6.16 9.91⇧ 500 kW > 500 kW 2 MW Biomass/ biogas 5 MW 150 kW > 150 kW Landfill gas 2 MW 500 kW 500 kW > 500 kW 5 MW 37 1303 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • FIT grants priority access to the grid and priority dispatch • Special Regime Control Centre (SRCC) oversees reliability • Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 1304 Spain⇠ • National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 1305 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System ⇥ 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 40 1306 Spanish FIT prices⇠ Euro cent/kWh Cdn cent/kWh⇧ (1.61)⇧ <20 kW 34.00 54.72⇧ <200 kW 33.00 53.11⇧ >200 kW 32.00 51.51⇧ Ground-mounted Systems- Any size⌫ 32.00 51.51⇧ Wind Onshore – Any size 7.58 12.18⇧ Hydro⇧ <10 MW⌫ 7.80 12.55⇧ Technology Solar PV Capacity Range <50 MW⌫ Biogas⇧ (biodigester gas)⌫ 3.38⇧ <500 kW⌫ 13.50 21.74⇧ >500 kW⌫ 10.00 16.10⇧ 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ 10.75-15.15 17.31 – 24.38⇧ 8.26 13.29⇧ <2 MW⌫ Biomass (energy⌫ Crops, forestry, waste,⌫ Agriculture, waste⌫ >2 MW⌫ Landfill gas 2.10 (on top of market price)⇧ Any size⌫ 41 1307 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 1308 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 1309 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 1310 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes $ 500 kW? No 2.✓ Is connection capacity available? 3.✓ Yes OPA✓ FIT Contract with full security 4.✓ LDC/IESO✓ CIA/SIA completed 5.✓ OPA✓ Contract milestones applied Commercial operation within required time No Reserve / Production Line 45 1311 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • Eligibility requirements based on technology and size • Limits on existing projects with previous OPA contracts • Incremental Projects • Application fee • Resource plan • Application Security Presentation and discussion on Eligibility⌫ 46 Requirements at 2:30 (March 17)⌫ 1312 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • Application time stamped • Review of application • Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⌫ process, connection assessments, and⌫ application review 47 –⇥ Part I on March 24, 2009⌫ 1313 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⌫ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process, connection assessments, and application review 48 Part II on March 31, 2009⌫ 1314 –⇥ Introduction to the Proposed FIT Program⇠ Pricing✓ • Pricing by technology and size • Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing⌫ 49 April 7, 2009⌫ 1315 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • Security • Completion of all Permits and Approvals – Renewable Energy Approval • Equipment Orders • Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract⌫ Milestones on April 14, 2009⌫ 50 1316 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration, Metering Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Independent Electricity System Operator (IESO) to effectively integrate renewable energy supply resources 51 1317 Introduction to the Proposed FIT Program⇠ • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – Transmission connected projects paid by IESO/OPA – Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract⌫ Management and Settlement on April 21, 2009⌫ 52 1318 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and✓ Future Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. every two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on⌫ April 28, 2009⌫ 53 1319 Introduction to the Proposed FIT Program⇠ Initialization Period✓ • Initial 60 day period to submit FIT applications • Different application process to manage legacy projects and manage the potential “intake” of applications • Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 54 1320 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 55 1321 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects $10 kW on residential properties – – simplified process for micro-scale OPA to work with LDC to streamline customer experience 56 1322 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • Geographically and electrically located in Ontario • A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind- 57 the-meter) 1323 Proposed Eligibility Requirements⇠ • Must not have had, or have, a NUG contract, an OPA contract • Previously operating facilities must have been out of service for 3 years – • e.g. abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects – Special provisions for solar PV (>10 MW) and waterpower (> 50MW) 58 1324 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 59 1325 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • – $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW Other technologies: $10,000/MW Community-Based or Aboriginal Projects: $5,000/MW 60 1326 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 1327 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: March-26-09 10:26 AM↵ To: Richard Duffy↵ Subject: FW: 10 - SUBMISSION Q&A↵ FOR APPROVAL TO POST: SUBJECT: FIT Program↵ QUESTION: The FIT Program is a good start but there's too much red tape in the proposed guidelines.↵ 1. Are the Solar PV rates applied incrementally ie. 20 KWh system = 80 cents for 1st 10 KWh and↵ 71 cents for next 10 KWh or is it 71 cents for the entire 20 KWh?↵ 2. It should be incremental or perhaps the groupings shoudl be expanded to 80 cents per KWh for↵ up to systems up to 20KWh.↵ 3. The non-refundable fees are a program killer. Who would put up a $5000 non-refundable↵ application fee? The application fee should be no more than $100 and refundable for projects↵ under 20 KWh.↵ 4. Who would be willing to tie up thousands of dollars in a performance deposit. There is an↵ opportunity cost in tieing up this amount of capital.↵ This should be scrapped.↵ 5. Have you considered a master agreement arrangement with businesses/coops/non-profits who↵ may be able to bring together a number of smale-scale "roof-top" projects ie. a group might have↵ a nieghbourhood sign up for say 20 projects ranging in size, total 100 KWh, some residential,↵ some commercial sites, help to put together the financing etc and be the broker for the entire↵ project?↵ 6. Will the Govt or OPA consider helping out with financing or loan guarantees?↵ Please provide some comprehensive examples of the cost for a homeowner to put up a 5KWh↵ system: cost of the system, financing, application fee, security deposit, insurance, risk, cash flow,↵ what is the opportunity cost for $10,000 per KWh system.↵ The FIT is an excellent initiative but it needs to make financial sense - IMHO some adjustments↵ are needed.↵ thanks,↵ Victor ** REMOVE NAME WHEN POSTING 1328 RESPONSE: 1. FIT prices will not be applied incrementally. They will be applied based on the size of the↵ project as indicated in the application↵ 2. The FIT prices for solar PV were determined based on the expected capital cost for↵ different size projects. Projects greater than 10 kW are expected to cost less per kW of↵ installed capacity and are therefore given a lower FIT price.↵ 3. Projects greater than 10 kW but less than 1000 kW will pay a $500.00 Application Fee, as↵ per section 3.1 Application Materials in the draft FIT rules. The Application Fee for Micro↵ generators, less than 10 kW, has not yet been determined.↵ 4. Queue Exempt Facilities will not be required to pay a Performance and Completion↵ Security. Larger projects are required to pay a Completion and Performance Security to↵ incent developers to achieve Commercial Operation on time.↵ 5. Contracts are required to specify a single connection point. A group of projects that have↵ multiple connection points would require multiple contracts. However, these projects are↵ eligible to apply separately.↵ 6. The OPA will not be offering financing however the government may introduce low interest↵ loans to assist home owners in financing the capital costs of residential renewables.↵ 7. You are encouraged to review the FIT website for more information on typical solar PV↵ costs: http://www.powerauthority.on.ca/fit/Page.asp?PageID=122&ContentID=10099↵ 1329 Cindy Roks↵ From: Cindy Roks↵ Sent: March-27-09 12:48 PM↵ To: Jim MacDougall↵ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy↵ Subject: RE: pricing schedule Attachments: FIT Pricing Schedule - Draft March 27 2009.pdf↵ Please see the new revised pricing table that reflects Jim ’ s comment below.⇠ I think we will need to title it as “ Pricing Schedule – clarification ” . If we say revised or updated – audiences may⇠ think the actual price changed.⇠ I will get it posted Monday.⇠ From: Jim MacDougall Sent: March 25, 2009 11:14 AM To: Cindy Roks Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy Subject: pricing schedule Cindy⌃ The wording of groundmounted PV is found at:⌃ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ -_Draft_March_13__2009.pdf⌃ and says:⌃ 9% price reduction⇠ triggered when 100⇠ MW contracted⇠ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⇠ what do you think about "9% price reductions triggered each 100MW contracted"⇠ other ideas?⇠ 1330 Jim MacDougall, P.Eng.⇠ Manager, Distributed Generation⇠ Ontario Power Authority⇠ (416) 969 - 6415⇠ 1331 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 1 2.2 5 MW 1 4.7 > 5 MW 1 0.4 50 MW 1 2.9 2 MW 1 3.4 5MW 1 1 .1 > 5 MW 1 0.3 1 0 kW 80.2 1 0 – 1 00 kW 71 .3 1 00 – 500 kW 63.5 > 500 kW 53.9 1 0 MW 44.3 Onshore Any size 1 3.5 Offshore Any size 1 9.0 1 0 MW 1 4.4 Adjustments Biomass* Biogas* Waterpower* Community Based or Aboriginal Landfill gas* Solar PV Rooftop Ground Mounted 9% price reduction triggered every 1 00 MW contracted Wind Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours.# 1332 Cindy Roks↵ From: Cindy Roks↵ Sent: March-30-09 5:36 PM↵ To: Jim MacDougall↵ Cc: Patricia Lightburn↵ Subject: RE: pricing schedule Please confirm it's okay to post with title "Pricing Schedule - Clarification"⌧ From: Cindy Roks↵ Sent: Fri 27/03/2009 12:48 PM↵ To: Jim MacDougall↵ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy↵ Subject: RE: pricing schedule↵ Please see the new revised pricing table that reflects Jim ’ s comment below.⌧ I think we will need to title it as “ Pricing Schedule – clarification ” . If we say revised or updated – audiences may⌧ think the actual price changed.⌧ I will get it posted Monday.⌧ From: Jim MacDougall↵ Sent: March 25, 2009 11:14 AM↵ To: Cindy Roks↵ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy↵ Subject: pricing schedule↵ Cindy⌃ The wording of groundmounted PV is found at:⌃ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ -_Draft_March_13__2009.pdf⌃ and says:⌃ 9% price reduction⌧ triggered when 100⌧ MW contracted⌧ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⌧ 1333 what do you think about "9% price reductions triggered each 100MW contracted"⌧ other ideas?⌧ Jim MacDougall, P.Eng.⌧ Manager, Distributed Generation⌧ Ontario Power Authority⌧ (416) 969 - 6415⌧ 1334 Jim MacDougall From: Jim MacDougall⇧ Sent: March-30-09 7:32 PM⇧ To: Cindy Roks⇧ Cc: Patricia Lightburn⇧ Subject: Re: pricing schedule⇧ Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Cindy Roks⇧ To: Jim MacDougall⇧ CC: Patricia Lightburn⇧ Sent: Mon Mar 30 17:35:42 2009⇧ Subject: RE: pricing schedule⇧ Please confirm it's okay to post with title "Pricing Schedule - Clarification"⇧ _________________________ _____ __⇧ From: Cindy Roks⇧ Sent: Fri 27/03/2009 12:48 PM⇧ To: Jim MacDougall⇧ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⇧ Subject: RE: pricing schedule⇧ Please see the new revised pricing table that reflects Jim ’ s comment below.⇧ I think we will need to title it as “ Pricing Schedule – clarification ” . If we say revised or updated – audiences may think the actual price changed.⇧ I will get it posted Monday.⇧ _________________________ _____ __⇧ From: Jim MacDougall⇧ Sent: March 25, 2009 11:14 AM⇧ To: Cindy Roks⇧ 1335 Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⇧ Subject: pricing schedule⇧ Cindy⇧ The wording of groundmounted PV is found at:⇧ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _Draft_March_13__2009.pdf⇧ and says:⇧ 9% price reduction⇧ triggered when 100⇧ MW contracted⇧ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⇧ what do you think about⇧ "9% price reductions triggered each 100MW contracted"⇧ other ideas?⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969 - 6415⇧ 1336 Jim MacDougall From: Jim MacDougall⇣ Sent: March-31-09 4:21 PM⇣ To: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'⇣ Cc: Sarah Simmons⇣ Subject: RE: spain⇣ Attachments: Pricing in Spain v2.ppt⇣ Thanks Patricia – John, can you find a place for this slide?⇠ Sarah is working away on the RESOP contract distribution slides by project size.⇠ Jim MacDougall , P.Eng.✓ Manager, Distributed Generation⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St W, Suite 1600⇠ Toronto , ON M5H 1T1 , Canada⇠ tel 416.969.6415⇠ From: Patricia Lightburn Sent: March 31, 2009 4:00 PM To: Jim MacDougall Subject: spain Patricia Lightburn✓ Analyst, Distributed Generation✓ Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 1337 FIT Pricing Approach⇣ • Market-based Feed-in Tariff prices vs Fixed price⇥ FITcontracts⇥ – OPA considered alternative approaches to FIT⇥ Supplier compensation⇥ – e.g. Spanish FIT offers 2 options for renewable suppliers:⇥ 1. Fixed price option 2. Market price + premium option⇥ • At this time, the introduction of FITs for Ontario⇥ requires stable, guaranteed long-term prices⇥ • OPA will consider alternative pricing approaches⇥ over time as the sector gains familiarity with FITs⇥ 1⇥ 1338 Richard Duffy From: Richard Duffy Sent: April-01-09 7:30 AM To: Sheri Bizarro Subject: RE: FOR APPROVAL - FW: 10152 OK to post as edited below.⇣ From: Sheri Bizarro Sent: Thursday, March 26, 2009 11:05 AM To: Richard Duffy Subject: FOR APPROVAL - FW: 10152 FOR APPROVAL TO POST↵ SUBJECT: Solar - Small Scale Solar Ground Mount⇣ Question:⌦ In other jurisdictions small scale solar ground mount (<1.0 MW) is an important part of the⇣ distributed generation mix, especially for those with rooftops that do not allow for a solar system⇣ (i.e. shading, structural integrity, size, etc). Is allowing small -scale ground mount to apply for the⇣ rooftop tranche rates being considered?⇣ If so, will it be subject to the same 9% price reduction. As you can imagine the economies of( scale are not as significant as large ground mount nor are they necessarily that much better than⇣ roof top (i.e. increased risk of vandalism, increase in property taxes on the land being used, larger⇣ racking system to keep projects off the ground and able to withstand wind sheer, potential costs⇣ to transmit the electricity several hundred feet to the facility, high fixed costs of⇣ metering/interconnection, etc.) Additionally, distributed small scale solar (<1 .0MW) are in line( with the GEA and OPA's desired encouragement of distributed generation (generation occurring⇣ where the load is consumed) nor does it subject the rate base to as high a risk related to a large⇣ uptake of large 10MW solar farms.⇣ RESPONSE:⌦ The OPA does not anticipate that Ground Mounted PV projects that are less than 1 MW would be⇣ offered a FIT price that is currently associated with large Rooftop PV systems. The proposed FIT( price schedule does not differentiate between sizes of Ground Mounted PV, therefore all Ground⇣ Mounted PV prices would be subject to the Automatic Price Adjustment.( Thank you for your comment. The OPA will consider this point further.( 1339 Cindy Roks↵ From: Cindy Roks↵ Sent: April-01-09 2:22 PM↵ To: webmaster↵ Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons;↵ jdalton@poweradvisoryllc.com; Richard Duffy↵ Subject: FIT pricing schedule - clarification↵ Attachments: FIT Pricing Schedule_Clarification - Draft March 27 2009.pdf↵ Webmaster,⌦ Please find attached a revised draft pricing schedule. This should replace the original pricing schedule. The only difference is the wording in the adjustments column from “ when 100MW contracted to every 100MW ”⇤ It should be entitled “ Pricing Schedule – Clarification ”⇤ -----Original Message----From: Jim MacDougall⌦ Sent: March 30, 2009 7:32 PM⌦ To: Cindy Roks⌦ Cc: Patricia Lightburn⌦ Subject: Re: pricing schedule⌦ Yes.⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ -----Original Message----From: Cindy Roks⌦ To: Jim MacDougall⌦ CC: Patricia Lightburn⌦ Sent: Mon Mar 30 17:35:42 2009⌦ Subject: RE: pricing schedule Please confirm it's okay to post with title "Pricing Schedule - Clarification"⌦ _________________________ _______⌦ From: Cindy Roks⌦ Sent: Fri 27/03/2009 12:48 PM⌦ To: Jim MacDougall⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: RE: pricing schedule Please see the new revised pricing table that reflects Jim ’ s comment below.⌦ 1340 I think we will need to title it as revised or updated – “ Pricing Schedule – clarification ” . If we say audiences may think the actual price changed.⌦ I will get it posted Monday.⌦ _________________________ _______⌦ From: Jim MacDougall⌦ Sent: March 25, 2009 11:14 AM⌦ To: Cindy Roks⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: pricing schedule Cindy⌦ The wording of groundmounted PV is found at:⌦ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _Draft_March_13__2009.pdf⌦ and says:⌦ 9% price reduction⌦ triggered when 100⌦ MW contracted⌦ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⌦ what do you think about "9% price reductions triggered each 100MW contracted"⌦ other ideas?⌦ 1341 Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ (416) 969-6415⌦ 1342 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 1 2.2 5 MW 1 4.7 > 5 MW 1 0.4 50 MW 1 2.9 2 MW 1 3.4 5MW 1 1 .1 > 5 MW 1 0.3 1 0 kW 80.2 1 0 – 1 00 kW 71 .3 1 00 – 500 kW 63.5 > 500 kW 53.9 1 0 MW 44.3 Onshore Any size 1 3.5 Offshore Any size 1 9.0 1 0 MW 1 4.4 Adjustments Biomass* Biogas* Waterpower* Community Based or Aboriginal Landfill gas* Solar PV Rooftop Ground Mounted 9% price reduction triggered every 1 00 MW contracted Wind Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours.# 1343 Jim MacDougall From: Jim MacDougall Sent: April-01-09 2:45 PM To: Cindy Roks; webmaster Cc: Patricia Lightburn; Sarah Simmons; 'jdalton@poweradvisoryllc.com'; Richard Duffy Subject: RE: FIT pricing schedule - clarification Hold off please – one more clarification to be made …⌅ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St W, Suite 1600⇠ Toronto , ON M5H 1T1 , Canada⇠ tel 416.969.6415⇠ From: Cindy Roks↵ Sent: April 1, 2009 2:22 PM↵ To: webmaster↵ Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons; jdalton@poweradvisoryllc.com; Richard Duffy↵ Subject: FIT pricing schedule - clarification↵ Webmaster,⌦ Please find attached a revised draft pricing schedule. This should replace the original pricing schedule. The only difference is the wording in the adjustments column from “ when 100MW contracted to every 100MW ”⇤ It should be entitled “ Pricing Schedule – Clarification ”⇤ -----Original Message----From: Jim MacDougall⌦ Sent: March 30, 2009 7:32 PM⌦ To: Cindy Roks⌦ Cc: Patricia Lightburn⌦ Subject: Re: pricing schedule⌦ Yes.⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ -----Original Message----From: Cindy Roks⌦ To: Jim MacDougall⌦ CC: Patricia Lightburn⌦ Sent: Mon Mar 30 17:35:42 2009⌦ Subject: RE: pricing schedule 1344 Please confirm it's okay to post with title "Pricing Schedule - Clarification"⌦ _________________________ _______⌦ From: Cindy Roks⌦ Sent: Fri 27/03/2009 12:48 PM⌦ To: Jim MacDougall⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: RE: pricing schedule Please see the new revised pricing table that reflects Jim ’ s comment below.⌦ I think we will need to title it as revised or updated – “ Pricing Schedule – clarification ” . If we say audiences may think the actual price changed.⌦ I will get it posted Monday.⌦ _________________________ _______⌦ From: Jim MacDougall⌦ Sent: March 25, 2009 11:14 AM⌦ To: Cindy Roks⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: pricing schedule Cindy⌦ The wording of groundmounted PV is found at:⌦ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _Draft_March_13__2009.pdf⌦ and says:⌦ 9% price reduction⌦ triggered when 100⌦ MW contracted⌦ 1345 Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⌦ what do you think about "9% price reductions triggered each 100MW contracted"⌦ other ideas?⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ (416) 969-6415⌦ 1346 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: April-01-09 2:51 PM↵ To: Patricia Lightburn↵ Subject: FW: 10154↵ Hey Patricia – do you have any more insight to add to this response? Thanks Sheri From: Jonathan Cheszes Sent: Wednesday, March 25, 2009 2:07 PM To: Sheri Bizarro Subject: RE: 10154 Sherri,⌥ Here is what I propose. I was thinking to add in a sentence stating that Germany and/or Spain did not reopen⌥ existing contracts when they changed their own FIT prices, but I am not certain of this. Patricia, any idea if Germany or Spain increased or decreased existing contract prices after price amendments?⌥ Proposed Response: The OPA enters into contracts to procure electricity generation on behalf of all Ontario rate payers. In order to protect both existing generators and rate payers, it cannot reopen existing executed contracts despite newer procurements which may offer prices that are higher or lower than those contained in original contracts. Jonathan Cheszes⌥ Business Analyst⌥ From: Sheri Bizarro Sent: March 24, 2009 12:13 PM To: Jonathan Cheszes Subject: ID: 10154 ** Jonathan at it. SUBJECT: – I have not posted this one yet – let draft up a response first and take a look How to appeal not offering FIT pricing to existing Standard Offer Contract Holders? Question: What is the process to appeal the OPA decision to not offer FIT pricing to existing Standard Offer⌥ Contract holders? Is there a petition or form available? 1347 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-01-09 3:03 PM↵ To: Jim MacDougall; webmaster↵ Cc: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'; Richard Duffy↵ Subject: RE: FIT pricing schedule - clarification↵ Attachments: FIT Pricing Schedule_Clarification - Draft March 27 2009 v2.pdf↵ This is the correct version. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email↵ From: Jim MacDougall Sent: April 1, 2009 2:45 PM To: Cindy Roks; webmaster Cc: Patricia Lightburn; Sarah Simmons; 'jdalton@poweradvisoryllc.com'; Richard Duffy Subject: RE: FIT pricing schedule - clarification Hold off please – one more clarification to be made …⌅ Jim MacDougall , P.Eng.↵ Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Cindy Roks Sent: April 1, 2009 2:22 PM To: webmaster Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons; jdalton@poweradvisoryllc.com; Richard Duffy Subject: FIT pricing schedule - clarification Webmaster,⌦ Please find attached a revised draft pricing schedule. This should replace the original pricing schedule. The only difference is the wording in the adjustments column from “ when 100MW contracted to every 100MW ”⇤ It should be entitled “ Pricing Schedule – Clarification ”⇤ 1348 -----Original Message----From: Jim MacDougall⌦ Sent: March 30, 2009 7:32 PM⌦ To: Cindy Roks⌦ Cc: Patricia Lightburn⌦ Subject: Re: pricing schedule⌦ Yes.⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ -----Original Message----From: Cindy Roks⌦ To: Jim MacDougall⌦ CC: Patricia Lightburn⌦ Sent: Mon Mar 30 17:35:42 2009⌦ Subject: RE: pricing schedule Please confirm it's okay to post with title "Pricing Schedule - Clarification"⌦ _________________________ _______⌦ From: Cindy Roks⌦ Sent: Fri 27/03/2009 12:48 PM⌦ To: Jim MacDougall⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: RE: pricing schedule Please see the new revised pricing table that reflects Jim ’ s comment below.⌦ I think we will need to title it as revised or updated – “ Pricing Schedule – clarification ” . If we say audiences may think the actual price changed.⌦ I will get it posted Monday.⌦ _________________________ _______⌦ From: Jim MacDougall⌦ Sent: March 25, 2009 11:14 AM⌦ To: Cindy Roks⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: pricing schedule 1349 Cindy⌦ The wording of groundmounted PV is found at:⌦ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _Draft_March_13__2009.pdf⌦ and says:⌦ 9% price reduction⌦ triggered when 100⌦ MW contracted⌦ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⌦ what do you think about "9% price reductions triggered each 100MW contracted"⌦ other ideas?⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ (416) 969-6415⌦ 1350 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 Adjustments Biomass* Biogas * 5 MW 14.7 > 5 MW 10.4 Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 Landfill gas* 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Solar PV Any type Rooftop 10 – 100 kW 71.3 Rooftop 100 – 500 kW 63.5 Rooftop > 500 kW 53.9 10 MW 44.3 Ground Mounted 9% price reduction triggered every 100 MW contracted Wind Onshore Any size 13.5 Offshore Any size 19.0 10 MW 14.4 Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower! price during off-peak hours.! 1351 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-01-09 3:39 PM↵ To: webmaster; Jim MacDougall↵ Cc: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'; Richard Duffy↵ Subject: RE: FIT pricing schedule - clarification↵ Attachments: FIT Pricing Schedule_Clarification - Draft March 27 2009 v2.pdf↵ Hi Judith,⌦ You ’ve got the wrong doc up. See attached.◆ Too many files with similar names – sorry!⌦ Sarah Simmons↵ Analyst⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St. W. Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 416.969.6213⌦ Fax 416.967.1947⌦ www.powerauthority.on.ca⌦ P please consider the environment before printing this email↵ From: Judith Burfoot On Behalf Of webmaster✓ Sent: April 1, 2009 3:33 PM✓ To: Sarah Simmons; Jim MacDougall✓ Cc: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'; Richard Duffy✓ Subject: RE: FIT pricing schedule - clarification✓ Hello everyone,⌦ The new schedule has been posted:⌦ http://www.powerauthority.on.ca/fit/Page.asp?PageID=122&ContentID=10101&SiteNodeID=1039⌦ It replaced the earlier version.⌦ Thank you,⌦ - Judith⌦ From: Sarah Simmons Sent: April 1, 2009 3:03 PM✓ To: Jim MacDougall; webmaster✓ Cc: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'; Richard Duffy✓ Subject: RE: FIT pricing schedule - clarification✓ This is the correct version.⌦ 1352 Sarah Simmons↵ Analyst⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St. W. Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 416.969.6213⌦ Fax 416.967.1947⌦ www.powerauthority.on.ca⌦ P please consider the environment before printing this email↵ From: Jim MacDougall✓ Sent: April 1, 2009 2:45 PM✓ To: Cindy Roks; webmaster✓ Cc: Patricia Lightburn; Sarah Simmons; 'jdalton@poweradvisoryllc.com'; Richard Duffy✓ Subject: RE: FIT pricing schedule - clarification✓ Hold off please – one more clarification to be made …◆ Jim MacDougall , P.Eng.↵ Manager, Distributed Generation⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Cindy Roks✓ Sent: April 1, 2009 2:22 PM✓ To: webmaster✓ Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons; jdalton@poweradvisoryllc.com; Richard Duffy✓ Subject: FIT pricing schedule - clarification✓ Webmaster,⌦ Please find attached a revised draft pricing schedule. This should replace the original pricing schedule. The only difference is the wording in the adjustments column from “ when 100MW contracted to every 100MW ”⇤ It should be entitled “ Pricing Schedule – Clarification ”⇤ -----Original Message----From: Jim MacDougall⌦ Sent: March 30, 2009 7:32 PM⌦ To: Cindy Roks⌦ Cc: Patricia Lightburn⌦ Subject: Re: pricing schedule⌦ Yes.⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ -----Original Message-----⌦ 1353 From: Cindy Roks⌦ To: Jim MacDougall⌦ CC: Patricia Lightburn⌦ Sent: Mon Mar 30 17:35:42 2009⌦ Subject: RE: pricing schedule Please confirm it's okay to post with title "Pricing Schedule - Clarification"⌦ _________________________ _______⌦ From: Cindy Roks⌦ Sent: Fri 27/03/2009 12:48 PM⌦ To: Jim MacDougall⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: RE: pricing schedule Please see the new revised pricing table that reflects Jim ’ s comment below.⌦ I think we will need to title it as revised or updated – “ Pricing Schedule – clarification ” . If we say audiences may think the actual price changed.⌦ I will get it posted Monday.⌦ _________________________ _______⌦ From: Jim MacDougall⌦ Sent: March 25, 2009 11:14 AM⌦ To: Cindy Roks⌦ Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy⌦ Subject: pricing schedule Cindy⌦ The wording of groundmounted PV is found at:⌦ http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _Draft_March_13__2009.pdf⌦ and says:⌦ 1354 9% price reduction⌦ triggered when 100⌦ MW contracted⌦ Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW.⌦ what do you think about "9% price reductions triggered each 100MW contracted"⌦ other ideas?⌦ Jim MacDougall, P.Eng.⌦ Manager, Distributed Generation⌦ Ontario Power Authority⌦ (416) 969-6415⌦ 1355 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 Adjustments Biomass* Biogas * 5 MW 14.7 > 5 MW 10.4 Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 Landfill gas* 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Solar PV Any type Rooftop 10 – 100 kW 71.3 Rooftop 100 – 500 kW 63.5 Rooftop > 500 kW 53.9 10 MW 44.3 Ground Mounted 9% price reduction triggered every 100 MW contracted Wind Onshore Any size 13.5 Offshore Any size 19.0 10 MW 14.4 Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower! price during off-peak hours.! 1356 Richard Duffy From: Richard Duffy Sent: April-02-09 11:14 AM To: Cindy Roks Subject: RE: ID: 10125 / Saturday, March 21 OK to post. From: Cindy Roks↵ Sent: Friday, March 27, 2009 2:21 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10125 / Saturday, March 21↵ I like Sarah ’ s answer but I thought I ’ d get you to review because it is a little different than the normal Q/A ’ s. - Cindy From: Cindy Roks↵ Sent: March 25, 2009 6:45 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10125 / Saturday, March 21↵ Q: Large developers have advantages of economies of scale unavailable to smaller developers, and it only takes 10 max size projects to incur the 9% price drop. This could very quickly crowd out smaller developers and prevent them from being able to compete. Could the price degression be applied on a "per developer" basis (after 1 0MW is installed), rather than globally? This would spread the most economically preferable contracts more evenly, allowing smaller developers to compete on a more equal footing. If the global limit of 100MW per price rung is still desired, it would be nice if at least 20MW of each price rung was reserved for smaller developers (<=2MW). IMO, the price for smaller developers shouldn't be subject to these automatic price adjustments; instead, they should be updated every one or two years as needed. A: Thank you for your question/comment. The OPA expects to use an Automatic Price Adjustment mechanism for certain technologies as proposed in section 5.2 of the draft FIT rules. At this time, the OPA has not considered alternative mechanisms to trigger an automatic price adjustment. If you disagree with the OPA ’ s proposed approach, we welcome submissions from stakeholders through the online “ Make a Submission ” tool. Submissions should include recommendations for an alternative approach, as well as a justification for the alternative approach. The OPA ’ s proposed FIT price schedule will be the topic of discussion during the April 7 th Stakeholder Engagement Session. The rationale for the automatic price trigger will be explained during this session. 1357 Richard Duffy From: Richard Duffy Sent: April-02-09 11:30 AM To: Cindy Roks Subject: RE: ID: 10140 / Tuesday, March 17 Webinar Q OK to post. From: Cindy Roks↵ Sent: Friday, March 27, 2009 2:36 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10140 / Tuesday, March 17 Webinar Q↵ From: Cindy Roks↵ Sent: March 24, 2009 11:36 AM↵ To: Richard Duffy↵ Subject: FW: ID: 10140 / Tuesday, March 17 Webinar Q↵ Q: Is it possible to have a sliding scale on rates, (it could be up or down) on cost matching similar to cost of living. In other words, if inflation forces our costs up, the rate should be reviewed and revised 10 years out to allow us to pay down our debt. The scale should follow the realistic cost recovery being contemplated at least today. A: The proposed FIT prices included an assumption that accounts for inflation over the course of the contract payment period. Further, for certain renewable fuels, the price schedule will include an annual escalation of a⇠ specified percentage of the contract price based on relative increases to the Consumer Price Index. For greater⇠ clarity, please refer to Section 5.3 of the draft REFIT rules. The proposed FIT price schedule will be the topic of discussion during the April 7 th Stakeholder Engagement Sessions. Greater clarification on contract prices is expected at that time. 1358 Richard Duffy From: Richard Duffy Sent: April-02-09 12:50 PM To: Cindy Roks Subject: RE: NEED RESPONSE: ID: 10166 / Tuesday, March 17 Webinar Q OK to post as edited below.⇣ From: Cindy Roks↵ Sent: Wednesday, April 01, 2009 4:51 PM↵ To: Richard Duffy↵ Subject: NEED RESPONSE: ID: 10166 / Tuesday, March 17 Webinar Q↵ Is this answer sufficient?⇣ From: Cindy Roks↵ Sent: March 25, 2009 12:17 PM↵ To: Richard Duffy↵ Subject: FW: ID: 10166 / Tuesday, March 17 Webinar Q↵ Q: Will there be any additional incentives for clean energy projects that are situated on first nations reserve lands, and which are controlled by first nations entities, including first nations private corporations?⇢ A: Eligible Aboriginal Projects are currently proposed to receive an increased FIT Price for wind power⌧ projects that are less than or equal to 10 MW. In addition, eligible Aboriginal Projects are currently proposed⌧ to have reduced A pplication Security and Completion and Performance Security requirements .⌧ 1359 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-02-09 4:17 PM↵ To: Patricia Lightburn; Cindy Roks↵ Subject: RE: Q&A↵ This was my stab at a response:✓ The FIT prices are designed to cover costs plus a reasonable rate of return for the generation facility. The proposed⇡ FIT prices are intended to incent the development of renewable energy projects, from a variety of technologies and a✓ variety of sizes. The proposed price for micro - scale PV is the highest because the system costs are the greatest in terms of dollars per Watt installed.⇡ It is important to note that the capacity would be contracted at proposed 80.2cents/kWh would represent a very small portion of the total contracted capacity. Further, the OPA would review the FIT prices on a regular basis. The⇡ costs for installing PV systems is expected to decline over the coming years, and updated FIT price schedules would reflect this decline.✓ The above market costs associated with the FIT contracts (as well as all other OPA generation contracts) are recovered through the customer rate base.⇡ For greater clarity, please refer to our Stakeholder Engagement Session on April 7 th . During this session, the⇡ rationale for the proposed FIT prices will be discussed in greater detail.✓ Sarah Simmons↵ Analyst✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St. W. Suite 1600✓ Toronto , ON , M5H 1T1✓ Tel 416.969.6213✓ Fax 416.967.1947✓ www.powerauthority.on.ca✓ P please consider the environment before printing this email↵ From: Patricia Lightburn Sent: April 2, 2009 4:08 PM To: Cindy Roks; Sarah Simmons Subject: RE: Q&A Sarah I think you may have a generic response to this – though Im not convinced we should post it …⇡ From: Cindy Roks Sent: Thursday, April 02, 2009 12:52 PM To: Patricia Lightburn; Sheri Bizarro Subject: RE: Q&A Yep – it was my mistake.✓ 1360 While you have it in your inbox Patricia – can you please draft an appropriate response J⇥ If there isn ’ t one, we don ’ t need to post (I have removed it from the website)✓ From: Patricia Lightburn Sent: April 2, 2009 12:31 PM To: Cindy Roks; Sheri Bizarro Subject: FW: Q&A FYI …⇡ From: Smith, Elliot [mailto:ESmith@osler.com] Sent: Thursday, April 02, 2009 12:30 PM To: Patricia Lightburn Subject: Q&A Hi Patricia,✓ I was interested to see the answer to this question, but it looks like there was a cutting & pasting error:✓ Category: Solar - Contract Pricing✓ Subject: Justification for buying electricity at 80.2 cents✓ ID: 10274✓ Date: 3/31/2009✓ Question: Given that residential customers can buy electricity for 5.6 cents per kwh, what is your justification for✓ buying electricity for 80.2 cents per kwh (at least fourteen times what it's worth) from rooftop solar installations?✓ On the face of it that's no way to run a business. If this plan is successful, will you have to raise the price and✓ make the consumer pay the excess? Just wondering.✓ Answer: Given that residential customers can buy electricity for 5.6 cents per kwh, what is your justification for✓ buying electricity for 80.2 cents per kwh (at least fourteen times what it's worth) from rooftop solar installations?✓ On the face of it that's no way to run a business. If this plan is successful, will you have to raise the price and✓ make the consumer pay the excess? Just wondering.✓ Elliot✓ Elliot Smith↵ Associate✓ 416.862.6435✓ ********************************************************************↵ This e-mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited.↵ Le contenu du présent courriel est privilégié, confidentiel et 1361 soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.↵ ********************************************************************↵ 1362 Richard Duffy From: Richard Duffy Sent: April-03-09 2:37 PM To: Heidi Parish; Claire Willison Cc: Emay Cowx Subject: FW: FIT Stakeholder Engagement - Session 4 FIT Price Schedule v5.ppt Attachments: FIT Stakeholder Engagement - Session 4 FIT Price Schedule v5.ppt Hi Heidi and Claire, Attached is the final presentation. Thanks for your continued patience. We expect this to easily be the most reviewed presentation so far, so we had⌧ to spend a far amount of time reviewing to ensure the proper content. Let me know if you have any questions or comments. Thanks again Richard From: Sarah Simmons Sent: Friday, April 03, 2009 2:30 PM⇡ To: Richard Duffy⇡ Subject: FIT Stakeholder Engagement - Session 4 FIT Price Schedule v5.ppt⇡ Changes made.⌧ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email↵ 1363 DDFI ()nlariu Pmu?r Aulhorin April 7, 2009 1 364 April 7 - Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA) 9:10 – 10:30 FIT Price Schedule Overview 10:30 – 10:40 Coffee Break 10:40 – 12:00 FIT Pricing Model and General Assumptions 12:00 –1:00 Lunch 1:00 – 2:00 FIT Pricing 2:00 – 2:10 Coffee Break 2:10 – 3:00 FIT Pricing (Continued) 3:00 Adjourn 2⇥ 1365 Proposed Feed-in Tariff Price Schedule • The proposed or draft Feed-in Tariff (FIT) Price⇥ Schedule is a list of standard prices (¢/kWh)⇥ – These prices or FITs are guaranteed for the term⇥ of the applicable contract⇥ – Contract settlement is based on these prices and⇥ the quantity of electricity produced⇥ • Contracts are not ‘take or pay’✓ • Different prices applied to different technologies⇥ • Different prices applied to different size tranches⇥ within applicable technologies⇥ 3⇥ 1366 Draft FIT Price Schedule Technology Capacity Range Price (¢/kWh) (CAD) Automatic Price Adjustment 80.2 None⇥ 71.3 None⇥ Rooftop Solar PV ◆ 1 0 kW > 1 0 kW ◆ 1 00 kW > 1 00 kW ◆ 500 kW 63.5 None⇥ Rooftop Solar PV > 500 kW 53.9 None⇥ Ground Mounted > 1 0 kW ◆ 1 0 MW 44.3 9% price reduction⇥ Micro Solar PV Rooftop Solar PV Solar PV triggered every 100 MW ◆ 1 0 MW 14.4 None⇥ On-shore Wind Any size 13.5 None⇥ Off-shore Wind Any size 19.0 None⇥ Community Based ◆ 2 MW 13.4 None⇥ Waterpower ◆ 50 MW 12.9 None⇥ Biomass Any size 12.2 None⇥ Biogas ◆ 5 MW 14.7 None⇥ > 5 MW 10.4 None⇥ ◆ 5 MW 11.1 None⇥ > 5 MW 10.3 None⇥ Community Based or Aboriginal Wind Waterpower Landfill gas 1367 FIT Price Schedule – Objectives • FIT Price Schedule designed to balance several⇥ objectives:⇥ – To promote broad participation in the program⇥ • Including different technologies, project sizes,⇥ and proponents (e.g., Aboriginal and⇥ community-based)⇥ – To provide price stability necessary to promote⇥ the investment objectives of the proposed Green⇥ Energy Act⇥ – To encourage efficient project development⇥ • Striking a balance of enabling project⇥ development while not overpaying for projects⇥ 5⇥ 1368 FIT Price Schedule – Overview • To develop a FIT price schedule, OPA had to make⇥ assumptions about the costs and performance⇥ characteristics of a ‘typical’ project✓ • OPA will closely monitor uptake of FIT contracts and⇥ will reassess prices at regular intervals, consistent⇥ with regular program review⇥ – OPA will review prices to reflect changes that⇥ impact the costs to develop renewable energy⇥ supply projects, for example material changes in:⇥ • • Equipment supply costs⇥ Exchange rates⇥ 6⇥ 1369 FIT Price Schedule – Overview • Prices are designed to provide participants and⇥ associated industries with a high measure of price⇥ stability and program sustainability⇥ • Prices for each category will aim to favour the most⇥ cost efficient projects in order to manage customer rate impacts⇥ 7⇥ 1370 FIT Price Schedule – Applicable Technologies • Prices were developed for renewable energy supply⇥ technologies that are anticipated to have widespread⇥ application in Ontario⇥ • Technologies include:⇥ – Solar PV (rooftop and ground mounted)⇥ – On-shore and off-shore wind⇥ – Waterpower (◆ 50 MW)✓ – Landfill gas⇥ – Biogas⇥ – Renewable Biomass (including Bio-fuel)⇥ 8⇥ 1371 FIT Price Schedule – Other Technologies • Prices were not developed for all renewable energy⇥ supply technologies • These technologies may have had⇥ – – – – Limited application in Ontario⇥ Costs that are likely to vary widely (e.g., site⇥ specific)⇥ Considerable uncertainty regarding costs⇥ Technology that is immature and still developing⇥ 9⇥ 1372 FIT Price Schedule – Other Technologies • Technologies currently not included in proposed FIT Price Schedule⇥ – – – – – – • Solar thermal electric⇥ Concentrating solar power⇥ Large waterpower (> 50 MW)⇥ Large Solar PV (> 10 MW)⇥ Geothermal electric⇥ Energy storage (including pumped storage)⇥ These technologies better lend themselves to alternative⇥ procurement methods⇥ # Such approaches may be more effective recognizing the⇥ distinct characteristics of these technologies⇥ 10⇥ 1373 FIT Price Schedule – Size Tranches • Size tranches established for different technologies to⇥ account for cost differences where there are distinct applications with meaningful cost or value differences⇥ • Size tranches were based on⇥ – – Experience in other jurisdictions⇥ Experience with Renewable Energy Standard Offer⇥ Contract (RESOP) contracts influenced size tranches – Consistency with Ontario Energy Board (OEB)⇥ Distribution System Code (DSC)⇥ • Aboriginal and community-based projects also have⇥ distinct size tranches to reflect projects that are expected to come forward⇥ 11⇥ 1374 RESOP Experience – Rooftop Solar PV • Rooftop solar PV size tranches and typical⇥ applications⇥ – ◆1 0 kW (residential)✓ – >1 0 kW ◆ 1 00 kW (small commercial)✓ – >1 00 kW ◆ 500 kW (large commercial)✓ – >500 kW (industrial)⇥ Capacity Range ⇤ 1 0 kW > 1 0 kW ⇤ 1 00 kW > 1 00 kW ⇤ 500 kW > 500 kW ⇤ 1 MW > 1 MW ⇤ 1 0 MW Number of RESOP Contracts 240⇥ 7⇥ 3⇥ 0⇥ 55⇥ 12⇥ 1375 RESOP Experience – Solar PV • The majority of the RESOP contracts were microgeneration projects (◆ – 1 0 kW)✓ Contract holders were early adopters of solar PV⇥ technology and were motivated by environmental⇥ benefits⇥ • Few RESOP contracts executed for mid-ranged projects⇥ • Most of the executed contracts > 1 MW are close to the 10 MW maximum⇥ – Many of these contracts were executed with larger⇥ developers who divided projects into 10 MW⇥ increments⇥ 13⇥ 1376 RESOP Experience – Wind • Wind size tranches⇥ – ◆ 1 0 MW: Aboriginal and community-based⇥ – Otherwise no limit⇥ Capacity Range Number of RESOP Contracts ⇤ 1 0 MW 93⇥ • Very few projects < 500 kW⇥ • Many of these contracts were executed with developers who divided larger projects into 10 MW increments⇥ • OPA heard from many proponents interested in⇥ developing Aboriginal and community-based projects⇥ – 10 MW wind project with 30% equity requires approximately $9 million investment⇥ 1377 RESOP Experience – Waterpower • Waterpower size tranches⇥ # ◆ 2 MW: Aboriginal and community-based⇥ # ◆ 50 MW⇥ Capacity Range ⇤ 2 MW > 2 MW ⇤ 1 0 MW • Number of RESOP Contracts 13⇥ 7⇥ Approximately two thirds of the contracts were for projects < 2 MW⇥ • OPA heard from many proponents who were interested⇥ in developing Aboriginal and community-based projects⇥ 15⇥ 1378 RESOP Experience – Biogas • Biogas size tranches⇥ – ◆ 5 MW✓ – > 5 MW⇥ Capacity Range Number of RESOP Contracts 6⇥ ⇤ 5 MW > 5 MW ⇤ 1 0 MW 0⇥ •✓ All Biogas contracts were < 5 MW⇥ •✓ Expect greater uptake of farm-based biogas⇥ 16⇥ 1379 RESOP Experience – Landfill gas • Landfill gas size tranches⇥ – ◆5 MW✓ – >5 MW⇥ Capacity Range ⇤ 5 MW > 5 MW ⇤ 1 0 MW Number of RESOP Contracts 8⇥ 3⇥ •✓The majority of landfill⇥gas projects were < 5 MW⇥ 1380 RESOP Experience – Biomass • Biomass tranche sizes⇥ – Only one price category⇥ Capacity Range Number of RESOP Contracts 1 0 MW 5⇥ • Biomass projects experienced limited uptake⇥ • All projects were > 2.5 MW⇥ 1381 FIT Pricing – Aboriginal and Community Projects • OPA proposes size tranches and prices that⇥ recognize the unique attributes of Aboriginal and⇥ community-based projects – Proposed prices for these size tranches are only⇥ available to Aboriginal and community-based⇥ projects⇥ – These projects are typically smaller, based on the⇥ local resource potential and benefit from local⇥ participation 19⇥ 1382 FIT Pricing – Aboriginal and Community Projects • Aboriginal and community-based projects recognized⇥ to have higher cost structures than projects⇥ developed by more commercially oriented developers⇥ – These higher costs can include⇥ • • • Requirements for greater consultation⇥ Longer development lead times⇥ Inability to fully utilize the tax benefits provided⇥ by project net operating losses⇥ • • Different financing structures⇥ Local resource availability⇥ 20⇥ 1383 FIT Price Schedule – Derivation • Proposed prices established to allow the proponent⇥ to recover project costs and earn a reasonable rate of⇥ return on investment – Cost-based pricing was used to enable a wide⇥ range of technologies and participation in program⇥ – Cost-based pricing methodology used in many⇥ European FIT Programs⇥ 21⇥ 1384 FIT Price Schedule – Derivation • Prices based on the following elements⇥ – Capital costs⇥ • Reasonable project development, construction,⇥ and equipment costs – Operating and maintenance costs⇥ • Reasonable project staffing and maintenance⇥ costs, including ongoing capital expenditures⇥ and property taxes – Connection costs⇥ • Reasonable project connection costs, no⇥ significant grid upgrade costs assumed⇥ 22⇥ 1385 FIT Price Schedule – Derivation • Prices based on the following elements⇥ – Contract term • – – Assumed 20-year contract term⇥ Reasonable rate of return⇥ Efficient project financing structure given longterm power purchase agreement with a creditworthy counterparty⇥ 23⇥ 1386 FIT Price Schedule – Cost-Based vs. Market-Based • Cost-based prices vs. market-based prices⇥ – OPA considered alternative approaches to cost-based⇥ prices⇥ – For example, Spanish FIT Price Schedule offers two⇥ options for renewable suppliers:⇥ • • • Market price + premium option⇥ At this time, introduction of the FIT Program in Ontario⇥ requires stable and guaranteed long-term prices to best⇥ meet broad policy objectives (i.e., infrastructure investment) as proposed in the Green Energy Act⇥ – • Fixed price option A cost-based approach best ensure this⇥ OPA will consider alternative pricing approaches over⇥ time as the FIT Program matures 24⇥ 1387 FIT Price Schedule – Location and Resource • Locational-based and resource-based pricing were⇥ also considered⇥ • However, these approaches are not being initially⇥ proposed due to⇥ – – Complexity of methodology⇥ Inconsistency with existing market design⇥ • IESO-administered markets do not have⇥ locational marginal pricing⇥ – Potential pricing distortions from current approach⇥ for allocating transmission facility costs⇥ – Objective of stimulating best resource locations⇥ first 25⇥ 1388 FIT Price Schedule – Model Overview • Prices developed using a Discounted Cash Flow⇥ (DCF) model⇥ – • DCF models are commonly used in project finance⇥ The DCF model calculates the prices required to⇥ – – – Cover the cost of investment⇥ Cover ongoing operating expenses⇥ Earn a reasonable rate of return over a 20-year⇥ contact term⇥ 26⇥ 1389 FIT Price Schedule – Model Overview A seven step process was used to calculate⇥ prices⇥ (1) Annual generation output is estimated for a⇥ given project based on the project capacity⇥ and assumed capacity factor⇥ (2) Operating expenses estimated and include⇥ fuel cost, variable operation and maintenance⇥ cost, fixed operation and maintenance cost, and property tax⇥ (3) Annual depreciation calculated using an⇥ appropriate capital cost allowance rate⇥ 27⇥ 1390 FIT Price Schedule – Model Overview (4) Operating expenses, depreciation, interests, and income taxes deducted from revenue to⇥ arrive at net income⇥ (5) Depreciation added back to net income to⇥ estimate actual cash flow⇥ (6) Capital investment, debt borrowing, and debt⇥ repayment added to calculate free cash flow⇥ for each year⇥ (7) Free cash flows are then discounted using the⇥ target return on equity⇥ 28⇥ 1391 FIT Price Schedule – Financing Assumptions • Financing assumptions assume that financial⇥ markets stabilize and return to conditions that are⇥ closer to historical norms # Prices are to be maintained for an extended⇥ period, so a long-term view was taken⇥ 29⇥ 1392 FIT Price Schedule – Financing Assumptions • Non-recourse project finance structure assumed,⇥ based on experience with RESOP⇥ • Experience indicates that this is the most efficient⇥ financing structure⇥ Variable Assumption Percent Equity 30%⇥ After Tax Return on Equity 11%⇥ Percent Debt 70%⇥ Cost of Debt 7%⇥ Income Tax Rate 30.5%⇥ 30⇥ 1393 FIT Price Schedule – Depreciation Assumptions • The majority of project capital costs were assumed⇥ to qualify for Class 43.2 Capital Cost Allowance⇥ treatment⇥ # Ranged from 60 to 80%, with more modular⇥ technologies (e.g., solar PV) assumed to have⇥ higher proportion of capital costs covered by⇥ Class 43.2⇥ # The remaining portion of project costs assumed⇥ to be 8% declining balance⇥ 31⇥ 1394 FIT Price Schedule – Other Assumptions • 20% of the contract price assumed to escalate at the Consumer Price Index (CPI) for all renewable energy⇥ supply technologies (except solar PV)⇥ # 20% is generally consistent with the proportion of⇥ project costs that vary with inflation and provides protection against changes in the rate of inflation⇥ # • 2.25% inflation assumption used in analysis⇥ No credit assumed for revenues from federal⇥ ecoENERGY program⇥ 32⇥ 1395 FIT Price Schedule – Other Assumptions • Domestic (Ontario) content requirements assumed to be⇥ phased in a manner that there is no adverse impact on project costs⇥ – Final Ontario government direction on domestic content may require recalculation of some, if not all,⇥ of the proposed prices⇥ 33⇥ 1396 FIT Price Schedule – Data Sources • Project cost information was developed from a range⇥ of sources using best available information⇥ – – • Consistent with literature and industry experience⇥ Sources clearly documented⇥ Preference was given to more recent cost estimates⇥ from reliable sources with transparent assumptions,⇥ which can be updated as appropriate and necessary⇥ The OPA used a wide rate of sources as inputs into the applicable models. The OPA necessarily applied professional judgment were applicable. 34⇥ 1397 FIT Prices – Cost and Performance Assumptions • Project costs can vary significantly depending on site⇥ conditions, proponent experience, and the cost and⇥ performance characteristics of the various⇥ technologies⇥ • Project cost estimates are part of an integrated⇥ package⇥ – Care needs to be taken when changing just one⇥ element of the cost estimates⇥ 35⇥ 1398 FIT Pricing – PV Assumptions • PV costs and performance estimates are from a⇥ Navigant Consulting study performed for the OPA⇥ Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Rooftop 10kW 5 2009 1 Rooftop 10-100kW 100 2009 1 Rooftop 100-500kW 500 2009 2 Rooftop > 500kW 1,000 2009 2 Ground◆ mounted 10,000 2009 2 2010 13% 9,200 2010 13% 8,160 2011 13% 6,690 2011 13% 5,650 2011 14% 4,600 10 11 12 13.5 15 Source: Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 36⇥ 1399 FIT Pricing – Solar PV Automatic Price Adjustment • For ground mounted solar PV, there is an Automatic⇥ Price Adjustment of 9% of the contract price after 100⇥ MW of contract capacity has been awarded⇥ – Use of an Automatic Price Adjustment is⇥ consistent with other jurisdictions (e.g., California)⇥ – This helps to mitigate customer rate impacts,⇥ given the size of ground mounted solar PV⇥ projects and the premium relative to other⇥ applicable renewable energy supply technologies⇥ 37⇥ 1400 Cost Projections for Ground Mounted Solar PV 6.00⇥ Dollars per Watt installed 5.00⇥ 4.00⇥ 3.00⇥ 2.00⇥ 1.00⇥ 0.00⇥ 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026⇥ Year Source: Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 1401 FIT Pricing – Solar PV Automatic Price Adjustment • Degression rate recognizes the significant cost⇥ reductions that are being realized for solar PV⇥ systems⇥ • An Automatic Price Adjustment is appropriate for technologies that are expected to experience a rapid⇥ decline in installed costs⇥ – The adjustment is an automatic correction⇥ mechanism⇥ • OPA will provide information regarding projects that⇥ have been awarded contracts so that proponents can⇥ evaluate the potential for Automatic Price⇥ Adjustments⇥ 1402 FIT Pricing – Wind Assumptions • Wind costs are from a range of reputable sources;⇥ capacity factors based on OPA estimates supported⇥ by Helimax studies and actual wind project⇥ production in Ontario Community Onshore Offshore Typical Size (MW) 10 100 400⇥ Construction Lead Time 1 2 3⇥ Capacity Factor (%) 30 30 37⇥ Capital Cost ($/kW) 3,200 2,900 Fixed O&M ($/kW/yr) 65 55 (1) (2) 4,800 100 (1)⇥ (3)⇥ Source: (1) Energy Information Administration of the US Department of Energy, Annual Energy Outlook 2009. (2) Cambridge Energy Research Associates, Capital Costs Analysis Forum — Power: Market Review, November 2008. (3) Pace Global Energy Services, Assessment of Florida Power & Light Energy Capital Cost Estimate 40⇥ 1403 FIT Pricing – Wind Assumptions • Community wind projects were assumed to have a⇥ 10% economies of scale penalty⇥ – This reflects reduced buying power with turbine⇥ vendors and EPC contractors, higher proportional⇥ mobilization costs⇥ • Fixed O&M costs increased to reflect land lease⇥ payments and property taxes⇥ 1404 FIT Pricing – Waterpower Assumptions • Waterpower assumptions are from a range of reports: (1) capital costs from Hatch Acres; (2) FOM costs⇥ from CPUC; and (3) capacity factors from Navigant⇥ Community General Typical Size (MW) 1 10⇥ Construction Lead Time 4 4⇥ Capacity Factor (%) 52 52⇥ 5,000 4,500 15 15 (1) Capital Cost ($/kW) Fixed O&M ($/kW/yr) (3) (2)⇥ Source: (1) Navigant Consulting, Inc., Renewable Energy: Costs, Performance and Market – An Outlook (2) Hatch Acres, to 2010 Final Report, June 2007 Evaluation and Assessment of Ontario’s Waterpower Potential Final Report, October 2004 (3) California Public Utilities Commission (CPUC), Greenhouse Gas Modelling Report, 2007. 42⇥ 1405 FIT Pricing – Waterpower Assumptions • Hatch Acres capital cost estimates were believed to⇥ be too low and were escalated by 30% to reflect⇥ increases in costs in power plant construction⇥ • Capital costs for community waterpower projects⇥ were assumed to have approximately a 10%⇥ economies of scale penalty relative to general⇥ waterpower⇥ 1406 FIT Pricing – Biogas Assumptions • Biogas assumptions are from a Navigant study, the⇥ larger Anaerobic digester is assumed to have a tipping⇥ fee⇥ Biogas Biogas Typical Size (MW) 1 5⇥ Construction Lead Time 2 2⇥ Capacity Factor (%) 75 75⇥ Capital Cost ($/kW) 6,700 5,600⇥ Fixed O&M ($/kW/yr) 55 174 Variable O&M ($/MWh) 21 29⇥ Heat Rate (MMbtu/MWh) 17 19⇥ Fuel Cost ($/MMBtu) 0 (2.5)⇥ Source: (1) Navigant Consulting, Inc., Renewable Energy: Costs, Performance and Market – An Outlook to 2010 Final Report, June 2007 44⇥ 1407 FIT Pricing – Landfill gas Assumptions • Landfill gas assumptions are from a Navigant study⇥ Landfill Gas Landfill Gas Typical Size (MW) 2.5 5⇥ Construction Lead Time 2 2⇥ Capacity Factor (%) 83 85⇥ Capital Cost ($/kW) 2,900 2,700⇥ Fixed O&M ($/kW/yr) 300 300⇥ Variable O&M ($/MWh) 17 14⇥ Heat Rate (MMbtu/MWh) 12 10.6⇥ Source: (1) Navigant Consulting, Inc., Renewable Energy: Costs, Performance and Market – An Outlook to 2010 Final Report, June 2007 45⇥ 1408 FIT Pricing – Biomass Assumptions • Biomass assumptions are from a Navigant study⇥ Biomass Typical Size (MW) 30⇥ Construction Lead Time 2⇥ Capacity Factor (%) 85⇥ Capital Cost ($/kW) 4,000⇥ Fixed O&M ($/kW/yr) 150⇥ Variable O&M ($/MWh) 7⇥ Heat Rate (MMbtu/MWh) 9⇥ Fuel Cost ($/MMBtu) 3⇥ Source: (1) Navigant Consulting, Inc., Renewable Energy: Costs, Performance and Market – An Outlook to 2010 Final Report, June 2007 46⇥ 1409 Draft FIT Price Schedule Technology Capacity Range Prices (cents/kWh) Automatic Price (CAD) Adjustment 80.2 None⇥ 71.3 None⇥ Rooftop Solar PV ◆ 1 0 kW > 1 0 kW ◆ 1 00 kW > 1 00 kW ◆ 500 kW 63.5 None⇥ Rooftop Solar PV > 500 kW 53.9 None⇥ Ground mounted > 1 0 kW ◆ 1 0 MW 44.3 9% price reduction⇥ Micro Solar PV Rooftop Solar PV Solar PV triggered every 100 MW ◆ 1 0 MW 14.4 None⇥ On-shore Wind Any size 13.5 None⇥ Off-shore Wind Any size 19.0 None⇥ Community Based ◆ 2 MW 13.4 None⇥ Waterpower ◆ 50 MW 12.9 None⇥ Biomass Any size 12.2 None⇥ Biogas ◆ 5 MW 14.7 None⇥ > 5 MW 10.4 None⇥ ◆ 5 MW 11.1 None⇥ > 5 MW 10.3 None⇥ Community Based or Aboriginal Wind Waterpower Landfill gas 1410 FIT Implementation – Incentive Payments • For technologies that are dispatchable (i.e., not⇥ intermittent): waterpower; biogas; landfill gas, and⇥ biomass⇥ – Incentive payment of 135% of contract price paid⇥ for 8 hour on-peak period, 11 am to 7 pm Monday⇥ to Friday, excluding statutory holidays⇥ – Off-peak payment of 90% of the contract price⇥ paid for all other hours⇥ • Incentive payment structure only rewards proponents⇥ who adjust the output profile of their projects⇥ • Projects that produce power 7x24 year round will⇥ earn the full price⇥ 48⇥ 1411 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-03-09 3:55 PM↵ To: 'deb@reidandassociates.ca'↵ Cc: Patricia Lightburn; Cindy Roks↵ Subject: RE: Pricing Questions for Next Tuesday↵ Attachments: Questions from Deb April 3 2009.doc↵ Hi Deb, Please see attached. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Patricia Lightburn Sent: April 2, 2009 5:01 PM To: 'Deb Reid' Cc: Emay Cowx; Tim Taylor; Pat Finnegan; Jim MacDougall; Jason Chee-Aloy; Richard Duffy; Cindy Roks; Sarah Simmons Subject: RE: Pricing Questions for Next Tuesday Sarah and Cindy have kindly offered to draft responses tomorrow. From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: Thursday, April 02, 2009 4:12 PM To: Patricia Lightburn; Jim MacDougall; Jason Chee-Aloy; Richard Duffy Cc: Emay Cowx; Tim Taylor; Pat Finnegan Subject: Pricing Questions for Next Tuesday Importance: High Hi Patricia: Throughout our discussions with the communications group on FIT a number of questions came up on pricing that will come up at next Tuesday ’s FIT SES on pricing.⌘ Can you co- ordinate a response from the technical team that can be used at Tuesday ’ s meeting and can be used for the web FAQs and the Call Centre Qs and As. Since the pricing session is on Tuesday, the Call Centre would⌘ need to have draft material by Monday for training and final by end of day Monday. So could you get something⌘ circulated and reviewed by your team to me by end of day Friday please and thanks? It will also have to be⌘ 1412 circulated and reviewed by your team to me by end of day Friday please and thanks? It will also have to be⌘ circulated through Tim and Emay for communications review on Monday. Hopefully you already have thought of⌘ these and have answers at the ready.⌘ Here are the questions: 1. How can you justify paying 80 cents for solar and selling it for 5 cents? 2. Why is biomass getting a lower price than what was recommended by the OSEA and why is it so much lower than wind? 3. Why is there no FIT price for CHP and solar thermal? 4. What kind of impact will these contract prices have on rates?⌘ 5. Will these prices result in excessive returns for contract holders? 6. What is the OPA ’ s definition of biomass (OSEA says the one in the FIT application looks like an old one). 7. Why, from OPA ’s 8. perspective, is biomass considered a green, sustainable energy source.⌘ Will homeowners/farmers/businesses with existing solar panels or wind turbines on their property be able to use this equipment to apply for a FIT contract? Thanks Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 1413 Questions from Deb – April 3, 2009 1. How can you justify paying 80 cents for solar and selling it for 5 cents? The FIT prices are designed to cover costs plus a reasonable rate of return for the" generation facility. The proposed FIT prices are intended to incent the development of" renewable energy projects, from a variety of technologies and a variety of sizes. The" proposed price for micro-scale PV is the highest because the system costs are the" greatest in terms of dollars per Watt installed. It is important to note that the capacity would be contracted at 80.2 cents kWh would" represent a very small portion of the total contracted capacity. The OPA will review the" FIT prices on a regular basis. The costs for installing PV systems is expected to decline" over the coming years, and updated FIT price schedules would reflect this decline. Feedback on the proposed prices is encouraged through the stakeholder engagement" process. 2. Why is biomass getting a lower price than what was recommended by the OSEA and why is it so much lower than wind? Rephrased Question: Why is the price for biomass lower than the prices for wind? The FIT prices are derived to cover the typical costs plus a reasonable rate of return for" each technology. Each renewable technology has different associated costs and" performance characteristics. Wind and biomass projects have different cost" components and performance characteristics, therefore they have different prices." Feedback on the proposed prices is encouraged through the stakeholder engagement" process. 3. Why is there no FIT price for CHP and solar thermal? Certain renewable fuels were not included in the proposed FIT program. They may not" have been included if they had uncertain cost components at this time, or widely" varying cost components. The OPA will consider an alternative procurement approach" for these technologies. Feedback on prices is encouraged through the stakeholder" engagement process. 4. What kind of impact will these contract prices have on rates? [I don’t have an answer for this] 5. Will these prices result in excessive returns for contract holders? 1414 The prices were derived to include a reasonable rate of return, given typical project" costs. The OPA will regularly review capital cost assumptions and revise FIT prices in" order to ensure that the FIT prices are at a reasonable level. 6. What is the OPA’s definition of biomass (OSEA says the one in the FIT⇢ application looks like an old one). Rephrased Question: What is the OPA’s definition of biomass? The definition of Renewable Biomass is outlined in the draft FIT Program Rules. In brief," Renewable Biomass means organic matter that is derived from a plant and available on" a renewable basis (e.g. dedicated energy crops, dedicated trees, agricultural food," manure, etc.). Renewable Biomass does not include Municipal Solid Waste, peat," treated by-products of manufacturing processes, hazardous or liquid waste. For greater" clarity, please refer to the draft FIT program rules, definition #128. 7. Why, from OPA’s perspective, is biomass considered a green, sustainable energy source. [I don’t think we have an answer for this… ] 8. Will homeowners/farmers/businesses with existing solar panels or wind turbines on their property be able to use this equipment to apply for a FIT contract? As per the draft FIT Rules, Existing Renewable Energy Facilities are not eligible for FIT" contracts. Existing Renewable Energy Facilities are those whose Generating Equipment" has been in commercial operation; meaning that they’ve received market revenues or" has operated for more than 500 hours year in any of the past three years. Likewise," projects that have existing contracts are not eligible for FIT contracts. For greater" clarity, please refer to section 2.1 of the draft FIT rules. 1415 Richard Duffy From: Richard Duffy Sent: April-04-09 5:26 PM To: Eric Vanden Heuvel; Jim MacDougall; webmaster Subject: RE: Urgent request; Re: FIT pricing schedule - clarification Attachments: FIT Price Schedule - Draft March 13 2009.pdf Hi Eric, Could the attached file be posted in place of the document that you had just removed? Thanks Richard From: Eric Vanden Heuvel✏ Sent: Sat 4/4/2009 5:02 PM✏ To: Jim MacDougall; webmaster✏ Cc: Richard Duffy✏ Subject: RE: Urgent request; Re: FIT pricing schedule - clarification✏ Hi Jim, I've removed the link to the Clarification document. please advise if you want the entire page along with the " FIT Program Rules - Draft March 13 , 2009 " document removed as well. Eric From: Jim MacDougall✏ Sent: Sat 4/4/2009 12:00 PM✏ To: webmaster✏ Cc: Richard Duffy✏ Subject: Urgent request; Re: FIT pricing schedule - clarification✏ Hey guys The posting of this price schedule was premature. Can you either; 1 replace with the original version or; 2 disable the link until Monday morning when we can get you the right doc. Thanks, and pls let me know what and when you can do this. Jim MacDougall, P.Eng. 1416 Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Judith Burfoot To: Sarah Simmons; Jim MacDougall CC: Patricia Lightburn; 'jdalton@poweradvisoryllc.com' ; Richard Duffy Sent: Wed Apr 01 15:33:04 2009 Subject: RE: FIT pricing schedule - clarification Hello everyone, The new schedule has been posted: http://www.powerauthority.on.ca/fit/Page.asp?PageID=122&ContentID=10101&SiteNodeID=1039 It replaced the earlier version. Thank you, - Judith _________________________ _____ __ From: Sarah Simmons Sent: April 1, 2009 3:03 PM To: Jim MacDougall; webmaster Cc: Patricia Lightburn; 'jdalton@poweradvisoryllc.com'; Richard Duffy Subject: RE: FIT pricing schedule - clarification This is the correct version. Sarah Simmons Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 1417 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email _________________________ _____ __ From: Jim MacDougall Sent: April 1, 2009 2:45 PM To: Cindy Roks; webmaster Cc: Patricia Lightburn; Sarah Simmons; 'jdalton@poweradvisoryllc.com'; Richard Duffy Subject: RE: FIT pricing schedule - clarification Hold off please – one more clarification to be made …⌅ Jim MacDougall, P.Eng. Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 _________________________ _____ __ From: Cindy Roks Sent: April 1, 2009 2:22 PM To: webmaster Cc: Jim MacDougall; Patricia Lightburn; Sarah Simmons; jdalton@poweradvisoryllc.com; Richard Duffy Subject: FIT pricing schedule - clarification Webmaster, Please find attached a revised draft pricing schedule. This should replace the original pricing schedule. The only difference is the wording in the adjustments column from “ when 100MW contracted to every 100MW ”⌅ It should be entitled “ Pricing Schedule – Clarification ”⌅ ----- Original Message ----From: Jim MacDougall Sent: March 30, 2009 7:32 PM To: Cindy Roks Cc: Patricia Lightburn 1418 Subject: Re: pricing schedule Yes. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Cindy Roks To: Jim MacDougall CC: Patricia Lightburn Sent: Mon Mar 30 17:35:42 2009 Subject: RE: pricing schedule Please confirm it's okay to post with title "Pricing Schedule - Clarification" _________________________ _____ __ From: Cindy Roks Sent: Fri 27/03/2009 12:48 PM To: Jim MacDougall Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy Subject: RE: pricing schedule Please see the new revised pricing table that reflects Jim ’ s comment below. 1419 I think we will need to title it as “ Pricing Schedule – clarification ” . If we say revised or updated – audiences may think the actual price changed. I will get it posted Monday. _________________________ _____ __ From: Jim MacDougall Sent: March 25, 2009 11:14 AM To: Cindy Roks Cc: Sarah Simmons; Patricia Lightburn; Richard Duffy Subject: pricing schedule Cindy The wording of groundmounted PV is found at: http://www.powerauthority.on.ca/FIT/Storage/29/10116_FIT_Price_Schedule_ - _ Draft_March_13__2009.pdf 1420 and says: 9% price reduction triggered when 100 MW contracted Some developers are unaware that it is 9% each and every 100 MW, not just the first 100 MW. what do you think about "9% price reductions triggered each 100MW contracted" other ideas? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 1421 Draft: March 13, 2009 Proposed Feed-In Tariff Prices✓ for Renewable Energy Projects in Ontario✓ Technology Proposed size tranches✓ Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 Adjustments✓ Biomass* Biogas* Waterpower* Community Based or Aboriginal 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 Landfill gas* Solar PV Rooftop 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 1 0 MW 14.4 Ground Mounted 9% price reduction+ triggered when 100+ MW contracted+ Wind Draft Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 1422 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-06-09 8:35 AM↵ To: 'Deb Reid'↵ Cc: Patricia Lightburn; Cindy Roks; Emay Cowx↵ Subject: RE: Pricing Questions for Next Tuesday↵ Good Morning Deb, Thanks for the feedback. 1. Watt vs. kilowatt – It doesn ’t really matter. However, I think it’ s more representative to say “dollars per⇢ Watt ”. E.g. solar costs are about $9.50 per watt, or $9500 per kilowatt. 2. With respect to impact on customer rates – Min. Smitherman did mention 1%, however, I have been unable to verify this number - so I am very uncomfortable using it. I will investigate further. I think for the time being⇢ we will need to come up with a more qualitative answer to this question. Really, it all depends on the⇢ predicted uptake and the types of renewable fuels that are most prevalent. 3. I ’ ve gotten in the habit of referring to sections of the draft rules, however, I can see that this would be unnecessary in a verbal response. The statements are complete without the reference.⇢ 4. With respect to “ why the OPA thinks biomass is sustainable ” question 5. … – I ’ m not really too sure how to approach this response. Any advice?⇢ And it would be tough to answer without an essay- style For the last question, about existing generating facilities – if they have had a contract (e.g. RESOP) they will not be eligible for the FIT program. The rules for the “ Micro- FIT ” are still being developed, so I ’ m hesitant to give more information – although, I expect that net- metered facilities will be eligible to participate in the FIT. Kindest regards, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: April 3, 2009 4:12 PM To: Sarah Simmons Cc: Patricia Lightburn; Cindy Roks; Emay Cowx Subject: RE: Pricing Questions for Next Tuesday Hi Sarah: 1423 Thanks for the quick turnaround. I have a few questions and comments on this draft. Can you look at them and⇢ send back to me with your thoughts please and thanks.⇢ Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 ----- Original Message----From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: Friday, April 03, 2009 3:55 PM To: deb@reidandassociates.ca Cc: Patricia Lightburn; Cindy Roks Subject: RE: Pricing Questions for Next Tuesday Hi Deb, Please see attached. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: www.energyconservationweek.ca From: Patricia Lightburn Sent: April 2, 2009 5:01 PM To: 'Deb Reid' Cc: Emay Cowx; Tim Taylor; Pat Finnegan; Jim MacDougall; Jason Chee-Aloy; Richard Duffy; Cindy Roks; Sarah Simmons Subject: RE: Pricing Questions for Next Tuesday Sarah and Cindy have kindly offered to draft responses tomorrow. From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: Thursday, April 02, 2009 4:12 PM To: Patricia Lightburn; Jim MacDougall; Jason Chee-Aloy; Richard Duffy 1424 Cc: Emay Cowx; Tim Taylor; Pat Finnegan Subject: Pricing Questions for Next Tuesday Importance: High Hi Patricia: Throughout our discussions with the communications group on FIT a number of questions came up on pricing that will come up at next Tuesday ’⇢ s FIT SES on pricing.⇢ Can you co- ordinate a response from the technical team that can be used at Tuesday ’ s meeting and can be used for the web FAQs and the Call Centre Qs and As. Since the pricing session is on Tuesday, the Call⇢ Centre would need to have draft material by Monday for training and final by end of day Monday. So could⇢ you get something circulated and reviewed by your team to me by end of day Friday please and thanks? It⇢ will also have to be circulated through Tim and Emay for communications review on Monday. Hopefully you⇢ already have thought of these and have answers at the ready.⇢ Here are the questions: 1. How can you justify paying 80 cents for solar and selling it for 5 cents? 2. Why is biomass getting a lower price than what was recommended by the OSEA and why is it so much lower than wind? 3. Why is there no FIT price for CHP and solar thermal? 4. What kind of impact will these contract prices have on rates?⇢ 5. Will these prices result in excessive returns for contract holders? 6. What is the OPA ’ s definition of biomass (OSEA says the one in the FIT application looks like an old one). 7. Why, from OPA ’s 8. Will homeowners/farmers/businesses with existing solar panels or wind turbines on their property perspective, is biomass considered a green, sustainable energy source.⇢ be able to use this equipment to apply for a FIT contract? Thanks Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 1425 Richard Duffy From: Richard Duffy Sent: April-07-09 5:38 PM To: Ziyaad Mia Subject: RE: just a reminder - slides when you have a chance please and thank you Attachments: Session 1 - Inaugural Session FINAL.ppt As requested. Thanks for the reminder, I had forgotten!⇠ From: Ziyaad Mia Sent: Tuesday, April 07, 2009 5:32 PM To: Richard Duffy Subject: just a reminder - slides when you have a chance please and thank you Ziyaad Mia Counsel Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON , M5H 1T1 T: 416 969 6025 1426 ONTARIO POWER AUTHORITY March 17, 2009 1427 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ March 17 - Agenda✓ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Process and Objectives✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Tariff Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft FIT Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 2 1428 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Objectives of Consultation✓ • To seek input from stakeholders on the proposed FIT Program Rules, Contracts and Price Schedule • To ensure that the Rules, Contracts and Price Schedule are adequately detailed and well understood • To identify areas for further OPA consideration • To identify implementation issues that need to be addressed to ensure success 3 1429 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Consultation Process✓ • OPA to host Stakeholder Engagement Sessions – Every Tuesday, for eight weeks • • March 17, 2009 – May 5, 2009 From 9:00 am to 4:00 pm – Registration required – Agenda and presentations to be posted in advance – Webcast and teleconference available – Audio recording available from OPA website – Sessions address the different technical elements underpinning the proposed FIT Program Rules 4 • Online Q&A Tool 1430 Timeline for Proposed FIT Program Development⇠ Date✓ Draft Price Schedule posted March 12 First Draft Program Rules posted March 14 Stakeholder Engagement Sessions March 17 Draft FIT Program Contracts posted Late April Revised Draft Program Rules, Contracts and Mid May – May 5 Price Schedule posted Final Draft Program Rules posted Late May FIT Training Late May Program Launch (subject to approval of GEA) Early June (projected) 5 1431 Stakeholder Sessions – Proposed Topics⇠ Date✓ Process and Objectives of the Proposed FIT Program March 17 Project Eligibility Requirements Application Requirements, Application Review – Part I March 24 Application Requirements, Application Review – Part II March 31 Price Schedule (i.e. technologies, size, and prices) April 7 FIT Contract Form, Execution and Milestones Program Initialization April 14 Resource Integration, Metering Requirements and Settlement April 21 Incremental Projects Program Review and Amendments Program Initialization April 28 Additional Issues, further discussion and questions May 5 6 1432 Proposed Feed-in Tariff Program Stakeholder Engagement⇠ Online Q and A✓ • On-line Q & A Tool on OPA website – Questions and responses posted publicly on OPA website – • Option to submit comments or recommendations Questions and comments will serve as input to the review of the Draft Program Rules and Contract 7 1433 FIT Training⇠ • On-line Training Module – OPA to develop an online FIT Program training resource • To guide interested participants through the different steps and requirements of the FIT program – Training material to be developed for different types of participants (e.g. residential, commercial, agricultural, other) • OPA Training Sessions – OPA to visit various communities across Ontario – Objective is provide training to potential program applicants 8 – Expected to run during late May 1434 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Program✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules: Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 9 1435 Overview of Proposed Green Energy Act⇠ • Framework • Legislative Changes • First Nations and Métis participation in Electricity Sector • Feed-in Tariffs • Smart Grid • System Connection • Approvals • Other Changes 10 1436 Proposed Framework⇠ • Facilitating renewable energy development and use • Enabling First Nations and Métis partnership and participation in electricity sector • Supporting capacity development in First Nations and Métis communities • Increasing conservation and culture of conservation • Creating green jobs • Developing “smart grid” 11 1437 Proposed Framework⇠ • Renewable Energy Source – “…renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy, tidal forces and such other energy sources as may be prescribed by the regulations...” • Next Steps – Legislative process and hearings – Development of regulations 12 1438 Proposed Legislative Changes⇠ • Green Energy and Green Economy Act, 2009 – – New Green Energy Act Amendments to many other Acts: • • • • • • • • • • • • • • • – 13 Electricity Act Ministry of Energy Act Ontario Energy Board Act Environmental Protection Act Clean Water Act Environmental Bill of Rights Ontario Water Resources Act Co-operative Corporations Act Building Code Act Planning Act Ministry of Natural Resources Act Conservation Authorities Act Niagara Escarpment Planning and Development Act Provincial Parks and Conservation Reserves Act Public Lands Act Repeals Energy Efficiency Act and Energy Conservation Leadership Act 1439 Proposed Legislative Changes⇠ • Green Energy Act – New Act that replaces Energy Conservation Leadership Act and Energy Efficiency Act – Incorporates provisions of these Acts with some modifications including energy audits on sale of a home – Allows for by-law and other restrictions to be overridden for renewable projects – Creates Renewable Energy Facilitation Office to assist proponents through approvals processes – Gives Minister power to direct ministries on energy and environmental standards in government facilities 14 1440 First Nations and Métis Participation in Electricity Sector⇠ • Act to be interpreted consistent with s. 35 of Constitution Act • Minister may direct consultation in relation to Ontario Power Authority activities • Minister may direct OPA to facilitate aboriginal peoples’ partnership and participation in development of renewable resources, transmission and distribution 15 1441 Feed-in Tariffs⇠ • Minister may direct OPA to develop Feed-in Tariff program for renewable resources – Standard rules – Standard contracts – Standard pricing – Differentiated by energy source, fuel type, capacity, etc. – Provision for Aboriginal and community involvement – Provisions for domestic content 16 1442 Smart Grid⇠ • Smart grid involves “advanced information exchange systems and equipment” enabling the increased use of renewable resources, demand response and conservation • Government may direct Ontario Energy Board (OEB) to facilitate development of smart grid • Government may make regulations on: – – – Timeframes for smart grid development Roles and responsibilities Communications standards 17 1443 System Connection⇠ • Transmitters and distributors must connect renewable energy facilities that – – Make a written request for connection; and Meet all technical, economic and other relevant requirements • Transmitters and distributors must provide priority connection access to renewable energy facilities that meet relevant regulatory requirements • Minister may direct OEB to enable connection of renewable resources to transmission or distribution systems (e.g., reinforcements, expansions) 18 1444 System Connection⇠ • Regulations may require timelines for connection assessments • Transmitters and distributors required by license to prepare plans on expansion of their systems to accommodate renewable generation and smart grid 19 1445 Proposed Approvals⇠ • Renewable Energy Facilitation Office – – – – • Ministry of Energy and Infrastructure office Led by Renewable Energy Facilitator Facilitate renewable energy development Information and resource hub Renewable Energy Approval – One approval process under the Environmental Protection Act to replace some processes under various legislation 20 1446 Proposed Approvals⇠ • Exemption from municipal controls and approvals (e.g., zoning, site plan control, etc.) for renewable generation • Government can set rules and standards for planning, notice and consultation, design, siting, reporting, etc. for renewable generation 21 1447 Other Proposed Changes⇠ • Distributors and municipalities may own some types of generation ($10MW) • Provides for renewable energy co-operatives • Minister may direct OEB to establish conservation and demand management targets for distributors and other licensees • Distributors can choose between conservation program they develop with OEB approval and OPA program 22 1448 Other Proposed Changes⇠ • Cost of distributor conservation program to be recovered through global adjustment • Chief Energy Conservation Officer (CECO) and Conservation Bureau provisions repealed with reporting role moving to Environmental Commissioner • Energy conservation standards in Building Code to be reviewed and new Building Code Energy Advisory Council to be established 23 1449 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to the FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 24 1450 Introduction to FIT Programs⇠ • What is a Feed-in Tariff (FIT) Program? • Objectives of FIT Program • Experience in other jurisdictions • Ontario FIT Program: – Residential renewable energy development and approach – Agricultural renewable energy development – Commercial renewable energy development – Community, Aboriginal renewable energy development 25 1451 I ntroduction to FIT Programs⇠ What is a FIT Program?✓ • Generators of renewable energy to large developers – from homeowners – are paid a reasonable price for the electricity they produce over the term of the contract • Allows generators to recover expected cost of the investment plus a reasonable rate of return A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 26 1452 Introduction to FIT Programs⇠ Standardized features of the FIT Program✓ • Open to various renewable energy supply technologies – – – – Wind Waterpower Solar PV Biomass technologies • Different prices for different technologies and project sizes • Long-term contracts • Prices that aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects 27 1453 Introduction to FIT Programs⇠ Objectives of the proposed FIT Program✓ • Increase capacity of renewable energy supply to ensure adequate generation and reduce emissions • Simpler method to procure and develop generation • Create new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies 28 1454 Experience in Other Jurisdictions⇠ • 46 jurisdictions have adopted some form of a FIT Program • More than half have been enacted since 2002 • 19 EU Countries have adopted FIT program 29 1455 Experience in Other Jurisdictions⇠ Year⇧ 30 Cumulative⇧ Number⇧ Countries/States/Provinces Added That Year⇧ 1978 1 United States (no longer in place)⌫ 1990 2 Germany⌫ 1991 3 Switzerland⌫ 1992 4 Italy⌫ 1993 6 India Denmark⌫ 1994 8 Greece Spain⌫ 1997 9 Sri Lanka⌫ 1998 10 Sweden⌫ 1999 13 Portugal, Norway, Slovenia⌫ 2000 13 --- 2001 15 France, Latvia⌫ 2002 21 Austria, Brazil, Czech Republic, Indonesia, Lithuania, Algeria⌫ 2003 28 Cyprus, Estonia, Hungary, Korea, Slovak Republic, Maharashtra (India)⌫ 2004 34 Italy, Israel, Nicaragua, Prince Edward Island (wind only), Andhra Pradesh and Madhya Pradesh (India)⌫ 2005 41 China; Turkey; Ecuador; Ireland, Karnataka, Uttaranchal, and Uttar Pradesh (India)⌫ 2006 44 Ontario (RESOP), Argentina, Thailand⌫ 2007 46 South Australia (Australia), Croatia⌫ Source: REN21 2006⇣ 1456 US Proposed Legislation⇠ • Interest in FIT Programs has been building in the US but no state has yet introduced a full FIT program • Six states have introduced (but have not yet passed) Feed-in Tariff bills, and another eight states have considered, or are considering, similar legislation – Introduced legislation: Michigan, Illinois, Minnesota, Rhode Island, Nevada, Hawaii, California – Considering Legislation: Florida, Oregon, Maine, Vermont, Wisconsin, New Jersey, Massachusetts, New York and Washington 31 1457 US Proposed Legislation⇠ • • • A Federal Bill was introduced in May 2008 ‘US Renewable Energy Jobs and Security Act’ – Congressman Jay Inslee (WA-1st-D) The Bill includes three main FIT design elements: 1. guaranteed interconnection through uniform minimum standards 2. a mandatory purchase requirement through fixed-rate 20- year contracts 3. rate recovery through a regionally partitioned national system benefits charge • Pricing – – Bill proposes minimum prices Prices must be designed to cover generation costs, plus a 10% rate of return on investment 32 1458 International Energy Agency Report, 2008⇠ • “The group of countries with the highest effectiveness (Germany, Spain, Denmark and, more recently, Portugal) use feed-in tariffs (FITs) to encourage wind power deployment.” • “Their success in deploying onshore wind stems from high investment stability guaranteed by the long✓ term FITs, an appropriate framework with low administrative and regulatory barriers, and relatively favourable grid access conditions.” 33 1459 Germany⇠ Renewable Energy Sources Act 2004✓ • Guarantee of purchase at a fixed rate for 20 years • Prices: – Price differentiation by size, application, resource quality, and technology – Annual degression of prices – No adjustment for inflation – Bonuses for ‘innovation’ (bioenergy) – Review of prices every 2 years – Prices have dropped over time to reflect falling prices in renewable energy supply technologies 34 1460 Germany⇠ • Contracts administered by grid operators – Equalization scheme distributes costs evenly among electricity rate-payers across regions of the country • Prices and rules set by national law 35 1461 Germany⇠ • • • 36 30,893 MW renewable electricity capacity installed 20,622 MW wind capacity installed; 2,831 MW solar PV About 20% of total installed capacity (Source: Renewable Energy Sources Act - Progress Report 2007) 1462 German FIT prices⇠ Technology Rooftop Solar PV Capacity Range EU cents/kWh Cdn cents/kWh⇧ (1.61)⇧ 43.01 69.23⇧ 40.36 65.85⇧ > 100 kW 1000 kW 39.90 63.71⇧ > 1000 kW 33.00 53.11⇧ 31.94 51.41⇧ 30 kW > 30 kW 100 kW Ground mounted Solar PV Any size On-shore Wind Any size (*based on resource differentiated tariffs) 9.22 5.02 14.81 8.08⇧ Off-shore Wind Any size (*based on resource differentiated tariffs) 13.00 3.50 20.92 5.63⇧ Waterpower (*new facilities)⌫ 12.67 20.39⇧ 8.65 13.92⇧ 7.65 12.31⇧ 11.67 18.78⇧ 9.18 14.78⇧ > 500 kW 5 MW 8.25 13.28⇧ > 5 MW 20 MW 7.79 12.54⇧ 9.00 14.49⇧ 6.16 9.91⇧ 500 kW > 500 kW 2 MW Biomass/ biogas 5 MW 150 kW > 150 kW Landfill gas 2 MW 500 kW 500 kW > 500 kW 5 MW 37 1463 Spain⇠ • Framework set out in law and details set out in Royal Decree (regulation) • FIT grants priority access to the grid and priority dispatch • Special Regime Control Centre (SRCC) oversees reliability • Federal ‘Administrative Registry of Production of Electricity under Special System’ 38 1464 Spain⇠ • National Commission of Energy performs settlement of costs incurred under the Special System by reimbursing distributors who have paid the prices, premiums and incentives • Red Eléctrica de España (REE) manages most of the transmission network Share of electricity from renewables: 19% in 2006 and 29.4% by 2010 (target) – 14,000 MW renewable capacity 39 1465 Spain⇠ Application Process – Service Guarantees✓ Time limit for the✓ authority to respond✓ ⇥ 1. Apply to the federal or regional authority to be Within 6 months included in the Special System ⇥ 2. Apply to the distribution company for the Within 1 month connection point and technical conditions necessary to undertake the project. ⇥ 3. Pre-register the installation in the federal ‘Administrative Registry of Production of Electricity under Special System’ Within 1 month ⇥ 4. Request a contract from the local distributor Within 1 month ⇥ 5. Definitive registration in the national Register Within 1 month 40 1466 Spanish FIT prices⇠ Euro cent/kWh Cdn cent/kWh⇧ (1.61)⇧ <20 kW 34.00 54.72⇧ <200 kW 33.00 53.11⇧ >200 kW 32.00 51.51⇧ Ground-mounted Systems- Any size⌫ 32.00 51.51⇧ Wind Onshore – Any size 7.58 12.18⇧ Hydro⇧ <10 MW⌫ 7.80 12.55⇧ Technology Solar PV Capacity Range <50 MW⌫ Biogas⇧ (biodigester gas)⌫ 3.38⇧ <500 kW⌫ 13.50 21.74⇧ >500 kW⌫ 10.00 16.10⇧ 12.99-16.42 (depending on technology)⇧ 20.91 – 26.43⇧ 10.75-15.15 17.31 – 24.38⇧ 8.26 13.29⇧ <2 MW⌫ Biomass (energy⌫ Crops, forestry, waste,⌫ Agriculture, waste⌫ >2 MW⌫ Landfill gas 2.10 (on top of market price)⇧ Any size⌫ 41 1467 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 42 1468 Structure of Draft Program Rules⇠ High level review of:✓ 1. Project Eligibility and Application Requirements 2. Application Review & Acceptance 3. Connection Assessment 4. Contract Pricing 5. Contract Milestones 6. Contract Management & Settlement 7. Program Review & Amendments 43 1469 Introduction to the Proposed FIT Program⇠ Small renewable energy supply projects✓ • Projects < 500kW will be subject to a simpler, streamlined process • The OPA will be discussing potential program administration with Local Distribution Companies – OPA successfully worked with LDCs to administer and implement the Renewable Energy Standard Offer Program (RESOP) 44 1470 Proposed Application Process⇠ Start 1.✓ Submit OPA FIT Application with pre-requisites Is application May re-submit with complete application complete and No meet all mandatory requirements? Yes Is this project Yes $ 500 kW? No 2.✓ Is connection capacity available? 3.✓ Yes OPA✓ FIT Contract with full security 4.✓ LDC/IESO✓ CIA/SIA completed 5.✓ OPA✓ Contract milestones applied Commercial operation within required time No Reserve / Production Line 45 1471 Introduction to the Proposed FIT Program⇠ Project Eligibility and Application Requirements✓ • Eligibility requirements based on technology and size • Limits on existing projects with previous OPA contracts • Incremental Projects • Application fee • Resource plan • Application Security Presentation and discussion on Eligibility⌫ 46 Requirements at 2:30 (March 17)⌫ 1472 Introduction to the Proposed FIT Program⇠ Application Review and Acceptance✓ • Application time stamped • Review of application • Connection capacity availability or approved plans for transmission or distribution • Contracts awarded Presentation and discussion on FIT application⌫ process, connection assessments, and⌫ application review 47 –⇥ Part I on March 24, 2009⌫ 1473 Introduction to the Proposed FIT Program⇠ Economic Connection Test:⌫ What transmission and/or distribution is required to connect additional renewable energy supply? • Results of the Economic Connection Test provide input to reasonable transmission and/or distribution grid expansions: – – – – Integrated Power System Plan (IPSP) Transmitter plans LDC plans Proposed Ontario Energy Board (OEB) requirements on transmitters and/or LDCs – Ministerial Directives Presentation and discussion on FIT application process, connection assessments, and application review 48 Part II on March 31, 2009⌫ 1474 –⇥ Introduction to the Proposed FIT Program⇠ Pricing✓ • Pricing by technology and size • Prices aim to cover total project costs and provide a reasonable rate of return over the contract term • Opportunities for promoting community-based and Aboriginal projects. • Prices derived using recent market data, OPA experience with previous renewable energy contracts (RES, RESOP) and experience in other jurisdictions Presentation and discussion on Pricing⌫ 49 April 7, 2009⌫ 1475 Introduction to the Proposed FIT Program⇠ Contract Milestones✓ • Security • Completion of all Permits and Approvals – Renewable Energy Approval • Equipment Orders • Requirement to reach commercial operation within a specified time (years) Presentation and discussion on Contract⌫ Milestones on April 14, 2009⌫ 50 1476 Introduction to the Proposed FIT Program⇠ Contract Management, Resource Integration, Metering Requirements and Settlement✓ • OPA responsible for ongoing contract management – OPA beginning discussions with LDCs for administering contracts for facilities < 500 kW • OPA working with Independent Electricity System Operator (IESO) to effectively integrate renewable energy supply resources 51 1477 Introduction to the Proposed FIT Program⇠ • Metering requirements in accordance with existing standards (IESO or LDC) • Monthly payments – Transmission connected projects paid by IESO/OPA – Distribution connected projects paid by LDCs on behalf of the OPA Presentation and discussion on Contract⌫ Management and Settlement on April 21, 2009⌫ 52 1478 Introduction to the Proposed FIT Program⇠ Program Rules and Price Schedule Review and✓ Future Amendments✓ • Review of Program Rules and Price Schedule on a regular basis (e.g. every two years) • Based on specific circumstance the Program Rules and/or Price Schedule could change ahead of the regular review period • Automatic degression of solar PV prices triggered by capacity targets – 9% every 100 MW Presentation and discussion on Program Review on⌫ April 28, 2009⌫ 53 1479 Introduction to the Proposed FIT Program⇠ Initialization Period✓ • Initial 60 day period to submit FIT applications • Different application process to manage legacy projects and manage the potential “intake” of applications • Use initial window to allow developers to gather FIT contract pre-requisites and in order to reduce the rush to apply 54 1480 March 1 7 – Agenda⇠ 9:00 – 9:10 Opening Remarks by Colin Andersen✓ 9:10 – 9:40 Objectives FIT Program Stakeholder✓ Engagement✓ 9:40 – 10:30 Overview of the Proposed Green Energy Act✓ 10:30 – 10:40 Coffee Break✓ 10:40 – 12:00 Introduction to FIT Programs✓ 12:00 –1:00 Lunch✓ 1:00 – 2:40 Structure of Draft Program Rules✓ 2:40 – 2:50 Coffee Break✓ 2:50 – 3:50 Draft FIT Program Rules:✓ Proposed Eligibility Requirements✓ 3:50 – 4:00 p.m. Adjourn✓ 55 1481 Proposed Eligibility Requirements⇠ • Renewable Energy technologies include: – – – – • Wind (offshore, onshore) Solar PV Biomass, bio-gas, bio-fuel, landfill gas Waterpower Separate rules apply to projects $10 kW on residential properties – – simplified process for micro-scale OPA to work with LDC to streamline customer experience 56 1482 Proposed Eligibility Requirements⇠ Projects must be:✓ • Fueled by a renewable fuel source (more than one permissible for a single project, but lowest price applies) • Geographically and electrically located in Ontario • A new project or an addition of incremental capacity to an existing project – • Only the incremental capacity is eligible Connected to a distribution system, the transmission system or connected through a customer (i.e., behind- 57 the-meter) 1483 Proposed Eligibility Requirements⇠ • Must not have had, or have, a NUG contract, an OPA contract • Previously operating facilities must have been out of service for 3 years – • e.g. abandoned waterpower sites May be pursued by any developer in Ontario, with no limits on total contract capacity – Special provisions apply for Aboriginal and CommunityBased projects – Special provisions for solar PV (>10 MW) and waterpower (> 50MW) 58 1484 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Evidence of Site Access • – Land ownership, land lease, option agreement, etc… Resource Data or Renewable Resource Supply Plan • e.g., wind data, supply agreements with biomass suppliers, water flow records, etc. – Renewable Energy Approval • Requirement is subject to details of Renewable Energy Approval process 59 1485 Proposed Eligibility Requirements⇠ Application Requirements✓ • FIT project developers must provide to the OPA: – Details of proposed project connection point • Name of feeder, transformer station or high-voltage circuit – Non-refundable Application Fee • $500 per MW of proposed Contract Capacity (maximum $5,000) • – $500 minimum Application Fee Application Security • • • Solar PV: $20,000/MW Other technologies: $10,000/MW Community-Based or Aboriginal Projects: $5,000/MW 60 1486 Proposed Eligibility Requirements⇠ Application Requirements✓ • Contract Prerequisites designed to require developer to undertake development work in advance of contract execution – Application Fee is non-refundable – Application Security is refundable upon contract signing or withdrawal because a project cannot be connected with existing resources 61 1487 Richard Duffy From: Richard Duffy Sent: April-08-09 12:45 PM To: Claire Willison; Jason Chee-Aloy Cc: Emay Cowx Subject: RE: FIT April 7 Bullet-point summary Attachments: OPA FIT consultation April 7-bullet points-draft_RD_v1.doc Hi Claire,⌦ Attached is a reviewed/edited copy of the bullet points. Let me know if you have any questions.⌧ Thanks⌦ Richard⌦ From: Claire Willison Sent: Wednesday, April 08, 2009 11:28 AM To: Jason Chee-Aloy; Richard Duffy Cc: Emay Cowx Subject: FIT April 7 Bullet-point summary Importance: High Jason / Richard,⌦ Herewith is the April 7 bullet- point summary for your review, etc. before it given to Tim Taylor for sending to the⌦ Ministry around noon today.⌦ Many thanks.⌦ Claire Willison⌦ Program Response Analyst/Coordinator Corporate Communications Direct: 416- 969 - 6080⌦ Fax: 416- 967 - 1947⌦ claire.willison@powerauthority.on.ca⌦ www.powerauthority.on.ca⌦ Ontario Power Authority⌦ 120 Adelaide Street West, Suite 1600⌦ Toronto , ON M5H 1T1⌦ 1488 Feed-In Tariff Consultation Bullet Notes Proposed Feed-in Tariff Price⌘ Schedule Ontario Power Authority Toronto, Ontario April 7, 2009 1489 FEED-I N TARIFF CONSULTATION PROPOSED FEED-I N TARIFF PRICE S CHEDULE PAGE 1 Proposed Feed-in Tariff Price Schedule Interest and participation in the Stakeholder Engagement Sessions (SES) continues to be⇡ strong. On April 7, 126 participants attended the live meeting in Toronto, while 171⇡ participants via webcast, and an additional 35 by telephone. Participants continued to praise the stakeholder engagement process and the OPA’s flexibility and willingness to revisit some of the proposed FIT program components, but⇡ asked for greater transparency. Some participants continue to state that the proposed FIT prices were too low for several⇡ technologies and project size tranches. Some also recommended introducing additional size⇡ tranches for some of the technologies. Participants questioned the price, the cap, and the nine percent price degression for groundmounted solar. Several participants recommended starting with a much higher FIT price,⇡ then lowering it once there has been significant uptake. Representatives of solar manufacturing industries said the cap and price were too low to⇡ actually create incentives for local manufacturing of solar technologies. Participants recommended and OPA representatives agreed that it would be helpful to hold⇡ technology-specific “sub-consultations ” with the specific industry associations.⇡ Representatives of the CanSIA, CanWEA and bio-energy proponents said they would be⇡ interested in such meetings. A representative of household consumers and a representative of the large industrial⇡ electricity consumers (AMPCO) cautioned that it was not clear what impact the proposed⇡ FIT program would have on electricity prices, and how potential increases could be borne⇡ by consumers. Many participants questioned the various assumptions regarding financing that were used⇡ in the pricing models. Several argued an 11 percent return on investment was not high⇡ enough to secure equity financing. Participants questioned whether inflationary costs had been properly apportioned in⇡ various models. In addition, they underscored the importance of accounting for the need to⇡ hedge against foreign currency exchange (particularly for equipment purchases). Many of the assumptions around operating and management costs for various types and⇡ sizes of projects were questioned. For example, participants said it is counter-intuitive that⇡ fixed and variable operating and maintenance costs would be higher for larger bio-mass⇡ projects than small ones. Participants asked the OPA to consider ways of including solar thermal technologies under⇡ ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1490 FEED-I N TARIFF CONSULTATION PROPOSED FEED-I N TARIFF PRICE S CHEDULE PAGE 2 the proposed FIT program or an alternative procurement method. A participant representing an Aboriginal developer emphasized that First Nation and Métis⇡ projects should not be “lumped together” with community-based projects because the⇡ challenges in Aboriginal communities are unique. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1491 Richard Duffy From: Richard Duffy Sent: April-14-09 8:11 PM To: Cindy Roks Subject: RE: NEED RESPONSE: ID: 10155 / March 23 OK to post as edited below.⇣ From: Cindy Roks↵ Sent: Thursday, April 02, 2009 7:18 PM↵ To: Richard Duffy↵ Subject: NEED RESPONSE: ID: 10155 / March 23↵ Q: How would a connection request be considered for a renewable generation project that is outside the FIT⇣ program, i.e, a third party (instead of OPA) is accepting the power generated from the renewable project.⇣ A: Connection requests for renewable generation that are for projects that are not part of the FIT Program would be handled in the same manner in which projects under the FIT Program would be handled. These⇢ projects would proceed as merchant generation and not eligible for the FIT Pricing. From: Jonathan Cheszes↵ Sent: Thu 02/04/2009 5:48 PM↵ To: Cindy Roks↵ Subject: RE: ID: 10155 / March 23↵ Cindy,⇣ This question raises a good point. Without changes to the way generators can apply for a CIA, they can continue to clog the queue without being eligible for the FIT. I know this is an OEB issue but I have added it to the FIT program⇣ issues list.⇣ If we want to post a response I propose the following:⇣ Jonathan Cheszes⇣ Business Analyst⇣ Electricity Resources⇣ 120 Adelaide St. West, Suite 1600⇣ Toronto , ON , M5H 1T1⇣ Tel 41 6.969.6251 Fax 416.967.1947⇣ www.powerauthority.on.ca⇣ From: Cindy Roks↵ Sent: April 2, 2009 11:27 AM↵ To: Jonathan Cheszes↵ Subject: ID: 10155 / March 23↵ Toronto Hydro is asking this question … It ’ s not posted on the website yet – perhaps this is one we could take off line (since it is Toronto Hydro).⇣ 1492 Q: How would a connection request be considered for a renewable generation project that is outside the FIT⇣ program, i.e, a third party (instead of OPA) is accepting the power generated from the renewable project.⇣ 1493 jdalton@poweradvisoryllc.com From: jdalton@poweradvisoryllc.com Sent: April-15-09 6:27 AM To: Deb Reid; Bing Young; Bob Chow; esmith@osler.com; Jason Chee-Aloy; Jim MacDougall; Patricia Lightburn; Richard Duffy; rcary@niagara.com; 'Sadikman, Jacob'; Susan Kennedy Cc: Claire Willison; Emay Cowx; Jill Medley Subject: Re: FIT April 7 Executive Summary Attachments: OPA FIT consultation-Apr7-ExecSum-draft (dr & jd edits).doc I have offered some edits to clarify the discussion. John Dalton ----- Original Message ----- From: Deb Reid To: 'Bing Young' ; 'Bob Chow' ; esmith@osler.com ; 'Jason Chee- Aloy' ; 'Jim MacDougall' ; 'John Dalton' ; 'Patricia Lightburn' ; 'Richard Duffy' ; rcary@niagara.com ; 'Sadikman, Jacob' ; 'Susan Kennedy' Cc: 'Claire Willison' ; 'Emay Cowx' ; 'Jill Medley' Sent: Tuesday, April 14, 2009 7:15 PM Subject: RE: FIT April 7 Executive Summary Hi Eveyone: I ’ ve done the first ed it on the April 7 comments by Friday, April 17 th th Executive Summary. Please review and send me your changes or⇢ .⇢ Thanks Deb Deb@ReidandAssociates.ca Tel: 41 6 - 698 - 5459 Fax: 41 6 - 698 - 0377 Cell: 41 6 - 729 - 0240 ----- Original Message----From: Claire Willison [mailto:Claire.Willison@powerauthority.on.ca] Sent: Tuesday, April 14, 2009 11:51 AM To: Bing Young; Bob Chow; Deb@ReidandAssociates.ca; esmith@osler.com; Emay Cowx; Jason CheeAl oy; Jill Medley; Jim MacDougall; John Dalton; Patricia Lightburn; Richard Duffy; rcary@niagara.com; Sadikman, Jacob; Susan Kennedy Subject: FIT April 7 Executive Summary Herewith is the draft executive summary of the April 7 th session. Please send your comments to Deb Reid for collating. Many thanks. Claire Willison Program Response Analyst/Coordinator Corporate Communications 1494 Corporate Communications Direct: 416- 969 - 6080 Fax: 416- 967 - 1947 claire.willison@powerauthority.on.ca www.powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: energyconservationweek.ca" 1495 Feed-in Tariff Consultation Executive Summary Proposed Feed-in Tariff Price Schedule Ontario Power Authority Toronto, Ontario April 7, 2009 1496 FEED-I N TARIFF CONSULTATION PAGE 1 Executive Summary Panel Jason Chee-Aloy Director, Energy Procurement Ontario Power Authority (OPA) Interest in this session was high, with 129 people attending in person, along with another 171 participating by telephone and 35 by webcast. Participants showed support for the concept of prices being based on costs, with a reasonable return on investment over the full 20-year term of the contract. However, many questioned the proposed tariffs for various technologies and size tranches. Some challenged specific elements in the pricing models, and participants in every sector—renewable energy advocacy groups, technology manufacturers, and consumer representatives—asked the OPA to share the modelling and spreadsheets used to arrive at the proposed FIT prices. OPA representatives assured participants that the OPA is reviewing which modelling background information could be released publicly. Participants commented that confidence in and support of the pricing model depends on their ability to examine all the underpinnings of the models used. Representatives from the solar industry suggested smaller technology-specific engagement subsessions to allow industry experts, developers, and advocates to address particular details of the modelling assumptions and other sector-specific concerns. Participants representing wind, biogas, bio-mass, and waterpower expressed interest as well, noting that such sessions should not be exclusive to members of the sector under discussion, but closely focused on it. Jason Chee-Aloy said he welcomes the opportunity for additional input, and underscored the OPA’s willingness to consult as widely as possible in designing the proposed FIT program. He also invited advice on how best to include stakeholders, such as consumer representatives, who are currently under-represented at these sessions. Representatives of household and large industrial electricity consumer groups noted that the impact of the proposed FIT program on electricity prices would be borne by businesses and households, and asked the OPA to provide the assumptions used to determine the balance between encouraging renewable energy uptake, procuring a reliable energy supply, and the acceptable impact on consumers. Other participants suggested specific quantifiable measures for monetizing the positive impacts of renewable energy in terms of environment, health, and carbon offsets. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1497 FEED-I N TARIFF CONSULTATION PAGE 2 One participant questioned the wisdom of this type of program, noting that it can cost much more to make some technologies feasible than others. Given the same amount of subsidy and differentiating by technology, it is possible to acquire less green power for the same investment, and the disparity between the top and the bottom of the scale justifies limiting the energy delivered by some technologies. Participants questioned many of the financing assumptions used to establish the price schedule, noting that they do not reflect the current global financial markets. Representatives of the OPA emphasized that the models are meant to deliver costs that could apply over the longer term of the contract and period for which these specific FIT prices will be in effect, and as such are likely to be better than in the current economy. Participants said that because investors are likely to be cautious for some time, the proposed 11 percent rate of return on investment will be insufficient to attract the necessary equity financing. Moreover, most technologies require immediate financing for large portions of project costs in order to secure equipment orders and embark on the necessary start-up measures. One participant commented that modelling would be more appropriate if based on an average weighted cost of capital, rather than the project finance approach assumed in the discounted cash-flow modeling. Several participants asked whether inflationary costs had been properly apportioned in various models and whether modelling had considered the need to hedge against foreign currency exchange. No participants said the proposed price for a particular technology is too high, but many said prices were too low to create incentive for developers—in some cases across an entire technology, and in others for particular size tranches. Some thought there should be size tranches for technologies where there are currently none or very few (e.g. biomass and biogas) as the way it is in the draft pricing schedule might discourage many smaller, but often important, kinds of projects. For example, they said, the projections used for bio-mass were based on 30 MW projects, which are generally based in pulp mills. Because the number of these facilities is shrinking in the current economic downturn, modelling should be based on smaller projects, or there should be a separate size tranche. There was concern that the price for landfill gas projects has decreased compared to Renewable Energy Standard Offer Program (RESOP) prices, while costs have increased. Participants noted there is significant cost differentiation between small 100 kW farm-based biogas systems and large centralized facilities. Without a separate price tranche, smaller projects will be unable to compete for high-energy waste streams. The concomitant environmental and rural employment benefits associated with small rural projects should be reflected in the pricing schedule. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1498 FEED-I N TARIFF CONSULTATION PAGE 3 Participants suggested that because capital costs for small wind projects are two to three times higher than those for larger ones on-shore, a separate tranche for small projects is needed to encourage farm and rural installations. Further, they said, small household wind projects are viable and should receive the same treatment as small household solar installations. Participants noted it may not be useful to base wind prices on higher capacity factors, since capacity factors can be biased by the assumed capacity rating and therefore do not necessarily have the most significant impact on output, In addition, high capacity factors would lead to clusters of projects in particular geographic areas. Clusters would increase local resistance while discouraging potential development in rural and remote areas, which are most in need of economic development. Participants suggested that all ground-mounted solar projects should not be grouped together in the same category; smaller projects should be considered separately for the price degression, and there should be an additional tranche for small or medium ground-mounted solar to prevent one or two large ground-mounted projects dominating capacity and triggering the price degression before smaller developers have an opportunity. Participants also said the initial price for solar is too low: a limited uptake with RESOP prices at 42 cents calls into question the effectiveness of the incentive at the proposed 44 cent rate, particularly given the proposed price degression. The price for ground-mounted solar, the cap on installed capacity, and the proposed nine per cent price degression once 100 MW of generation is contracted were all discussed extensively. Developers said that the cap is unfair, set too low, and will discourage equipment manufacturers from investing. Several participants recommended emulating a European model either by starting at a higher price with more gradual degressions after significant uptake, or tying the initial price to inflation. Solar technology producers noted that while the proposed Green Energy Act (GEA) is also intended to drive green manufacturing jobs, the proposed price and cap are too low to create incentives for local manufacturing, and 100 MW of installed capacity is too small a portion of the global market to have any impact on equipment prices. Participants asked the OPA to consider ways to include solar thermal technologies under the proposed FIT program or an alternative procurement method, pointing out that there is room within the proposed GEA and FIT definitions to add technologies once those technologies are more established, or to support other government initiatives. A participant representing a developer said that First Nations and Métis projects should not be “lumped together” with community-based projects, because of the unique challenges in First Nations communities. Representatives of the OPA said it is consulting with the provincial ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1499 FEED-I N TARIFF CONSULTATION PAGE 4 government to develop specific incentives for First Nations and Métis to roll out in tandem with the proposed FIT program. Participants said they are still awaiting details on community-based projects, and expressed concern about as-yet-unknown factors that could significantly affect costs, such as the depth of connection costs and the final definition of the Renewable Energy Approval. Participants requested full transparency on the details of the Economic Connection Test. The OPA’s representatives assured them these would be forthcoming in the near future. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • APRIL 7, 2009 1500 Jason Chee-Aloy From: Jason Chee-Aloy Sent: April-22-09 3:55 PM To: Electricity Resources Group Subject: Scotia Capital FIT Report Attachments: Alt. & Renewable Energy_ Crunching the Numbers... 20090421.pdf 1501 Equity Research Industry Report April 2009⌦ Alternative & Renewable Energy✓ Crunching the Numbers on Ontario’s✓ Proposed Feed-In Tariff Program✓ Utilities –⌦ Ben Isaacson, MBA, CFA – (416) 945-5310% Alternative & Renewable Energy⌦ For Reg AC Certifi% cation and important disclosures see Appendix A of this report.% 1502 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program 3 Overview 3 Key Findings & Recommendations 3 Investment Implications 4 An Overview of Ontario’s Proposed Feed-In Tariff Program 4 How Other Feed-In Tariff Programs Stack Up 6 Next Steps for Ontario 7 Model Output and Sensitivity Analyses 7 Onshore Wind 8 Key Findings 8 Assumptions 8 Sensitivity Tables and Charts 8 Offshore Wind 12 Key Findings 12 Assumptions 12 Sensitivity Tables and Charts 12 Hydro 16 Key Findings 16 Assumptions 16 Sensitivity Tables and Charts 16 Ground-Mounted Solar PV 20 Key Findings 20 Assumptions 20 Sensitivity Tables and Charts 20 Rooftop Solar PV 24 Key Findings 24 Assumptions 24 Sensitivity Tables and Charts 24 Biomass 28 Key Findings 28 Assumptions 28 Sensitivity Tables and Charts 28 1 1503 Utilities – Alternative & Renewable Energy April 2009 Landfill Gas 32 Key Findings 32 Assumptions 32 Sensitivity Tables and Charts 32 Biogas 36 Key Findings 36 Assumptions 36 Sensitivity Tables and Charts 36 2 1504 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program OVERVIEW On March 12, the Ontario Power Authority (OPA) unveiled North America’s first Feed-In Tariff (FIT) program, to promote an increase in renewable energy development within Ontario. Theoretically, there is no cap on the amount of renewable power capacity that can be submitted into the✓ program. However, we note that in 2006, the OPA offered standard offer contracts for sub-10 MW✓ renewable power projects with an objective of reaching 1,000 MW contracted within 10 years. The goal✓ was exceeded within the first year of the program, and the program was subsequently scrapped. The✓ proposed FIT program is the successor to the OPA’s standard offer contracts.✓ At first glance, the implied economics of many of the proposed FIT prices look attractive, and for( the most part, they are. However, investors must realize that unlike the OPA’s Standard Offer Program,✓ PPA prices are not partially indexed to inflation, and the likelihood of a project developer receiving the✓ $10/MWh ecoENERGY incentive is close to nil, as the remaining federal subsidy is oversubscribed by✓ about three times and expires in March 2011. Additionally, the tenure of FIT contracts are for 20 years,✓ less than the typical life of a new wind or solar farm, and materially less than the 40+ year life of a hydro✓ facility. This introduces re-contracting risk and/or a merchant tail.✓ To better gauge the investment implications of the proposed FIT program, and to account for several moving parts, such as new PPA prices, capital cost trends, and structural changes within the proposed contract, we developed several discounted cash flow financial models (one for each technology) to determine base case equity returns. We then looked at the impact of leverage and sensitized the results accordingly. KEY FINDINGS & RECOMMENDATIONS Exhibit 1: Pre-Tax Unlevered IRRs on the OPA’s Proposed FIT Program Biomass 11.2% Hydro 10.9%% Landfill Gas 10.9% Onshore Wind 10.9% Rooftop Solar 10.1%% Biogas 9.9% Offshore Wind 9.4% Ground Solar 8.0% 9.2%% 8.5% 9.0% Source: Scotia Capital estimates. 9.5% 10.0% 10.5% 11.0% 11.5% In our minds, the OPA’s FIT price for( biomass power, at $122/MWh, seems to( offer the best pre-tax, unlevered equity( return at about 11.2%. We believe the✓ premium is justified due to the fuel cost✓ commodity risk exposure that a developer✓ faces with a biomass plant compared to a✓ hydro or wind facility. From there, onshore✓ wind, hydro, and landfill gas come in at✓ around the 10.9% area. We estimate the pretax unlevered equity returns for rooftop solar✓ (> 500 kW) at 10.1%. The remaining✓ technologies offer sub-10% pre-tax, unlevered equity returns; specifically, biogas✓ at 9.9%, offshore wind power at 9.4%, and✓ ground-mounted solar at 9.2% (Exhibit 1). In our minds, the OPA’s proposed FIT prices are reasonable. However, to increase developer appetite,✓ we think the OPA’s FIT prices for (onshore) wind power and hydro power should yield pre-tax unlevered✓ equity returns closer to the 12% area. To achieve this, our financial models suggest a wind power FIT✓ price of $144/MWh, up from the proposed $135/MWh, and a hydro power price of $137/MWh, up from 3 1505 Utilities – Alternative & Renewable Energy April 2009 the proposed $129/MWh. We note that South Africa recently announced a similar FIT proposal for wind✓ power at about $170/MWh. Germany’s onshore wind price in 2009 is F92/MWh, or about $147/MWh to $150/MWh. For a sub-10 MW ground-mounted solar facility to achieve a 12% pre-tax unlevered equity return,( we estimate a FIT price of $530/MWh would be required. To put this another way, and using the✓ proposed FIT price of $443/MWh, the installed capital cost of a ground-mounted solar system would need✓ to come in at about $4.18 million per MW to yield a 12% return. The OPA uses $4.6 million per installed✓ MW in its calculations, which, in our opinion, is unrealistic and too low for Ontario-based solar✓ development to occur in the near term. We use $5 million per MW in our model, which many would argue✓ is also low. INVESTMENT IMPLICATIONS If/when Bill 150 (i.e., the Green Energy Act) is passed, and the OPA’s FIT program kicks off as proposed,✓ we anticipate a surge of development activity within the renewable power space in Ontario. Within our coverage universe specifically, we rank Boralex followed by Canadian Hydro Developers as✓ the two primary beneficiaries of the FIT program. Innergex could fare well following some added liquidity, and we expect Plutonic Power to jump into✓ Ontario if it loses its 1,027 MW Bute Inlet bid into BC Hydro’s Clean Power Call (results expected in June). Despite the above, perhaps the unsung hero could be Pristine Power, but we don’t expect the company to✓ announce any wind or solar power projects. Instead, we look for Pristine to possibly add biomass, biogas,✓ or landfill gas projects to its development portfolio.✓ AN OVERVIEW OF ONTARIO’S PROPOSED Exhibit 2: Pricing for Ontario’s FIT Program% Technology% Proposed Tranches FEED-IN TARIFF PROGRAM Proposed Price% ($/MWh)⌦ Biomass* Any size $122⌦ 5 MW $147⌦ > 5 MW $104⌦ 50 MW $129⌦ 2 MW $134⌦ On March 12, the Ontario Power Authority unveiled✓ proposed feed-in tariff prices for Ontario-based✓ renewable power projects (Exhibit 2). The program is✓ part of Bill 150, or Ontario’s Green Energy Act,✓ Biogas* Hydro* Community-based Landfill Gas* 5 MW $111⌦ > 5 MW $103⌦ 10 kW $802⌦ Solar PV% Rooftop Ground 10 - 100 kW $713⌦ 100 kW - 500 kW $635⌦ > 0.5 MW $539⌦ 10 MW $443⌦ Wind% Onshore Community-based Offshore Any size $135⌦ 10 MW $144⌦ Any size $190⌦ which seeks to establish Ontario as North America’s✓ leader in renewable energy.✓ Intended benefits of the FIT program include: (1) a simpler way to contract for renewable power✓ generation; (2) allow all types of generators to✓ participate, from homeowners to private developers;✓ (3) have set prices for different technologies and✓ project sizes; (4) have prices cover total project costs✓ and provide a reasonable rate of return over the✓ contract period; (5) offer long-term price guarantees✓ to increase investor confidence and access to✓ financing; and (6) provide a right to connect based on✓ shared reasonable costs.✓ *On/Off-Peak pricing applies Source: Ontario Power Authority; Scotia Capital. 4 1506 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 The FIT program applies only to a new project or an addition of incremental capacity to an existing( project, where only the incremental capacity is eligible to receive FIT prices. Additionally, previously✓ operating facilities must have been out of service for at least three years. We don’t expect the federal government’s ecoENERGY subsidy of $10/MWh to be available to( projects that register under the FIT program. Why: (1) the subsidy expires in March 2011; and (2) the✓ remaining funding is, in our minds, two to three times oversubscribed. Please refer to our January 28 Daily⌃ Edge comment titled “Federal Budget Disappointing for Green Infrastructure” for further details.✓ There will be no annual escalation of power prices under the FIT program, unlike recent RFPs and( the RESOP (Renewable Energy Standard Offer Program) program in Ontario. We spoke with the✓ Ontario Power Authority and learned that FIT pricing will be reviewed: (1) every two years; and/or (2) as✓ market conditions warrant. We note that the contracts are not “take or pay,” and that contract settlement is based solely on the FIT✓ prices and the quantity of electricity delivered.✓ Technologies that were not included in the proposed FIT price schedule: (1) solar thermal electric; (2) concentrating solar power; (3) hydro power greater than 50 MW; (4) solar PV power greater than 10✓ MW; (5) geothermal; and (6) energy storage.✓ How the OPA Set Its Feed-In Tariff Prices FIT pricing is set by technology and project size, and aims to cover total project (levelized) costs as( well as a “reasonable” rate of return over the contract term. Prices were derived using recent market✓ data, OPA experience with previous renewable energy contracts (i.e., RES, RESOP), and experience in✓ other jurisdictions. Specifically, FIT prices were set using a discounted cash flow analysis.✓ For technologies that are dispatchable, such as hydro and bioenergy, there is an incentive payment of 135% of the contract price paid for an eight-hour on-peak period, 11 a.m. to 7 p.m. Monday to Friday,✓ excluding holidays. The off-peak payment of 90% of the contract price is paid for all other hours.✓ For ground-mounted solar PV, there is an automatic price adjustment of negative 9% of the( contract price after each 100 MW of capacity has been awarded. The degression rate recognizes the✓ cost reductions that are occurring for solar PV systems and helps to mitigate customer rate impacts. For onshore and offshore wind power, the OPA assumed installed capital costs of $2.9 million and $4.8✓ million per MW, respectively. Additionally, a 30% capacity factor was used for onshore wind, whereas a✓ 37% capacity factor was used for wind produced offshore. The OPA’s hydro assumptions are fairly in( line, with the exception of the installed capital cost estimate of $4.5 million per MW, which in our minds✓ is somewhat steep. We use an installed capital cost estimate of $3.95 million per MW.✓ Exhibit 3 shows the OPA’s assumptions used to set its bioenergy FIT prices. Exhibit 3: OPA’s Bioenergy Assumptions% Biogas Biogas Landfill Gas Landfill Gas Biomass% Typical size (MW) 1 5 2.5 5 Lead time (years) 2 2 2 2 2⌦ Capacity factor 75% 75% 83% 85% 85%⌦ Capital cost ($/kW) 6,700 5,600 2,900 2,700 4,000⌦ 55 174 300 300 150⌦ Variable O&M ($/MWh) 21.0 29.0 17.0 14.0 7.0⌦ Heat rate (mmBtu/MWh) 17.0 19.0 12.0 10.6 9.0⌦ 0.0 -2.5 - - 3.0⌦ Fixed O&M ($/kW/y) Fuel Cost ($/mmBtu) 30⌦ Source: Ontario Power Authority; Navigant Consulting; Scotia Capital. 5 1507 Utilities – Alternative & Renewable Energy April 2009 HOW OTHER FEED-IN TARIFF PROGRAMS STACK UP To date, 46 jurisdictions have adopted some form of a feed-in tariff program, with more than half of these enacted since 2002 (Exhibit 4). Exhibit 4: 46 Jurisdictions Have Adopted Feed-In Tariff Programs% Year% Cumulative Countries/States/Provinces Added That Year% Number% 1978 1 United States (no longer in place)⌦ 1990 2 Germany⌦ 1991 3 Switzerland⌦ 1992 4 Italy⌦ 1993 6 India; Denmark⌦ 1994 8 Greece; Spain⌦ 1997 9 Sri Lanka⌦ 1998 10 Sweden⌦ 1999 13 Portugal; Norway; Slovenia⌦ 2000 13 - 2001 15 France; Latvia⌦ 2002 21 Austria; Brazil; Czech Republic; Indonesia; Lithuania; Algeria⌦ 2003 28 Cyprus; Estonia; Hungary; Korea; Slovak Republic; Maharashtra (India)⌦ 2004 34 Italy; Israel; Nicaragua; Prince Edward Island (wind only); Andhra Pradesh and Madhya Pradesh (India)⌦ 2005 41 China; Turkey; Ecuador; Ireland; Karnataka; Uttaranchal; and Uttar Pradesh (India)⌦ 2006 44 Ontario (RESOP); Argentina; Thailand⌦ 2007 46 South Australia (Australia); Croatia⌦ Source: Company reports; Scotia Capital estimates. In our view, Germany stands out as the country that has developed the most successful FIT( program in history. Since implementing its FIT program in 1990, installed wind power capacity has✓ grown from 56 MW to about 24,000 MW. Solar PV power in Germany has soared to 5,337 MW at the end✓ of 2008 from a mere 2 MW in 1990. Biomass has increased to 2,740 MW (2006) from 190 MW in 1990.✓ Exhibit 5 tables Germany’s feed-in tariff prices in euros and the Canadian dollar equivalent.✓ Exhibit 5: Germany’s Feed-In Tariff Pricing Schedule% Technology Capacity Range G/MWh C$/MWh% (FX @ 1.61)⌦ 430.10 692.46⌦ 403.60 649.80⌦ 399.00 642.39⌦ > 1,000 kW 330.00 531.30⌦ Ground mounted solar PV Any size 250.10 Wind (onshore) Any size 92.20 50.20 148.44 80.82⌦ Wind (offshore) Any size 130.00 35.00 209.30 56.35⌦ Rooftop Solar PV 30 kW > 30 kW 100 kW > 100 kW Hydro 500 kW > 500 kW > 2 MW Biomass/Biogas 2 MW 5 MW 150 kW 402.66⌦ 126.70 203.99⌦ 86.50 139.27⌦ 76.50 123.17⌦ 116.70 187.89⌦ > 150 kW 500 kW 91.80 147.80⌦ > 500 kW 5 MW 82.50 132.83⌦ 20 MW 77.90 125.42⌦ 90.00 144.90⌦ 61.60 99.18⌦ > 5 MW Landfill gas 1,000 kW 500 kW > 500 kW 5 MW Source: Renewable Energy Sources Act – Progress Report 2007; Ontario Power Authority; Scotia Capital. 6 1508 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Spain has had similar success under its FIT program (Exhibit 6). Within its FIT application for✓ developers are service guarantees that provide maximum time limits for the relevant authorities/regulators✓ to respond. Specifically, the regional authority has a six-month (maximum) window to approve or decline✓ applications, and interconnection, registration, and other contracts have one-month time limits. In Ontario,✓ the Green Energy Act proposes a new streamlined approvals process to alleviate the province’s poor track✓ record of timing delays, which caused cost overruns for many renewable power projects, and subsequently✓ ruined the economics on several projects.✓ Within the United States, interest continues to build, but no pure feed-in tariff bills have been( passed to-date. Specifically, six states have introduced bills and another eight states are considering✓ similar legislation. In May 2008, Congressman Jay Inslee introduced the U.S. Renewable Energy Jobs and✓ Security Act. The proposed act included the following feed-in tariff related elements: (1) guaranteed✓ interconnection; (2) a mandatory purchase requirement through fixed-rate, 20-year contracts; and (3) rate✓ recovery through a regionally partitioned national system benefits charge.✓ South Africa’s National Energy Regulator recently announced a feed-in tariff program designed to( produce up to 10 TWh/year by 2013. Similar to Ontario’s proposal, the contracts are for 20 years.✓ However, South Africa’s FIT price for (onshore) wind power is much better than Ontario’s, at $170/MWh,✓ or a 26% premium to the OPA’s proposed $135/MWh.✓ Exhibit 6: Spain’s Feed-In Tariff Pricing Schedule% Technology Capacity Range C$/MWh% G/MWh% (FX @ 1.61)⌦ Solar PV < 20 kW⌦ 340.00⌦ 547.⌦ 40⌦ < 200 kW⌦ 330.00⌦ 531.30⌦ 320.00⌦ 515.20⌦ > 200 kW⌦ Ground mounted solar PV Any size⌦ 320.00⌦ 515.20⌦ 75.80⌦ 122.04⌦ Wind (onshore) Any size⌦ Wind (offshore) - Hydro < 10 MW⌦ 78.00⌦ 125.58⌦ < 50 MW⌦ Market + L21/MW h⌦ 80/MW h⌦ Market + $33.⌦ < 500 kW⌦ 135.00⌦ 217.⌦ 35⌦ > 500 kW⌦ 100.00⌦ 161.⌦ 00⌦ Biogas - - Biomass < 2 MW⌦ 129.9 - 164.2⌦ 1⌦ - 264.⌦ 3⌦ 209.⌦ > 2 MW⌦ 107.5 - 151.5⌦ 173.⌦ 1⌦ - 243.⌦ 8⌦ Landfill gas Any size⌦ 82.60 132.⌦ 99⌦ Source: Ontario Power Authority; Scotia Capital. NEXT STEPS FOR ONTARIO We expect final contracts and FIT prices to be released in late May and the program itself to launch in✓ June following the anticipated approval of Bill 150. MODEL OUTPUT AND SENSITIVITY ANALYSES On the following pages, we present the key findings, assumptions, model output tables and charts,( and sensitivity analyses of the eight technologies we looked at. For technologies that offer multiple FIT✓ prices dependent on project size, we chose the largest size.✓ Within our discounted cash flow models, we considered only cash taxes paid during the life of the✓ contract, and did not consider the value of any assets and liabilities beyond the PPA term.✓ 7 1509 Utilities – Alternative & Renewable Energy April 2009 Onshore Wind KEY FINDINGS • Pre-tax unlevered equity IRR: 10.9%✓ • After-tax unlevered equity IRR: 10.3%✓ • Pre-tax levered equity IRR: 24.0%✓ • After-tax levered equity IRR: 23.2%✓ ASSUMPTIONS • FIT Price: $135/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $2.80 million per MW installed • Capacity Factor: 33%✓ • Operating & Maintenance: $15/MWh + 1.5% per year✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 7 through 9 show the output tables and charts of our sensitivity analyses performed on our base✓ case wind farm under Ontario’s proposed FIT program. In Exhibit 8, a table showing after-tax levered equity returns on a generic wind power facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 8 1510 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 7: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Wind Farm% Installed Capital Cost ($M per MW)% O&M ($/MWh) 10.9% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $21 8.1% 8.5% 9.0% 9.5% 10.0% 10.6% 11.2% 11.8%⌦ $19 8.3% 8.8% 9.3% 9.8% 10.3% 10.9% 11.5% 12.1%⌦ $17 8.6% 9.1% 9.5% 10.1% 10.6% 11.2% 11.8% 12.5%⌦ $15 8.9% 9.3% 9.8% 10.3% 10.9% 11.5% 12.1% 12.8%⌦ $13 9.1% 9.6% 10.1% 10.6% 11.2% 11.8% 12.4% 13.1%⌦ $11 9.4% 9.8% 10.3% 10.9% 11.4% 12.0% 12.7% 13.4%⌦ $9 9.6% 10.1% 10.6% 11.1% 11.7% 12.3% 13.0% 13.7%⌦ 10.9% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% 27% 6.1% 6.5% 6.9% 7.4% 7.9% 8.4% 9.0% 9.5%⌦ 29% 7.0% 7.5% 7.9% 8.4% 8.9% 9.5% 10.0% 10.6%⌦ 31% 8.0% 8.4% 8.9% 9.4% 9.9% 10.5% 11.1% 11.7%⌦ 33% 8.9% 9.3% 9.8% 10.3% 10.9% 11.5% 12.1% 12.8%⌦ 35% 9.7% 10.2% 10.7% 11.3% 11.8% 12.4% 13.1% 13.8%⌦ 37% 10.6% 11.1% 11.6% 12.2% 12.8% 13.4% 14.1% 14.8%⌦ 39% 11.4% 11.9% 12.5% 13.1% 13.7% 14.4% 15.1% 15.8%⌦ 10.9% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $129 8.1% 8.6% 9.0% 9.5% 10.1% 10.6% 11.2% 11.9%⌦ $131 8.4% 8.8% 9.3% 9.8% 10.3% 10.9% 11.5% 12.2%⌦ $133 8.6% 9.1% 9.6% 10.1% 10.6% 11.2% 11.8% 12.5%⌦ $135 8.9% 9.3% 9.8% 10.3% 10.9% 11.5% 12.1% 12.8%⌦ $137 9.1% 9.6% 10.1% 10.6% 11.1% 11.7% 12.4% 13.0%⌦ $139 9.3% 9.8% 10.3% 10.8% 11.4% 12.0% 12.6% 13.3%⌦ $141 9.6% 10.1% 10.6% 11.1% 11.7% 12.3% 12.9% 13.6%⌦ 10.9% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $0 8.9% 9.3% 9.8% 10.3% 10.9% 11.5% 12.1% 12.8%⌦ $10 9.7% 10.2% 10.7% 11.3% 11.9% 12.5% 13.1% 13.9%⌦ Utilization (%) Installed Capital Cost ($M per MW)% Final FIT ($/MWh) Installed Capital Cost ($M per MW)% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) Source: Scotia Capital estimates. 9 1511 Utilities – Alternative & Renewable Energy April 2009 Exhibit 8: After-Tax Levered Equity IRRs on an Ontario FIT-Based Wind Farm% Installed Capital Cost ($M per MW)% O&M ($/MWh) 23.2% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $21 x x x x 19.5% 22.0% 24.7% 27.6%⌦ $19 x x x 18.3% 20.8% 23.3% 26.0% 29.0%⌦ $17 x x x 19.6% 22.0% 24.6% 27.4% 30.3%⌦ $15 x x 18.5% 20.8% 23.2% 25.9% 28.7% 31.7%⌦ $13 x x 19.6% 22.0% 24.5% 27.1% 30.0% 33.0%⌦ $11 x 18.6% 20.8% 23.2% 25.7% 28.4% 31.3% 34.4%⌦ $9 x 19.7% 22.0% 24.4% 26.9% 29.7% 32.6% 35.7%⌦ 23.2% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% 27% x x x x x x x x% 29% x x x x x x 19.4% 22.1%⌦ 26.9%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 31% x x x x 18.9% 21.4% 24.1% 33% x x 18.5% 20.8% 23.2% 25.9% 28.7% 31.7%⌦ 35% x 20.2% 22.5% 25.0% 27.5% 30.3% 33.2% 36.4%⌦ 37% 21.9% 24.2% 26.5% 29.1% 31.8% 34.7% 37.8% 41.1%⌦ 39% 25.7% 28.0% 30.5% 33.1% 36.0% 39.0% 42.3% 45.9%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 12.2% 12.8% 13.6% 14.6% 16.0% x x x% 8.0% 12.8% 13.5% 14.4% 15.6% 17.3% x x x% 7.5% 13.3% 14.2% 15.2% 16.7% 18.6% 21.6% x x% 7.0% 13.8% 14.8% 16.0% 17.7% 19.9% 23.2% 28.7% x% 6.5% 14.3% 15.4% 16.8% 18.6% 21.2% 24.9% 31.0% x% 6.0% 14.8% 16.0% 17.6% 19.6% 22.4% 26.5% 33.3% 46.8%⌦ 5.5% 15.3% 16.6% 18.3% 20.5% 23.6% 28.1% 35.5% 50.3%⌦ $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $129 x x x x 19.7% 22.2% 24.9% 27.7%⌦ $131 x x x 18.4% 20.9% 23.4% 26.1% 29.1%⌦ $133 x x x 19.6% 22.1% 24.6% 27.4% 30.4%⌦ $135 x x 18.5% 20.8% 23.2% 25.9% 28.7% 31.7%⌦ $137 x x 19.6% 21.9% 24.4% 27.1% 29.9% 33.0%⌦ $139 x 18.5% 20.7% 23.1% 25.6% 28.3% 31.2% 34.3%⌦ $141 x 19.6% 21.8% 24.2% 26.8% 29.5% 32.4% 35.6%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 13.5% 14.5% 15.8% 17.4% 19.7% 23.1% 28.6% x% 25% 13.8% 14.8% 16.0% 17.7% 19.9% 23.2% 28.7% x% 20% 14.1% 15.1% 16.3% 17.9% 20.1% 23.4% 28.8% x% Capital Structure - Debt (%)% Cost of Debt (%) 23% Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 23.2% Capital Structure - Debt (%)% Tax Rate (%) 23.2% 15% 14.4% 15.3% 16.5% 18.1% 20.3% 23.6% 28.9% x% 10% 14.6% 15.5% 16.7% 18.3% 20.5% 23.7% 29.0% x% 5% 14.8% 15.8% 17.0% 18.5% 20.7% 23.9% 29.1% x% 0% 15.1% 16.0% 17.2% 18.7% 20.9% 24.0% 29.2% x% 23.2% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% $0 x x 18.5% 20.8% 23.2% 25.9% 28.7% 31.7%⌦ 18.8% 21.1% 23.5% 26.1% 28.7% 31.6% 34.7% 38.0%⌦ Installed Capital Cost ($M per MW)% ecoEn. ($/MWh)% $10 Source: Scotia Capital estimates. 10 1512 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 9: After-Tax Levered Equity IRRs on an Ontario FIT-Based Wind Farm% Equity IRR (%) 40%% 35%% Base 30%% Case% O&M @ $9/MWh% 25%% O&M @ $21/MWh% 20%% 15%% O&M @ $15/MWh% DSCR < 1.5% 10%% 5%% 0%% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% Installed Capital Cost ($M per MW)% Equity IRR (%) 50%% 40%% 30%% Utilization @ 39%% Utilization @ 33%% 20%% Utilization @ 27%% Base DSCR < 1.5 10%% (n.a. - DSCR breach)% Case% 0%% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% Installed Capital Cost ($M per MW)% Equity IRR (%) 40%% 85% Debt Financed% 30%% DSCR < 1.5% 75% Debt Financed% 20%% 65% Debt Financed Base 10%% Case (80%)% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% 40%% Final FIT @ Equity IRR (%) 35%% $141/MWh% 30%% 25%% Final FIT @ 20%% $129/MWh% Final FIT @ 15%% Base 10%% $135/MWh% Case% 5%% 0%% $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 11 1513 Utilities – Alternative & Renewable Energy April 2009 Offshore Wind KEY FINDINGS • Pre-tax unlevered equity IRR: 9.4%✓ • After-tax unlevered equity IRR: 9.0%✓ • Pre-tax levered equity IRR: 18.3%✓ • After-tax levered equity IRR: 17.4%✓ ASSUMPTIONS • FIT Price: $190/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $4.75 million per MW installed • Capacity Factor: 38%✓ • Operating & Maintenance: $25/MWh + 1.5% per year • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 10 through 12 show the output tables and charts of our sensitivity analyses performed on our base✓ case offshore wind farm, under Ontario’s proposed FIT program. In Exhibit 11, a table showing after-tax levered equity returns on a generic offshore wind facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 12 1514 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 10: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Offshore Wind Farm% Installed Capital Cost ($M per MW)% O&M ($/MWh) 9.4% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $31 8.0% 8.3% 8.6% 8.9% 9.2% 9.5% 9.8% $4.35% 10.2%⌦ $29 8.2% 8.5% 8.8% 9.1% 9.4% 9.7% 10.0% 10.4%⌦ $27 8.4% 8.7% 9.0% 9.3% 9.6% 9.9% 10.2% 10.6%⌦ $25 8.6% 8.9% 9.1% 9.4% 9.8% 10.1% 10.4% 10.8%⌦ $23 8.8% 9.0% 9.3% 9.6% 9.9% 10.3% 10.6% 10.9%⌦ $21 8.9% 9.2% 9.5% 9.8% 10.1% 10.5% 10.8% 11.1%⌦ $19 9.1% 9.4% 9.7% 10.0% 10.3% 10.6% 11.0% 11.3%⌦ $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% 32% 6.3% 6.5% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3%⌦ 34% 7.1% 7.3% 7.6% 7.9% 8.2% 8.5% 8.8% 9.1%⌦ 36% 7.8% 8.1% 8.4% 8.7% 9.0% 9.3% 9.6% 9.9%⌦ 38% 8.6% 8.9% 9.1% 9.4% 9.8% 10.1% 10.4% 10.8%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 9.4% 40% 9.3% 9.6% 9.9% 10.2% 10.5% 10.8% 11.2% 11.5%⌦ 42% 10.0% 10.3% 10.6% 10.9% 11.3% 11.6% 12.0% 12.3%⌦ 44% 10.7% 11.0% 11.3% 11.7% 12.0% 12.4% 12.7% 13.1%⌦ $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% $184 8.1% 8.3% 8.6% 8.9% 9.2% 9.5% 9.9% 10.2%⌦ $186 8.2% 8.5% 8.8% 9.1% 9.4% 9.7% 10.0% 10.4%⌦ $188 8.4% 8.7% 9.0% 9.3% 9.6% 9.9% 10.2% 10.6%⌦ $190 8.6% 8.9% 9.1% 9.4% 9.8% 10.1% 10.4% 10.8%⌦ $192 8.7% 9.0% 9.3% 9.6% 9.9% 10.3% 10.6% 10.9%⌦ $194 8.9% 9.2% 9.5% 9.8% 10.1% 10.4% 10.8% 11.1%⌦ $196 9.1% 9.4% 9.7% 10.0% 10.3% 10.6% 11.0% 11.3%⌦ $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% $0 8.6% 8.9% 9.1% 9.4% 9.8% 10.1% 10.4% 10.8%⌦ $10 9.2% 9.5% 9.8% 10.1% 10.4% 10.7% 11.1% 11.4%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 9.4% Installed Capital Cost ($M per MW)% 9.4% ecoEn. ($/MWh)% Source: Scotia Capital estimates. 13 1515 Utilities – Alternative & Renewable Energy April 2009 Exhibit 11: After-Tax Levered Equity IRRs on an Ontario FIT-Based Offshore Wind Farm% Installed Capital Cost ($M per MW)% O&M ($/MWh) 17.4% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% $31 x x x x x 17.7% 19.1% 20.5%⌦ $29 x x x x x 18.5% 19.9% 21.4%⌦ $27 x x x x 18.0% 19.3% 20.8% 22.2%⌦ $25 x x x 17.4% 18.8% 20.2% 21.6% 23.0%⌦ $23 x x x 18.2% 19.6% 21.0% 22.4% 23.9%⌦ $21 x x 17.7% 19.0% 20.4% 21.8% 23.2% 24.7%⌦ $19 x x 18.5% 19.8% 21.2% 22.6% 24.0% 25.5%⌦ $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% 32% x x x x x x x x% 34% x x x x x x x x% 36% x x x x x x 18.1% 19.6%⌦ 38% x x x 17.4% 18.8% 20.2% 21.6% 23.0%⌦ 40% x 18.1% 19.4% 20.7% 22.0% 23.5% 24.9% 26.4%⌦ 42% 19.9% 21.2% 22.5% 23.8% 25.2% 26.7% 28.2% 29.7%⌦ 44% 22.9% 24.2% 25.5% 26.9% 28.4% 29.8% 31.4% 33.0%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 9.5% 9.8% 10.2% 10.7% x x x x% 8.0% 10.1% 10.5% 11.0% 11.8% x x x x% 7.5% 10.6% 11.2% 11.8% 12.8% 14.0% x x x% 7.0% 11.1% 11.8% 12.6% 13.7% 15.2% 17.4% x x% 6.5% 11.6% 12.4% 13.4% 14.7% 16.4% 19.0% x x% 6.0% 12.1% 13.0% 14.1% 15.6% 17.6% 20.5% 25.2% x% 5.5% 12.6% 13.6% 14.8% 16.4% 18.7% 22.0% 27.2% 37.4%⌦ $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% $184 x x x x x 17.8% 19.2% 20.6%⌦ $186 x x x x x 18.6% 20.0% 21.4%⌦ $188 x x x x 18.0% 19.4% 20.8% 22.2%⌦ $190 x x x 17.4% 18.8% 20.2% 21.6% 23.0%⌦ $192 x x x 18.2% 19.5% 20.9% 22.4% 23.8%⌦ $194 x x 17.6% 19.0% 20.3% 21.7% 23.1% 24.6%⌦ $196 x x 18.4% 19.7% 21.1% 22.5% 23.9% 25.4%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 10.9% 11.5% 12.4% 13.5% 15.0% 17.2% x x% 25% 11.1% 11.8% 12.6% 13.7% 15.2% 17.4% x x% 20% 11.4% 12.0% 12.9% 13.9% 15.4% 17.6% x x% 15% 11.6% 12.3% 13.1% 14.2% 15.6% 17.8% x x% 10% 11.9% 12.5% 13.3% 14.4% 15.8% 18.0% x x% 5% 12.1% 12.7% 13.5% 14.6% 16.0% 18.1% x x% 0% 12.3% 12.9% 13.7% 14.7% 16.2% 18.3% x x% 17.4% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% $0 x x x 17.4% 18.8% 20.2% 21.6% 23.0%⌦ 16.7% 18.0% 19.4% 20.7% 22.1% 23.6% 25.1% 26.6%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 17.4% Capital Structure - Debt (%)% Cost of Debt (%) 17.4% Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 17.4% Capital Structure - Debt (%)% Tax Rate (%) 17.4% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) $10 Source: Scotia Capital estimates. 14 1516 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 12: After-Tax Levered Equity IRRs on an Ontario FIT-Based Offshore Wind Farm% Equity IRR (%) 30%% Base Case% 25%% O&M @ $19/MWh% 20%% O&M @ $31/MWh% 15%% DSCR < 1.5 O&M @ $25/MWh% 10%% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% Installed Capital Cost ($M per MW)% Equity IRR (%) 35%% 30%% 25%% Utilization @ 44%% 20%% Utilization @ 38%% 15%% DSCR < 1.5% 10%% Base Case 5%% Utilization @ 32%% (n.a. - DSCR breach)% 0%% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% Installed Capital Cost ($M per MW)% 40%% Equity IRR (%) 35%% Base Case (80%)% 30%% 85% Debt Financed% 25%% DSCR < 1.5 20%% 75% Debt Financed% 15%% 10%% 5%% 65% Debt Financed% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% 28%% Equity IRR (%) 26%% Final FIT @ $196/MWh% 24%% Final FIT @ $190/MWh% 22%% 20%% Final FIT @ 18%% $184/MWh% 16%% DSCR < 1.5% 14%% Base Case% 12%% 10%% $5.05 $4.95 $4.85 $4.75 $4.65 $4.55 $4.45 $4.35% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 15 1517 Utilities – Alternative & Renewable Energy April 2009 Hydro KEY FINDINGS • Pre-tax unlevered equity IRR: 10.9%✓ • After-tax unlevered equity IRR: 10.3%✓ • Pre-tax levered equity IRR: 24.2%✓ • After-tax levered equity IRR: 23.5%✓ ASSUMPTIONS • FIT Price: $129/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $3.95 million per MW installed • Capacity Factor: 50% • Operating & Maintenance: $14/MWh + 1.5% per year✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained.✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 13 through 15 show the output tables and charts of our sensitivity analyses performed on our base✓ case hydro plant under Ontario’s proposed FIT program. In Exhibit 14, a table showing after-tax levered equity returns on a generic hydro power facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 16 1518 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 13: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Hydro Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 10.9% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% $20 8.9% 9.3% 9.6% 10.0% 10.4% 10.8% 11.2% 11.6%⌦ $18 9.2% 9.6% 9.9% 10.3% 10.7% 11.1% 11.5% 12.0%⌦ $16 9.5% 9.8% 10.2% 10.6% 11.0% 11.4% 11.8% 12.3%⌦ $14 9.8% 10.1% 10.5% 10.9% 11.3% 11.7% 12.1% 12.6%⌦ $12 10.0% 10.4% 10.8% 11.1% 11.6% 12.0% 12.4% 12.9%⌦ $10 10.3% 10.7% 11.0% 11.4% 11.8% 12.3% 12.7% 13.2%⌦ $8 10.6% 10.9% 11.3% 11.7% 12.1% 12.6% 13.0% 13.5%⌦ 10.9% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% 44% 7.9% 8.3% 8.6% 9.0% 9.3% 9.7% 10.1% 10.5%⌦ 46% 8.6% 8.9% 9.2% 9.6% 10.0% 10.4% 10.8% 11.2%⌦ 48% 9.2% 9.5% 9.9% 10.2% 10.6% 11.0% 11.5% 11.9%⌦ 50% 9.8% 10.1% 10.5% 10.9% 11.3% 11.7% 12.1% 12.6%⌦ 52% 10.3% 10.7% 11.1% 11.5% 11.9% 12.3% 12.8% 13.2%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 54% 10.9% 11.3% 11.7% 12.1% 12.5% 12.9% 13.4% 13.9%⌦ 56% 11.5% 11.9% 12.3% 12.7% 13.1% 13.6% 14.0% 14.5%⌦ 10.9% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% $123 9.0% 9.3% 9.7% 10.0% 10.4% 10.8% 11.3% 11.7%⌦ $125 9.2% 9.6% 9.9% 10.3% 10.7% 11.1% 11.5% 12.0%⌦ $127 9.5% 9.8% 10.2% 10.6% 11.0% 11.4% 11.8% 12.3%⌦ Final FIT ($/MWh) Installed Capital Cost ($M per MW)% $129 9.8% 10.1% 10.5% 10.9% 11.3% 11.7% 12.1% 12.6%⌦ $131 10.0% 10.4% 10.7% 11.1% 11.5% 12.0% 12.4% 12.9%⌦ $133 10.3% 10.6% 11.0% 11.4% 11.8% 12.2% 12.7% 13.1%⌦ $135 10.5% 10.9% 11.3% 11.7% 12.1% 12.5% 13.0% 13.4%⌦ 10.9% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% $0 9.8% 10.1% 10.5% 10.9% 11.3% 11.7% 12.1% 12.6%⌦ 10.7% 11.1% 11.4% 11.9% 12.3% 12.7% 13.2% 13.7%⌦ Installed Capital Cost ($M per MW)% ecoEn. ($/MWh)% $10 Source: Scotia Capital estimates. 17 1519 Utilities – Alternative & Renewable Energy April 2009 Exhibit 14: After-Tax Levered Equity IRRs on an Ontario FIT-Based Hydro Project% Installed Capital Cost ($M per MW)% 23.5% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% x x 18.1% 19.8% 21.4% 23.2% 25.0% 26.9%⌦ $18 x 17.8% 19.4% 21.0% 22.7% 24.4% 26.3% 28.2%⌦ $16 17.5% 19.0% 20.6% 22.2% 23.9% 25.7% 27.6% 29.5%⌦ $14 18.7% 20.2% 21.8% 23.5% 25.2% 27.0% 28.9% 30.8%⌦ $12 19.8% 21.4% 23.0% 24.7% 26.4% 28.2% 30.1% 32.1%⌦ O&M ($/MWh) $20 $10 21.0% 22.5% 24.2% 25.9% 27.6% 29.5% 31.4% 33.4%⌦ $8 22.1% 23.7% 25.3% 27.1% 28.8% 30.7% 32.7% 34.7%⌦ 23.5% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% 44% x x x x x 18.5% 20.2% 22.1%⌦ 46% x x x 18.0% 19.7% 21.4% 23.2% 25.0%⌦ 48% x 17.6% 19.1% 20.8% 22.4% 24.2% 26.0% 27.9%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 50% 18.7% 20.2% 21.8% 23.5% 25.2% 27.0% 28.9% 30.8%⌦ 52% 21.2% 22.8% 24.4% 26.1% 27.9% 29.7% 31.7% 33.7%⌦ 54% 23.7% 25.3% 27.0% 28.7% 30.5% 32.4% 34.4% 36.5%⌦ 56% 26.2% 27.8% 29.5% 31.3% 33.2% 35.1% 37.2% 39.4%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 12.4% 13.1% 13.9% 15.0% 16.5% x x x% 8.0% 12.9% 13.7% 14.7% 16.0% 17.7% 20.3% x x% 7.5% 13.4% 14.3% 15.4% 16.9% 18.9% 21.9% x x% 7.0% 13.9% 14.9% 16.2% 17.8% 20.1% 23.5% 28.9% x% 6.5% 14.4% 15.5% 16.9% 18.7% 21.3% 25.0% 31.0% 42.7%⌦ Capital Structure - Debt (%)% Cost of Debt (%) 23.5% 6.0% 14.9% 16.1% 17.6% 19.6% 22.4% 26.4% 33.1% 45.9%⌦ 5.5% 15.3% 16.6% 18.3% 20.5% 23.5% 27.9% 35.1% 49.1%⌦ $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% x x 18.3% 19.9% 21.6% 23.3% 25.1% 27.0%⌦ $125 x 17.9% 19.5% 21.1% 22.8% 24.5% 26.4% 28.3%⌦ $127 17.5% 19.1% 20.6% 22.3% 24.0% 25.8% 27.6% 29.6%⌦ $129 18.7% 20.2% 21.8% 23.5% 25.2% 27.0% 28.9% 30.8%⌦ $131 19.8% 21.3% 22.9% 24.6% 26.4% 28.2% 30.1% 32.1%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 23.5% $123 $133 20.9% 22.5% 24.1% 25.8% 27.5% 29.4% 31.3% 33.3%⌦ $135 22.0% 23.6% 25.2% 26.9% 28.7% 30.6% 32.5% 34.6%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 13.6% 14.6% 15.9% 17.6% 19.9% 23.3% 28.8% x% 25% 13.9% 14.9% 16.2% 17.8% 20.1% 23.5% 28.9% x% 20% 14.2% 15.2% 16.4% 18.1% 20.3% 23.6% 29.0% x% 15% 14.5% 15.4% 16.7% 18.3% 20.5% 23.8% 29.1% x% 10% 14.7% 15.7% 16.9% 18.5% 20.7% 23.9% 29.2% x% 5% 14.9% 15.9% 17.1% 18.7% 20.9% 24.1% 29.3% x% 0% 15.2% 16.1% 17.3% 18.9% 21.0% 24.2% 29.4% x% 23.5% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% $0 18.7% 20.2% 21.8% 23.5% 25.2% 27.0% 28.9% 30.8%⌦ $10 23.6% 25.3% 27.0% 28.8% 30.7% 32.6% 34.7% 36.8%⌦ Capital Structure - Debt (%)% Tax Rate (%) 23.5% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) Source: Scotia Capital estimates. 18 1520 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 15: After-Tax Levered Equity IRRs on an Ontario FIT-Based Hydro Project% Equity IRR (%) 40%% 35%% Base Case% 30%% O&M @ $8/M Wh% 25%% O&M @ $14/M Wh% 20%% O&M @ $20/M Wh% 15%% DSCR < 1.5% 10%% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% Installed Capital Cost ($M per MW)% Equity IRR (%) 50%% Base Case% 40%% 30%% Utilization @ 56%% 20%% Utilization @ 50% Utilization @ 44%% 10%% DSCR < 1.5% 0%% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% Installed Capital Cost ($M per MW)% 40%% 85% Debt Financed% Equity IRR (%) 35%% 30%% DSCR < 1.5% 25%% 75% Debt Financed% 20%% 15%% Base Case (80%)% 10%% 65% Debt Financed% 5%% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% Equity IRR (%) 40%% 35%% 30%% Base Case% Final FIT @ $135/MWh% 25%% 20%% Final FIT @ $123/MWh% 15%% Final FIT @ $129/MWh% DSCR < 1.5% 10%% $4.25 $4.15 $4.05 $3.95 $3.85 $3.75 $3.65 $3.55% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 19 1521 Utilities – Alternative & Renewable Energy April 2009 Ground-Mounted Solar PV KEY FINDINGS • Pre-tax unlevered equity IRR: 9.2%✓ • After-tax unlevered equity IRR: 8.8%✓ • Pre-tax levered equity IRR: 15.4%✓ • After-tax levered equity IRR: 14.5%✓ ASSUMPTIONS • FIT Price: $443/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $5.00 million per MW installed • Capacity Factor: 15%, net of power conditioning efficiencies, system efficiencies, temperature correction, and insolation✓ • Operating & Maintenance: $8/MWh + 1.5% per year✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 75%/25% debt/equity, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x.✓ SENSITIVITY TABLES AND CHARTS Exhibits 16 through 18 show the output tables and charts of our sensitivity analyses performed on our base✓ case ground-mounted solar farm under Ontario’s proposed FIT program. In Exhibit 17, a table showing after-tax levered equity returns on a generic ground-mounted solar facility,✓ an “x” represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 20 1522 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 16: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Ground-Mounted Solar PV Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 9.2% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $14 7.5% 8.0% 8.5% 9.0% 9.6% 10.2% 10.9% 11.6%⌦ $12 7.5% 8.0% 8.6% 9.1% 9.7% 10.3% 11.0% 11.7%⌦ $10 7.6% 8.1% 8.6% 9.2% 9.8% 10.4% 11.1% 11.8%⌦ $8 7.7% 8.2% 8.7% 9.2% 9.8% 10.5% 11.1% 11.9%⌦ $6 7.7% 8.2% 8.8% 9.3% 9.9% 10.5% 11.2% 12.0%⌦ $4 7.8% 8.3% 8.8% 9.4% 10.0% 10.6% 11.3% 12.0%⌦ $2 7.9% 8.4% 8.9% 9.5% 10.0% 10.7% 11.4% 12.1%⌦ $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% 9% 1.7% 2.0% 2.4% 2.9% 3.3% 3.8% 4.3% 4.9%⌦ 11% 3.8% 4.3% 4.7% 5.2% 5.7% 6.2% 6.8% 7.4%⌦ 13% 5.8% 6.3% 6.8% 7.3% 7.8% 8.4% 9.0% 9.7%⌦ 15% 7.7% 8.2% 8.7% 9.2% 9.8% 10.5% 11.1% 11.9%⌦ 14.0%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 9.2% 17% 9.4% 9.9% 10.5% 11.1% 11.7% 12.4% 13.2% 19% 11.1% 11.6% 12.2% 12.9% 13.6% 14.3% 15.1% 16.0%⌦ 21% 12.7% 13.3% 13.9% 14.6% 15.3% 16.1% 17.0% 17.9%⌦ $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $437 7.5% 8.0% 8.5% 9.0% 9.6% 10.3% 10.9% 11.7%⌦ $439 7.6% 8.0% 8.6% 9.1% 9.7% 10.3% 11.0% 11.7%⌦ $441 7.6% 8.1% 8.6% 9.2% 9.8% 10.4% 11.1% 11.8%⌦ $443 7.7% 8.2% 8.7% 9.2% 9.8% 10.5% 11.1% 11.9%⌦ $445 7.7% 8.2% 8.8% 9.3% 9.9% 10.5% 11.2% 11.9%⌦ $447 7.8% 8.3% 8.8% 9.4% 10.0% 10.6% 11.3% 12.0%⌦ $449 7.9% 8.4% 8.9% 9.4% 10.0% 10.7% 11.4% 12.1%⌦ $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $0 7.7% 8.2% 8.7% 9.2% 9.8% 10.5% 11.1% 11.9%⌦ $10 7.9% 8.4% 8.9% 9.5% 10.1% 10.7% 11.4% 12.1%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 9.2% Installed Capital Cost ($M per MW)% 9.2% ecoEn. ($/MWh)% Source: Scotia Capital estimates. 21 1523 Utilities – Alternative & Renewable Energy April 2009 Exhibit 17: After-Tax Levered Equity IRRs on an Ontario FIT-Based Ground-Mounted Solar PV Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 14.5% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $14 x x x 13.7% 15.8% 18.0% 20.3% 22.8%⌦ $12 x x 12.0% 14.0% 16.0% 18.2% 20.6% 23.0%⌦ $10 x x 12.2% 14.2% 16.3% 18.5% 20.8% 23.3%⌦ $8 x x 12.5% 14.5% 16.5% 18.7% 21.1% 23.6%⌦ $6 x x 12.7% 14.7% 16.8% 19.0% 21.3% 23.8%⌦ $4 x x 13.0% 14.9% 17.0% 19.2% 21.6% 24.1%⌦ $2 x x 13.2% 15.2% 17.3% 19.5% 21.8% 24.4%⌦ 14.5% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% 9% x x x x x x x x% 11% x x x x x x x x% 13% x x x x x x 13.7% 16.0%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 15% x x 12.5% 14.5% 16.5% 18.7% 21.1% 23.6%⌦ 17% 15.1% 16.9% 18.9% 20.9% 23.1% 25.5% 28.0% 30.7%⌦ 19% 20.8% 22.8% 24.8% 27.0% 29.4% 31.9% 34.7% 37.6%⌦ 21% 26.3% 28.4% 30.6% 32.9% 35.5% 38.2% 41.2% 44.4%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 9.1% 9.4% 9.7% 10.1% x x x x% 8.0% 9.7% 10.0% 10.5% 11.1% x x x x% 7.5% 10.2% 10.7% 11.3% 12.1% 13.2% x x x% 7.0% 10.7% 11.3% 12.1% 13.1% 14.5% x x x% 6.5% 11.2% 11.9% 12.8% 14.0% 15.7% 18.0% x x% 6.0% 11.7% 12.5% 13.6% 14.9% 16.8% 19.5% 24.0% x% 5.5% 12.2% 13.1% 14.3% 15.8% 17.9% 21.0% 26.0% x% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $437 x x x 13.8% 15.8% 18.0% 20.3% 22.8%⌦ $439 x x 12.0% 14.0% 16.1% 18.2% 20.6% 23.1%⌦ $441 x x 12.3% 14.2% 16.3% 18.5% 20.8% 23.3%⌦ $443 x x 12.5% 14.5% 16.5% 18.7% 21.1% 23.6%⌦ $445 x x 12.7% 14.7% 16.8% 19.0% 21.3% 23.8%⌦ $447 x x 12.9% 14.9% 17.0% 19.2% 21.6% 24.1%⌦ $449 x x 13.2% 15.2% 17.2% 19.4% 21.8% 24.3%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 10.4% 11.1% 11.8% 12.8% 14.2% x x x% 25% 10.7% 11.3% 12.1% 13.1% 14.5% x x x% Capital Structure - Debt (%)% Cost of Debt (%) 14.5% Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 14.5% Capital Structure - Debt (%)% Tax Rate (%) 14% 20% 11.0% 11.6% 12.3% 13.3% 14.7% x x x% 15% 11.2% 11.8% 12.5% 13.5% 14.9% x x x% 10% 11.4% 12.0% 12.7% 13.7% 15.1% x x x% 5% 11.6% 12.2% 13.0% 13.9% 15.2% x x x% 0% 11.9% 12.4% 13.2% 14.1% 15.4% x x x% 14.5% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% $0 x x 12.5% 14.5% 16.5% 18.7% 21.1% 23.6%⌦ $10 x x 13.4% 15.4% 17.5% 19.8% 22.2% 24.7%⌦ Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) Source: Scotia Capital estimates. 22 1524 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 18: After-Tax Levered Equity IRRs on an Ontario FIT-Based Ground-Mounted Solar PV Project% 25%% Equity IRR (%) O&M @ $2/M Wh% 20%% O&M @ $14/MWh% Base Case% O&M @ $8/M Wh% 15%% DSCR < 1.5% 10%% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% Installed Capital Cost ($M per MW)% Equity IRR (%) 35%% Utilization @ 17%% 30%% Base Case% 25%% 20%% Utilization @ 15%% 15%% 10%% Utilization @ 13%% DSCR < 1.5% DSCR < 1.5 5%% 0%% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% Installed Capital Cost ($M per MW)% Equity IRR (%) 35%% 30%% 85% Debt Financed% Base Case (80%)% 25%% 20%% 75% Debt Financed% 15%% DSCR < 1.5% 65% Debt Financed% 10%% 5%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% Equity IRR (%) 25%% Final FIT @ $449/MWh% 20%% Base Case% Final FIT @ $437/MWh% 15%% Final FIT @ $443/MWh% DSCR < 1.5% 10%% $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 23 1525 Utilities – Alternative & Renewable Energy April 2009 Rooftop Solar PV KEY FINDINGS • Pre-tax unlevered equity IRR: 10.1%✓ • After-tax unlevered equity IRR: 9.6%✓ • Pre-tax levered equity IRR: 20.5%✓ • After-tax levered equity IRR: 19.7%✓ ASSUMPTIONS • FIT Price: $539/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $5.5 million per MW installed✓ • Capacity Factor: 14%, net of power conditioning efficiencies, system efficiencies, temperature✓ correction, and insolation✓ • Operating & Maintenance: $8/MWh + 1.5% per year • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 19 through 21 show the output tables and charts of our sensitivity analyses performed on our base✓ case rooftop solar facility under Ontario’s proposed FIT program. In Exhibit 20, a table showing after-tax levered equity returns on a generic rooftop solar installation, an✓ “x” represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 24 1526 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 19: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Rooftop Solar PV Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 10.1% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $14 8.4% 8.9% 9.4% 9.9% 10.5% 11.1% 11.8% 12.5%⌦ $12 8.5% 8.9% 9.5% 10.0% 10.6% 11.2% 11.8% 12.5%⌦ $10 8.5% 9.0% 9.5% 10.1% 10.6% 11.2% 11.9% 12.6%⌦ $8 8.6% 9.1% 9.6% 10.1% 10.7% 11.3% 12.0% 12.7%⌦ $6 8.6% 9.1% 9.6% 10.2% 10.8% 11.4% 12.0% 12.7%⌦ $4 8.7% 9.2% 9.7% 10.2% 10.8% 11.4% 12.1% 12.8%⌦ $2 8.7% 9.2% 9.8% 10.3% 10.9% 11.5% 12.2% 12.9%⌦ 10.1% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% 8% 1.7% 2.0% 2.4% 2.8% 3.2% 3.7% 4.1% 4.6%⌦ 10% 4.2% 4.6% 5.0% 5.5% 5.9% 6.4% 6.9% 7.5%⌦ 12% 6.5% 6.9% 7.4% 7.9% 8.4% 8.9% 9.5% 10.2%⌦ 12.7%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 14% 8.6% 9.1% 9.6% 10.1% 10.7% 11.3% 12.0% 16% 10.6% 11.1% 11.7% 12.3% 12.9% 13.6% 14.3% 15.1%⌦ 18% 12.5% 13.1% 13.7% 14.3% 15.0% 15.7% 16.5% 17.4%⌦ 20% 14.4% 15.0% 15.6% 16.3% 17.1% 17.9% 18.7% 19.7%⌦ 10.1% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $533 8.4% 8.9% 9.4% 9.9% 10.5% 11.1% 11.8% 12.5%⌦ $535 8.5% 8.9% 9.5% 10.0% 10.6% 11.2% 11.8% 12.5%⌦ $537 8.5% 9.0% 9.5% 10.1% 10.6% 11.2% 11.9% 12.6%⌦ $539 8.6% 9.1% 9.6% 10.1% 10.7% 11.3% 12.0% 12.7%⌦ $541 8.6% 9.1% 9.6% 10.2% 10.7% 11.4% 12.0% 12.7%⌦ $543 8.7% 9.2% 9.7% 10.2% 10.8% 11.4% 12.1% 12.8%⌦ $545 8.7% 9.2% 9.7% 10.3% 10.9% 11.5% 12.1% 12.9%⌦ 10.1% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $0 8.6% 9.1% 9.6% 10.1% 10.7% 11.3% 12.0% 12.7%⌦ $10 8.8% 9.3% 9.8% 10.3% 10.9% 11.5% 12.2% 12.9%⌦ Final FIT ($/MWh) Installed Capital Cost ($M per MW)% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh)% Source: Scotia Capital estimates. 25 1527 Utilities – Alternative & Renewable Energy April 2009 Exhibit 20: After-Tax Levered Equity IRRs on an Ontario FIT-Based Rooftop Solar PV Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 19.7% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $14 x x x 18.9% 21.5% 24.2% 27.1% 30.2%⌦ $12 x x x 19.2% 21.7% 24.5% 27.4% 30.5%⌦ $10 x x x 19.5% 22.0% 24.7% 27.7% 30.8%⌦ $8 x x x 19.7% 22.3% 25.0% 27.9% 31.1%⌦ $6 x x x 20.0% 22.6% 25.3% 28.2% 31.4%⌦ $4 x x x 20.3% 22.8% 25.6% 28.5% 31.7%⌦ $2 x x x 20.5% 23.1% 25.9% 28.8% 32.0%⌦ 19.7% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% 8% x x x x x x x x% 10% x x x x x x x x% 12% x x x x x x x 19.9%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 14% x x x 19.7% 22.3% 25.0% 27.9% 31.1%⌦ 16% 21.8% 24.1% 26.6% 29.3% 32.1% 35.2% 38.5% 42.1%⌦ 18% 30.4% 33.0% 35.7% 38.7% 41.9% 45.4% 49.1% 53.2%⌦ 20% 38.9% 41.8% 44.8% 48.2% 51.7% 55.6% 59.8% 64.3%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 10.6% 11.0% 11.5% 12.2% x x x x% 8.0% 11.2% 11.7% 12.4% 13.2% 14.5% x x x% Capital Structure - Debt (%)% Cost of Debt (%) 19.7% 7.5% 11.7% 12.4% 13.2% 14.3% 15.8% x x x% 7.0% 12.2% 13.0% 14.0% 15.3% 17.1% 19.7% x x% 6.5% 12.8% 13.7% 14.8% 16.3% 18.4% 21.4% x x% 6.0% 13.3% 14.3% 15.6% 17.2% 19.6% 23.0% 28.6% x% 5.5% 13.8% 14.9% 16.3% 18.2% 20.8% 24.6% 30.9% 43.2%⌦ $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $533 x x x 19.0% 21.5% 24.2% 27.1% 30.2%⌦ $535 x x x 19.2% 21.8% 24.5% 27.4% 30.5%⌦ $537 x x x 19.5% 22.0% 24.7% 27.7% 30.8%⌦ $539 x x x 19.7% 22.3% 25.0% 27.9% 31.1%⌦ $541 x x x 20.0% 22.5% 25.3% 28.2% 31.4%⌦ $543 x x x 20.2% 22.8% 25.6% 28.5% 31.7%⌦ $545 x x x 20.5% 23.1% 25.8% 28.8% 32.0%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 12.0% 12.8% 13.8% 15.1% 16.9% 19.5% x x% 25% 12.2% 13.0% 14.0% 15.3% 17.1% 19.7% x x% 20% 12.5% 13.3% 14.3% 15.5% 17.3% 19.9% x x% 15% 12.8% 13.5% 14.5% 15.7% 17.5% 20.1% x x% 10% 13.0% 13.8% 14.7% 16.0% 17.7% 20.2% x x% 5% 13.2% 14.0% 14.9% 16.2% 17.9% 20.4% x x% 0% 13.5% 14.2% 15.1% 16.4% 18.0% 20.5% x x% 19.7% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% $0 x x x 19.7% 22.3% 25.0% 27.9% 31.1%⌦ $10 x x 18.4% 20.9% 23.5% 26.3% 29.3% 32.5%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 19.7% Capital Structure - Debt (%)% Tax Rate (%) 19.7% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh)% Source: Scotia Capital estimates. 26 1528 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 21: After-Tax Levered Equity IRRs on an Ontario FIT-Based Rooftop Solar PV Project% 33%% Equity IRR (%) 31%% 29%% 27%% 25%% O&M @ O&M @ $2/M Wh 23%% $8/M Wh% O&M @ $14/M Wh 21%% 19%% DSCR < 1.5 Base Case% 17%% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% Installed Capital Cost ($M per MW)% Equity IRR (%) 50%% 40%% Utilization @ 16%% Utilization @ 14%% 30%% 20%% 10%% $6.10 $5.90 Utilization @ 12%% Base Case DSCR < 1.5% 0%% $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% Installed Capital Cost ($M per MW)% 40%% Equity IRR (%) 35%% 85% Debt Financed% 30%% 25%% 20%% Base Case (80%)% 75% Debt Financed% DSCR < 1.5% 15%% 65% Debt Financed% 10%% 5%% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% 33%% Final FIT @ $545/MWh% Equity IRR (%) 31%% 29%% 27%% 25%% Base Case 23%% 21%% Final FIT @ $539/MWh% Final FIT @ $533/MWh% 19%% DSCR < 1.5% 17%% $6.10 $5.90 $5.70 $5.50 $5.30 $5.10 $4.90 $4.70% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 27 1529 Utilities – Alternative & Renewable Energy April 2009 Biomass% KEY FINDINGS • Pre-tax unlevered equity IRR: 11.2%✓ • After-tax unlevered equity IRR: 10.7%✓ • Pre-tax levered equity IRR: 26.3%✓ • After-tax levered equity IRR: 25.6%✓ ASSUMPTIONS • FIT Price: $122/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $3.75 million per MW installed • Capacity Factor: 85%✓ • Operating & Maintenance: $55/MWh + 1.5% per year✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 22 through 24 show the output tables and charts of our sensitivity analyses performed on our base✓ case biomass plant under Ontario’s proposed FIT program. In Exhibit 23, a table showing after-tax levered equity returns on a generic biomass facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 28 1530 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 22: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Biomass Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 11.2% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% $61 8.4% 8.8% 9.2% 9.6% 10.0% 10.4% 10.9% 11.4%⌦ $59 9.0% 9.3% 9.7% 10.1% 10.6% 11.0% 11.5% 12.0%⌦ $57 9.5% 9.9% 10.3% 10.7% 11.1% 11.6% 12.1% 12.6%⌦ $55 10.0% 10.4% 10.8% 11.2% 11.7% 12.2% 12.6% 13.2%⌦ $53 10.5% 10.9% 11.3% 11.8% 12.2% 12.7% 13.2% 13.7%⌦ $51 11.0% 11.4% 11.9% 12.3% 12.8% 13.3% 13.8% 14.3%⌦ $49 11.5% 11.9% 12.4% 12.8% 13.3% 13.8% 14.3% 14.9%⌦ $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% 79% 8.9% 9.3% 9.7% 10.1% 10.5% 10.9% 11.4% 11.9%⌦ 81% 9.3% 9.7% 10.0% 10.5% 10.9% 11.3% 11.8% 12.3%⌦ 83% 9.6% 10.0% 10.4% 10.9% 11.3% 11.8% 12.2% 12.7%⌦ 85% 10.0% 10.4% 10.8% 11.2% 11.7% 12.2% 12.6% 13.2%⌦ 87% 10.4% 10.8% 11.2% 11.6% 12.1% 12.6% 13.1% 13.6%⌦ 89% 10.7% 11.1% 11.6% 12.0% 12.5% 12.9% 13.5% 14.0%⌦ 91% 11.1% 11.5% 11.9% 12.4% 12.9% 13.3% 13.9% 14.4%⌦ 11.2% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% $116 8.5% 8.9% 9.3% 9.7% 10.1% 10.5% 11.0% 11.5%⌦ $118 9.0% 9.4% 9.8% 10.2% 10.6% 11.1% 11.5% 12.0%⌦ $120 9.5% 9.9% 10.3% 10.7% 11.2% 11.6% 12.1% 12.6%⌦ $122 10.0% 10.4% 10.8% 11.2% 11.7% 12.2% 12.6% 13.2%⌦ $124 10.5% 10.9% 11.3% 11.7% 12.2% 12.7% 13.2% 13.7%⌦ $126 11.0% 11.4% 11.8% 12.3% 12.7% 13.2% 13.7% 14.3%⌦ $128 11.4% 11.9% 12.3% 12.8% 13.2% 13.7% 14.2% 14.8%⌦ 11.2% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% $0 10.0% 10.4% 10.8% 11.2% 11.7% 12.2% 12.6% 13.2%⌦ $10 11.8% 12.2% 12.7% 13.1% 13.6% 14.2% 14.7% 15.3%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 11.2% Final FIT ($/MWh) Installed Capital Cost ($M per MW)% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) Source: Scotia Capital estimates. 29 1531 Utilities – Alternative & Renewable Energy April 2009 Exhibit 23: After-Tax Levered Equity IRRs on an Ontario FIT-Based Biomass Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 25.6% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $61 x x x 18.1% 20.1% 22.1% 24.2% $3.35% 26.5%⌦ $59 x x 18.8% 20.7% 22.7% 24.7% 26.9% 29.2%⌦ 31.8%⌦ $57 x 19.4% 21.2% 23.2% 25.2% 27.3% 29.5% $55 20.0% 21.8% 23.6% 25.6% 27.6% 29.8% 32.1% 34.5%⌦ $53 22.2% 24.1% 26.0% 28.0% 30.1% 32.3% 34.6% 37.1%⌦ $51 24.5% 26.4% 28.3% 30.4% 32.5% 34.8% 37.2% 39.7%⌦ $49 26.7% 28.6% 30.6% 32.7% 34.9% 37.2% 39.7% 42.3%⌦ $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% x x 18.3% 20.2% 22.2% 24.2% 26.4% 28.6%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 25.6% 79% 81% x 18.3% 20.1% 22.0% 24.0% 26.1% 28.3% 30.6%⌦ 83% 18.3% 20.0% 21.9% 23.8% 25.8% 27.9% 30.2% 32.5%⌦ 85% 20.0% 21.8% 23.6% 25.6% 27.6% 29.8% 32.1% 34.5%⌦ 87% 21.6% 23.5% 25.4% 27.4% 29.4% 31.6% 34.0% 36.4%⌦ 89% 23.3% 25.1% 27.1% 29.1% 31.2% 33.5% 35.8% 38.3%⌦ 91% 24.9% 26.8% 28.8% 30.9% 33.0% 35.3% 37.7% 40.3%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 13.0% 13.8% 14.7% 16.0% 17.7% x x x% 8.0% 13.6% 14.5% 15.6% 17.0% 19.1% 22.1% x x% 7.5% 14.1% 15.1% 16.4% 18.1% 20.4% 23.9% 29.6% x% 7.0% 14.7% 15.8% 17.2% 19.1% 21.7% 25.6% 32.0% x% Capital Structure - Debt (%)% Cost of Debt (%) 25.6% 6.5% 15.2% 16.4% 18.0% 20.1% 23.0% 27.3% 34.4% 48.6%⌦ 6.0% 15.7% 17.0% 18.8% 21.0% 24.2% 28.9% 36.7% 52.3%⌦ 5.5% 16.2% 17.6% 19.5% 22.0% 25.4% 30.5% 39.0% 56.0%⌦ $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% $116 x x x 18.5% 20.4% 22.4% 24.6% 26.8%⌦ $118 x x 19.0% 20.9% 22.9% 24.9% 27.1% 29.4%⌦ $120 17.7% 19.5% 21.3% 23.3% 25.3% 27.4% 29.6% 31.9%⌦ $122 20.0% 21.8% 23.6% 25.6% 27.6% 29.8% 32.1% 34.5%⌦ $124 22.2% 24.0% 25.9% 27.9% 30.0% 32.2% 34.5% 37.0%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 25.6% $126 24.3% 26.2% 28.1% 30.2% 32.3% 34.6% 37.0% 39.5%⌦ $128 26.5% 28.4% 30.4% 32.5% 34.7% 37.0% 39.5% 42.1%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 14.4% 15.5% 17.0% 18.9% 21.5% 25.4% 31.9% x% 25% 14.7% 15.8% 17.2% 19.1% 21.7% 25.6% 32.0% x% 20% 15.0% 16.0% 17.5% 19.3% 21.9% 25.7% 32.1% x% 15% 15.2% 16.3% 17.7% 19.5% 22.1% 25.9% 32.2% x% 10% 15.5% 16.5% 17.9% 19.7% 22.2% 26.0% 32.3% x% 5% 15.7% 16.8% 18.1% 19.9% 22.4% 26.2% 32.4% x% 0% 15.9% 17.0% 18.3% 20.1% 22.6% 26.3% 32.5% x% 25.6% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% $0 20.0% 21.8% 23.6% 25.6% 27.6% 29.8% 32.1% 34.5%⌦ $10 30.0% 32.1% 34.3% 36.6% 38.9% 41.4% 44.1% 46.9%⌦ Capital Structure - Debt (%)% Tax Rate (%) 25.6% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) Source: Scotia Capital estimates. 30 1532 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 24: After-Tax Levered Equity IRRs on an Ontario FIT-Based Biomass Project% 50%% Equity IRR (%) Base 40%% Case% O&M @ $49/MWh% 30%% 20%% O&M @ $55/MWh% O&M @ $61/MWh% 10%% DSCR < 1.5% 0%% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% Installed Capital Cost ($M per MW)% Equity IRR (%) 45%% Base 40%% Case% 35%% 30%% Utilization @ 91%% 25%% Utilization @ 85%% 20%% 15%% Utilization @ 79%% DSCR < 1.5% 10%% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% Installed Capital Cost ($M per MW)% 50%% Equity IRR (%) Base 40%% 30%% 85% Debt Financed% Case (80%)% DSCR < 1.5% 75% Debt Financed% 20%% 65% Debt Financed% 10%% 0%% 8.0% 8.5% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% 45%% Equity IRR (%) 40%% 35%% 30%% Final FIT @ $128/MWh% 25%% 20%% 15%% Final FIT @ $116/MWh% DSCR < 1.5% 10%% Final FIT @ $122/MWh% Base 5%% Case% 0%% $4.05 $3.95 $3.85 $3.75 $3.65 $3.55 $3.45 $3.35% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 31 1533 Utilities – Alternative & Renewable Energy April 2009 Landfill Gas KEY FINDINGS • Pre-tax unlevered equity IRR: 10.9%✓ • After-tax unlevered equity IRR: 10.3%✓ • Pre-tax levered equity IRR: 24.9%✓ • After-tax levered equity IRR: 24.2%✓ ASSUMPTIONS • FIT Price: $103/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $2.70 million per MW installed✓ • Capacity Factor: 85%✓ • Operating & Maintenance: $55/MWh + 1.5% per year✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 25 through 27 show the output tables and charts of our sensitivity analyses performed on our base✓ case landfill gas plant under Ontario’s proposed FIT program. In Exhibit 26, a table showing after-tax levered equity returns on a generic landfill gas facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 32 1534 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 25: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Landfill Gas Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 10.9% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% $61 7.0% 7.5% 8.0% 8.5% 9.1% 9.7% 10.3% 11.0%⌦ $59 7.7% 8.2% 8.7% 9.3% 9.9% 10.5% 11.2% 11.9%⌦ $57 8.5% 9.0% 9.5% 10.1% 10.7% 11.3% 12.0% 12.8%⌦ $55 9.2% 9.7% 10.3% 10.9% 11.5% 12.1% 12.8% 13.6%⌦ $53 9.9% 10.4% 11.0% 11.6% 12.2% 12.9% 13.7% 14.4%⌦ $51 10.6% 11.1% 11.7% 12.3% 13.0% 13.7% 14.5% 15.3%⌦ $49 11.3% 11.8% 12.4% 13.1% 13.8% 14.5% 15.3% 16.1%⌦ Utilization (%) Installed Capital Cost ($M per MW)% 10.9% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% 79% 8.1% 8.6% 9.1% 9.7% 10.3% 10.9% 11.6% 12.3%⌦ 81% 8.5% 9.0% 9.5% 10.1% 10.7% 11.3% 12.0% 12.7%⌦ 83% 8.8% 9.4% 9.9% 10.5% 11.1% 11.7% 12.4% 13.2%⌦ 85% 9.2% 9.7% 10.3% 10.9% 11.5% 12.1% 12.8% 13.6%⌦ 87% 9.6% 10.1% 10.6% 11.2% 11.9% 12.5% 13.3% 14.0%⌦ 89% 9.9% 10.4% 11.0% 11.6% 12.2% 12.9% 13.7% 14.5%⌦ 91% 10.3% 10.8% 11.4% 12.0% 12.6% 13.3% 14.1% 14.9%⌦ $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% $97 7.1% 7.6% 8.1% 8.6% 9.2% 9.8% 10.4% 11.1%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 10.9% $99 7.8% 8.3% 8.8% 9.4% 10.0% 10.6% 11.3% 12.0%⌦ $101 8.5% 9.0% 9.6% 10.1% 10.7% 11.4% 12.1% 12.8%⌦ $103 9.2% 9.7% 10.3% 10.9% 11.5% 12.1% 12.8% 13.6%⌦ $105 9.9% 10.4% 11.0% 11.6% 12.2% 12.9% 13.6% 14.4%⌦ $107 10.5% 11.1% 11.7% 12.3% 12.9% 13.6% 14.4% 15.2%⌦ $109 11.2% 11.7% 12.3% 13.0% 13.6% 14.4% 15.1% 16.0%⌦ 10.9% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% $0 9.2% 9.7% 10.3% 10.9% 11.5% 12.1% 12.8% 13.6%⌦ 11.6% 12.2% 12.9% 13.5% 14.3% 15.1% 15.9% 16.8%⌦ Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) $10 Source: Scotia Capital estimates. 33 1535 Utilities – Alternative & Renewable Energy April 2009 Exhibit 26: After-Tax Levered Equity IRRs on an Ontario FIT-Based Landfill Gas Project% Installed Capital Cost ($M per MW)% 24.2% O&M ($/MWh) $61 $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% x x x x x 18.9% 22.0% 25.2%⌦ $59 x x x x 19.9% 22.8% 25.9% 29.2%⌦ $57 x x 18.0% 20.7% 23.5% 26.5% 29.7% 33.2%⌦ $55 x 18.9% 21.5% 24.2% 27.1% 30.1% 33.4% 37.0%⌦ $53 19.7% 22.2% 24.8% 27.6% 30.5% 33.7% 37.2% 40.9%⌦ $51 22.8% 25.4% 28.0% 30.9% 34.0% 37.3% 40.8% 44.7%⌦ $49 25.9% 28.5% 31.2% 34.2% 37.4% 40.8% 44.5% 48.5%⌦ $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% 79% x x x 18.8% 21.5% 24.5% 27.6% 31.0%⌦ 81% x x 18.0% 20.6% 23.4% 26.4% 29.6% 33.0%⌦ 83% x x 19.7% 22.4% 25.2% 28.3% 31.5% 35.0%⌦ 85% x 18.9% 21.5% 24.2% 27.1% 30.1% 33.4% 37.0%⌦ 87% 18.1% 20.6% 23.2% 25.9% 28.9% 32.0% 35.4% 39.1%⌦ 89% 19.8% 22.3% 24.9% 27.7% 30.7% 33.9% 37.3% 41.1%⌦ 91% 21.4% 23.9% 26.6% 29.4% 32.5% 35.7% 39.3% 43.1%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 12.3% 12.9% 13.8% 14.8% 16.4% x x x% 8.0% 12.9% 13.6% 14.6% 16.0% 17.8% 20.6% x x% 7.5% 13.4% 14.3% 15.5% 17.0% 19.2% 22.4% x x% Installed Capital Cost ($M per MW)% Utilization (%) 24.2% Capital Structure - Debt (%)% Cost of Debt (%) 24.2% 7.0% 14.0% 15.0% 16.3% 18.1% 20.5% 24.2% 30.2% x% 6.5% 14.5% 15.6% 17.1% 19.1% 21.8% 25.9% 32.7% 46.2%⌦ 6.0% 15.0% 16.3% 17.9% 20.1% 23.1% 27.6% 35.0% 50.0%⌦ 5.5% 15.5% 16.9% 18.7% 21.0% 24.3% 29.2% 37.4% 53.7%⌦ $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% x x x x x 19.4% 22.5% 25.7%⌦ Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 24.2% $97 $99 x x x 17.4% 20.2% 23.1% 26.2% 29.5%⌦ $101 x x 18.2% 20.8% 23.7% 26.6% 29.8% 33.3%⌦ $103 x 18.9% 21.5% 24.2% 27.1% 30.1% 33.4% 37.0%⌦ $105 19.6% 22.0% 24.7% 27.4% 30.4% 33.6% 37.0% 40.8%⌦ $107 22.6% 25.1% 27.8% 30.7% 33.7% 37.0% 40.6% 44.5%⌦ $109 25.5% 28.1% 30.9% 33.8% 37.0% 40.4% 44.1% 48.2%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 13.7% 14.7% 16.1% 17.8% 20.3% 24.0% 30.1% x% 25% 14.0% 15.0% 16.3% 18.1% 20.5% 24.2% 30.2% x% 20% 14.2% 15.2% 16.6% 18.3% 20.7% 24.3% 30.3% x% Capital Structure - Debt (%)% Tax Rate (%) 24.2% 15% 14.5% 15.5% 16.8% 18.5% 20.9% 24.5% 30.4% x% 10% 14.7% 15.7% 17.0% 18.7% 21.1% 24.6% 30.5% x% 5% 15.0% 15.9% 17.2% 18.9% 21.2% 24.7% 30.6% x% 0% 15.2% 16.2% 17.4% 19.1% 21.4% 24.9% 30.7% x% 24.2% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% $0 x 18.9% 21.5% 24.2% 27.1% 30.1% 33.4% 37.0%⌦ 30.4% 33.3% 36.4% 39.7% 43.2% 46.9% 51.0% 55.4%⌦ Installed Capital Cost ($M per MW)% ecoEn. ($/MWh) $10 Source: Scotia Capital estimates. 34 1536 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 27: After-Tax Levered Equity IRRs on an Ontario FIT-Based Landfill Gas Project% Equity IRR (%) 60%% 50%% 40%% Base Case% O&M @ $49/MWh% 30%% 20%% O&M @ $55/MWh 10%% O&M @ $61/MWh% DSCR < 1.5% 0%% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% Installed Capital Cost ($M per MW)% 50%% Equity IRR (%) Base 40%% 30%% Utilization @ 85%% Case% Utilization @ 91%% Utilization @ 79%% 20%% DSCR < 1.5% 10%% 0%% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% Installed Capital Cost ($M per MW)% 40%% 85% Debt Financed% Equity IRR (%) 35%% 30%% 25%% DSCR < 1.5% 75% Debt Financed% 20%% 15%% 65% Debt Financed% Base 10%% Case 5%% (80%)% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% Equity IRR (%) 50%% Base Case% 40%% Final FIT @ $109/MWh% 30%% 20%% Final FIT @ $103/MWh Final FIT @ $97/MWh% 10%% DSCR < 1.5% 0%% $3.0 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 35 1537 Utilities – Alternative & Renewable Energy April 2009 Biogas KEY FINDINGS • Pre-tax unlevered equity IRR: 9.9%✓ • After-tax unlevered equity IRR: 9.5%✓ • Pre-tax levered equity IRR: 19.6%✓ • After-tax levered equity IRR: 18.8%✓ ASSUMPTIONS • FIT Price: $104/MWh, as proposed by the OPA, and for a term of 20 years • Capital Cost: $5.50 million per MW installed • Capacity Factor: 75%✓ • Operating & Maintenance: $6/MWh + 1.5% per year, net of a tipping fee✓ • Incentives: No ecoENERGY subsidy, carbon credits, or any other environmental attributes✓ • Capital Structure: 80%/20% debt/equity split, provided DSCR is maintained✓ • Cost of Debt: 7.00% • Debt Service Coverage Ratio (DSCR): Minimum of 1.5x✓ SENSITIVITY TABLES AND CHARTS Exhibits 28 through 30 show the output tables and charts of our sensitivity analyses performed on our base✓ case biogas plant under Ontario’s proposed FIT program. In Exhibit 29, a table showing after-tax levered equity returns on a generic biogas facility, an “x”✓ represents a scenario where the DSCR minimum threshold of 1.5x is breached.✓ 36 1538 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 28: Pre-Tax Unlevered Equity IRRs on an Ontario FIT-Based Biogas Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 9.9% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% $12 8.1% 8.4% 8.6% 8.9% 9.2% 9.4% 9.7% 10.0%⌦ $10 8.5% 8.7% 9.0% 9.2% 9.5% 9.8% 10.1% 10.4%⌦ $8 8.8% 9.0% 9.3% 9.6% 9.8% 10.1% 10.4% 10.7%⌦ $6 9.1% 9.4% 9.6% 9.9% 10.2% 10.5% 10.8% 11.1%⌦ $4 9.4% 9.7% 10.0% 10.2% 10.5% 10.8% 11.1% 11.4%⌦ $2 9.7% 10.0% 10.3% 10.6% 10.8% 11.1% 11.4% 11.8%⌦ $0 10.0% 10.3% 10.6% 10.9% 11.2% 11.5% 11.8% 12.1%⌦ $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% 69% 7.9% 8.2% 8.4% 8.7% 8.9% 9.2% 9.5% 9.8%⌦ 71% 8.3% 8.6% 8.8% 9.1% 9.4% 9.6% 9.9% 10.2%⌦ 73% 8.7% 9.0% 9.2% 9.5% 9.8% 10.1% 10.3% 10.6%⌦ 75% 9.1% 9.4% 9.6% 9.9% 10.2% 10.5% 10.8% 11.1%⌦ 77% 9.5% 9.8% 10.0% 10.3% 10.6% 10.9% 11.2% 11.5%⌦ 79% 9.9% 10.1% 10.4% 10.7% 11.0% 11.3% 11.6% 11.9%⌦ 81% 10.3% 10.5% 10.8% 11.1% 11.4% 11.7% 12.0% 12.3%⌦ $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% 8.2% 8.4% 8.7% 9.0% 9.2% 9.5% 9.8% 10.1%⌦ Installed Capital Cost ($M per MW)% Utilization (%) 9.9% Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 9.9% $98 $100 8.5% 8.7% 9.0% 9.3% 9.5% 9.8% 10.1% 10.4%⌦ $102 8.8% 9.1% 9.3% 9.6% 9.9% 10.1% 10.4% 10.7%⌦ $104 9.1% 9.4% 9.6% 9.9% 10.2% 10.5% 10.8% 11.1%⌦ $106 9.4% 9.7% 9.9% 10.2% 10.5% 10.8% 11.1% 11.4%⌦ $108 9.7% 10.0% 10.2% 10.5% 10.8% 11.1% 11.4% 11.7%⌦ $110 10.0% 10.3% 10.5% 10.8% 11.1% 11.4% 11.7% 12.1%⌦ $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% 9.1% 9.4% 9.6% 9.9% 10.2% 10.5% 10.8% 11.1%⌦ 10.2% 10.4% 10.7% 11.0% 11.3% 11.6% 12.0% 12.3%⌦ Installed Capital Cost ($M per MW)% 9.9% ecoEn. ($/MWh) $0 $10 Source: Scotia Capital estimates. 37 1539 Utilities – Alternative & Renewable Energy April 2009 Exhibit 29: After-Tax Levered Equity IRRs on an Ontario FIT-Based Biogas Project% Installed Capital Cost ($M per MW)% O&M ($/MWh) 18.8% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% $12 x x x x x x x 19.4%⌦ $10 x x x x x 18.4% 19.7% 21.0%⌦ $8 x x x x 18.6% 19.9% 21.2% 22.5%⌦ $6 x x x 18.8% 20.1% 21.4% 22.7% 24.1%⌦ $4 x x 19.0% 20.3% 21.5% 22.8% 24.2% 25.6%⌦ $2 x 19.2% 20.4% 21.7% 23.0% 24.3% 25.7% 27.1%⌦ $0 19.4% 20.6% 21.8% 23.1% 24.4% 25.8% 27.1% 28.6%⌦ 18.8% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% 69% x x x x x x x 18.3%⌦ 71% x x x x x x 18.9% 20.2%⌦ 73% x x x x x 19.5% 20.8% 22.2%⌦ 75% x x x 18.8% 20.1% 21.4% 22.7% 24.1%⌦ 77% x x 19.4% 20.6% 21.9% 23.2% 24.6% 26.0%⌦ 79% 18.7% 19.9% 21.1% 22.4% 23.7% 25.0% 26.4% 27.9%⌦ 81% 20.4% 21.6% 22.9% 24.2% 25.5% 26.9% 28.3% 29.7%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 8.5% 10.2% 10.5% 10.9% 11.5% x x x x% 8.0% 10.7% 11.2% 11.8% 12.6% x x x x% 7.5% 11.3% 11.9% 12.6% 13.7% 15.0% x x x% 7.0% 11.8% 12.5% 13.5% 14.7% 16.4% 18.8% x x% 6.5% 12.3% 13.2% 14.3% 15.7% 17.6% 20.5% x x% 6.0% 12.9% 13.8% 15.0% 16.6% 18.9% 22.1% 27.5% x% 5.5% 13.3% 14.4% 15.8% 17.6% 20.1% 23.7% 29.7% 41.5%⌦ $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% $98 x x x x x x 18.3% 19.6%⌦ $100 x x x x x 18.5% 19.8% 21.1%⌦ $102 x x x x 18.7% 19.9% 21.2% 22.6%⌦ $104 x x x 18.8% 20.1% 21.4% 22.7% 24.1%⌦ $106 x x 19.0% 20.2% 21.5% 22.8% 24.1% 25.5%⌦ Utilization (%) Installed Capital Cost ($M per MW)% Capital Structure - Debt (%)% Cost of Debt (%) 18.8% Installed Capital Cost ($M per MW)% Final FIT ($/MWh) 18.8% $108 x 19.1% 20.3% 21.6% 22.9% 24.2% 25.6% 27.0%⌦ $110 19.3% 20.4% 21.7% 22.9% 24.2% 25.6% 27.0% 28.4%⌦ 55% 60% 65% 70% 75% 80% 85% 90%% 30% 11.5% 12.3% 13.2% 14.4% 16.1% 18.6% x x% 25% 11.8% 12.5% 13.5% 14.7% 16.4% 18.8% x x% 20% 12.1% 12.8% 13.7% 14.9% 16.6% 19.0% x x% 15% 12.3% 13.0% 13.9% 15.1% 16.8% 19.2% x x% 10% 12.6% 13.3% 14.2% 15.3% 16.9% 19.3% x x% 5% 12.8% 13.5% 14.4% 15.5% 17.1% 19.5% x x% 0% 13.0% 13.7% 14.6% 15.7% 17.3% 19.6% x x% 18.8% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% $0 x x x 18.8% 20.1% 21.4% 22.7% 24.1%⌦ 21.1% 22.4% 23.7% 25.0% 26.4% 27.9% 29.4% 30.9%⌦ Capital Structure - Debt (%)% Tax Rate (%) 18.8% Installed Capital Cost ($M per MW)% ecoEn. ($/MWh)% $10 Source: Scotia Capital estimates. 38 1540 Crunching the Numbers on Ontario’s Proposed Feed-In Tariff Program April 2009 Exhibit 30: After-Tax Levered Equity IRRs on an Ontario FIT-Based Biogas Project% Equity IRR (%) 35%% Net O&M @ $6/MWh% 30%% 25%% Net O&M @ $0/MWh% 20%% 15%% 10%% Net O&M @ $12/MWh% Base 5%% Case% DSCR < 1.5% 0%% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% Installed Capital Cost ($M per MW)% Equity IRR (%) 35%% Utilization @ 75%% 30%% 25%% Utilization @ 81%% 20%% 15%% 10%% Base 5%% DSCR < 1.5% 0%% $5.8 $5.7 Utilization @ 69%% Case% $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% Installed Capital Cost ($M per MW)% Equity IRR (%) 35%% DSCR < 1.5% 30%% 85% Debt Financed% 25%% 75% Debt Financed% 20%% 15%% 10%% 65% Debt Financed% Base Case 5%% (80%)% 0%% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5%% Cost of Debt (%)% Equity IRR (%) 30%% 25%% Final FIT @ $110/MWh% 20%% 15%% Final FIT @ DSCR < 1.5 DSCR < 1.5% Base 10%% Case% Final FIT @ $98/MWh% $104/MWh% 5%% 0%% $5.8 $5.7 $5.6 $5.5 $5.4 $5.3 $5.2 $5.1% Installed Capital Cost ($M per MW)% Source: Scotia Capital estimates. 39 1541 Utilities Alternative Renewable Energy April 2009 Notes 40 5 Scotia 1?tipital Crunching the Numbers on Ontario?s Proposed Feed-In Tariff Program April 2009 Notes 41 Scotia E?pital Appendix A: Important Disclosures Company Ticker Disclosures* Boralex Inc. Canadian Hydro Developers Inc. Plutonic Power Corporation BLX KHD PCC T⇣ S, U⇣ P⇣ I, Ben Isaacson, certify that (1) the views expressed in this report in connection with securities or issuers that I analyze⇣ accurately reflect my personal views and (2) no part of my compensation was, is, or will be directly or indirectly, related⇣ to the specific recommendations or views expressed by me in this report.⇣ The Research Analyst's compensation is based on various performance and market criteria and is charged as an⇣ expense to certain departments of Scotia Capital Inc., including investment banking.⇣ Scotia Capital Inc. and/or its affiliates: expects to receive or intends to seek compensation for investment banking⇣ services from issuers covered in this report within the next three months; and has or seeks a business relationship with the issuers referred to herein which involves providing services, other than securities underwriting or advisory services, for which compensation is or may be received. These may include services relating to lending, cash⇣ management, foreign exchange, securities trading, derivatives, structured finance or precious metals.⇣ For Scotia Capital Research analyst standards and disclosure policies, please visit⇣ http://www.scotiacapital.com/disclosures⇣ * Legend P This issuer paid a portion of the travel-related expenses incurred by the Fundamental Research⇣ Analyst/Associate to visit material operations of this issuer. S Scotia Capital Inc. and its affiliates collectively beneficially own in excess of 1% of one or more classes⇣ of the issued and outstanding equity securities of this issuer.⇣ T The Fundamental Research Analyst/Associate has visited material operations of this issuer.⇣ U Within the last 12 months, Scotia Capital Inc. and/or its affiliates have undertaken an underwriting liability with respect to equity or debt securities of, or have provided advice for a fee with respect to, this⇣ issuer. 1544 Definition of Scotia Capital Equity Research Ratings & Risk Rankings⇢ We have a three-tiered rating system, with ratings of 1-Sector Outperform, 2-Sector Perform, and 3-Sector Underperform. Each analyst assigns a rating that is relative to his or her coverage universe.⇣ Our risk ranking system provides transparency as to the underlying financial and operational risk of each stock⇣ covered. Statistical and judgmental factors considered are: historical financial results, share price volatility, liquidity of the shares, credit ratings, analyst forecasts, consistency and predictability of earnings, EPS growth, dividends, cash⇣ flow from operations, and strength of balance sheet. The Director of Research and the Supervisory Analyst jointly make the final determination of all risk rankings. Ratings Risk Rankings⇢ 1-Sector Outperform Low The stock is expected to outperform the average total return of the analyst’s coverage universe by sector over the next 12 months.⇣ Low financial and operational risk, high predictability of⇣ financial results, low stock volatility. 2-Sector Perform The stock is expected to perform approximately in line with the average total return of the analyst’s coverage universe by sector over the next 12 months.⇣ 3-Sector Underperform The stock is expected to underperform the average total return of the analyst’s coverage universe by sector over⇣ the next 12 months.⇣ Other Ratings Tender – Investors are guided to tender to the terms of the takeover offer. Under Review – The rating has been temporarily placed under review, until sufficient information has been received and assessed by the analyst. Medium Moderate financial and operational risk, moderate⇣ predictability of financial results, moderate stock⇣ volatility.⇣ High High financial and/or operational risk, low predictability of financial results, high stock volatility.⇣ Caution Warranted Exceptionally high financial and/or operational risk,⇣ exceptionally low predictability of financial results,⇣ exceptionally high stock volatility. For risk-tolerant investors⇣ only.⇣ Venture Risk and return consistent with Venture Capital. For risk-tolerant investors only. Scotia Capital Equity Research Ratings Distribution*⇢ Distribution by Ratings and Equity and Equity-Related Financings* Percentage of companies covered by Scotia Capital Equity Research within each rating category. Percentage of companies within each rating⇣ category for which Scotia Capital has⇣ undertaken an underwriting liability or has⇣ provided advice for a fee within the last 12⇣ months.⇣ Source: Scotia Capital. For the purposes of the ratings distribution disclosure the NASD requires members who use a ratings system with terms different than “buy,” “hold/neutral” and “sell,” to equate their own ratings into these categories. Our 1-Sector⇣ Outperform, 2-Sector Perform, and 3-Sector Underperform ratings are based on the criteria above, but for this⇣ purpose could be equated to buy, neutral and sell ratings, respectively. 1545 Scotia Capital Equity Research Team INCOME TRUSTS Diversified Business Trusts⌃ UTILITIES Pipelines, Energy Utilities & IPPs⌃ Turan Quettawala, CFA................................(416) 863-7065 Sam Kanes, CA, CFA .................................. (416) 863-7798 sam_kanes@scotiacapital.com⇣ turan_quettawala@scotiacapital.com Power & Energy Infrastructure Trusts⌃ SUPERVISORY ANALYST Claude King, CFA......................................... (416) 863-7985 claude_king@scotiacapital.com⇣ Tony Courtright, CA......................................(416) 945-4536 tony_courtright@scotiacapital.com⇣ REITs⌃ DIRECTOR OF ADMINISTRATION Erika Osmond............................................... (416) 945-4529 erika_osmond@scotiacapital.com CHINA STRATEGY Na Liu, CFA .................................................. (416) 945-4235 na_liu@scotiacapital.com CONSUMER DISCRETIONARY Cable⌃ John Henderson, P.Eng ............................... (416) 863-7780 john_henderson@scotiacapital.com Hotels, Restaurants & Leisure⌃ Turan Quettawala, CFA................................ (416) 863-7065 turan_quettawala@scotiacapital.com Mario Saric, CA, CFA ...................................(416) 863-7824 mario_saric@scotiacapital.com⇣ Pammi Bir, CA, CFA.....................................(416) 863-7218 pammi_bir@scotiacapital.com INDUSTRIALS Transportation & Aerospace⌃ Paul Steep.................................................... (416) 945-4310 paul_steep@scotiacapital.com⇣ CONSUMER STAPLES Food Products⌃ Cherilyn Radbourne, CA, CFA ..................... (416) 863-2899 cherilyn_radbourne@scotiacapital.com ECONOMICS Warren Jestin .............................................. (416) 866-6136 Aron Gampel ............................................... (416) 866-6259 Mary Webb .................................................. (416) 866-4202 Derek Holt.................................................... (416) 863-7707 PORTFOLIO ADVISORY GROUP (SCOTIAMCLEOD) Managing Director: Cherilyn Radbourne, CA, CFA .....................(416) 863-2899 cherilyn_radbourne@scotiacapital.com Stewart Hunt ................................................ (416) 863-2855 INFORMATION TECHNOLOGY Hardware & Equipment⌃ Elliott Fishman ............................................. (416) 863-7860 Angelo Rizzo ............................................... (416) 863-7521 Dave Stephens ............................................ (416) 862-3115 Gus Papageorgiou, CFA ..............................(416) 863-7552 gus_papageorgiou@scotiacapital.com Software & Services⌃ Media⌃ Alternative & Renewable Energy Ben Isaacson, CFA...................................... (416) 945-5310 ben_isaacson@scotiacapital.com Paul Steep ....................................................(416) 945-4310 paul_steep@scotiacapital.com⇣ MATERIALS Chemicals⌃ Sam Kanes, CA, CFA...................................(416) 863-7798 sam_kanes@scotiacapital.com⇣ Trading Portfolio Manager: Stephen Uzielli............................................. (416) 863-7939 Equity Advisory Paul Danesi ................................................. (416) 863-7735 Gareth Watson, CFA ................................... (416) 863-7604 Geoff Ho, CFA ............................................. (416) 865-6354 Institutional Equity Sales & Trading Toronto ........................................................ (416) 863-2885 1-888-251-4484 Gold & Precious Minerals Retailing⌃ Patricia Baker, Ph.D. .................................... (514) 287-4535 patricia_baker@scotiacapital.com⇣ Ryan Balgopal, CFA ..................................... (416) 863-7902 ryan_balgopal@scotiacapital.com⇣ ENERGY Energy Equipment & Services⌃ Peter Doig, CFA ........................................... (403) 213-7331 peter_doig@scotiacapital.com Trevor Turnbull, MSc ....................................(416) 863-7427 trevor_turnbull@scotiacapital.com⇣ David Christie, P.Geo ...................................(416) 863-7141 david_christie@scotiacapital.com⇣ Indi Gopinathan, P.Eng. ...............................(416) 945-4083 indi_gopinathan@scotiacapital.com Montreal....................................................... (514) 287-4513 Vancouver ................................................... (604) 661-7411 1-888-926-2288 New York ................................................ (212) 225-6605/04 1-800-262-4060 (617) 330-1477 011-44-207-826-5919 Boston ........................................................ London, U.K. .................................... Metals & Mining⌃ Lawrence Smith, CFA...................................(416) 945-4526 lawrence_smith@scotiacapital.com⇣ Oil & Gas – Integrated and E&P⌃ Mark Polak, CFA .......................................... (403) 213-7349 mark_polak@scotiacapital.com Alex Terentiew, P.Geo..................................(416) 863-7484 alex_terentiew@scotiacapital.com⇣ Oil & Gas – International Paper & Forest Products⌃ Gavin Wylie .................................................. (403) 213-7333 Benoît Laprade, CA, CFA.............................(514) 287-3627 gavin_wylie@scotiacapital.com⇣ benoit_laprade@scotiacapital.com⇣ Oil & Gas – Junior E&P⌃ PORTFOLIO STRATEGY Peter Doig, CFA........................................... (403) 213-7331 peter_doig@scotiacapital.com Vincent Delisle, CFA.....................................(514) 287-3628 vincent_delisle@scotiacapital.com George Toriola, P.Eng. ................................ (403) 213-7345 george_toriola@scotiacapital.com REAL ESTATE Mario Saric, CA, CFA ...................................(416) 863-7824 mario_saric@scotiacapital.com⇣ Oil & Gas – Royalty Trusts⌃ Jeremy Kaliel ................................................ (403) 213-7750 jeremy_kaliel@scotiacapital.com FINANCIALS Banks & Diversified Financials⌃ Kevin Choquette, CFA, CMA........................ (416) 863-2874 Pammi Bir, CA, CFA.....................................(416) 863-7218 pammi_bir@scotiacapital.com SPECIAL SITUATIONS Anthony Zicha...............................................(514) 350-7748 anthony_zicha@scotiacapital.com⇣ kevin_choquette@scotiacapital.com⇣ Diversified Financials – Small Cap⌃ Cherilyn Radbourne, CA, CFA .....................(416) 863-2899 cherilyn_radbourne@scotiacapital.com Phil Hardie, CFA, P.Eng ............................... (416) 863-7430 phil_hardie@scotiacapital.com TELECOMMUNICATION SERVICES Insurance⌃ John Henderson, P.Eng. .............................(416) 863-7780 john_henderson@scotiacapital.com Tom MacKinnon, FSA, FCIA, MAAA ............ (416) 863-7299 tom_mackinnon@scotiacapital.com⇣ 1546 TM⌦ www.scotiacapital.com⌦ TM Trademark of The Bank of Nova Scotia. The Scotia Capital trademark represents the corporate and investment banking businesses of The Bank of Nova⌦ Scotia, Scotiabank Europe plc, Scotia Capital Inc. and Scotia Capital (USA) Inc. – all members of the Scotiabank Group and authorized users of the mark.⌦ Scotia Capital Inc. is a member of CIPF.⌦ Equity research reports published by Scotia Capital are available electronically via: Bloomberg, Thomson Financial/First Call - Research Direct,% Reuters, Capital IQ, and FactSet. Institutional clients with questions regarding distribution of equity research should contact us at 1-800-208-7666.% This report has been prepared by SCOTIA CAPITAL INC. (SCI), a subsidiary of the Bank of Nova Scotia. Opinions, estimates and projections contained⌦ herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled⌦ or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither⌦ SCI nor its affi liates accepts any liability whatsoever for any loss arising from any use of this report or its contents. This report is not, and is not to be⌦ construed as, an offer to sell or solicitation of an offer to buy any securities and/or commodity futures contracts. The securities mentioned in this report⌦ may not be suitable for all investors nor eligible for sale in some jurisdictions. This research and all the information, opinions, and conclusions contained⌦ in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information,⌦ opinions, and conclusions contained in it be referred to without the prior express consent of SCI. SCI is authorized and regulated by The Financial Services⌦ Authority. U.S. Residents: This report is being distributed by Scotia Capital Inc. directly to U.S. persons who are Major Institutional Investors only. Any U.S.⌦ institutional investor wishing further information or to effect transactions in any security discussed in this report should contact Scotia Capital (USA) Inc., a⌦ broker-dealer registered with the SEC and FINRA and a member of SPIC, at 212-225-6500.⌦ 1547 Richard Duffy From: Richard Duffy Sent: April-23-09 2:31 PM To: 'deb@reidandassociates.ca' Cc: Emay Cowx Subject: Executive Summaries - Mar 17 and 24 Attachments: FIT SES 1-ExecSummary-draft(ec-dr)_Reviewed.doc; FIT SES 2-March 24-ExecSum v2 (dr)_Reviewed.doc Hi Deb, Attached are the reviewed Executive Summaries from the Mar 17 th and 24 th sessions. These documents have the⌘ track changes included.⌘ I ’ m continuing to review the next session summaries and will get them to you as soon as completed. Let me know if there are any questions. Thanks for your patience Richard 1548 Feed-in Tariff Consultation Ontario Power Authority Toronto, Ontario March 17, 2009 1549 FEED-I N TARIFF CONSULTATION PAGE 1 Executive Summary Ninety-eight participants attended the Ontario Power Authority’s (OPA) first Stakeholder Engagement Session in Toronto for the proposed Feed-In Tariff (FIT) Program . In addition 300 people participated via the Internet and 65 via telephone. Jason Chee-Aloy, the OPA’s Director of Electricity Resources, requested participants’ detailed input on the proposed program, and asked them to identify elements in the proposed program’s implementation that might require special care. Any issues raised during the engagement sessions that fall outside the proposed program’s parameters will be flagged and directed to the appropriate forums. Stakeholder engagement sessions will continue weekly over an eight-week period. Each will focus on a specific element of program design or implementation. Participants were encouraged to use an online question and answer tool on the OPA website, where questions and responses will be publicly posted, along with comments concerning the Draft Rules and Contract. The session began with an overview of Ontario’s Green Energy and Green Economy Act (GEA). The GEA is an omnibus bill affecting at least 15 other pieces of legislation that will require dozens of regulations. The OPA’s goal is to have the proposed FIT Program ready for implementation by late spring 2009, when the proposed GEA could become law. The OPA also intends to have an online training module in place by the end of May 2009 to guide participants through the proposed FIT Program requirements, and to create training material for the range of potential participants, including training sessions at various communities throughout the province. Panelists for the OPA said the proposed GEA provides an overarching framework for energy policy in Ontario to: override bylaw and other restrictions regarding renewable energy projects; create a Renewable Energy Facilitation office to assist program participants; give the minister the authority to direct ministries and agencies on energy and environmental standards; facilitate Aboriginal and Métis participation in the electricity sector; establish a program of Feed-In Tariffs; promote the development of “Smart Grid,” which will enable more renewable energy sources, supply and demand response, and conservation; obligate transmitters and distributors to accommodate renewable generation and “Smart" Grid” technology; and ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 1 7, 2009 1550 FEED-I N TARIFF CONSULTATION PAGE 2 create a single approval process—the Renewable Energy Approval—under the Environmental Protection Act. OPA representatives described the proposed FIT Program as a “made in Ontario” approach" based on the lessons learned in other jurisdictions, the current government’s philosophy" regarding green energy, and the unique aspects of Ontario’s geography, economy, and" electricity systems. The proposed FIT Program is a standardized procurement process for renewable energy technologies, based on the principle that generators should recover their capital costs, plus a reasonable return on investment over an extended fixed period of 20 years. The proposed program would apply to several renewable technologies, including wind, waterpower, solar photovoltaic, and biomass, and could encompass other technologies as they become advanced enough to produce reliable, reasonably priced electricity. The tariff establishes a schedule of prices that vary for projects of different sizes and technologies. The proposed FIT Program differs from previous renewable energy procurements in several ways, including the provision of milestones that projects must meet, and for which developers are obligated to provide security. Project approval will be based on a “first-ready” approach," rather than “first-come.” Participants expressed concern about the importance of work done by other agencies and ministries regarding issues critical to the successful implementation of the proposed FIT Program, and agreed that a seamless approach is needed, incorporating the parallel work taking place through different consultation and program-design processes. They encouraged the OPA to bring as many representatives of these other processes as possible to future engagement sessions. It is especially important that work done on the Renewable Energy Approval and the creation of the Renewable Energy Facilitation Office be considered while moving forward with draft program rules and contract design. Equally important is the requirement of keeping proponents informed on the positioning of initiatives involving environmental, First Nations and Métis, and economic issues. Proponents from larger projects noted that they are already working closely to consult with First Nations and Métis groups regarding many projects under development. Participants also noted the importance of incentives for manufacturing and technology development and transmission capacity development. Several participants’ questions related to the rules for micro-projects and the reasonableness of requiring security and application fees from smaller developers. Participants noted that the current draft rules are intended to provide an enduring model for both medium- and large-scale projects. OPA officials explained that the process for smaller projects will be more streamlined and likely will be handled through local distribution companies (LDCs) and said that the OPA ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 1 7, 2009 1551 FEED-I N TARIFF CONSULTATION PAGE 3 has already initiated discussions with LDCs to work out details regarding these projects. They anticipate cooperation and collaboration. Several participants requested the opportunity to examine the spreadsheets and variables used to establish the price schedule, along with additional lead time to review documents prior to each week’s engagement session. Participants asked about the integration of the proposed FIT Program with projects already involved in either the Request for Proposal (RFP) process or the Renewable Energy Standard Offer Program (RESOP). OPA representatives said developers with existing contracts within the earlier programs will be expected to adhere to the terms and conditions of those contracts. Eligibility of other projects in various stages of the assessment process are being reviewed. There may also be projects that did not qualify for RESOP that are eligible for the proposed FIT Program. OPA representatives acknowledged that the changeover may create complications, but said the OPA is committed to rationalizing the process and applying principles of fairness. A number of developers described specific scenarios and asked whether projects already in the RESOP pipeline could be transferred to the proposed FIT Program. They expressed particular concern about projects approved, not issued a RESOP or other contract, and not yet built. OPA representatives emphasized that the proposed FIT Program’s objective is to create an enduring model for application review, impact assessment, triggers, and implementation. However, a spirit of fairness will be applied to legacy projects to ensure that the overall goal of increasing the use of renewables in Ontario’s energy mix is met. Participants expressed a hope that the proposed FIT Program can assist developers in securing financing by providing a guaranteed long-term price for electricity. OPA representatives said the OPA is willing to work with developers in reassuring financers by reviewing the proposed FIT Program with them and providing developers with multi-year contracts with clearly identified milestones. The proposed FIT Program will create a Production Line for projects where adequate connection capacity is not currently available or planned, conducting an Economic Connection Test to determine what transmission is required to be able to connect the new renewable energy supply provided by the proposed project. OPA representatives said proponents would have the option of staying in the production line until plans for transmission are approved and in place. If they prefer to withdraw from the process, however, proponents would be provided with opportunity to do so and to recover the relevant portion of their security deposit. The results of the Economic Connection Test will be used to provide input about reasonable and necessary grid enhancements or expansion. The proposed GEA gives the minister the power to issue directives ordering the installation of new connection capacity. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 1 7, 2009 1552 FEED-I N TARIFF CONSULTATION PAGE 4 Participants emphasized the importance of stability with any new renewable procurement programs and questioned whether that stability could be provided through regulation, as opposed to legislation. Presenters for the OPA acknowledged that investors and developers need certainty and confidence, while noting that the proposed FIT Program’s objective is to evolve over time to take advantage of changing technology and markets. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 1 7, 2009 1553 Feed-in Tariff Consultation – Session 2 Executive Summary Ontario Power Authority Toronto, Ontario March 24, 2009 1554 FEED-I N TARIFF CONSULTATION PAGE 1 Executive Summary Approximately 86 participants attended in person the second of the OPA’s Feed-In-Tariff⇠ stakeholder engagement sessions, along with 148 who attended via webcast and 180 by⇠ telephone. Jason Chee-Aloy, Elliot Smith, Jacob Sadikman, and Robert Cary presented⇠ program details on behalf of the OPA. Many participant questions and comments related to matters to be addressed through other⇠ mechanism other than the proposed FIT Program and the OPA; in particular the details of the⇠ Renewable Energy Approval and the shape and direction of First Nation and Métis or⇠ community-based projects. Panel members identified that the OPA’s goal is to balance the⇠ interests of the public, developers, consumers, and other parties, and that the program must⇠ reflect the provincial policy goals. For these reasons, some aspects of the program are⇠ dependent on work occurring in other government departments or agencies. Chee-Aloy emphasized that the issues participants were describing are the subject of parallel⇠ reviews and consultations. Participants noted that without clearer indications of the likely⇠ direction of these related matters, it may be difficult to make informed comments about certain details regarding both the proposed Draft Rules and the proposed FIT program. Chee-Aloy said⇠ he would attempt to bring together some of the individuals involved in parallel consultations⇠ for this stakeholder engagement series to provide a broader picture of how the program will⇠ work. Participants raised several issues related to the transition of projects from the Renewable Energy⇠ Standard Offer Program (RESOP) to the proposed FIT Program. Panel members reiterated that⇠ developers with existing contracts from an earlier program will be expected to adhere to the⇠ terms and conditions of those contracts and also explained that they are still working on the⇠ transition details for legacy projects and others projects in various stages of development that⇠ have not executed contracts through previous procurements. They emphasized that proponents⇠ who already hold binding contracts would be expected to adhere to the terms of those contracts. Panel members did express some willingness to review the situatiuon, with the understanding⇠ that any contract amendments would be reciprocal: it is expected that proponents would agree⇠ to the more stringent requirements of the draft FIT Program rules, including the deposit of⇠ appropriate securities and the establishment of milestones. Some participants challenged this⇠ position, noting that it is unfair to proponents who have been willing to take risks and adhere to⇠ the rules of previous procurements that now place them at a competitive disadvantage with⇠ projects participating in the proposed FIT Program. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 24, 2009 1555 FEED-I N TARIFF CONSULTATION PAGE 2 Participants noted the possibility of combining some potential legacy projects that had been⇠ artificially uncoupled to qualify or comply with previous procurements, in particular RESOP.⇠ Participants also discussed the proposed rule limiting proponents in the proposed FIT Program⇠ to one 10 MW project per transformer station, and the method for establishing a queue for⇠ transmission-connected projects. They questioned the efficacy of distribution-connection versus⇠ transmission-connection with regard to particular projects. Participants expressed concern that the 10-day response period allowed in several parts of the⇠ draft rules is unrealistically short. They noted in particular the rules stipulating that projects⇠ moving from assessment to contracting require double the security. Several participants noted⇠ the difficulty in meeting this expectation given the current climate of tight credit. Participants⇠ also noted a brief period in which the OPA would hold both application and performance⇠ securities—large sums in the case of medium and large projects. The OPA panel expressed⇠ willingness to consider giving proponents the opportunity to roll over the application security⇠ on deposit to cover part of the performance security. Participants called attention to the short delays proponents would receive in which to consider⇠ whether or not to accept recommended modifications to their projects in the event of OPA⇠ recommending Connection Alteration Proposals (s. 4.3 (c)(ii)). Panel members explained that⇠ many of the tight deadlines had been established to ensure that projects move forward as⇠ quickly as practically possible, with clear deadlines intended to discourage the kinds of delays⇠ that have been evident in past procurements. It was also pointed out that proponents we⇠ provided with the option of accepting the proposal or having their submission continuing along⇠ as originally submitted. Participants questioned the application process for special relief, citing concerns about the⇠ potential for price drops to trigger off-ramps for proponents. Projects might choose to stay in⇠ the production line after a 5% price drop triggered an off-ramp opportunity, and if this were to⇠ happen, even a small subsequent increase might make it financially unrealistic to remain in the⇠ queue despite the rules mechanism not allowing another exit opportunity until there was⇠ another 5% drop. Participants noted that this would prevent proponents from withdrawing an⇠ application without forfeiting some portion of their application security, though the change in⇠ price was beyond their control. Several participants raised concerns that the relatively high price offered for bio-mass and biogas projects in the proposed FIT Program would encourage many new projects. Bio-mass and⇠ bio-gas projects differ from other renewables in that there is a limited supply of the fuel source⇠ at any given time: new projects in the proposed FIT Program could increase demand for biofuels, driving up the price. The participants noted the unfair competitive advantage this would create for those opting in under the higher proposed FIT Program price, and the substantial⇠ decrease in the profitability of proponents who had undertaken projects under the terms of⇠ earlier RFPs or procurements. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 24, 2009 1556 FEED-I N TARIFF CONSULTATION PAGE 3 Participants also expressed concern that the installation of 100 MW of ground-mounted solar⇠ photovoltaic (PV) capacity could trigger a price degression. Panel members explained that the⇠ price reduction had been put in place both to acknowledge that the cost of solar PV technology⇠ is expected to drop significantly over time, and to account for the impact the high price could⇠ have on the overall cost of energy to consumers. Participants suggested that the OPA not⇠ consider generation from legacy projects as part of the 100 MW price change trigger, but rather consider a time-basis model for price degression. Participants questioned whether the proposed FIT Program would change, be cancelled, or be⇠ replaced before it came to fruition, and Chee-Aloy acknowledged disappointments related to⇠ earlier renewable energy procurements. However, he said, the current government is⇠ committed to maintaining the province’s position as leaders in the renewable energy sector. The program will be reviewed every two years, and there will be an opportunity to make⇠ appropriate changes rapidly in the face of major or drastic events. He agreed on the need for⇠ certainty and stability and said every effort is being made to ensure clear rules and a⇠ transparent process for arriving at them. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MARCH 24, 2009 1557 Richard Duffy From: Richard Duffy Sent: April-30-09 3:57 PM To: Irene Mauricette Subject: FIT Slides Attachments: FIT MEI May0409.ppt 1558 ONTARIO POWER AUTHORITY May 4, 2009 1559 Stakeholder Feedback on FIT Price Schedule • General support for OPA proposed pricing schedule⇥ • Recent Scotia Capital analysis of Ontario FIT prices⇥ suggest overall the prices appear reasonable⇥ 2⇥ 1560 Overall Price Schedule Considerations • OPA is considering:⇥ – Providing full CPI indexation prior to Commercial⇥ Operation Date⇥ – Adding additional pricing categories for smaller⇥ projects, particularly bio-energy⇥ – Offering additional flexibility in compensation for⇥ Aboriginal and Community Projects⇥ 3⇥ 1561 Bio-Energy Proposed Changes • Biogas projects (including on-farm bio-digesters)⇥ – New price category for ⌅ 500 kW projects at 1 6 cents/kWh⇥ • • Reflects higher costs for very small projects⇥ Supports Ontario Ministry of Agriculture and Rural Affairs incentive program⇥ • • Customer-based generation on farms⇥ Biogas projects⇥ – Increasing size tranche from 5 MW to 10 MW⇥ • Better reflects size categories of projects that are⇥ currently under development⇥ 4⇥ 1562 Bio-Energy Proposed Changes • Biomass projects⇥ – New price category for ⌅ 1 0 MW projects at 1 3.5 cents/kWh⇥ • • Reflects higher costs for smaller projects⇥ Stimulates small scale projects with regional economic development benefit, such as forest wood waste⇥ 5⇥ 1563 Aboriginal and Community Projects • FIT Rules currently require Aboriginal and⇥ Community control of projects as majority equity⇥ partners⇥ • Stakeholders suggest including additional flexibility to⇥ incent more Aboriginal projects⇥ – Considering an incentive price adder that will be⇥ proportionally linked to Aboriginal interest in project • Reflects likely project ownership structure (e.g., OPG Lac Seul arrangement)⇥ • Encourages corporate local community partnerships⇥ 6⇥ 1564 Rooftop Solar PV • Micro-scale PV price is currently limited to rooftop⇥ applications only⇥ – Permit rooftop or ground-mounted micro-scale PV⇥ projects⇥ • • Pole-mounted trackers will be encouraged⇥ Provides greater options for residential applications⇥ 7⇥ 1565 Ground Mounted Solar PV • • Currently over 3500 MW PV projects under development⇥ OPA proposed initial price of 44.3 cents/kWh declining by 9%⇥ every 100 MW contracted - results in 2.5% increase in electricity⇥ costs in a $15 billion/year sector⇥ • Because of this projected cost, no changes planned for pricing⇥ Scenario Price Trigger Cost above Maximum Total⇥ (MW) market (NPV annual cost contracted⇥ in billions) (millions) MW⇥ Base 100 $5.3 $357 1700⇥ A 200 $9.0 $714 3400⇥ B 300 $15.9 $1070 5100⇥ 8⇥ 1566 Changes to FIT Program Rules Not Responsive 1567 10 Working with LDCs Not Responsive 1568 11 OPA Website and Power System Information Not Responsive 1569 12 Overarching Role of Communications Not Responsive 1570 13 Activities and Timing Not Responsive 1571 14 Key Communication Tools Not Responsive 1572 Richard Duffy From: Richard Duffy Sent: April-30-09 6:29 PM To: Jason Chee-Aloy Subject: Updated - Proposed FIT Program Presentation Attachments: FIT MEI May0409_v3.ppt 1573 ONTARIO POWER AUTHORITY May 4, 2009 1574 Stakeholder Feedback on FIT Price Schedule • General support for OPA proposed pricing schedule⇥ • Recent Scotia Capital analysis of Ontario FIT prices⇥ suggest overall the prices appear reasonable⇥ 2⇥ 1575 Overall Price Schedule Considerations • OPA is considering:⇥ – Providing full CPI indexation prior to Commercial⇥ Operation Date⇥ – Adding additional pricing categories for smaller⇥ projects, particularly bio-energy⇥ – Offering additional flexibility in compensation for⇥ Aboriginal and Community Projects⇥ 3⇥ 1576 Summary of Changes to the Price Schedule Technology Revised Original Capacity Range Capacity Range Revised Price Original Price (¢/kWh) (¢/kWh) 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV ⌅ 1 0 kW ⌅ 1 0 kW > 1 0 kW ⌅ 1 00 kW > 1 0 kW ⌅ 1 00 kW > 1 00 kW ⌅ 500 kW > 1 00 kW ⌅ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⌅ 1 0 MW > 1 0 kW ⌅ 1 0 MW Micro Solar PV Rooftop Solar PV Solar PV 44.3 (Automatic 44.3 (Automatic degression) degression)⇥ On-shore Wind Any size Any size 13.5 13.5⇥ Off-shore Wind Any size Any size 19.0 19.0⇥ Waterpower* ⌅ 50 MW ⌅ 50 MW 12.9 12.9⇥ Biomass* ⌅ 1 0 MW Any Size [14-15] 12.2⇥ Biomass* > 10 MW Biogas* ⌅ 5 MW Biogas* ⌅ 500 kW > 500kW ⌅ 1 0 MW Biogas* > 10 MW > 5 MW 10 10.4⇥ Landfill gas* ⌅ 1 0 MW ⌅ 5 MW 11.1 11.1⇥ > 10 MW > 5 MW 10.3 10.3⇥ Community Based ⌅ 1 0 MW ⌅ 2 MW (Water) Price Adder (TBD) 13.4⇥ and Aboriginal (Wind, Water, < 10 MW (Wind) Projects Bio-Energy)⇥ - on top of regular 14.4⇥ 12.2⇥ [16-17] 14.7⇥ 14.7⇥ tariff⇥ 4⇥ 1577 Bio-Energy Proposed Changes • Biogas projects (including on-farm bio-digesters)⇥ – New price category for ⌅ 500 kW projects at 1 6⇡ cents/kWh⇥ • • Reflects higher costs for very small projects⇥ Supports Ontario Ministry of Agriculture and Rural Affairs incentive program⇥ • • Customer-based generation on farms⇥ Biogas projects⇥ – Increasing size tranche from 5 MW to 10 MW⇥ • Better reflects size categories of projects that are⇥ currently under development⇥ 5⇥ 1578 Bio-Energy Proposed Changes • Biomass projects⇥ – New price category for ⌅ 1 0 MW projects at 1 3.5⇡ cents/kWh⇥ • • Reflects higher costs for smaller projects⇥ Stimulates small scale projects with regional economic development benefit, such as forest wood waste⇥ 6⇥ 1579 Aboriginal and Community Projects • FIT Rules currently require Aboriginal and⇥ Community control of projects as majority equity⇥ partners⇥ • Stakeholders suggest including additional flexibility to⇥ incent more Aboriginal projects⇥ – Considering an incentive price adder to the regular⇥ tariff that will be proportionally linked to Aboriginal interest in project • • Reflects likely project ownership structure⇥ Encourages corporate local community partnerships⇥ – – – – 50+% - 100% of price adder⇥ 40% - 80% of price adder⇥ 25% - 50% of price adder⇥ 10% - 20% of price adder (minimum level required)⇥ 7⇥ 1580 Micro Solar PV • Micro-scale PV price is currently limited to rooftop⇥ applications only⇥ – Permit rooftop or ground-mounted micro-scale PV⇥ projects⇥ • • Pole-mounted trackers will be encouraged⇥ Provides greater options for residential applications⇥ 8⇥ 1581 Ground Mounted Solar PV • • Currently over 3500 MW PV projects under development⇥ OPA proposed initial price of 44.3 cents/kWh declining by 9%⇥ every 100 MW contracted - results in 2.5% increase in electricity⇥ costs in a $15 billion/year sector⇥ • Because of this projected cost, no changes planned for pricing⇥ Scenario Price Trigger Cost above Maximum Total⇥ (MW) market (NPV annual cost contracted⇥ in billions) (millions) MW⇥ Base 100 $5.3 $357 1700⇥ A 200 $9.0 $714 3400⇥ B 300 $15.9 $1070 5100⇥ 9⇥ 1582 10 Changes to FIT Program Rules Not Responsive 1583 11 Working with LDCs Not Responsive 1 584 OPA Website and Power System Information Not Responsive 1585 Sample Ontario Transmission System Display Not Responsive 1586 Stakeholdering and Training • Final Stakeholder Engagement Session – May 12⇥ • Posting of final Program Rules, Contract and Price⇥ Schedule – May 22⇥ • Working collaboratively in setting dates and locations⇥ for training sessions throughout Ontario with LDCs,⇥ renewable energy associations, First Nations &⇥ Métis, AMO, etc.⇥ 14⇥ 1587 15 Activities and Timing Not Responsive 1588 16 Key Communication Tools Not Responsive 1589 17 Ongoing Items Not Responsive 1590 Richard Duffy From: Richard Duffy⌥ Sent: May-07-09 9:53 AM⌥ To: Jim MacDougall⌥ Subject: RE: Draft FIT Deck for Minister⌥ Attachments: FIT Update MEI May1109 v3 - Pricing Slides.ppt⌥ Hi Jim,⌥ I've made an attempt to create a comparison table for the Ground Mounted Solar PV prices.⌥ Can you expand / correct what is here?⌥ Thanks⌥ Richard⌥ ----- Original Message ----From: Jason Chee- Aloy⌥ Sent: Thursday, May 07, 2009 7:51 AM⌥ To: Richard Duffy⌥ Cc: Jim MacDougall⌥ Subject: Re: Draft FIT Deck for Minister⌥ Can we also put in a table comparing: original groundmount solar PV pricing; CanSIA proposal; and, no degression direction? Thanks.⌘ ----- Original Message ----From: Jason Chee- Aloy⌥ To: Richard Duffy⌥ CC: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle⌥ Sent: Wed May 06 22:30:43 2009⌥ Subject: Fw: Draft FIT Deck for Minister⌥ Richard,⌥ Attached is a really rough draft of the FIT deck for Monday's meeting with the Minister.⌥ As discussed, please run with it and coral others as needed to build up the missing pieces.⌥ I will need the revised deck by early afternoon so I can review before sending it to Colin and JoAnne for their review.⌥ I need to give the final deck to Jordan by tomorrow night.⌥ Thanks,⌥ Jason⌥ ----- Original Message ----From: Jason Chee- Aloy ⌥ To: Jason Chee- Aloy⌥ Sent: Wed May 06 22:25:59 2009⌥ 1591 Subject: Draft FIT Deck for Minister 1592 Revised FIT Price Schedule Changes Technology Rooftop or Other Solar PV Capacity Range Proposed Mar Revised Price 12 Price (¢/kWh) (¢/kWh) 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV 1 0 kW > 1 0 kW 1 00 kW > 1 00 kW 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted Solar PV > 1 0 kW 44.3 (automatic 44.3 (automatic⇥ degression) degression)⇥ Rooftop Solar PV 1 0 MW On-shore Wind* Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower ** 50 MW 12.9 12.9⇥ Biomass ** 1 0 MW 12.2 13.5⇥ Biomass** > 10 MW Biogas ** 14.7 Biogas ** 500 kW > 500kW 1 0 MW Biogas ** > 10 MW 10.4 10.4⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ Landfill gas ** 12.2⇥ 16.0⇥ 14.7⇥ * Aboriginal and Community Projects eligible for up to 0.9 ¢/kWh premium for 50% equity share⇥ ** Aboriginal and Community Projects eligible for up to 0.5 ¢/kWh premium for 50% equity share⇥ All FIT prices to increase by CPI up to Commercial Operation Date, then increase by 20% of CPI⇥ 1⇥ 1593 Revised FIT Price Schedule Changes • [NTD: Jim to update table and provide rationale for changes on this slide – please keep this slide to one⇥ page]⇥ 2⇥ 1594 Ground Mounted Solar PV - Price Comparisons Originally⇥ CanSIA⇥ Revised⇥ RESOP⇥ Proposed⇥ Proposed⇥ Capacity⇥ Price⇥ FIT Price⇥ Technology⇥ FIT Price⇥ FIT Price⇥ Range⇥ (¢/kWh)⇥ (¢/kWh)⇥ (¢/kWh)⇥ (¢/kWh)⇥ Ground > 10 kW Mounted < 10 MW 42 * 44.3 ^ 44.3 Solar PV * - No lower limit on the Capacity Range was established for RESOP Contracts.⇥ ^ - Included an automatic 9% price degression after each 100 MW of contracted Ground Mounted Solar PV.⇥ 3⇥ 1595 Richard Duffy From: Richard Duffy⌦ Sent: May-07-09 2:35 PM⌦ To: Jason Chee-Aloy⌦ Cc: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle; Ziyaad Mia; Emay Cowx⌦ Subject: RE: Draft FIT Deck for Minister⌦ Attachments: FIT Update MEI May1109 v3.ppt⌦ Hi Jason,⌦ Updated draft slide desk is attached.⌘ Richard⌦ ----- Original Message ----From: Jason Chee- Aloy⌦ Sent: Wednesday, May 06, 2009 10:31 PM⌦ To: Richard Duffy⌦ Cc: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle⌦ Subject: Fw: Draft FIT Deck for Minister⌦ Richard,⌦ Attached is a really rough draft of the FIT deck for Monday's meeting with the Minister.⌦ As discussed, please run with it and coral others as needed to build up the missing pieces.⌦ I will need the revised deck by early afternoon so I can review before sending it to Colin and JoAnne for their review.⌦ I need to give the final deck to Jordan by tomorrow night.⌦ Thanks,⌦ Jason⌦ ----- Original Message ----From: Jason Chee- Aloy ⌦ To: Jason Chee- Aloy⌦ Sent: Wed May 06 22:25:59 2009⌦ Subject: Draft FIT Deck for Minister⌦ <<...>>⌦ 1596 ONTARIO POWER AUTHORITY May 1 1, 2009 1597 FIT Program Program Launch Not Responsive 1598 Not Responsive RESOP Contracts Not Responsive 1600 Summary of Changes to the FIT Price Schedule⌦ Technology Capacity Range Original Price Revised Price◆ (¢/kWh) (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3 (tbd)⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind* Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower * ⇥ 1 0 MW 12.9 12.2⇥ Waterpower Biomass * > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass* > 10 MW Biogas * ⇥ 500 kW > 500kW ⇥ 1 0 MW 14.7 Biogas * Biogas * > 10 MW 10.4 10.4⇥ Landfill gas * ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 11.1⇥ 12.2 13.8⇥ 13.0⇥ 16.0⇥ 14.7⇥ All FIT prices increase by CPI to expected Commercial Operation Date, then increase by 20% of CPI⇥ 5⇥ *Eligible for Aboriginal or Community Price Adder⇥ 1601 Aboriginal and Community Price Adders⌦ Technology⇥ Wind Biogas 1.0 0.6 0.4 0.4 0.4◆ 1.5 0.9 0.6 0.6 0.6◆ (Onshore) Biomass⇥ Landfill⇥ Water Gas⇥ Community◆ Projects◆ Adder*◆ (¢/kWh)◆ Aboriginal◆ Projects◆ Adder* (¢/kWh)◆ *Adder will escalate with FIT rate at 20% of CPI◆ 6⇥ 1602 Revised FIT Price Schedule Changes⌦ • Proposed changes include:⇥ – – – – – Applying CPI increases at 100% pre COD⇥ Allowing micro-PV to be Rooftop or Ground Mounted⇥ Reviewing approach for Ground Mount PV degression⇥ Offering Aboriginal and Community adder to more technologies and increasing Aboriginal adder⇥ Creating a new ⇥ 10 MW Biomass category and increasing price to reflect higher fuel costs⇥ – Creating new ⇥ 500 kW Biogas category⇡ – Creating new ⇥ 1 0 MW Waterpower category and⇡ extending all Contracts to 40 years⇥ – Increasing Landfill Gas category from 5 to 10 MW⇥ 7⇥ 1603 Ground Mounted Solar PV - Price Comparisons⌦ Ground⇥ Mounted⇥ RESOP⇥ Solar PV⇥ Price Originally⇥ CanSIA⇥ Revised⇥ Proposed⇥ Proposed⇥ FIT⇥ FIT⇥ FIT⇥ 42 44.3 ^ 44.3 * 44.3◆ open open ^ 510 * (tbd)◆ (¢/kWh)◆ Capacity (MW)◆ ^ - with 9% price degression after each 100 MW of contracted capacity⇥ * - for 510 MW of contracted capacity eligible prior to first 2-year FIT Program Price review⇥ 8⇥ 1604 Proposed Framework for Aboriginal Projects⌦ • FIT Program Aboriginal Goals⇥ – Minister may establish goals for OPA FIT program,⇥ including “participation by aboriginal peoples in the⇡ development and establishment of renewable energy⇥ projects”⇡ • Facilitating Aboriginal Participation⇥ – – – – – FIT Rules⇥ FIT Pricing⇥ Programs and Funding⇥ Loan Guarantees⇥ Advanced Aboriginal Projects⇥ 9⇥ 1605 Proposed Framework for Aboriginal Projects⌦ • FIT Rules⇥ – Lower security requirements apply to projects with Aboriginal control (i.e. greater than 50% interest in⇥ project)⇥ • FIT Pricing⇥ – Price adder for Aboriginal projects as an increment to⇥ standard FIT prices⇥ – Reflects additional challenges facing Aboriginal projects (e.g. possible incremental capital costs)⇥ – – Price adder applies to all technologies, except solar PV⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 10⇥ 1606 Proposed Framework for Aboriginal Projects⌦ • Requiring Aboriginal and Community control of projects as majority⇥ equity partners is being contemplated but not yet discussed with stakeholders • Stakeholders suggest including additional flexibility to incent more partnerships with Aboriginal community projects⇥ – Proposing an incentive price adder to the FIT price that will be⇥ proportionally linked to Aboriginal interest in project⇥ • • Reflects likely project ownership structure⇥ Encourages corporate local community partnerships⇥ – 50+%: 100% of price adder (e.g., 100% of 0.9 ¢/kWh) – 40%: 80% of price adder⇥ – 25%: 50% of price adder⇥ – 10%: 20% of price adder (minimum level required)⇥ 11⇥ 1607 Proposed Framework for Aboriginal Projects⌦ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity⇥ and development program⇥ – May involve two streams: (i) long term capacity⇥ building for Aboriginal communities to develop⇥ expertise in the energy sector; and (ii) funding and assistance to facilitate project development (e.g. prefeasibility work, business planning, corporate structure)⇥ 12⇥ 1608 Proposed Framework for Aboriginal Projects⌦ • Loan Guarantees⇥ – Equity financing is a significant challenge facing⇥ Aboriginal renewable energy projects⇥ – Ontario Financing Authority will administer $250 million⇥ loan guarantee program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT contract should enable⇥ other financing⇥ 13⇥ 1609 Proposed Framework for Aboriginal Projects⌦ • Advanced Aboriginal Projects⇥ – A number of Aboriginal renewable energy projects may⇥ be sufficiently advanced to move forward in development⇥ – Minister could issue a directive to OPA to offer FITtype contracts to a few specific Aboriginal projects that⇥ are most advanced, which would ensure aboriginal participation at early stages of FIT program⇥ – Minister could issue a directive to OPA to offer FIT-type⇥ contracts to serve remote or off-grid communities⇥ 14⇥ 1610 Forums with Aboriginal Communities⌦ • In addition to general stakeholder sessions, the OPA⇥ has conducted forums with Aboriginal communities⇥ outlining the GEA and FIT and to receive their input⇥ on the proposed FIT program⇥ • The following forums have been completed:⇥ – – – – • April 18 (Métis Nation of Ontario April 25 (MNO – Thunder Bay)⇥ – Toronto)⇥ April 21-22 (Nishnawbe Aski Nation Bay)⇥ April 23 (Southern First Nations – Thunder⇥ – Rama)⇥ OPA plans to conduct a forum on May 13-14 (NAN Timmins)⇥ –⇡ 15⇥ 1611 16 Supplemental Slides 1612 17 FIT Application Process Diagram Not Responsive 1613 Richard Duffy From: Richard Duffy⇢ Sent: May-07-09 3:01 PM⇢ To: Richard Duffy; Jason Chee-Aloy⇢ Cc: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle; Ziyaad Mia; Emay Cowx⇢ Subject: RE: Draft FIT Deck for Minister⇢ Attachments: FIT Update MEI May1109 v4.ppt⇢ Not Responsive ----- Original Message ----From: Richard Duffy⇢ Sent: Thursday, May 07, 2009 2:35 PM⇢ To: Jason Chee- Aloy⇢ Cc: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle; Ziyaad Mia; Emay Cowx⇢ Subject: RE: Draft FIT Deck for Minister⇢ Hi Jason,⇢ Updated draft slide desk is attached.⌘ Richard⇢ ----- Original Message ----From: Jason Chee- Aloy⇢ Sent: Wednesday, May 06, 2009 10:31 PM⇢ To: Richard Duffy⇢ Cc: JoAnne Butler; Jill Medley; Jim MacDougall; Michael Lyle⇢ Subject: Fw: Draft FIT Deck for Minister⇢ Richard,⇢ Attached is a really rough draft of the FIT deck for Monday's meeting with the Minister.⇢ As discussed, please run with it and coral others as needed to build up the missing pieces.⇢ I will need the revised deck by early afternoon so I can review before sending it to Colin and JoAnne for their review.⇢ I need to give the final deck to Jordan by tomorrow night.⇢ Thanks,⇢ Jason⇢ ----- Original Message ----From: Jason Chee- Aloy ⇢ To: Jason Chee- Aloy⇢ Sent: Wed May 06 22:25:59 2009⇢ Subject: Draft FIT Deck for Minister⇢ 1614 ONTARIO POWER AUTHORITY May 1 1, 2009 1615 FIT Program Program Launch Not Responsive 1616 Not Responsive RESOP Contracts Not Responsive 1618 Summary of Changes to the FIT Price Schedule⌦ Technology Capacity Range Original Price Revised Price◆ (¢/kWh) (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3 (tbd)⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind* Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower * ⇥ 1 0 MW 12.9 12.2⇥ Waterpower * Biomass * > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass* > 10 MW Biogas * ⇥ 500 kW > 500kW ⇥ 1 0 MW 14.7 Biogas * Biogas * > 10 MW 10.4 10.4⇥ Landfill gas * ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 11.1⇥ 12.2 13.8⇥ 13.0⇥ 16.0⇥ 14.7⇥ All FIT prices increase by CPI to expected Commercial Operation Date, then increase by 20% of CPI⇥ 5⇥ *Eligible for Aboriginal or Community Price Adder⇥ 1619 Aboriginal and Community Price Adders⌦ Technology⇥ Wind Biogas 1.0 0.6 0.4 0.4 0.4◆ 1.5 0.9 0.6 0.6 0.6◆ (Onshore) Biomass⇥ Landfill⇥ Water Gas⇥ Community◆ Projects◆ Adder*◆ (¢/kWh)◆ Aboriginal◆ Projects◆ Adder* (¢/kWh)◆ *Adder will escalate with FIT rate at 20% of CPI◆ 6⇥ Price Adders shown represent full project control◆ 1620 Revised FIT Price Schedule Changes⌦ • Proposed changes include:⇥ – – – – – Applying CPI increases at 100% pre COD⇥ Allowing micro-PV to be Rooftop or Ground Mounted⇥ Reviewing approach for Ground Mount PV degression⇥ Offering Aboriginal and Community adder to more technologies and increasing Aboriginal adder⇥ Creating a new ⇥ 10 MW Biomass category and increasing price to reflect higher fuel costs⇥ – Creating new ⇥ 500 kW Biogas category⇡ – Creating new ⇥ 1 0 MW Waterpower category and⇡ extending all Contracts to 40 years⇥ – Increasing Landfill Gas category from 5 to 10 MW⇥ 7⇥ 1621 Ground Mounted Solar PV - Price Comparisons⌦ Ground⇥ Mounted⇥ RESOP⇥ Solar PV⇥ Price Originally⇥ CanSIA⇥ Revised⇥ Proposed⇥ Proposed⇥ FIT⇥ FIT⇥ FIT⇥ 42 44.3 ^ 44.3 * 44.3◆ open open ^ 510 * (tbd)◆ (¢/kWh)◆ Capacity (MW)◆ ^ - with 9% price degression after each 100 MW of contracted capacity⇥ * - for 510 MW of contracted capacity eligible prior to first 2-year FIT Program Price review⇥ 8⇥ 1622 Proposed Framework for Aboriginal Projects⌦ • FIT Program Aboriginal Goals⇥ – Minister may establish goals for OPA FIT program,⇥ including “participation by aboriginal peoples in the⇡ development and establishment of renewable energy⇥ projects”⇡ • Facilitating Aboriginal Participation⇥ – – – – – FIT Rules⇥ FIT Pricing⇥ Programs and Funding⇥ Loan Guarantees⇥ Advanced Aboriginal Projects⇥ 9⇥ 1623 Proposed Framework for Aboriginal Projects⌦ • FIT Rules⇥ – Lower security requirements apply to projects with Aboriginal control (i.e. greater than 50% interest in⇥ project)⇥ • FIT Pricing⇥ – Price adder for Aboriginal projects as an increment to⇥ standard FIT prices⇥ – Reflects additional challenges facing Aboriginal projects (e.g. possible incremental capital costs)⇥ – – Price adder applies to all technologies, except solar PV⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 10⇥ 1624 Proposed Framework for Aboriginal Projects⌦ • Allowing Aboriginal and Community projects as minority equity⇥ partners is being contemplated but not yet discussed with interested parties • Industry input suggests including additional flexibility to incent⇥ more partnerships with Aboriginal community projects⇥ – Proposing an incentive price adder to the FIT price that will be⇥ proportionally linked to Aboriginal interest in project⇥ • • Reflects likely project ownership structure⇥ Encourages corporate local community partnerships⇥ – 50+%: 100% of price adder (e.g., 100% of 0.9 ¢/kWh) – 40%: 80% of price adder⇥ – 25%: 50% of price adder⇥ – 10%: 20% of price adder (minimum level required)⇥ 11⇥ 1625 Proposed Framework for Aboriginal Projects⌦ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity⇥ and development program⇥ – May involve two streams: (i) long term capacity⇥ building for Aboriginal communities to develop⇥ expertise in the energy sector; and (ii) funding and assistance to facilitate project development (e.g. prefeasibility work, business planning, corporate structure)⇥ 12⇥ 1626 Proposed Framework for Aboriginal Projects⌦ • Loan Guarantees⇥ – Equity financing is a significant challenge facing⇥ Aboriginal renewable energy projects⇥ – Ontario Financing Authority will administer $250 million⇥ loan guarantee program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT contract should enable⇥ other financing⇥ 13⇥ 1627 Proposed Framework for Aboriginal Projects⌦ • Advanced Aboriginal Projects⇥ – A number of Aboriginal renewable energy projects may⇥ be sufficiently advanced to move forward in development⇥ – Minister could issue a directive to OPA to offer FITtype contracts to a few specific Aboriginal projects that⇥ are most advanced, which would ensure aboriginal participation at early stages of FIT program⇥ – Minister could issue a directive to OPA to offer FIT-type⇥ contracts to serve remote or off-grid communities⇥ 14⇥ 1628 Forums with Aboriginal Communities⌦ • In addition to general stakeholder sessions, the OPA⇥ has conducted forums with Aboriginal communities⇥ outlining the GEA and FIT and to receive their input⇥ on the proposed FIT program⇥ • The following forums have been completed:⇥ – – – – • April 18 (Métis Nation of Ontario April 25 (MNO – Thunder Bay)⇥ – Toronto)⇥ April 21-22 (Nishnawbe Aski Nation Bay)⇥ April 23 (Southern First Nations – Thunder⇥ – Rama)⇥ OPA plans to conduct a forum on May 13-14 (NAN Timmins)⇥ –⇡ 15⇥ 1629 16 Supplemental Slides 1630 17 FIT Application Process Diagram Not Responsive 1631 Richard Duffy From: Richard Duffy Sent: May-11-09 7:52 AM To: Jason Chee-Aloy Subject: RE: Revised Draft FIT Deck for Wed May 13 Minister Meeting Attachments: FIT Update MEI May1109 v8.ppt Hi Jason,⌦ Not Responsive Let me know if there are any additional updates required.⌦ Richard⌦ From: Jason Chee-Aloy Sent: Sunday, May 10, 2009 12:58 PM To: Colin Andersen; JoAnne Butler; Richard Duffy Cc: Irene Mauricette; Jim MacDougall; Ziyaad Mia; Michael Lyle Subject: Revised Draft FIT Deck for Wed May 13 Minister Meetingq Importance: High Colin and JoAnne, Attached for your review is a revised deck for this Wed morning ’s provide Jordan with a revise deck before 10:00 am tomorrow. meeting with the Minister. I need to✓ The changes I made result from my Friday afternoon meeting with Jordan. The main changes include:✓ Not Responsive Richard, I do not have Visio on my computer so I cannot change the timeline graphic on slide 3. Can you✓ please make the following changes before 9:00 am tomorrow? Not Responsive 1632 Not Responsive I now have three mothers to entertain. Have a good day. Jason 1633 ONTARIO POWER AUTHORITY May 1 1, 2009 1634 FIT Program Launch Not Responsive 1635 Not Responsive Distribution and Transmission Expansion Not Responsive 1637 RESOP Contracts Not Responsive 1638 Summary of Changes – FIT Price Schedule⌦ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 12.2⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 6 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1639 Proposed Framework for Aboriginal Projects⌦ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 7⇥ 1640 Proposed Framework for Aboriginal Projects⌦ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity⇥ and development program⇥ – May involve two streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ 8⇥ 1641 Proposed Framework for Aboriginal Projects⌦ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 9⇥ 1642 10 Items for Subsequent Discussions Not Responsive 1643 11 Supplemental Slides 1644 12 FIT Application Process Diagram Not Responsive 1645 Richard Duffy From: Richard Duffy Sent: May-11-09 1:02 PM To: Jason Chee-Aloy Cc: Jim MacDougall; Ziyaad Mia Subject: RE: Revised Draft FIT Deck for Wed May 13 Minister Meeting Attachments: FIT Update MEI May13_09_v9.ppt Hi Jason,⌦ Updated deck to reflect discussion from this morning.⌦ Not Responsive Let us know if additional information or explanation is required.⌦ Richard⌦ From: Richard Duffy Sent: Monday, May 11, 2009 7:52 AM To: Jason Chee-Aloy Subject: RE: Revised Draft FIT Deck for Wed May 13 Minister Meeting Hi Jason,⌦ Not Responsive Let me know if there are any additional updates required.⌦ Richard⌦ From: Jason Chee-Aloy Sent: Sunday, May 10, 2009 12:58 PM To: Colin Andersen; JoAnne Butler; Richard Duffy Cc: Irene Mauricette; Jim MacDougall; Ziyaad Mia; Michael Lyle Subject: Revised Draft FIT Deck for Wed May 13 Minister Meetingq Importance: High Colin and JoAnne, Attached for your review is a revised deck for this Wed morning ’s provide Jordan with a revise deck before 10:00 am tomorrow. meeting with the Minister. I need to✓ The changes I made result from my Friday afternoon meeting with Jordan. The main changes include:✓ Not Responsive 1646 of set-asides for Aboriginal projects through a Directive or by other means – this tells me we should probably do some more thinking on how the OPA will propose a specific Directive to deal with this in the not to distant future Richard, I do not have Visio on my computer so I cannot change the timeline graphic on slide 3. Can you✓ please make the following changes before 9:00 am tomorrow? Not Responsive I now have three mothers to entertain. Have a good day.✓ Jason 1647 ONTARIO POWER AUTHORITY May 1 3, 2009 1648 FIT Program Launch Not Responsive 1649 Not Responsive Not Responsive RESOP Contracts Not Responsive 1652 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 12.2⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 6 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1653 Aboriginal and Community Adder↵ PV⇥ Technology Wind (Ground Water Biogas Biomass⇥ Mounted)⇥ Landfill⇥ Gas⇥ Maximum◆ Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6◆ 1.0 1.0 0.6 0.4 0.4 0.4◆ (¢ / kWh)◆ Maximum◆ Community Adder (¢ / kWh)◆ Adder for Aboriginal and Community projects reflects 10% incremental capital costs◆ Adder for Aboriginal projects further reflects incremental cost of debt financing for equity portion◆ Adder is available on a sliding scale based on equity interest◆ 7⇥ 1654 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ 44.3 ^ FIT⇥ 44.3 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year◆ tbd *◆ ^ with 9% price degression after each 100 MW of contracted capacity⇥ * cost is approx $50 million/year per 100 MW contracted, for the contract term⇥ 8⇥ 1655 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 9⇥ 1656 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 10⇥ 1657 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 11⇥ 1658 12 Items for Subsequent Discussions Not Responsive 1659 13 Supplemental Slides 1660 14 FIT Application Process Diagram 1661 Richard Duffy From: Richard Duffy Sent: May-11-09 2:26 PM To: JoAnne Butler Cc: Jason Chee-Aloy; Jim MacDougall; Ziyaad Mia Subject: Updated Slide Deck for Minister's Presentation Attachments: FIT Update MEI May13_09_v10.ppt Hi JoAnne,⌦ Attached is an updated slide deck for the Wednesday presentation to the Minister.⌦ Jason is in a Stakeholder meeting and we do need to have this sent to Jordan ASAP. Can you review and let us⇢ know if we can forward this to Jordan ?⌦ Let me know if you have any questions.⌦ Richard⌦ 1662 ONTARIO POWER AUTHORITY May 1 3, 2009 1663 FIT Program Launch Not Responsive 1664 Not Responsive RESOP Contracts Not Responsive 1666 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 / 20-yrs 12.2 / 40-yrs⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1 / 40-yrs⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 5 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1667 Aboriginal and Community Price Adder↵ • Price Adder designed to reflect the incremental⇥ capital cost experienced by Aboriginal and⇥ Community groups⇥ – Further reflects debt financing costs for Aboriginal project equity portion⇥ • Price Adder applied to incent developer partnerships⇥ with Aboriginal and Community groups⇥ • Price Adder ratio increases proportional to the equity⇥ share of the Aboriginal and/or Community group⇥ 6⇥ 1668 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ FIT⇥ 44.3 ^ 44.3 º 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year º◆ open *◆ ^ With 9% price degression after each 100 MW of contracted capacity⇥ º With 5% price degression after each 170 MW contracted for the first three years. Capped at 510 MW contracted in 2009. Price review to follow. * Prices and contracted capacity subject to 2-year review period⇥ 7⇥ 1669 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 8⇥ 1670 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 9⇥ 1671 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 10⇥ 1672 11 Items for Subsequent Discussions Not Responsive 1673 12 Supplemental Slides 1674 13 FIT Application Process Diagram Not Responsive 1675 Richard Duffy From: Richard Duffy⌥ Sent: May-11-09 2:51 PM⌥ To: JoAnne Butler; Sylvie Doucet⌥ Cc: Jason Chee-Aloy; Jim MacDougall; Ziyaad Mia⌥ Subject: RE: Updated Slide Deck for Minister's Presentation⌥ Attachments: FIT Update MEI May13_09_v11.ppt⌥ Great.⌥ Sylvie attached is the slide deck we discussed to be forwarded to Jordan.⌥ Thanks⌥ Richard⌥ ----- Original Message ----From: JoAnne Butler⌥ Sent: Monday, May 11, 2009 2:47 PM⌥ To: Richard Duffy⌥ Cc: Jason Chee- Aloy; Jim MacDougall; Ziyaad Mia⌥ Subject: Re: Updated Slide Deck for Minister's Presentation⌥ Richard,⌥ Not Responsive Good to go....⌥ JCB⌥ ----- Original Message ----From: Richard Duffy⌥ To: JoAnne Butler⌥ CC: Jason Chee- Aloy; Jim MacDougall; Ziyaad Mia⌥ Sent: Mon May 11 14:26:16 2009⌥ Subject: Updated Slide Deck for Minister's Presentation⌥ Hi JoAnne,⌥ Attached is an updated slide deck for the Wednesday presentation to the Minister.⌥ Jason is in a Stakeholder meeting and we do need to have this sent to Jordan ASAP. Can you review and let us know if we can forward this to Jordan?⌥ Let me know if you have any questions.⌥ 1676 Richard 1677 ONTARIO POWER AUTHORITY May 1 3, 2009 1678 FIT Program Launch Not Responsive 1679 Not Responsive RESOP Contracts Not Responsive 1681 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 / 20-yrs 12.2 / 40-yrs⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1 / 40-yrs⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 5 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1682 Aboriginal and Community Price Adder↵ • Price Adder designed to reflect the incremental⇥ capital cost experienced by Aboriginal and⇥ Community groups⇥ – Further reflects debt financing costs for Aboriginal project equity portion⇥ • Price Adder applied to incent developer partnerships⇥ with Aboriginal and Community groups⇥ • Price Adder ratio increases proportional to the equity⇥ share of the Aboriginal and/or Community group⇥ 6⇥ 1683 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ FIT⇥ 44.3 ^ 44.3 º 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year º◆ open *◆ ^ With 9% price degression after each 100 MW of contracted capacity⇥ º With 5% price degression after each 170 MW contracted for the first three years. Capped at 510 MW contracted in 2009. Price review to follow. * Prices and contracted capacity subject to 2-year review period⇥ 7⇥ 1684 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 8⇥ 1685 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 9⇥ 1686 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 10⇥ 1687 11 Items for Subsequent Discussions Not Responsive 1688 12 Appendix - FIT Application Process Diagram Not Responsive 1689 Richard Duffy From: Richard Duffy Sent: May-11-09 5:43 PM To: Heidi Parish Cc: Claire Willison; Jim MacDougall; Emay Cowx; Jill Medley; Connie Ellison-Johnson; Jason Chee-Aloy Subject: SES Presentation - May 12 Attachments: Pricing slides update and rule changes_V13_05112009.ppt Hi Heidi,⌥ Attached is the presentation for tomorrow.⌥ Please get a pdf copy to Connie as quick as possible as she is also patiently awaiting the deliver of this document⌥ Thank you all for your patience.⌥ Let me know if you have any questions.⌥ Richard⌥ 1690 May 1 2, 2009⌦ Proposed Feed-in Tariff Program – Revised Rules, Draft Contract and Revised Price Schedule 1691 May 1 2 - Agenda 9:00 – 9:10 Introduction by Jason Chee-Aloy (OPA) 9:10 – 10:40 Revised Program Rules 10:40 – 11:00 Coffee Break 11:00 – 12:00 Draft FIT Contract 12:00 – 12:30 Q&A 12:30 – 1:30 Lunch 1:30 – 3:00 Revised Price Schedule 3:00 – 3:30 Q&A 3:30 – 3:45 Closing Remarks 2⇥ 1692 Revised Program Rules Overview of Changes 1693 Incremental Projects Not Responsive 1694 Prior Contracts Refined Definition Not Responsive 0'3? 1695 Prior Contracts Not Responsive 1696 Application Requirements Not Responsive 0'3? 1697 TAT Outcome Where LDC Investments Required Not Responsive 1698 Evolution of Transmission and Distribution Not Responsive 1699 10 Application Security Not Responsive 1700 11 Significant Program Amendments Not Responsive 0'3? 1701 12 Assignment and Change of Control Not Responsive 1702 13 Program Initialization 2.1 Not Responsive 1703 14 Program Initialization 2.1 Not Responsive 1 704 15 Group I Definition Not Responsive 1705 16 Program Initialization Not Responsive 1706 17 Draft FIT Contract Overview of Changes (lnmriu Pimrr \ulhurm, 1707 18 Draft FIT Contract Not Responsive 1708 19 Commercial Operation Not Responsive 1709 20 Bio-Resource Supply Plan Not Responsive 1710 21 Changes to NTP Not Responsive 1711 22 Security Not Responsive 1712 23 Queue Exempt Facilities Not Responsive 0'3? 1713 24 Force Majeure Not Responsive 1714 25 Settlement Not Responsive 1715 26 IESO Instructions (Exhibit B, Type 1A, 1B and 2A, 5.1.5) Not Responsive 1716 27 Discriminatory Action Not Responsive 0'3? 1717 28 Change of Control Not Responsive 1718 29 Revised Price Schedule Overview of changes 1719 Original Price Schedule⌦ Technology Capacity Range Original Price (¢/kWh) Micro Solar PV 80.2⇥ 71.3⇥ Rooftop Solar PV ⇥ 1 0 kW > 1 0 kW ⇥ 1 00 kW > 1 00 kW ⇥ 500 kW Rooftop Solar PV > 500 kW 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW Rooftop Solar PV Solar PV 63.5⇥ 44.3 (Automatic degression)⇥ On-shore Wind Any size 13.5⇥ Off-shore Wind Any size 19.0⇥ Waterpower ⇥ 50 MW 12.9⇥ Biomass Any Size 12.2⇥ Biogas ⇥ 5 MW 14.7⇥ Biogas > 5 MW 10.4⇥ Landfill gas ⇥ 5 MW 11.1⇥ > 5 MW 10.3⇥ 30⇥ 1720 Revised Price Schedule⌦ Renewable Fuels Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV Rooftop Solar PV Solar PV* degression)⇥ On-shore Wind* Any size 13.5 13.5⇥ Off-shore Wind* Any size 19.0 19.0⇥ Waterpower * ⇥ 1 0 MW 12.9 13.1**⇥ Waterpower * Biomass * > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass* > 10 MW Biogas * ⇥ 500 kW > 500kW ⇥ 1 0 MW 14.7 Biogas * Biogas * > 10 MW 10.4 10.4⇥ Landfill gas * ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 12.2**⇥ 12.2 13.8⇥ 13.0⇥ 16.0⇥ 14.7⇥ *Eligible for Aboriginal or Community Adder⇥ 31 **Contract term for water power extended to 40 years⇥ 1721 Revised Price Schedule – Overview⌦ • General revisions to the price schedule⇥ – Aboriginal and Community adder eligible on additional⇥ renewable fuels⇥ – – – Increased price indexation during construction⇥ Updated discounted cash flow (DCF) model⇥ Updated some assumptions and prices using new⇥ model⇥ – – Extended water power contracts to 40 years⇥ Increased a number of size tranches⇥ 32⇥ 1722 Stakeholder Feedback on Price Schedule⌦ • General support for OPA proposed price schedule⇥ • Recent Scotia Capital analysis of Ontario FIT prices⇥ suggest “the proposed FIT prices look attractive”" • Specific comments from stakeholders:⇥ – Cost of debt is higher right now due to economic downturn⇥ – – Equity expectations are higher than a year ago⇥ Some resource assumptions are high/low⇥ 33⇥ 1723 Stakeholder Feedback on Price Schedule⌦ • Aboriginal and Community Based Projects⇥ – – • First Nations interest in bio-energy projects⇥ Consumer Price Index⇥ – • Current incentive requires Control and may limit eligibility⇥ Projects are subject to inflation prior to commercial operation⇥ Discount Cash Flow Model⇥ – Not all projects are able to take advantage of accelerated⇥ depreciation⇥ – – Concern over assumed tax treatment⇥ Concern about interest that may accrue during construction⇥ 34⇥ 1724 Aboriginal and Community Project Adder⌦ • Rules currently require Aboriginal and Community control of⇥ projects as majority equity partners⇥ • Propose varying adder in proportion to % of equity ownership by⇥ Aboriginal or Community Group, for example:⇥ – – – – • 50+% » 100% of price adder⇥ 40% » 80% of price adder⇥ 25% » 50% of price adder⇥ 10% » 20% of price adder (minimum level required)⇥ Rationale⇥ – Stakeholders suggest that many projects likely to be⇥ structured as partnerships⇥ – Encourages partnerships with local Aboriginal and⇥ Community members⇥ – Encourages Aboriginal and Community partners to maximize⇥ their equity share⇥ 35⇥ 1725 Aboriginal and Community Project Adder⌦ • Aboriginal and Community Projects are expected to⇥ incur higher costs for equipment and construction⇥ – • No bulk purchasing power⇥ Adder calculated in order to compensate for a portion⇥ of these additional costs⇥ • Adder levelized across technologies in relation to⇥ capacity factor and installed MW⇥ • Aboriginal groups are expected to borrow in order to⇥ access funds for an equity share of project⇥ • These incremental borrowing costs are incorporated⇥ into the Aboriginal adder⇥ 36⇥ 1726 Aboriginal and Community Adder⌦ PV⇥ Technology Wind (Ground Water Biogas Biomass⇥ Landfill⇥ Mounted)⇥ Gas⇥ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects reflects incremental cost of debt financing for equity portion Adder is available on a sliding scale based on equity interest 37⇥ 1727 Aboriginal Project - Examples⌦ Scenario A B Biomass Water⇥ (> 10 MW) (⇥ 10 MW)⇥ FIT 13 12.2⇥ Full Adder 0.6 0.9⇥ Company A Equity % 75% 90%⇥ Aboriginal Group B Equity % 25% 10%⇥ Technology Eligible Adder % (Ratio of Aboriginal⇥ = 25 / 50⇥ = 10 / 50⇥ = 50%⇥ = 20 %⇥ Applicable Adder (cents / kWh)⇥ = 0.6 x 50%⇥ = 0.9 x 20%⇥ {Full Adder x Eligible Adder %}⇥ = 0.30⇥ = 0.18⇥ = 13 + 0.30⇥ =12.2 + 0.18⇥ = 13.30 = 12.38 Group Equity / 50% equity)⇥ All-in FIT Price (cents / kWh)⇥ {FIT+ Applicable Adder}⇥ 38⇥ 1728 Community Project - Examples⌦ Scenario Technology A B Wind Water⇥ (⇥ 10 MW)⇥ FIT 13.5 12.2⇥ 1.0 0.6⇥ Company A Equity % 75% 90%⇥ Community Group B Equity % 25% 10%⇥ Full Adder Eligible Adder % (Ratio of Community⇥ = 25 / 50⇥ = 10 / 50⇥ = 50%⇥ = 20 %⇥ Applicable Adder (cents / kWh)⇥ = 1.0 x 50%⇥ = 0.6 x 20%⇥ {Full Adder x Eligible Adder %}⇥ = 0.50⇥ = 0.12⇥ = 13.5 + 0.50⇥ =12.2 + 0.12⇥ = 14.00 = 12.32 Group Equity / 50% equity)⇥ All-in FIT Price (cents / kWh)⇥ {FIT+ Applicable Adder}⇥ 39⇥ 1729 Consumer Price Indexation⌦ • Rules currently offer price indexation at 20% of CPI⇥ from contract execution to Commercial Operation⇥ • Propose full CPI indexation prior to contract milestone Commercial Operation Date⇥ • Rationale:⇥ – provides additional inflation protection after contract execution⇥ – mitigates against increasing labour and equipment⇥ costs⇥ – provides price consistency within each technology type⇥ for ease of contract administration⇥ 40⇥ 1730 Revisions to Discounted Cash Flow Model⌦ • The OPA incorporated stakeholder feedback to revise⇥ the Discounted Cash Flow (DCF) model⇥ • The OPA revised the original DCF model by⇥ adjusting:⇥ – The depreciation schedule for both normal asset⇥ depreciation and accelerated depreciation⇥ – Treatment and timing of interest accrued during⇥ construction⇥ – Treatment of unused depreciation⇥ 41⇥ 1731 Scenario Analysis⌦ • Using the revised DCF model, a scenario analysis⇥ was performed for each price category⇥ • Purpose: to determine the reasonableness of⇥ original FIT prices given the revisions to the DCF⇥ model, while recognizing the variation in possible⇥ input values⇥ 42⇥ 1732 Scenario Analysis⌦ • Scenarios evaluated FIT price sensitivity to changes⇥ to the following assumptions:⇥ – – – – – – – • Capital Cost⇥ Capacity Factor⇥ Debt Equity ratio⇥ Cost of Debt⇥ Return on Equity⇥ Fuel Cost⇥ Tax Treatment⇥ The following slides review stakeholder feedback, the⇥ results of the scenario analysis for each technology,⇥ and the proposed changes to the draft FIT price⇥ schedule⇥ 43⇥ 1733 Solar PV – Stakeholder Feedback⌦ • Establishing a ground-mounted FIT for micro-scale⇥ projects⇥ • Establishing a ground-mounted FIT for projects that⇥ are community based and queue exempt⇥ • Eliminating or reducing the automatic price⇥ degression of ground-mounted projects⇥ • Implementing a time-based price degression instead⇥ of a capacity based price degression⇥ • Including “Building Integrated PV” in the definition of" Rooftop⇥ • • Revisions to the size tranches for Rooftop PV⇥ Capital Cost assumptions for rooftop PV are too high⇥ 44⇥ 1734 Solar PV – Price Tranches⌦ • The revised draft price schedule will allow for microscale PV projects to be either Rooftop or Ground⇥ Mounted⇥ • The revised draft price schedule makes adjustment to⇥ the capacity tranches of mid-sized solar PV rooftop⇥ installations⇥ – The proposed changes are consistent with the definitions within OEB’s Distribution System Code" Rooftop or Ground ⇥ 1 0 kW" Mounted Solar PV Rooftop Solar PV Rooftop Solar PV > 1 0 kW ⇥ 250 kW" > 250 kW ⇥ 500 kW" Rooftop Solar PV > 500 kW⇥ Ground Mounted Solar > 1 0 kW ⇥ 1 0 MW" PV 45⇥ 1735 Micro-scale Solar PV – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between 42.2 and⇥ 87.1 cents per kWh.⇥ Scenario A B C D E⇥ Capital Cost 8740 9200 9200 9200 8740⇥ Capacity Factor 13% 13% 13% 13% 13%⇥ Percent Debt 100% 100% 100% 100% 70%⇥ Interest Rate 7% 7% 6% 0% 7%⇥ Yes Yes Yes No No⇥ 76.0 80.0 73.6 42.2 87.1 Accelerated⇥ Depreciation⇥ Derived FIT price (cents/kWh) 46⇥ 1736 1 0-250 kW Rooftop Solar PV – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between⇥ approximately 37 to 77.5 cents per kWh. Scenario A B C D E⇥ Capital Cost 7752 8160 8160 8160 7752⇥ Capacity Factor 13% 13% 13% 13% 13%⇥ Percent Debt 70% 100% 70% 100% 70%⇥ Interest Rate 7% 7% 6% 0% 7%⇥ Yes Yes Yes No No⇥ 75.7 71.1 75.7 37.0 77.5 Accelerated⇥ Depreciation⇥ Derived FIT price (cents/kWh) 47⇥ 1737 250-500 kW Rooftop Solar PV – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between⇥ approximately 31.1 to 63.7 cents per kWh.⇥ Scenario A B C D E⇥ Capital Cost 6355 6690 6690 6690 6355⇥ Capacity Factor 13% 13% 13% 13% 13%⇥ Percent Debt 70% 100% 70% 100% 70%⇥ Interest Rate 7% 7% 6% 0% 7%⇥ Yes Yes Yes No No⇥ 62.3 58.5 62.3 31.1 63.7 Accelerated⇥ Depreciation⇥ Derived FIT price (cents/kWh) 48⇥ 1738 Greater than 500 kW Rooftop Solar PV – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between⇥ approximately 26.4 to 56.2 cents per kWh. Scenario A B C D E⇥ Capital Cost 5282 5560 5560 5560 5282⇥ Capacity Factor 13% 13% 13% 13% 13%⇥ Percent Debt 70% 100% 70% 100% 70%⇥ Interest Rate 7% 7% 6% 0% 7%⇥ Yes Yes Yes No No⇥ 54.9 51.2 54.8 26.4 56.2 Accelerated⇥ Depreciation⇥ Derived FIT price (cents/kWh) 49⇥ 1739 Ground Mounted Solar PV – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between⇥ approximately 37.2 to 48.3 cents per kWh. Scenario A B C D E⇥ Capital Cost 4600 4600 4600 4370 4370⇥ Capacity Factor 14% 14% 14% 14.5% 14%⇥ Percent Debt 80% 70% 70% 80% 70%⇥ Interest Rate 7% 8% 6% 6% 7%⇥ 11% 12% 11% 11% 12%⇥ 43.1 48.3 42.6 37.2 43.7 Return on Equity Derived FIT price (cents/kWh) 50⇥ 1740 Ground Mount Solar PV – Price Degression⌦ • No automatic price degression⇥ • Provides greater certainty for project developers⇥ 51⇥ 1741 Conclusion on Solar PV pricing⌦ • The OPA adjusted the size tranches for the mid-sized Solar PV⇥ prices⇥ • Micro-scale ground mounted PV projects would receive the⇥ same price as a micro-scale rooftop projects⇥ • Results of scenario analysis demonstrated that the range of⇥ possible prices is within original price schedule⇥ – • The OPA concluded that original prices are reasonable⇥ Automatic price degression has been eliminated⇥ – PV pricing will be re-evaluated at 2 year review⇥ 52⇥ 1742 Wind – Stakeholder Feedback⌦ • Stakeholder feedback included:⇥ – – – – Capacity Factor is too low⇥ Capacity Factor is too high⇥ Capital Cost is too high⇥ Requests for price differentiation amongst different size⇥ categories (e.g. establishing a price for micro-scale⇥ wind or queue exempt wind)⇥ 53⇥ 1743 Wind – Price Tranches⌦ • The revised price category removes the price tranche⇥ dedicated to Aboriginal and Community Projects⇥ – However, a price adder will be available for qualifying⇥ projects⇥ • A separate price category was not included in the⇥ revised price schedule⇥ – Limited potential of distributed wind generation to contributed to on-peak demand⇥ – Limited modularity of installations 54⇥ 1744 Wind – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between 13.1 to⇥ 15.8 cents per kWh.⇥ A B C D E⇥ Capital Cost 2900 2900 2900 2900 2610⇥ Capacity Factor 32% 30% 30% 31% 30%⇥ Percent Debt 80% 70% 70% 80% 70%⇥ Interest Rate 7% 8% 6% 6% 7%⇥ 11% 12% 11% 11% 12%⇥ 13.3 15.8 14.1 13.1 13.4 Scenario Return on Equity Derived FIT price (cents/kWh) 55⇥ 1745 Conclusion on Wind pricing⌦ • The OPA did not create additional price tranches for⇥ smaller wind projects⇥ • Results of scenario analysis demonstrated that the⇥ range of possible prices is within original price⇥ schedule⇥ – The OPA concluded that original prices are reasonable⇥ 56⇥ 1746 Waterpower – Stakeholder Feedback⌦ • Stakeholder feedback included:⇥ – Waterpower projects have longer useful operating lives⇥ • Consider terms of 20, 30 and 40 years which is consistent with other OPA waterpower contract⇥ negotiations⇥ – Longer FIT contract terms offer long term benefit for⇥ Ontario ratepayers⇥ – – – Fixed O&M is too low⇥ Creating two size tranches, ⇥ 1 0 MW and > 1 0 MW" Change Aboriginal and Community Project price adder⇥ to be independent of project size category⇥ 57⇥ 1747 Waterpower - Extend FIT Contract Term⌦ • FIT Rules currently propose Contract term of 20⇥ years for all technologies⇥ • Proposing longer terms for these technologies⇥ – • Waterpower: 40 year term⇥ Rationale:⇥ – – Waterpower projects have longer useful operating lives⇥ Longer term reduces FIT price and provides longerterm benefit to Ontario ratepayers⇥ 58⇥ 1748 Waterpower – Price Tranches⌦ • FIT Rules currently offer same price for large and small projects⇥ – Propose differentiating FIT prices for large and small⇥ projects⇥ • consistent with the OEB’s Distribution System Code" threshold⇥ • Eliminating the requirement of Aboriginal and Community⇥ Projects for eligibility for smaller size tranche⇥ • Aboriginal and Community partnership recognized in⇥ price adder⇥ • Rationale:⇥ – Project price size differentiation reflects smaller projects⇥ higher initial capital cost and ongoing operation and⇥ maintenance costs⇥ 59⇥ 1749 Water– Scenario Analysis⌦ • Range of possible FIT prices from analysis is between 12.2 and⇥ 15.7 cents per kWh.⇥ Scenario A B C D E⇥ Capacity (MW) 5 5 5 20 20⇥ 5100 5100 5100 4700 4700⇥ 20 30 40 20 40⇥ 5 5 5 5 5⇥ 50 50 50 50 50⇥ 20 30 40 20 40⇥ 15.7 13.8 13.1 14.6 12.2 Capital Cost Contract Term Variable O&M⇥ ($/MWh)⇥ Fixed O&M⇥ ($/kWh)⇥ Debt Term (yr) Derived FIT price (cents/kWh) 60⇥ 1750 Waterpower – Revised assumption and pricing⌦ Waterpower Waterpower (⇤10 MW) (>10MW) Typical Size (MW) 10 20⇥ Contract Term 40 40⇥ 4 4⇥ Capacity Factor (%) 52 52⇥ Capital Cost ($/kW) 5,100 4,700⇥ 5 5⇥ 50 50⇥ 13.1 12.2⇥ Construction Lead Time Variable O&M ($/MWh) Fixed O&M ($/kW/yr) Revised FIT (cents/kWh) 61⇥ 1751 Conclusion on Waterpower pricing⌦ • OPA revised the FIT pricing for waterpower by:⇥ – – – – Creating two size tranches, ⇥ 10 MW & > 10 MW⇥ Increasing Fixed O&M to $30 / kW / year⇥ Including Variable O&M at $5 / MWh⇥ Removing price tranche for Aboriginal and Community Projects⇥ – Lengthening contract term to 40 years⇥ 62⇥ 1752 Biomass – Stakeholder Feedback⌦ • Stakeholders comments included:⇥ – – – – Pricing should vary based on project capacity⇥ Capital costs should vary based on project capacity⇥ Fuel costs can vary widely⇥ Fuel costs were too low and not representative of long term costs⇥ 63⇥ 1753 Biomass – Price Tranches⌦ • FIT pricing not differentiated based on size⇥ • Propose a new price tranche for • Rationale:⇥ – ⇥ 1 0 MW projects⇥ Reflects smaller projects higher initial capital cost and ongoing operation and maintenance costs⇥ – Stimulates small scale projects with regional economic⇥ development benefit⇥ – Consistent with OEB’s Distribution System Code" 64⇥ 1754 Biomass – Pricing Scenarios⌦ • Range of possible FIT prices from analysis is between 11.9 to⇥ 14.6 cents per kWh. • Sample of scenarios:⇥ A B C D E⇥ 3750 4000 3750 4000 4000⇥ 30 10 30 10 10⇥ Capacity Factor 85% 85% 85% 75% 85%⇥ Percent Debt 70% 70% 80% 80% 80%⇥ Interest Rate 7% 7% 6% 7% 6%⇥ 3 4.5 6 4.5 3⇥ 11.9 13.8 14.4 14.6 11.6 Scenario Capital Cost Capacity Fuel Cost ($)/⇥ MMBTU⇥ Derived FIT price (cents/kWh) 65⇥ 1755 Biomass – Revised assumptions and pricing⌦ • Revised Biomass scenarios:⇥ Biomass Biomass 10 30⇥ 2 2⇥ Capacity Factor (%) 85 85⇥ Capital Cost ($/kW) 3850 3500⇥ 150 150⇥ Variable O&M ($/MWh) 9 7⇥ Heat Rate (MMbtu/MWh) 9 9⇥ 4.5 4.5⇥ 13.8 13.0⇥ Typical Size (MW) Construction Lead Time Fixed O&M ($/kW/yr) Fuel Cost ($/MMBtu) Revised FIT (cents/kWh) 66⇥ 1756 Conclusions on Biomass pricing⌦ • OPA revised the FIT pricing for Biomass by:⇥ – Creating two size tranches, ⇥ 10 MW & > 10 MW⇥ – Lowering the capital cost per MW⇥ – Increasing the fuel cost / MMBTU⇥ – Increasing Variable O&M for projects ⇥ 10 MW⇥ 67⇥ 1757 Biogas – Stakeholder Feedback⌦ • Stakeholders feedback included:⇥ – – Not enough size differentiation⇥ Pricing should include a kW size tranche in⇥ recognition of likely application⇥ – – – Operating and Maintenances costs are too low⇥ Fuel costs are too low⇥ Price tranche of 5 MW would hinder the⇥ development of projects developing under RESOP⇥ 68⇥ 1758 Biogas – Price Tranches⌦ • FIT Rules currently split all biogas facilities in two⇥ tranches, • ⇥ 5 MW and > 5MW⇥ Propose increasing the lower tranche of biogas from⇥ 5 MW to 10 MW⇥ • Rationale:⇥ – Reflects size of projects that are currently under⇥ development⇥ – Consistent with thresholds in the OEB’s Distribution" System Code and IESO Market Rules⇥ 69⇥ 1759 Biogas – Scenario Analysis⌦ • Range of possible FIT prices from analysis is between 10 to cents 16.3 cents per kWh.⇥ Scenario A B C D E⇥ Capacity (MW) 5 0.5 15 5 0.5⇥ Capital Cost 6700 7300 5600 6700 7370⇥ Capacity Factor 75% 75% 75% 75% 75%⇥ Percent Debt 70% 70% 80% 80% 80%⇥ Interest Rate 7% 7% 6% 7% 8%⇥ 11% 11% 11% 11% 12%⇥ 14.7 15.8 10.0 14.3 16.3 Return on Equity Derived FIT price (cents/kWh) 70⇥ 1760 Biogas – Revised assumptions and pricing⌦ Biogas Biogas Biogas 0.5 >0.5 ⇥10 >10⇥ 2 2 2⇥ Capacity Factor (%) 75 75 75⇥ Capital Cost ($/kW) 7300 6,700 5,600⇥ Fixed O&M ($/kW/yr) 55 55 Variable O&M ($/MWh) 21 21 29⇥ Heat Rate (MMbtu/MWh) 17 17 19⇥ 0 0 (2.5)⇥ 16.0 14.7 10.4⇥ Typical Size (MW) Construction Lead Time Fuel Cost ($/MMBtu) Revised FIT (cents/kWh) 174 71⇥ 1761 Conclusion on Biogas pricing⌦ • The results of scenario analysis demonstrated that⇥ the range of possible prices is within original price⇥ schedule⇥ – The OPA believes that the original pricing level is⇥ reasonable for larger projects⇥ • A new price category for biogas projects 500 kW or⇥ less was added⇥ • Original price tranches were increased from 5 MW to⇥ 10 MW⇥ 72⇥ 1762 Landfill Gas – Stakeholder Feedback⌦ • Stakeholders feedback included:⇥ – – – Operating and Maintenances costs are too low⇥ Fuel costs are too low⇥ Price tranche of 5 MW would hinder the⇥ development of projects developing under RESOP⇥ assumed prices⇥ 73⇥ 1763 Landfill Gas – Price Tranches⌦ • FIT price schedule originally split landfill gas facilities⇥ in two tranches, • ⇥ 5 MW and > 5MW⇥ Propose increasing the lower tranche of landfill gas⇥ from 5 MW to 10 MW⇥ • Rationale:⇥ – Reflects size of projects that are currently under⇥ development⇥ – Consistent with thresholds in the OEB’s Distribution" System Code and IESO Market Rules⇥ 74⇥ 1764 Landfill Gas – Revised assumptions and pricing⌦ Landfill Gas Landfill Gas ⇥ 10 > 10⇥ 2 2⇥ Capacity Factor (%) 83 85⇥ Capital Cost ($/kW) 2,900 2,700⇥ 300 300⇥ Variable O&M ($/MWh) 17 14⇥ Heat Rate (MMbtu/MWh) 12 10.6⇥ 11.1 10.3⇥ Typical Size (MW) Construction Lead Time Fixed O&M ($/kW/yr) FIT (cents / kWh) 75⇥ 1765 Landfill Gas⌦ • Range of possible FIT prices from analysis is between 10.1 to 11.3 cents per kWh.⇥ Scenario A B C D E⇥ Capacity 5 15 5 15 5⇥ Capital Cost 2900 2700 2900 2700 2900⇥ Capacity Factor 83% 85% 83% 85% 83%⇥ Percent Debt 70% 70% 80% 80% 80%⇥ Interest Rate 6% 7% 6% 7% 8%⇥ 11% 12% 11% 11% 12%⇥ 10.9 10.4 10.7 10.1 11.3 Return on Equity Derived FIT price (cents/kWh) 76⇥ 1766 Conclusion on Landfill Gas pricing⌦ • The results of scenario analysis demonstrated that⇥ the range of possible prices is within original price⇥ schedule⇥ – The OPA believes that the original pricing level is⇥ reasonable for larger projects⇥ • The small price category will increase to 10 MW⇥ 77⇥ 1767 Revised Price Schedule⌦ Renewable Fuels Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV Rooftop Solar PV Solar PV* degression)⇥ On-shore Wind* Any size 13.5 13.5⇥ Off-shore Wind* Any size 19.0 19.0⇥ Waterpower * ⇥ 1 0 MW 12.9 13.1**⇥ Waterpower * Biomass * > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass* > 10 MW Biogas * ⇥ 500 kW > 500kW ⇥ 1 0 MW 14.7 Biogas * Biogas * > 10 MW 10.4 10.4⇥ Landfill gas * ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 12.2**⇥ 12.2 13.8⇥ 13.0⇥ 16.0⇥ 14.7⇥ *Eligible for Aboriginal or Community Adder⇥ 78 **Contract term for water power extended to 40 years⇥ 1768 Richard Duffy From: Richard Duffy Sent: May-12-09 9:38 AM To: Michael Lyle Subject: RE: Minister's Slides Attachments: FIT Update MEI May13_09_v12.ppt Hi Mike, Here is the final deck sent to Jordan Penic of the Ministry yesterday. Richard From: Michael Lyle↵ Sent: Tuesday, May 12, 2009 9:28 AM↵ To: Richard Duffy↵ Subject: Minister's Slides↵ Can I have the final version of this deck for Wednesday as I am attending the Minister ’ s briefing? Michael Lyle General Counsel and Vice President Legal, Aboriginal & Regulatory Affairs Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , Ontario, M5H 1T1 Direct: 416- 969 - 6035 Fax: 41 6.969.6383 Email: michael.lyle@powerauthority.on.ca This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message 1769 ONTARIO POWER AUTHORITY May 1 3, 2009 1770 FIT Program Launch Not Responsive 1771 Not Responsive RESOP Contracts Not Responsive 1773 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 / 20-yrs 13.1 / 40-yrs⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 12.2 / 40-yrs⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 5 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1774 Aboriginal and Community Price Adder↵ • Price Adder designed to reflect the incremental⇥ capital cost experienced by Aboriginal and⇥ Community groups⇥ – Further reflects debt financing costs for Aboriginal project equity portion⇥ • Price Adder applied to incent developer partnerships⇥ with Aboriginal and Community groups⇥ • Price Adder ratio increases proportional to the equity⇥ share of the Aboriginal and/or Community group⇥ 6⇥ 1775 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ FIT⇥ 44.3 ^ 44.3 º 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year º◆ open *◆ ^ With 9% price degression after each 100 MW of contracted capacity⇥ º With 5% price degression after each 170 MW contracted for the first three years. Capped at 510 MW contracted in 2009. Price review to follow. * Prices and contracted capacity subject to 2-year review period⇥ 7⇥ 1776 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 8⇥ 1777 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 9⇥ 1778 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 10⇥ 1779 11 Items for Subsequent Discussions Not Responsive 1780 12 Appendix - FIT Application Process Diagram Not Responsive 1781 Richard Duffy From: Richard Duffy Sent: May-13-09 5:14 PM To: Claire Willison Subject: RE: FIT May 12 Bullet-point draft report Attachments: OPA FIT consultation May12-bullet points-draft_RD.doc Hi Claire,⌦ Attached is a reviewed copy of the bullet points for the Ministry.⌦ Thanks⌦ Richard⌦ From: Claire Willison Sent: Wednesday, May 13, 2009 12:00 PM To: Emay Cowx; Richard Duffy Subject: RE: FIT May 12 Bullet-point draft report Richard, attached is the May 12 FIT session report for your perusal before it is sent to the Ministry.⌦ As requested by Emay, the point mentioned in her email below is included in the report, but the project size is not mentioned. See the highlighted bullet- point in the attached report.⌦ Claire⌦ From: Emay Cowx Sent: May 13, 2009 8:40 AM To: Claire Willison Subject: Bullet summary from Conf Publishers When you receive, can you please quickly peruse and see if noted on it is the following:⌦ · Suggest more price tranches for biogas small projects below 1 MW to make more economic and to contribute to rural economic development.✓ This is an issue which MEI should be alerted to by way of this report that gets sent; Please add to the report when you send to Richard for review. Thanks! 1782 Feed-In Tariff Stakeholder Engagement Session Bullet Notes Revised Price Schedule, Revised Program Rules, and Draft Contract Ontario Power Authority Toronto, Ontario May 1 2, 2009 1783 FEED-I N TARIFF STAKEHOLDER ENGAGEMENT SESSION REVISED PRICE SCHEDULE, REVISED PROGRAM RULES, AND DRAFT CONTRACT PAGE 1 Feed-in Tariff Stakeholder Engagement Session Revised Price Schedule, Revised Program Rules, and Draft Contract At the May 12 Stakeholder Engagement Session on the proposed Feed-in Tariff program, 103 participants attended in person, with xxx participating via webcast and an additional xx by telephone. Participants agreed nearly unanimously that instituting a lottery to determine priority status during the initialization period would be arbitrary, unfair, and inefficient. Developers noted that this would represent a complete change in direction from the general sense of the stakeholder discussions to date, that it would unfairly penalize developers who had moved forward based on the apparent direction the OPA had been taking, and that it would create a prolonged period of uncertainty. One participant expressed an opposing view, saying some way must be found to create incentives and attract new players into the renewable market in Ontario by offering opportunity to enter the market on a level playing field with existing proponents. Participants also strongly disagreed with establishing two groups of projects. Several participants said this would result in developers who have done no significant work on their project being placed ahead of those who are extremely close to being shovel-ready. Several participants said it is not fair to use zoning approvals as a criterion. There is a view that RESOP participants, even those with contracts, should be allowed to participate in the proposed FIT program. It was expressed that MicroFIT projects in particular should be allowed to take advantage of the proposed FIT program. An opinion was expressed that the price for wind power is still too low. At 13.5¢ per kW, the price will not result in the robust FIT production line the program needs to achieve its broader goal of creating long-term sustainable growth in the renewable energy sector. It was noted that most developers do not qualify for accelerated Capital Cost Allowance on class 42. It was also stated that the average capacity factor of 30% was too high. Three participants suggested tying the price to available resource capacity in order to attract projects across various regions. Participants supported the adder for First Nation, Métis, and community-based projects. One participant requested that the adder be available for roof-mounted solar PV community projects, or that a new tranche be established for those installations in the 10–250 kW range. Most participants expressed support for the removal of the cap and automatic price degression for ground-mounted solar projects. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MAY 1 2, 2009 1784 FEED-I N TARIFF STAKEHOLDER ENGAGEMENT SESSION REVISED PRICE SCHEDULE, REVISED PROGRAM RULES, AND DRAFT CONTRACT PAGE 2 Participants suggested adding architecturally-mounted installations to the roof-mounted solar category. Concerns were expressed regarding the cost and pricing assumptions made for biogas. Representatives of the farming sector said the price was too low. It was recommended to introduce a series of smaller price tranches. The environmental benefits and rural economic development opportunities have a tremendous value that should be reflected in the price. A representative of large electricity users vehemently opposed the proposal for compensating generators in the event of curtailment by IESO, stating it created a take or pay system. Participants asked the OPA to reconsider the blanket requirement to submit the application for Notice to Proceed six months in advance of the milestone commercial operation date, since some projects could be on-line in less than six months. ONTARIO POWER AUTHORITY • TORONTO, ONTARIO • MAY 1 2, 2009 1785 Richard Duffy From: Richard Duffy Sent: May-15-09 7:24 AM To: 'Sadikman, Jacob'; Jonathan Cheszes Cc: Jim MacDougall Subject: RE: updated FIT docs for May 15 posting Hi Guys, To be consistent and in step with the actual Price Schedule, I think the identified sections should also reference the “¢ / kWh ” and not $/MWh. If we change the unit measurement on one item related to the Price Schedule, we would need to have everything match or there would be confusion. It’ s easier and still consistent to update Section 8.1 in the Program Rules. We’ ll also need to update 8.1 (c) and 8.1 (f) as well. I ’ ve done that on the copy filed on the shared drive and created the .pdf file for posting as well. Richard From: Sadikman, Jacob [mailto:JSadikman@osler.com]⇠ Sent: Thursday, May 14, 2009 10:05 PM⇠ To: Jonathan Cheszes⇠ Cc: Richard Duffy; Jim MacDougall⇠ Subject: RE: updated FIT docs for May 15 posting⇠ my instinct would be for everything in $/MWh. But that's a policy thing, but whatever it is needs to be consistent throughout. Jacob Sadikman Associate Ext. 4931 ----- Original Message----From: Jonathan Cheszes [mailto:Jonathan.Cheszes@powerauthority.on.ca]⇠ Sent: Thursday, May 14, 2009 10:03 PM⇠ To: Sadikman, Jacob⇠ Cc: Richard Duffy; Jim MacDougall⇠ Subject: RE: updated FIT docs for May 15 posting⇠ Jake, I have reviewed the Contract, Rules and standard defintions for references to the Price Schedule. I believe the schedule attached includes all the required information as per these three docs. Please take a look and let me know if there is something else to be amended before posting. One question on the Price Schedule: 1) Section 8.1 (i) and (j) of the Rules state the Maximum Aboriginal and Community Adders have to be listed on the price schedule in $/MWh, as compared to the Contract Price which I currently have in cents / kWh. I assume they should be consistent. Which should I change? 1786 Jonathan Cheszes Policy Analyst Conservation Bureau P. 416- 969 - 6251 www.conservationbureau.on.ca This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. Say "Count Me In!" to Energy Conservation Week - learn more at: energyconservationweek.ca✏ From: Sadikman, Jacob [mailto:JSadikman@osler.com]⇠ Sent: Wed 5/13/2009 2:09 PM⇠ To: Jonathan Cheszes⇠ Subject: FW: updated FIT docs for May 15 posting⇠ ----- Original Message ----- From: Subject: Sadikman, Jacob Tuesday, May 12, 2009 6:50 PM⇠ Jason Chee - Aloy ; rcary@niagara.com; Jim MacDougall ; 'Ziyaad Mia'; Michael Lyle ; ' Susan Kennedy '; Richard Duffy; Sarah Simmons⇠ Sebastiano, Rocco; Smith, Elliot⇠ updated FIT docs for May 15 posting⇠ Team, In preparation for posting this Friday, attached are updated versions of the FIT Rules, FIT Contract and Standard definitions incorporating the few changes coming out of today's stakeholder session as well as some changes on the definitions for First Nations and Métis provided by OPA today. I have not included blacklines to the May 11 versions but will be happy to produce blacklines to any of the prior versions that people want to see. In the meantime, we should all have these most updated drafts in preparation for finalization and posting on Friday. Cheers, - Jake Jacob A. Sadikman✏ Associate 416.862.4931 DIRECT 41 6.862.6666 FACSIMILE jsadikman@osler.com Osler, Hoskin & Harcourt LLP Box 50 , 1 First Canadian Place Toronto , Ontario, Canada M5X 1 B8 osler.com ********************************************************************⇥ 1787 This e-mail message is privileged, confidential and subject to⇥ copyright. Any unauthorized use or disclosure is prohibited.⇥ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⇥ ********************************************************************⇥ ********************************************************************⇥ This e-mail message is privileged, confidential and subject to⇥ copyright. Any unauthorized use or disclosure is prohibited.⇥ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⇥ ********************************************************************⇥ 1788 Richard Duffy From: Richard Duffy⇣ Sent: May-19-09 10:01 AM⇣ To: Jim MacDougall⇣ Subject: FW: Updated Slide Deck for Minister's Presentation⇣ Attachments: FIT Update MEI May13_09_v11.ppt⇣ May 13 Minister presentation.⇣ ----- Original Message ----From: Richard Duffy⇣ Sent: Monday, May 11, 2009 2:51 PM⇣ To: JoAnne Butler; Sylvie Doucet⇣ Cc: Jason Chee- Aloy; Jim MacDougall; Ziyaad Mia⇣ Subject: RE: Updated Slide Deck for Minister's Presentation⇣ Great.⇣ Sylvie attached is the slide deck we discussed to be forwarded to Jordan.⇣ Thanks⇣ Richard⇣ ----- Original Message ----From: JoAnne Butler⇣ Sent: Monday, May 11, 2009 2:47 PM⇣ To: Richard Duffy⇣ Cc: Jason Chee- Aloy; Jim MacDougall; Ziyaad Mia⇣ Subject: Re: Updated Slide Deck for Minister's Presentation⇣ Richard,⇣ Not Responsive Good to go....⇣ JCB⇣ ----- Original Message ----From: Richard Duffy⇣ To: JoAnne Butler⇣ CC: Jason Chee- Aloy; Jim MacDougall; Ziyaad Mia⇣ Sent: Mon May 11 14:26:16 2009⇣ Subject: Updated Slide Deck for Minister's Presentation⇣ Hi JoAnne,⇣ Attached is an updated slide deck for the Wednesday presentation to the Minister.⇣ 1789 Jason is in a Stakeholder meeting and we do need to have this sent to Jordan ASAP. Can you review and let us know if we can forward this to Jordan?⇣ Let me know if you have any questions.⇣ Richard⇣ 1790 ONTARIO POWER AUTHORITY May 1 3, 2009 1791 FIT Program Launch Not Responsive 1792 Not Responsive RESOP Contracts Not Responsive 1 794 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 / 20-yrs 12.2 / 40-yrs⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1 / 40-yrs⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 5 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1795 Aboriginal and Community Price Adder↵ • Price Adder designed to reflect the incremental⇥ capital cost experienced by Aboriginal and⇥ Community groups⇥ – Further reflects debt financing costs for Aboriginal project equity portion⇥ • Price Adder applied to incent developer partnerships⇥ with Aboriginal and Community groups⇥ • Price Adder ratio increases proportional to the equity⇥ share of the Aboriginal and/or Community group⇥ 6⇥ 1796 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ FIT⇥ 44.3 ^ 44.3 º 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year º◆ open *◆ ^ With 9% price degression after each 100 MW of contracted capacity⇥ º With 5% price degression after each 170 MW contracted for the first three years. Capped at 510 MW contracted in 2009. Price review to follow. * Prices and contracted capacity subject to 2-year review period⇥ 7⇥ 1797 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 8⇥ 1798 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 9⇥ 1799 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 10⇥ 1800 11 Items for Subsequent Discussions Not Responsive 1801 12 Appendix - FIT Application Process Diagram 1802 Richard Duffy From: Richard Duffy Sent: May-19-09 10:05 AM To: Ziyaad Mia Subject: RE: slides Attachments: FIT Update MEI May13_09_v11.ppt For your usage. From: Ziyaad Mia Sent: Tuesday, May 19, 2009 9:28 AM To: Richard Duffy Subject: slides Hi Richard, Can you please send me the slide deck used with the Minister? I can use that to develop my portion of the slides⇢ for the BOD. Thanks, Ziyaad Mia Counsel Legal, Aboriginal & Regulatory Affairs Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON , M5H 1T1 T: 416 969 6025 1803 ONTARIO POWER AUTHORITY May 1 3, 2009 1804 FIT Program Launch Not Responsive 1805 Not Responsive RESOP Contracts Not Responsive 1807 Summary of Changes – FIT Price Schedule↵ Technology Capacity Range Original Proposed Revised Proposed◆ Price (¢/kWh) Price (¢/kWh)◆ ⇥ 1 0 kW 80.2 80.2⇥ 71.3 71.3⇥ Rooftop Solar PV > 1 0 kW ⇥ 250 kW > 250 kW ⇥ 500 kW 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted > 1 0 kW ⇥ 1 0 MW 44.3 (automatic 44.3⇥ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV degression)⇥ On-shore Wind Any size 13.5 13.5⇥ Off-shore Wind Any size 19.0 19.0⇥ Waterpower^ ⇥ 1 0 MW 12.9 / 20-yrs 12.2 / 40-yrs⇥ Waterpower^ Biomass > 1 0 MW ⇥ 50 MW ⇥ 1 0 MW Biomass > 10 MW Biogas 11.1 / 40-yrs⇥ 12.2 13.8⇥ 14.7 16.0⇥ Biogas ⇥ 500 kW > 500kW ⇥ 1 0 MW Biogas > 10 MW 10.4 10.4⇥ Landfill gas ⇥ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ 13.0⇥ 14.7⇥ All prices increase by CPI to Commercial Operation Date, then increase by 20% of CPI⇥ All technologies eligible for Aboriginal or Community Price Adder up to 1.5 c/kWh for up to 50% equity share⇥ 5 ^ Contract term for waterpower projects proposed to increase to 40-years, therefore lower prices⇥ 1808 Aboriginal and Community Price Adder↵ • Price Adder designed to reflect the incremental⇥ capital cost experienced by Aboriginal and⇥ Community groups⇥ – Further reflects debt financing costs for Aboriginal project equity portion⇥ • Price Adder applied to incent developer partnerships⇥ with Aboriginal and Community groups⇥ • Price Adder ratio increases proportional to the equity⇥ share of the Aboriginal and/or Community group⇥ 6⇥ 1809 Ground Mounted Solar PV Price↵ Ground⇥ Originally⇥ CanSIA⇥ Revised⇥ Mounted⇥ Proposed⇥ Proposed⇥ FIT⇥ Solar PV⇥ Price FIT⇥ FIT⇥ 44.3 ^ 44.3 º 44.3 *◆ (¢ / kWh)◆ Capacity◆ (MW)◆ 100 MW ^◆ 170 MW◆ / year º◆ open *◆ ^ With 9% price degression after each 100 MW of contracted capacity⇥ º With 5% price degression after each 170 MW contracted for the first three years. Capped at 510 MW contracted in 2009. Price review to follow. * Prices and contracted capacity subject to 2-year review period⇥ 7⇥ 1810 Proposed Framework for Aboriginal Projects↵ • FIT Program Rules⇥ – Lower security applied to projects with Aboriginal control (> 50% interest in project)⇥ • FIT Price Schedule⇥ – Price adders for Aboriginal projects applying to all technologies⇥ • – Reflects additional challenges facing Aboriginal projects⇥ Price adder scaled by proportion of Aboriginal interest in project⇥ 8⇥ 1811 Proposed Framework for Aboriginal Projects↵ • Programs and Funding⇥ – OPA working with MEI to develop Aboriginal capacity and⇥ development program⇥ – May involve three streams⇥ • Long-term capacity building for Aboriginal communities to⇥ develop expertise in the energy sector⇥ • • Funding for Community Energy Plans⇥ Funding and assistance to facilitate project development⇥ (e.g., pre-feasibility work, business planning, corporate⇥ structure, etc.)⇥ • Opportunity to showcase “advanced” First Nations wind# projects by offering FIT Contract:⇥ – – – – Georgina Island (20 MW)⇥ M'Chigeeng (9MW)⇥ Walpole Island (10 MW with potential up to 40 MW)⇥ Wikwemikong (20 MW with potential up to 26 MW)⇥ 9⇥ 1812 Proposed Framework for Aboriginal Projects↵ • Loan Guarantees⇥ – – Equity financing is a significant challenge Ontario Financing Authority will administer $250 million⇥ Loan Guarantee Program to assist Aboriginal participation in renewable energy projects and transmission⇥ – Province would guarantee loans of Aboriginal projects⇥ for portion of their equity interest – Underlying rationale is that equity facilitated by loan⇥ guarantee combined with FIT Contract should enable⇥ other financing⇥ 10⇥ 1813 11 Items for Subsequent Discussions Not Responsive 1814 12 Appendix - FIT Application Process Diagram Not Responsive 1815 Richard Duffy From: Richard Duffy⌥ Sent: June-01-09 9:34 PM⌥ To: Jim MacDougall⌥ Subject: RE: BoD slides⌥ Attachments: FIT_BOD_June1009_RD_v2.PPT⌥ Hi Jim,⌥ Here ’s where I am at so far. I was just about to pack it in for the evening and send this off to you for review. Excellent timing!⌥ Cheers⌥ Richard⌥ ----- Original Message ----From: Jim MacDougall⌥ Sent: Monday, June 01, 2009 9:32 PM⌥ To: Richard Duffy⌥ Subject: BoD slides⌥ As it turns out I didn't email you or myself the slides, only the link on the n drive.⌥ Have you worked on this? Will you have a new version for JCA by morning? If you update a doc pls send to me, as will be at OEB in the morn.⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Ontario Power Authority⌥ 416 969 6415⌥ Sent from my BB⌥ 1816 June 10, 2009↵ Update: Development of Proposed Ontario Renewable Energy Feed-in Tariff Program Jason Chee-Aloy Director, Generation Procurement 1817 Updates to the Proposed Feed-In Tariff (FIT) Program (Inhmn INnu-r \ulhr-nu Summary of Significant FIT Program Changes↵ Not Responsive • Draft Price Schedule↵ – – – Removal of PV degression trigger↵ Additional differentiation for bio-energy projects↵ Aboriginal and Community adder↵ Not Responsive 1819 FIT Project Prioritization Methodology Not Responsive 1820 RESOP Termination Option Not Responsive 1821 Revised Price Schedule↵ Renewable Fuels Rooftop or Ground Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇧ 1 0 kW 80.2 80.2↵ > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW 71.3 71.3↵ Rooftop Solar PV 63.5 63.5↵ Rooftop Solar PV > 500 kW 53.9 53.9↵ Ground Mounted Solar > 1 0 kW ⇧ 1 0 MW 44.3 (automatic 44.3↵ Mounted Solar PV↵ Rooftop Solar PV PV * degression)↵ On-shore Wind * Any size 13.5 13.5↵ Off-shore Wind * Any size 19.0 19.0↵ Waterpower * ⇧ 1 0 MW 12.9 13.1**↵ Waterpower * Biomass * > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW On-Farm Biogas * ⇧ 1 00 kW 14.7 19.5↵ On-Farm Biogas * 14.7 18.5↵ Biogas * > 1 00 kW ⇧ 250 kW ⇧ 500 kW > 500kW ⇧ 1 0 MW Biogas * > 10 MW 10.4 Landfill gas * ⇧ 1 0 MW 11.1 11.1↵ > 10 MW 10.3 10.3↵ Biogas * 12.2**↵ 12.2 13.8↵ 13.0↵ 14.7 16.0↵ 14.7↵ 10.4↵ * Eligible for Aboriginal or Community Adder↵ ** Contract term for water power extended to 40 years↵ All prices increase by CPI until Commercial Operation Date↵ 1822 Aboriginal and Community Adder↵ Original adder design required Aboriginal/Community project control - 50% equity interest not realistic PV↵ Technology Wind (Ground Water Biogas Biomass↵ Mounted)↵ Landfill↵ Gas↵ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects further reflects incremental cost of debt for aboriginal equity portion Adder is available on a sliding scale, with 100% paid for controlling equity interest 1823 FIT Program Next Steps Not Responsive 1 824 FIT Program Timeline Not Responsive 1825 10 Not Responsive 1826 TAT, DAT and ECT Not Responsive 1827 12 Two aspects of TAT Not Responsive 1828 13 Sample Ontario Transmission System Display Not Responsive 1829 14 What is the Proposed Not Responsive 1830 Purpose of the ECT Not Responsive 1831 16 Not Responsive 1832 Not Responsive 1833 Not Responsive 1 834 Not Responsive Richard Duffy From: Richard Duffy Sent: June-01-09 9:36 PM To: Jim MacDougall Subject: RE: BoD slides Attachments: FIT Update BofD May 26 09 jm.ppt Hi Again, Here's your original version as reference (I did make some edits). Richard ----- Original Message ----From: Jim MacDougall Sent: Monday, June 01, 2009 9:32 PM To: Richard Duffy Subject: BoD slides As it turns out I didn't email you or myself the slides, only the link on the n drive. Have you worked on this? Will you have a new version for JCA by morning?⌧ If you update a doc pls send to me, as will be at OEB in the morn. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB 1836 Summary of Significant FIT Program Changes⌫ Not Responsive • Draft Price Schedule⇥ – – – Removal of PV degression trigger⇥ Additional differentiation for bio-energy projects⇥ Aboriginal and Community adder⇥ Not Responsive 1⇥ 1837 Program Launch Managing Demand Not Responsive 1838 RESOP Contract Transition Not Responsive 1839 Revised Price Schedule⌫ Renewable Fuels Rooftop or Ground Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇧ 1 0 kW 80.2 80.2⇥ > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW 71.3 71.3⇥ Rooftop Solar PV 63.5 63.5⇥ Rooftop Solar PV > 500 kW 53.9 53.9⇥ Ground Mounted Solar > 1 0 kW ⇧ 1 0 MW 44.3 (automatic 44.3⇥ Mounted Solar PV⇥ Rooftop Solar PV PV * degression)⇥ On-shore Wind * Any size 13.5 13.5⇥ Off-shore Wind * Any size 19.0 19.0⇥ Waterpower * ⇧ 1 0 MW 12.9 13.1**⇥ Waterpower * Biomass * > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW On-Farm Biogas * ⇧ 1 00 kW 14.7 19.5⇥ On-Farm Biogas * 14.7 18.5⇥ Biogas * > 1 00 kW ⇧ 250 kW ⇧ 500 kW > 500kW ⇧ 1 0 MW Biogas * > 10 MW 10.4 Landfill gas * ⇧ 1 0 MW 11.1 11.1⇥ > 10 MW 10.3 10.3⇥ Biogas * 12.2**⇥ 12.2 13.8⇥ 13.0⇥ 14.7 16.0⇥ 14.7⇥ 10.4⇥ * Eligible for Aboriginal or Community Adder⇥ ** Contract term for water power extended to 40 years⇥ 4 All prices increase by CPI until Commercial Operation Date⇥ 1840 Aboriginal and Community Adder⌫ Original adder design required Aboriginal/Community project control - 50% equity interest not realistic PV⇥ Technology Wind (Ground Water Biogas Biomass⇥ Mounted)⇥ Landfill⇥ Gas⇥ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects further reflects incremental cost of debt for aboriginal equity portion Adder is available on a sliding scale, with 100% paid for controlling equity interest 5⇥ 1841 FIT Program Timeline Not Responsive 1842 DDFI ()nlniin mer 1843 TAT, DAT and ECT Not Responsive 1 844 Two aspects of TAT Not Responsive 1845 10 Sample Ontario Transmission System Display Not Responsive 1846 11 What is the Proposed Not Responsive 1847 12 Purpose of the ECT Not Responsive 1848 13 MicroFlT 1849 14 Not Responsive PPR 1 850 15 Not Responsive PPR 1851 Not Responsive 1 852 Richard Duffy From: Richard Duffy Sent: June-02-09 12:40 PM To: Jason Chee-Aloy Cc: Jim MacDougall Subject: FIT_BOD_June1009_RD_v3.PPT Attachments: FIT_BOD_June1009_RD_v3.PPT Hi Jason,⌦ Attached is a draft of the Board Presentation. Jim may have some additional comments.⌫ Richard⌦ 1853 June 10, 2009↵ Update: Development of Proposed Ontario Renewable Energy Feed-in Tariff Program Jason Chee-Aloy Director, Generation Procurement 1854 Updates to the Proposed Feed-In Tariff (FIT) Program (Inhmn INnu-r \ulhr-nu Summary of Significant FIT Program Changes↵ Not Responsive • Draft Price Schedule↵ – – – Removal of PV degression trigger↵ Additional differentiation for bio-energy projects↵ Aboriginal and Community adder↵ Not Responsive 1856 FIT Project Prioritization Methodology Not Responsive 1 857 RESOP Termination Option Not Responsive 1 858 Revised Price Schedule↵ Renewable Fuels Rooftop or Ground Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇧ 1 0 kW 80.2 80.2↵ > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW 71.3 71.3↵ Rooftop Solar PV 63.5 63.5↵ Rooftop Solar PV > 500 kW 53.9 53.9↵ Ground Mounted Solar > 1 0 kW ⇧ 1 0 MW 44.3 (automatic 44.3↵ Mounted Solar PV↵ Rooftop Solar PV PV * degression)↵ On-shore Wind * Any size 13.5 13.5↵ Off-shore Wind * Any size 19.0 19.0↵ Waterpower * ⇧ 1 0 MW 12.9 13.1**↵ Waterpower * Biomass * > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW On-Farm Biogas * ⇧ 1 00 kW 14.7 19.5↵ On-Farm Biogas * 14.7 18.5↵ Biogas * > 1 00 kW ⇧ 250 kW ⇧ 500 kW > 500kW ⇧ 1 0 MW Biogas * > 10 MW 10.4 Landfill gas * ⇧ 1 0 MW 11.1 11.1↵ > 10 MW 10.3 10.3↵ Biogas * 12.2**↵ 12.2 13.8↵ 13.0↵ 14.7 16.0↵ 14.7↵ 10.4↵ * Eligible for Aboriginal or Community Adder↵ ** Contract term for water power extended to 40 years↵ All prices increase by CPI until Commercial Operation Date↵ 1859 Aboriginal and Community Adder↵ Original adder design required Aboriginal/Community project control - 50% equity interest not realistic PV↵ Technology Wind (Ground Water Biogas Biomass↵ Mounted)↵ Landfill↵ Gas↵ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects further reflects incremental cost of debt for aboriginal equity portion Adder is available on a sliding scale, with 100% paid for controlling equity interest 1860 FIT Program Next Steps Not Responsive 1861 FIT Program Timeline Not Responsive 1862 10 Communications and Stakeholder Initiatives (lm-Inn lerr \ulh-?nnu 1863 Key Communication Initiatives Not Responsive 1 864 Key Stakeholder Initiatives Not Responsive 1865 FIT Stakeholder Engagement Sessions - Statistics Not Responsive 1866 Transmission Availability Test↵ (TAT)↵ Distribution Availability Test↵ (DAT)↵ Economic Connection Test↵ (ECT)↵ 14↵ 1867 15 TAT, DAT and ECT Not Responsive 1868 16 Two aspects of TAT Not Responsive 1869 17 Sample Ontario Transmission System Display Not Responsive 1870 18 What is the Proposed Not Responsive 1871 19 Purpose of the ECT Not Responsive 1872 20 microFlT Program (Imam. INnu-r 1873 Not Responsive 1 874 Not Responsive 1875 Not Responsive 1876 Richard Duffy From: Richard Duffy Sent: June-11-09 5:42 PM To: Joe Toneguzzo Cc: Nancy Marconi; Emay Cowx Subject: FW: FIT_BOD_June1009_RD_v3.PPT Attachments: FIT_BOD_June1009_RD_v3.PPT Hi Joe, As discussed, attached is a copy of the BOD June 10 Presentation. Thanks Richard From: Richard Duffy Sent: Tuesday, June 02, 2009 12:40 PM To: Jason Chee-Aloy Cc: Jim MacDougall Subject: FIT_BOD_June1009_RD_v3.PPT Hi Jason, Attached is a draft of the Board Presentation. Jim may have some additional comments.⌫ Richard 1877 June 10, 2009↵ Update: Development of Proposed Ontario Renewable Energy Feed-in Tariff Program Jason Chee-Aloy Director, Generation Procurement 1878 Updates to the Proposed Feed-In Tariff (FIT) Program (Inhmn INnu-r \ulhr-nu Summary of Significant FIT Program Changes↵ Not Responsive • Draft Price Schedule↵ – – – Removal of PV degression trigger↵ Additional differentiation for bio-energy projects↵ Aboriginal and Community adder↵ Not Responsive 1880 FIT Project Prioritization Methodology Not Responsive 1881 RESOP Termination Option Not Responsive 1882 Revised Price Schedule↵ Renewable Fuels Rooftop or Ground Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇧ 1 0 kW 80.2 80.2↵ > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW 71.3 71.3↵ Rooftop Solar PV 63.5 63.5↵ Rooftop Solar PV > 500 kW 53.9 53.9↵ Ground Mounted Solar > 1 0 kW ⇧ 1 0 MW 44.3 (automatic 44.3↵ Mounted Solar PV↵ Rooftop Solar PV PV * degression)↵ On-shore Wind * Any size 13.5 13.5↵ Off-shore Wind * Any size 19.0 19.0↵ Waterpower * ⇧ 1 0 MW 12.9 13.1**↵ Waterpower * Biomass * > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW On-Farm Biogas * ⇧ 1 00 kW 14.7 19.5↵ On-Farm Biogas * 14.7 18.5↵ Biogas * > 1 00 kW ⇧ 250 kW ⇧ 500 kW > 500kW ⇧ 1 0 MW Biogas * > 10 MW 10.4 Landfill gas * ⇧ 1 0 MW 11.1 11.1↵ > 10 MW 10.3 10.3↵ Biogas * 12.2**↵ 12.2 13.8↵ 13.0↵ 14.7 16.0↵ 14.7↵ 10.4↵ * Eligible for Aboriginal or Community Adder↵ ** Contract term for water power extended to 40 years↵ All prices increase by CPI until Commercial Operation Date↵ 1883 Aboriginal and Community Adder↵ Original adder design required Aboriginal/Community project control - 50% equity interest not realistic PV↵ Technology Wind (Ground Water Biogas Biomass↵ Mounted)↵ Landfill↵ Gas↵ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects further reflects incremental cost of debt for aboriginal equity portion Adder is available on a sliding scale, with 100% paid for controlling equity interest 1884 FIT Program Next Steps Not Responsive 1885 FIT Program Timeline Not Responsive 1886 10 Communications and Stakeholder Initiatives (lm-Inn lerr \ulh-?nnu 1887 Key Communication Initiatives Not Responsive 1888 Key Stakeholder Initiatives Not Responsive 1889 FIT Stakeholder Engagement Sessions - Statistics Not Responsive 1890 Transmission Availability Test↵ (TAT)↵ Distribution Availability Test↵ (DAT)↵ Economic Connection Test↵ (ECT)↵ 14↵ 1891 15 TAT, DAT and ECT Not Responsive 1892 16 Two aspects of TAT Not Responsive 1893 17 Sample Ontario Transmission System Display Not Responsive 1 894 18 What is the Proposed Not Responsive 1895 19 Purpose of the ECT Not Responsive 1896 20 microFlT Program (Imam. INnu-r 1897 Not Responsive 1898 Not Responsive 1899 Not Responsive Richard Duffy From: Richard Duffy Sent: June-16-09 11:42 AM To: Jim MacDougall Subject: FW: FIT_BOD_June1009_RD_v3.PPT Attachments: FIT_BOD_June1009_RD_v3.PPT From: Richard Duffy Sent: Thursday, June 11, 2009 5:42 PM To: Joe Toneguzzo Cc: Nancy Marconi; Emay Cowx Subject: FW: FIT_BOD_June1009_RD_v3.PPT Hi Joe, As discussed, attached is a copy of the BOD June 10 Presentation. Thanks Richard From: Richard Duffy Sent: Tuesday, June 02, 2009 12:40 PM To: Jason Chee-Aloy Cc: Jim MacDougall Subject: FIT_BOD_June1009_RD_v3.PPT Hi Jason, Attached is a draft of the Board Presentation. Jim may have some additional comments.⌫ Richard 1901 June 10, 2009↵ Update: Development of Proposed Ontario Renewable Energy Feed-in Tariff Program Jason Chee-Aloy Director, Generation Procurement 1902 Updates to the Proposed Feed-In Tariff (FIT) Program (Inhmn INnu-r \ulhr-nu Summary of Significant FIT Program Changes↵ Not Responsive • Draft Price Schedule↵ – – – Removal of PV degression trigger↵ Additional differentiation for bio-energy projects↵ Aboriginal and Community adder↵ Not Responsive 1904 FIT Project Prioritization Methodology Not Responsive 1905 RESOP Termination Option Not Responsive 1906 Revised Price Schedule↵ Renewable Fuels Rooftop or Ground Capacity Range Original Proposed Revised Proposed Price (¢/kWh) Price (¢/kWh) ⇧ 1 0 kW 80.2 80.2↵ > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW 71.3 71.3↵ Rooftop Solar PV 63.5 63.5↵ Rooftop Solar PV > 500 kW 53.9 53.9↵ Ground Mounted Solar > 1 0 kW ⇧ 1 0 MW 44.3 (automatic 44.3↵ Mounted Solar PV↵ Rooftop Solar PV PV * degression)↵ On-shore Wind * Any size 13.5 13.5↵ Off-shore Wind * Any size 19.0 19.0↵ Waterpower * ⇧ 1 0 MW 12.9 13.1**↵ Waterpower * Biomass * > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW On-Farm Biogas * ⇧ 1 00 kW 14.7 19.5↵ On-Farm Biogas * 14.7 18.5↵ Biogas * > 1 00 kW ⇧ 250 kW ⇧ 500 kW > 500kW ⇧ 1 0 MW Biogas * > 10 MW 10.4 Landfill gas * ⇧ 1 0 MW 11.1 11.1↵ > 10 MW 10.3 10.3↵ Biogas * 12.2**↵ 12.2 13.8↵ 13.0↵ 14.7 16.0↵ 14.7↵ 10.4↵ * Eligible for Aboriginal or Community Adder↵ ** Contract term for water power extended to 40 years↵ All prices increase by CPI until Commercial Operation Date↵ 1907 Aboriginal and Community Adder↵ Original adder design required Aboriginal/Community project control - 50% equity interest not realistic PV↵ Technology Wind (Ground Water Biogas Biomass↵ Mounted)↵ Landfill↵ Gas↵ Maximum Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 (cents / kWh) Maximum Community Adder (cents / kWh) Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects further reflects incremental cost of debt for aboriginal equity portion Adder is available on a sliding scale, with 100% paid for controlling equity interest 1908 FIT Program Next Steps Not Responsive 1909 FIT Program Timeline Not Responsive 1910 10 Communications and Stakeholder Initiatives (lm-Inn lerr \ulh-?nnu 1911 Key Communication Initiatives Not Responsive 1912 Key Stakeholder Initiatives Not Responsive 1913 FIT Stakeholder Engagement Sessions - Statistics Not Responsive 1914 Transmission Availability Test↵ (TAT)↵ Distribution Availability Test↵ (DAT)↵ Economic Connection Test↵ (ECT)↵ 14↵ 1915 15 TAT, DAT and ECT Not Responsive 1916 16 Two aspects of TAT Not Responsive 1917 17 Sample Ontario Transmission System Display Not Responsive 1918 18 What is the Proposed Not Responsive 1919 Purpose of the ECT Not Responsive 1920 20 microFlT Program (Imam. INnu-r 1921 Not Responsive 1922 Not Responsive 1923 Not Responsive Jim MacDougall From: Jim MacDougall Sent: June-17-09 5:11 PM To: Glenna Ford; Patricia Lightburn Cc: Jill Medley; Pat Finnegan; Emay Cowx Subject: RE: FIT and microFIT FAQs Attachments: OPA FIT FAQs RHF June 11_JAM Comments pl jm.doc There was one omission on the price table , water less than 10 MW which I have added here. Jim MacDougall, P.Eng.✓ Manager, Distributed Generation Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Glenna Ford↵ Sent: June 17, 2009 3:18 PM↵ To: Patricia Lightburn↵ Cc: Jim MacDougall; Jill Medley; Pat Finnegan; Emay Cowx↵ Subject: RE: FIT and microFIT FAQs↵ Thank you – I have all I need now from both Jill and Jim! From: Patricia Lightburn↵ Sent: June 17, 2009 3:13 PM↵ To: Glenna Ford↵ Cc: Jim MacDougall; Jill Medley; Pat Finnegan; Emay Cowx↵ Subject: RE: FIT and microFIT FAQs↵ I have added comments and suggestions to the copy sent around by Jill. One point that I cleared up was about existing generators metered for example) will be eligible for FIT – – all existing non- RESOP projects under 10 kW (net- provided they meet all the FIT requirements (such as domestic content). Projects greater than 10 kW are not eligible. Patricia From: Jim MacDougall↵ Sent: Tuesday, June 16, 2009 4:32 PM↵ To: Patricia Lightburn↵ Subject: FW: FIT and microFIT FAQs↵ Jim MacDougall , P.Eng.✓ Manager, Distributed Generation Electricity Resources 1925 Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Jill Medley↵ Sent: June 16, 2009 3:53 PM↵ To: Glenna Ford; Jim MacDougall↵ Cc: Emay Cowx; Pat Finnegan; Sheri Bizarro; Cindy Roks↵ Subject: RE: FIT and microFIT FAQs↵ Glenna/Jim - see the attached for my recommended changes and comments. Jim - I suggest you start with these documents and add your changes and comments to this as I have identified a few comments where we need your program knowledge to confirm the facts.⇠ Thanks...Jill From: Glenna Ford↵ Sent: Fri 6/12/2009 1:36 PM↵ To: Jill Medley; Jim MacDougall↵ Cc: Emay Cowx; Pat Finnegan↵ Subject: FIT and microFIT FAQs↵ Jill and Jim: Please find attached the latest FAQs for the FIT and microFIT website for your review and comment as soon as possible. The documents have been edited by Russell Felton and still include a number of comments made by Mark Dodick in late May – please focus on the substantive comments from Mark and ignore those that are editorial in nature as communications will be addressing those shortly. Our primary goal is to ensure that the responses are clear and accurate. Many thanks. Glenna Glenna Ford✓ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 1926 OPA FIT Program Q&As RHF June 11.doc Q & As re FIT Program From POV of Prospective Applicant Prepared by R. Felton, June 11, 2009 General Questions: GEA and FIT Q. What is the Green Energy Act about? Ontario’s Green Energy and Green Economy Act, 2009 is also known as the Green Energy Act or “GEA.” The legislation, and the expected regulatory changes and policies that would flow from it, include a range of measures intended to foster a culture of conservation and encourage the development of renewable energy projects.It is intended to stimulate the green energy sector in Ontario, in order to attract new investment, create green jobs and provide clean renewable power to Ontario. Specifically, it will: Spark growth in renewable sources of energy such as wind, solar, hydro, biomass and biogas in Ontario. Create the potential for greater household savings by introducing new conservation measures across the province. Create 50,000 jobs for Ontarians in the first three years. Contribute towards climate change objectives Q. What are the major components of the Green Energy Act? The primary goal of the GEA is to further enable and promote energy conservation and renewable energy through a variety of mechanisms such as the renewable energy Feed-in Tariff Program, the Renewable Energy Facilitation Office, a streamlined environmental approval process and aggressive new conservation targets. Q. Where can I find out more information about the GEA? The Ministry of Energy and Infrastructure has information on its website about all aspects of the GEA: www.mei.gov.on.ca. Q. What is a Feed-in-Tariff (FIT) and how does it work? A Feed-In-Tariff (FIT) Program is a simpler way to contract for renewable energy generation. It is simpler because of standardized program rules and standardized contracts, including standardized prices. Feed-in tariffs refer to the specific prices paid to renewable energy suppliers for the electricity produced by the generating facility. The prices are set at levels and for a period that aims to provide a reasonable return on investment and is differentiated by both the size and technology of the generator. lessons learned in several European countries and other jurisdictions, it has been specifically tailored to the unique Ontario’s FIT Program is the first of its kind in North America. While it incorporates needs of Ontario’s electricity system and situation. For more information on the program please visit the OPA’s website at: www.powerauthority.on.ca/fit. Q. What are the key features of Ontario’s Feed-in-Tariff Program? Ontario’s FIT program has a number of key features. It: provides a simpler way to contract for generation FIT FAQs Version 2b 12/06/2009 1927 2 is open to various renewable energy technologies (e.g., wind, waterpower, solar and bioenergy technologies) allows all types of generators, from homeowners to private developers, to participate has different prices for different technologies and project sizes has prices that cover total project costs and provide a reasonable rate of return over a longterm contract (typically 20 years – waterpower contracts will be for 40 years) provides incentives for First Nation, Métis and community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows generators to connect to the grid Q. Is the OPA responsible for electricity procurement under the FIT Program? Yes. The OPA is responsible for administering the FIT Program and microFIT Program. All contracts awarded through the FIT Program will require the developer to get appropriate approvals through the new environmental permitting process as well as from their connection authority, such as the Local Distribution Company (LDC), or the Independent Electricity System Operator (IESO) The government has established a new Renewable Energy Facilitation Office (REFO) to assist developers as they go through the required approvals and permitting processes. Q. Will applications for the FIT program have to be approved? Yes, there is an approval process designed to help a project successfully achieve a contract. Standard rules will be used to assess each project and determine when a project can be awarded a contract. Standard rules, contracts and pricing help to ensure that the process is efficient and accessible to all types of generators Please visit our website for eligibility rules and application information at: www.powerauthority.on.ca/fit. Q. Over what period of time will the tariffs run? Most contracts will be for 20 years – waterpower contracts will be for 40 years. Q. Are there grants or loans for Ontario homeowners who want to participate in a program offered3 under the Green Energy Act ? The GEA enables the Ministry of Energy and Infrastructure (MEI) to make grants and loans available to encourage energy conservation and renewable energy projects. We encourage you to contact the MEI website at www.mei.gov.on.ca to learn more about their plans. Q. Where can I find more information about the FIT program? Information is posted to the OPA website at www.powerauthority.on.ca/fit. FIT Eligibility/Application Questions Q. Who can apply for a Feed-in-Tariff contract? How do you qualify? The FIT Program is designed to be open to a variety of generators, projects sizes and renewable fuel types. Anyone from a homeowner to a commercial developer can apply to the program. The principle requirement is that the project is located in Ontario and is fuelled by a renewable resource such as wind, solar, water, biomass and biogas. Small projects less than 10 kilowatts will apply under the microFIT Program, which provides simple, streamlined access to the FIT Program. FIT FAQs Version of 28/05/2009 1928 3 Incremental projects (additions to existing facilities) may be eligible provided they use the same renewable energy source. However, only the incremental generation will be eligible for FIT payments. Complete eligibility rules are posted on the OPA website at: www.powerauthority.on.ca/fit Q. What types of renewable energy projects are eligible under the FIT Program? Biogas, biomass, landfill gas, solar photovoltaic (solar PV), waterpower and onshore and offshore wind projects are eligible. Q. How will the process work? How can I apply? The specific process for applying to the FIT program is outlined in the information package and on our website at: www.powerauthority.on.ca/fit. You will submit you application online using the form provided on the website. Documentation supporting your application will be required in order to apply. The OPA will communicate further steps in the process via e-mail. Q. Are there any fees for applying? There is no application fee for small projects less than 10 kilowatts, such as residential rooftop solar PV projects. For projects larger than 10 kilowatts, there is a non-refundable application fee that corresponds to the size of the project. The larger the project, the larger the application fee. There is a $500.00 minimum and $5000.00 maximum. For details on the fee requirements, see the FIT Program Rules. An Application Security that varies according to technology and project size is also required for projects larger than 10 kilowatts. The level of security also depends on whether the application is in respect of an Aboriginal or community-based project. For the security payment schedule, see the FIT Program Rules. The application security will be refunded by the OPA upon execution of the FIT Contract and payment of a Completion and Performance Security, which will be refunded on successful completion of the project. The security payments are intended to give the OPA and electricity system planners some assurance that proposed projects will be brought into production. Q. What areas of the province can participate in the FIT program? All areas of the province that are connected to the IESO grid can participate.. A plan for expanding transmission and distribution will address the connection requirements for additional renewable energy projects under the FIT Program. The Bruce-Milton expansion will relieve transmission constraints in Southern Ontario, permitting additional contracting for renewable energy in that region. Plans to expand transmission and distribution will enable additional contracting for renewable energy in Northern Ontario over the next few years. Q. The draft FIT Program Rules talk about domestic content – what does this mean? Domestic content rules are currently being developed by the Ministry of Energy and Infrastructure. We expect that for some projects there will be a requirement that a minimum amount of the components of a renewable energy project are made in Ontario. Developers will have to demonstrate compliance with domestic content requirements after the contract has been executed, not when the contract is signed or when the application is made. The details of the domestic content requirements will be available before the FIT Program is launched. Q. Will there be low-interest loans available? FIT FAQs Version of 28/05/2009 1929 4 The government is expected to introduce plans to provide low-cost financing for Aboriginal, community-based and residential renewable projects. I would encourage you to contact the Ministry of Energy and Infrastructure to find out more about their plans. FIT Pricing/Payment Questions Q. If I enter into a FIT Program contract, how much will I be paid for the electricity my project produces? A range of standardized payments has been established under Ontario’s FIT Program based on OPA knowledge of typical project costs, stakeholder input and experience in other jurisdictions where FIT programs operate. These prices have been determined by project size and type of renewable energy technology being used in the project, and are intended to cover over the contract term equipment, installation and operation and maintenance costs and provide a reasonable rate of return on investment. Full details of the FIT Program payment schedule can be found at www.powerauthority.on.ca/fit. The payments, in cents per kilowatt hour of actual generation, are: Rooftop solar PV Rooftop solar PV Rooftop solar PV Ground-mounted solar PV On-shore wind Off-shore wind Waterpower Waterpower Biomass Biomass Biogas Biogas Biogas Landfill gas Landfill gas 10 kW – 250 kW 250 kW – 500 kW More than 500 kW 10 kW – 10 MW Any size Any size 10 MW or less 10 MW – 50 MW 10 MW or less More than 10 MW 500 kW or less 500 kW – 10 MW More than 10 MW 10 MW or less More than 10 MW 71.3 63.5 53.9 44.3 13.5 19.0 13.1 12.2 13.8 13.0 16.0 14.7 10.4 11.1 10.3 We encourage you to visit the OPA website for full details about the payment schedule at: www.powerauthority.on.ca/fit. Q. How are payments made? Payments under FIT program contracts are made by the OPA to projects connected to local distribution company (LDCs) through the settlement procedures of the LDC to which the project is connected. Projects connected to the high voltage transmission system are settled directly by the OPA. Once a project is built and in-service, payments will be made on a regular basis, usually monthly. Q. Is there a limit on how much I can generate and receive payments for? There is no limit on generation output. However, payments vary depending on technology and project size. A range of payments has been established based on experiences in Ontario and in other places where FIT programs operate. These payments: Are determined by project size, thetype of renewable energy technology being used in the project and under certain circumstances the project ownership. Cover building and maintenance costs and allow for a reasonable rate of return on investment Are for an approximate 20-year period (waterpower contracts will be for 40 years). FIT FAQs Version of 28/05/2009 1930 5 Were refined through an eight-week consultation process in the spring of 2009 with renewable energy stakeholders. A full payments schedule is available on the OPA website at: www.powerauthority.on.ca/fit Q. Why are the prices different for different renewable energy sources? Prices differ by type of technology and are based on the size of the project because there are different building and maintenance costs associated with different technologies and project sizes. The intent of having different prices according to project type and size is to encourage all renewable energy project types equally, despite differing levels of building and maintenance costs. Q. How do these prices compare to other places where FIT Programs are offered? Experience from other places where a FIT Program is offered served as input to the prices for Ontario. These prices take into account how much is being offered to renewable energy generators in other countries (such as Germany and Spain) but they also specifically reflect the economic and resource conditions unique to Ontario. Q. Why are solar PV prices so high? Solar PV prices are higher than prices for other technologies because of the high costs to buy solar PV systems. However, Solar PV brings good value to Ontario consumers because it can be sited at the location of the load customers and contributes needed supply during the peak load times of the day. Technologies associated with solar PV are rapidly advancing and the current market is still small. The FIT prices are designed to kick-start the solar PV industry in Ontario. With regular price reviews scheduled in coming years, the FIT price is expected to decrease to reflect technological advances and growing market supply. Q. Why is the payment for some biomass lower than for wind? In fact, while biomass projects greater than 10 MW earn less than wind, the payment for biomass under 10 MW is more than for wind. The FIT prices cover the typical costs to install the specific technology plus a reasonable rate of return. Each renewable technology has different costs and provides different amounts of energy in different timelines. Wind and biomass projects have different cost components and performance characteristicstherefore they have different prices. Q. What is cost-based generation pricing? The FIT prices are designed to allow a renewable energy project to recover the cost of building and maintaining the projects and earn a reasonable rate of return on the investment over the term of the FIT contract. Prices account for the following: Capital costs (e.g., building, acquiring land, etc), Operating and maintenance costs, Connection costs, and Reasonable rate of return. For greater clarity on how the prices were derived, please refer to the April 7 th Stakeholder Engagement Session as well as the May 12th Stakeholder Engagement Session, archived through the OPA FIT website: www.powerauthority.on.ca/fit. Q. How were the generation project size categories selected? The project sizes were selected based on the different costs associated with different size projects. OPA experience with contracting for small and large generators also served as input. Setting technology specific FIT prices helps ensure development across a range of technologies and project sizes. Almost all existing and proposed FIT programs in Europe and the United States take this approach. They set specific rates for a particular technology in relation to project size to account for variations in generation costs depending on project size. Projects are separated into size category by capacity, and the rate is set at different levels for the smaller and larger projects. FIT FAQs Version of 28/05/2009 1931 6 Q. How were the prices determined? The FIT prices were developed based on experience here in Ontario and in other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover facility construction and operating and maintenance costs and allow for a reasonable return on investment over a 20-year contract term. The FIT prices were also discussed during the OPA’s stakeholder engagement( sessions. The OPA incorporated much of the feedback from stakeholders into the price schedule. For greater clarity on how the prices were derived, please refer to the April 7 th Stakeholder Engagement Session as well as the May 12th Stakeholder Engagement Session, archived through the OPA FIT website: www.powerauthority.on.ca/fit. Q. Are the prices under the FIT program guaranteed? For how long?3 Once the contract has been signed, the generator will receive the price specified in the contract over the life of the contract term (20 years – or 40 years for water). The price will not change for the generator once the contract has been signed. FIT prices for new projects will drop over time as project costs decrease. The rules specify that the FIT Program (including prices) will be reviewed every 2 years. This means that if you sign a contract today, you will receive the price stated in your contract for the contract term. If, on the other hand, you wait for two years to apply and sign a contract, you will receive the price that is current two years from now. Q. Will prices change over time? For some technologies, the contract price for existing FIT contract holders will be escalated based on 20 percent of the customer price index. This escalation will help protect developers against inflationary pressures. Prices will be reviewed every two years to consider technological advances and other factors that may lead to cost decreases. Changes in prices will only apply to new projects, and before there’s any( price change, the OPA will give due notice. FIT Technology/Project Questions Q. What type of equipment can I install? Information about each of the renewable energy supply technologies is available on the OPA’s( website. Each of the industry associations for the eligible technologies has additional information available. Q. How much energy does an average system under the FIT program generate? There is no average generation, as the program hasn’t begun yet. Projects can be from up to 10 kW for microFIT to over 10 MW for FIT systems. The size will depend on the technology used and the project location. To calculate how much energy a particular system can produce, we recommend a tool called RETSCREEN, which was developed and is made available by Natural Resources Canada. The website is http://www.retscreen.net/ang/home.php. Another tool to calculate grid-connected photovoltaic energy systems would be the PV WATT calculator. The website is http://www.nrel.gov/rredc/pvwatts/. Q. I currently have solar panels/wind turbine, etc. on my property. Can I use this current equipment to feed into the grid and obtain a FIT contract? All existing small projects less than 10 kilowatts will be eligible to apply for the FIT Program. However, these existing projects will still need to meet the requirements set out in the Program Rules. Small projects that have a signed RESOP contract are not eligible for the FIT Program FIT FAQs Version of 28/05/2009 1932 7 Existing projects larger than 10 kilowatts that were already in operation prior to March 14, 2009 or have already signed a RESOP contract are not eligible to apply to the FIT Program. Q. Are there any environmental implications of installing solar panels, wind turbines or wires for3 the new FIT program? The Ministry of Environment and Ministry of Natural Resources will implement a new renewable energy approval process. You should contact them for more detailed information. Q. Should I worry about damage to my property (home, business, large business) with the3 installation of this renewable equipment? Who pays if it happens? As with any renewable energy project, the technology you propose using should be properly assessed whether it is appropriate for your property. To minimize risk of damage to your property, you may wish to hire a professional installer for your renewable energy system. All installations will require an inspection from the Electrical Safety Authority before they can be connected to the grid. You can contact the ESA by calling: 1-877-372-7233 or learn more by visiting their website at: www.esainspection.net Q. I bought solar panels for my house. What kind of savings can I expect? How do I tie them into the grid? The OPA has established a separate “stream” of the Fit Program, known as microFIT, for small -scale (10 kW or less) solar PV generators. You can find details about solar generation within the microFIT program on the OPA website at: www.powerauthority.on.ca/fit. For example, a homeowner in Ontario would be looking at a residential scale Solar PV project of about 3 kilowatts, which costs around $30,000. This would provide enough electricity to meet one third of their consumption and would generate about $7 per day. This payment would result in approximately $2,500 in revenue per year for the homeowner, resulting in about a 12-year payback. In order to connect you solar panels to the grid you will need to contact you local distribution company. Q. What is the OPA’s definition of biomass? Renewable biomass means organic matter that is derived from a plant and available on a renewable basis (e.g., dedicated energy crops, dedicated trees, agricultural food, manure, etc.). Renewable biomass does not include Municipal Solid Waste, peat, treated by-products of manufacturing processes, hazardous or liquid waste. Q. Why is biomass considered a green, sustainable energy source? Biomass fuel-fired generation is sustainable because it is carbon neutral over its lifecycle. Q. Will homeowners/farmers/businesses with existing solar panels or wind turbines on their property be able to use this equipment to apply for a FIT contract? All existing small projects less than 10 kilowatts will be eligible to apply for the FIT Program. However, these existing projects will still need to meet the requirements set out in the Program Rules. Small projects that have a signed RESOP contract are not eligible for the FIT Program Existing projects larger than 10 kilowatts that were already in operation prior to March 14, 2009 or have already signed a RESOP contract are not eligible to apply to the FIT Program. For more information on eligibility rules, please visit the OPA’s website www.powerauthority.on.ca Q. I’ve got some properties that would be ideal for wind generation. Can I speak to someone at the" OPA about purchasing/leasing the property to OPA for wind development? FIT FAQs Version of 28/05/2009 1933 8 The Ontario Power Authority does not purchase or lease properties for wind developments or any other form of generation. Please contact the Canadian Wind Energy Association for more details on how you can make your land available to developers. www.canwea.ca. Q. Ontario apparently has a very attractive environment for solar generation (photovoltaic). Can3 you send me some detailed information about your alternative energy program? For Solar PV projects, the OPA has developed a Feed-in Tariff Program that will provide a guaranteed rate for the electricity produced for a 20-year term [Talk about FIT]. For more details please visit our [FIT Webpage]. For additional solar PV incentives, please visit GOSOLAR at http://www.gosolarontario.ca/en/incentives_gs.asp For additional information on solar projects, please visit the Canadian Solar Industry Association at http://www.cansia.ca/. Q. Will energy generated from energy-from-waste (EFW) facilities qualify for the FIT program? . Energy-from-waste is not considered a renewable resource and does not qualify for the FIT program. Technologies eligible for the FIT Program include biomass, biogas, wind, solar and waterpower Q. Are geothermal projects part of the FIT program? Geothermal is not included in the definition for renewable fuel in the FIT Program rules, and therefore is not included in the FIT Program. Geothermal resources for electricity production are limited in the province. Options for encouraging geothermal may be explored in the future. Q. Does the OPA have a list of contractors who are certified or are acceptable to the OPA for3 installation of these systems? The OPA does not have a list of approved installers. We encourage proponents to contact the relevant industry association for each of the eligible technologies. You can find a list with their website addresses on the OPA’s FIT website. Q.Do I have to install a system that has been approved by the OPA to qualify for a FIT payment? If3 so, how do I determine which systems qualify? The OPA does not “approve” systems. However, all generating facilities must receive approval by the( Electricity Safety Authority (ESA) and the relevant local distribution company, before they are connected to the grid. You can contact the ESA by calling: 1-877-372-7233 or learn more by visiting their website at: www.esainspection.net Q. Will any local permits be required for a renewable project? The Ministry of Environment is developing the requirements for a new permit called the Renewable Energy Approval (REA) and will also be responsible for granting these approvals. For many projects municipal building code permits will also be required. Local permitting processes are expected to be replaced by the REA requirement. I would encourage you to contact the Ministry of the Environment to find out more about their plans. Q. Is there a step-by-step procedure to follow from start to finish for homeowners and small3 business persons to help implement a renewable energy project? Yes. Material to assist developers, homeowners and small businesses understand the rules and application process is on the OPA FIT website. In addition, projects less than 10 kW will qualify for a simplified version of the FIT program – called microFIT – which will provide a streamlined process for issuing contracts. Connection Questions FIT FAQs Version of 28/05/2009 1934 9 Q. How will the electricity get from my renewable energy facility to the grid? Your renewable energy projects will be connected to the grid through an electricity meter that will be different from the meter that measures your consumption. This meter will allow your local distributor to measure the electricity you generate and pay you accordingly. Successful implementation of a FIT Program will require changes across the energy sector that enable renewable energy to be brought into service more quickly and efficiently. The Ontario Energy Board (OEB), the Independent Electricity System Operator (IESO) and transmitters and distributors are working together to bring more renewable electricity generation online in Ontario. The OPA as established a simplified process for micro-scale projects through the microFIT Program. Full program details including connection information are available on the OPA website at: www.powerauthority.on.ca/fit. Q. Who is responsible for getting the electricity to the grid? You are responsible for the cost of the connection necessary to get your electricity from you generation project to the distribution or transmission grid. The Ontario Energy Board is currently reviewing it’s policies regarding costs related to connecting( projects. Connection charges and costs for grid upgrades are being reviewed to determine how much the generator will have to pay to connect to the grid. Full program details including connection information are available on the OPA website www.powerauthority.on.ca/fit. Q. Is there enough transmission and/or distribution capacity to connect all proposed renewable3 energy supply projects? In some areas of the province transmission and distribution capacity is limited or not available at this time. Additional transmission and distribution capacity will be developed to enable connection of additional renewable energy supply under the FIT Program. Q. What if my project can’t be connected right away? If your project qualifies under FIT Program requirements, it will be subjected to an “economic( connection test” to ensure that the costs of connection, which will ultimately be borne by ratepayers,( are reasonable. If so, you will have the option of having your application placed in a “FIT production( line.” This means that when connection room becomes available, it will be allocated to projects in the FIT production line in the order of the OPA time stamp on the applications. If not, it may be placed in transmission assessment test and economic connection test. If you choose to withdraw your application during this period your application security will be refunded and your OPA time stamp forfeited. a “FIT reserve,” which means it will be reassessed under the next scheduled These provisions are spelled out in detail in the FIT Program Rules. Q. What if I don’t generate any power and I need to take power from the local distribution" company? All projects that are connected to the system of the local distribution company will have back up power available to them. . For load embedded projects, any period of time that you do not produce power, or do not produce enough power to meet your own demand, you will be able to meet your demand by purchasing power from your local distribution power. Q. What are the implications of FIT to Smart Meters? Do they work together? Yes, they combine to enhance the overall efficiency of Ontario’s electricity system. The Feed -in Tariff Program is designed to encourage and promote greater use of renewable energy sources (wind, FIT FAQs Version of 28/05/2009 1935 10 waterpower, biomass, biogas, bio-fuel, landfill gas and solar). The Smart Meter records the total electricity consumption by hour, as compared to the old-style metre which could only measure total electricity used between meter readings. This means different prices can be applied at different times of the day. The two initiatives will work together to promote a change in how we generate and when we use electricity resulting in a positive impact on Ontario’s climate change strategy. For additional information on smart meters, please visit the government of Ontario’s website at( http://www.smartmetersontario.ca. First Nations Questions Q. Why are First Nations and Métis peoples given special—perhaps preferential⇥attention in the3 FIT program? First Nations and Metis peoples, along with community power projects, are treated differently than other projects because these projects have additional barriers and higher project costs than other projects driven by commercial developers. As such, an additional price incentive is available to these groups to help ensure that their projects are financially viable. Providing additional incentives and support mechanisms is intended to help ‘level the playing field’ for groups that would otherwise be( excluded from developing renewable energy projects. Additionally, adopting this type of electricity production will make it possible for First Nations and Métis peoples to reduce or eliminate their reliance on expensive and highly polluting diesel generation. This benefits all Ontario as it can positively impact climate change. FIT FAQs Version of 28/05/2009 1936 Peter Huang↵ From: Peter Huang⌥ Sent: July-07-09 1:03 PM⌥ To: Jim MacDougall; Travis Lusney⌥ Cc: Patricia Lightburn⌥ Subject: RE: fit module⌥ Attachments: FIT_module_for_July8.ppt⌥ Hi Jim,⌥ Attached here is the file you provided with slides 17 - 24 replaced with a portion of the connection assessment slides we prepared. They are very similar in content; we just added a few more slides to it with more details. Now the connection assessment portion covers slides 17 - 31. Travis and I can speak to these slides when it's the connection portion.⌥ Please let me know if you notice any coordination issues.⌥ Thank you Jim!⌥ Peter⌥ ----- Original Message ----From: Jim MacDougall⌥ Sent: July 7, 2009 11:50 AM⌥ To: Jim MacDougall; Peter Huang; Travis Lusney⌥ Cc: Patricia Lightburn⌥ Subject: RE: fit module⌥ Let us know what deck you want to use so we can integrate it well into the slides for our slot.⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto, ON M5H 1T1, Canada⌥ tel 416.969.6415⌥ ----- Original Message ----From: Jim MacDougall⌥ Sent: July 6, 2009 9:10 PM⌥ To: Peter Huang; Travis Lusney⌥ Subject: Fw: fit module⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Ontario Power Authority⌥ 416 969 6415⌥ Sent from my BB⌥ ----- Original Message ----From: Patricia Lightburn⌥ To: Jim MacDougall⌥ Sent: Mon Jul 06 13:57:07 2009⌥ 1937 Subject: fit module⌥ This is draft still …⇥ Still time for comments and review!⌥ Patricia Lightburn⌥ Analyst, Distributed Generation⌥ Ontario Power Authority⌥ 120 Adelaide Street West⌥ Suite 1600⌥ Toronto ON M5H 1T1⌥ 416 - 969 - 6267⌥ patricia.lightburn@powerauthority.on.ca < mailto:patricia.lightburn@powerauthority.on.ca >⌥ 1938 Module 4 FIT Program (Inmn?u . 1939 Module 4 - FIT Program Not Responsive 1940 Module 4 – FIT Program⌘ Not Responsive d. FIT Price Schedule⇥ i. On peak production⇥ ii. Aboriginal and Community Projects⇥ Not Responsive 3⇥ 1941 I ntroduction to FIT Program⌘ What is a FIT Program?⌘ • Generators of renewable energy to large developers – from homeowners⇥ – are paid a reasonable price for the electricity they produce over the term of the⇥ contract⇥ • Allows generators to recover expected cost of the⇥ investment plus a reasonable rate of return⇥ A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 4⇥ 1942 Introduction to FIT Program Not Responsive 1943 Introduction to FIT Program Not Responsive 1 944 FIT vs. microFlT Not Responsive 1945 Not Responsive PPR 1946 Eligibility Criteria Not Responsive 0'3? 1947 Eligibility Criteria⌘ • Projects must be:⇥ – Fueled by a renewable fuel source (more than one⇥ permissible for a single project, but lowest price⇥ applies)⇥ – Geographically located in Ontario and electrically⇥ connected to the IESO Controlled Grid⇥ – A new project or an addition of incremental capacity to⇥ an existing project⇥ • – Only the incremental capacity is eligible⇥ Connected to a distribution system, the transmission⇥ system or connected through a customer (i.e., behindthe-meter)⇥ 10⇥ 10 1948 11 Contract Prerequisites Not Responsive 1949 12 Contract Prerequisites Not Responsive 1 950 13 Driving Grid Expansion Not Responsive 1951 14 Driving Grid Expansion Not Responsive 1 952 15 FIT Application Process Simplified Summary (NTD: 2 Not Responsive 1 953 Not Responsive 17 17 Purpose of TAT DAT Not Responsive 1 955 18 TAT DAT Not Responsive 1 956 19 Transmission Availability Test (TAT) Not Responsive 1 957 20 Distribution Availability Test (DAT) Not Responsive 1 958 21 Outcome of the TAT DAT Not Responsive 0'3? 1 959 22 22 The Economic Connection Test (ECT) Not Responsive 1960 23 Purpose of the ECT Not Responsive 1961 24 The Economic Connection Test Not Responsive 1962 25 ECT Process for Enabler Facilities Not Responsive 1963 26 ECT Process for Enablers Not Responsive 1 964 27 27 ECT Process for Network Upgrades Not Responsive 1965 28 28 ECT Process for Distribution Assessment Not Responsive 1966 29 29 FIT Production Line - System Upgrades Not Responsive 1967 30 3O FIT Reserve Information for Future Planning Not Responsive 0'3? 1968 31 31 Overall Process Not Responsive 1969 32 Post FIT Contract Requirements Not Responsive 0'3? 1970 33 Post FIT Contract: Project Development Not Responsive 1971 34 Post FIT Contract: Project Development Not Responsive 0'3? 1972 35 Post FIT Contract: Project Development Not Responsive 1973 36 Post FIT Contract: Project Development Not Responsive 1 974 37 Contract Management and Settlement Not Responsive 1975 Draft FIT Price Schedule (May 1 5, 2009)⌘ Renewable Fuels Capacity Range Proposed Price⌘ (¢/kWh)⌘ Rooftop or Ground Mounted Solar PV 71.3⇥ Rooftop Solar PV ⇧ 1 0 kW > 1 0 kW ⇧ 250 kW > 250 kW ⇧ 500 kW Rooftop Solar PV > 500 kW 53.9⇥ Ground Mounted Solar PV* > 1 0 kW ⇧ 1 0 MW 44.3⇥ On-shore Wind* Any size 13.5⇥ Off-shore Wind* Any size 19.0⇥ Waterpower * Biomass * ⇧ 1 0 MW > 1 0 MW ⇧ 50 MW ⇧ 1 0 MW Biomass* > 10 MW 13.0⇥ Biogas * 16.0⇥ Biogas * ⇧ 500 kW > 500kW ⇧ 1 0 MW 14.7⇥ Biogas * > 10 MW 10.4⇥ Landfill gas * ⇧ 1 0 MW 11.1⇥ > 10 MW 10.3⇥ Rooftop Solar PV Waterpower * 80.2⇥ 63.5⇥ 13.1**⇥ 12.2**⇥ 13.8⇥ *Eligible for Aboriginal or Community Adder⇥ 38⇥ 38 **Contract term for water power extended to 40 years⇥ 1976 Incenting On-peak Production⌘ • Technologies that are not intermittent (i.e., dispatchable)⇥ will be encouraged to shift production to on-peak periods when the electricity is most needed⇥ – – • Waterpower⇥ Bio-energy⇥ 35% higher from 11am to 7pm on business days, and a 10%⇥ lower price during off-peak hours.⇥ – Projects will earn the posted FIT price multiplied by:⇥ • • • 0.9 for off-peak periods⇥ 1.35 for on-peak periods⇥ Projects that operate 24 X 7 all year will earn the same⇥ total revenue as if they were earning the posted FIT price⇥ 39⇥ 39 1977 Aboriginal Projects⌘ • Minister’s directive power on FIT includes goals on" participation by Aboriginal peoples⇥ • • Encouraging Aboriginal participation in FIT • Address additional challenges faced by Aboriginal projects⇥ • Price adder for Aboriginal projects (in addition to⇥ standard FIT prices)⇥ • Sliding scale for price adder proportional to Aboriginal interest in project⇥ • FIT rules (reduced security requirements)⇥ Loan guarantees (Ontario Financing Authority)⇥ 40⇥ 1978 Community Participation⌘ • Minister may direct OPA to establish initiatives to⇥ facilitate participation by community groups in the⇥ electricity sector⇥ • Community participation in FIT (similar to Aboriginal⇥ projects)⇥ • • Price adder⇥ FIT rules 41⇥ 1979 Aboriginal and Community Project Adder⌘ • Varying adder in proportion to % of equity ownership by⇥ Aboriginal or Community Group, for example:⇥ – – – – • 50+% » 100% of price adder⇥ 40% » 80% of price adder⇥ 25% » 50% of price adder⇥ 10% » 20% of price adder (minimum level required)⇥ Rationale⇥ – Stakeholders suggest that many projects likely to be structured⇥ as partnerships⇥ – Encourages partnerships with local Aboriginal and Community⇥ members⇥ – Encourages Aboriginal and Community partners to maximize⇥ their equity share⇥ 42⇥ 42 1980 Aboriginal and Community Project Adder⌘ PV⌘ Technology Wind (Ground Water Biogas Biomass⌘ Landfill⌘ Mounted)⌘ Gas⌘ Maximum⌘ Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6⌘ 1.0 1.0 0.6 0.4 0.4 0.4⌘ (cents / kWh)⌘ Maximum⌘ Community Adder (cents / kWh)⌘ Adder for Aboriginal and Community projects reflects 10% incremental capital costs⌘ Adder for Aboriginal projects reflects incremental cost of debt financing for equity portion⌘ Adder is available on a sliding scale based on equity interest⌘ 43⇥ 43 1981 Aboriginal and Community Project Adder⌘ • Aboriginal and Community Projects are expected to⇥ incur higher costs for equipment and construction⇥ – • No bulk purchasing power⇥ Adder calculated in order to compensate for a portion⇥ of these additional costs⇥ • Adder levelized across technologies in relation to⇥ capacity factor and installed MW⇥ • Aboriginal groups are expected to borrow in order to⇥ access funds for an equity share of project⇥ • These incremental borrowing costs are incorporated⇥ into the Aboriginal adder⇥ 44⇥ 44 1982 45 Program Review Not Responsive 1983 Richard Duffy From: Richard Duffy Sent: July-13-09 10:05 AM To: Sylvie Doucet Subject: FW: Key Messages and Q&As for LDC event Attachments: LDC FIT FAQs June 30-09 Final.doc; Key Messages--FIT Launch Period DRAFT FOUR.doc FYI⌅ From: Tim Taylor⌦ Sent: Friday, July 10, 2009 2:54 PM⌦ To: 'Cross, Annamaria (MEI'; 'Remtulla, Faruq (MEI'⌦ Cc: Colin Andersen; Ben Chin ; Jason Chee-Aloy; Emay Cowx; Richard Duffy⌦ Subject: Key Messages and Q&As for LDC event⌦ Annamaria...I've attached two sets of messaging that will be helpful for the LDC meeting: 1. FAQs developed to respond to LDC technical questions. These were prepared as a result of our ongoing dialogue with the LDCs; 2. Broader FIT messages that go beyond LDC interests. I hope these help. Timothy N. Taylor Manager, Media and Public Relations 416 -969 -6353 www.powerauthority.on.ca tim.taylor@powerauthority.on.ca 1984 DRAFT THREE Key Messages & Reactive Questions and Answers Feed-in Tariff—Launch Period! June 22, 2009 Overall Key Messages Not Responsive On Financial & Payment Related Matters FIT prices differ based on project size and type of renewable energy technology; they! cover costs plus a reasonable rate of return. They’re intended to stimulate development⇡ of renewable energy projects, and they reflect experience in Ontario and from other! jurisdictions. 1985 2 Not Responsive Issues Focused Q&A RESOP Matters & Conversion to FIT Q. There used to be an OPA program called RESOP – Renewable Energy% Standard Offer Program – how is this FIT program different? The Ontario Power Authority’s RESOP program was designed to promote small -scale! renewables of less than 10 MW. The new FIT program includes projects greater than 10! MW, and will provide different prices based on the type of technology and the project! size. Not Responsive 1986 3 Not Responsive Financial & Payment Related Matters Q. Why doesn’t the OPA provide any grants or loans to support FIT? FIT prices have been established at levels that provide a reasonable rate of return to developers and homeowners within a 20-year period (40 for waterpower). This is an incentive in itself.! The Green Energy Act also enables the Ministry of Energy and Infrastructure (MEI) to make grants and loans available to encourage energy conservation and renewable! energy projects. It’s therefore unnecessary for the OPA to provide them. Q. Is there a limit on how much some generation can produce and receive payments for? There is no limit on generation output. However, payments vary depending on technology and project size. A range of payments has been established based on experiences in Ontario and in other places where FIT programs operate. A full payment! schedule is available on the OPA website at: www.powerauthority.on.ca/fit Q. Why pay more for type of technology and by size of project—isn’t that unfair? There are different costs associated with different technologies and project sizes. Prices! differ based on type of technology and size with the specific goal of being fair. Q. What formula was used to determine the prices for FIT?% Prices were developed based on experience in Ontario and in other jurisdictions. They! differ based on project size and type of renewable energy technology. They cover! facility construction. operations and maintenance costs and allow for a reasonable! return on investment over a 20-year contract term (40 years for waterpower). They were! discussed at length during the OPA’s stakeholder engagement sessions held last spring! and much of this feedback was incorporated into the price schedule. Q. Are prices fixed over time—won’t that be a disincentive to future participation ?% Changes in prices will only apply to new projects, and before there’s any price change,⇡ the OPA will give due notice. The OPA is committed to maximizing the development of! renewable energy sources in a cost-effective way to ensure that electricity prices remain! affordable for Ontario consumers. For some technologies, the price for FIT contract holders will be increase annually! based on a formula derived using the consumer price index. This escalation will help! protect developers against inflationary pressures. Prices will be reviewed every two 1987 4 years to consider technological advances and other factors that may lead to cost! decreases. Q. How do Ontario’s FIT prices compare with other places these programs are% offered—are we overpaying because we are behind other jurisdiction?% Experience from other places where a FIT Program is offered served as input to the! prices for Ontario. They also specifically reflect the economic and resource conditions! unique to Ontario. The OPA is committed to maximizing the developing of renewable! energy sources in a cost-effective way to ensure that electricity prices remain affordable! for Ontario consumers. Q. How can you justify such high solar PV prices?% Solar PV prices are higher than for other technologies because of the high costs to buy! solar PV systems. Technologies associated with solar PV are rapidly advancing and the market is small. The FIT prices are designed to kick-start the solar PV industry in! Ontario. With regular price reviews scheduled in coming years, the FIT prices are! expected to decrease to reflect technological advances and growing market supply. Q. How do you justify paying up to 80.2 cents for solar and selling it for five cents? FIT prices cover costs plus a reasonable rate of return for the generation facility.! They’re intended to stimulate development of renewable energy projects, from a variety! of technologies and in a variety of sizes. The price for micro-scale solar PV (photovoltaic) is the highest because this technology costs the most to install. These small solar projects are expected to represent a very small portion of all FIT renewable! energy projects. The OPA will review FIT prices on a regular basis. The costs for! installing solar PV systems are expected to decrease as the technology improves, and this change will be reflected in updated FIT price schedules. Q. How do you justify that the payment for some biomass is lower than for wind? In fact, while biomass projects greater than 10 MW earn less than wind, the payment for! biomass under 10 MW is more than for wind. FIT prices cover the typical costs to install! the specific technology plus a reasonable rate of return. Each renewable technology! has different costs and provides different amounts of energy in different timelines. Wind and biomass projects have different cost components and performance characteristics,! so they have different prices. Q. What kind of impact will these contract prices have on electricity rates to% consumers? The impact on rates will depend on how may renewable energy projects come into service under the FIT program and the types of technologies used. All renewable! technologies will contribute to cleaner sources of electricity for the province, and will! support Ontario’s climate change strategy. Q. Won’t FIT contract holders be getting excessive returns at the expense of% ratepayers?% 1988 5 The prices include a reasonable rate of return for the developer, given typical project! costs. The OPA will regularly review the price schedule based on new cost inputs as! technologies improve and will revise FIT prices to ensure that the FIT prices are at a reasonable level and provide value for Ontario taxpayers. Not Responsive 1989 Not Responsive Not Responsive Not Responsive 1992 FIT & microFIT Programs FAQs for LDCs June 30, 2009 Not Responsive Page 1 of 9⌦ Final June 30, 2009⌦ 1993 Q. Can one customer rent property from another customer to install a FIT or⇡ microFIT project? R. This is possible. The account would have to be connected in parallel with a separate⌫ meter to differentiate between the generator (the lessee) and the load customer (the⌫ lessor). Also, if there is already a project on the same property with or applying for a⌫ FIT or microFIT contract you would have to take into consideration the project size⌫ and type – if together they are over 10 kW it could trigger a connection impact⌫ assessment (CIA) and the price would be settled at the lower technology rate for the⌫ total project size. Not Responsive Page 2 of 9⌦ Final June 30, 2009⌦ 1994 Not Responsive Page 3 of 9 Final June 30, 2009 1995 Not Responsive Q. Will there be changes in pricing over time that would reflect uptake? R. Yes, uptake could trigger new prices. In addition, there is an automatic review of⌫ prices every two years. Q. What safeguards exist to prevent a proponent from breaking a larger project⇡ into multiple smaller projects to get a higher rate. R. Neither the FIT nor microFIT programs will allow that. If there is a series of projects⌫ part of a larger project, then all will get the lowest price. Not Responsive Page 4 of 9⌦ Final June 30, 2009⌦ 1996 Not Responsive Pricing: FIT and microFIT Q. Are FIT and microFIT contracts take or pay? Will there be provisions for a⇡ global oversupply adjustment? Page 5 of 9⌦ Final June 30, 2009⌦ 1997 R. In some circumstances the contract has an element of take or pay as a way to help⌫ balance demand and supply. There are three circumstances where the contract will⌫ afford a negative payment when there are certain triggers in place. If all are met, the⌫ contract would pay out on the forecast production. Q. Can a generator use energy storage devices to firm up supply?⇡ R. There is nothing stopping a generator from using energy storage devices, however, it⌫ must be made clear that the OPA will not give compensation for any part of an energy⌫ storage facility. The FIT and microFIT prices are for the primary fuel source. Q. Can a project be on non reserve lands and still receive the Aboriginal adder? R. Yes. Q. If one site has a wind project and a solar project, then is it correct that they⇡ would receive the lower payment for wind? R. Yes, if they are on the same meter. If the projects are on the same site and have two⌫ separate meters, then there would be two separate contracts at two separate prices. Not Responsive Q. How will the FIT program manage the evolution of technical and other⇡ requirements as the system evolves? R. We recognize the system is dynamic and things will change. Who bears those costs and risks will be very important. The OEB is reviewing the cost allocation⌫ methodologies for FIT and microFIT contracts. There will also be a review every⌫ Page 6 of 9⌦ Final June 30, 2009⌦ 1998 two years of the pricing and the contract includes some mechanisms which talk to⌫ changes in regulations and laws. Not Responsive Page 7 of 9⌦ Final June 30, 2009⌦ 1999 Not Responsive Page 8 of 9 Final June 30, 2009 2000 Q. If a generator uses an energy storage device, to which side of the meter does the⇡ storage device get connected? R. The OPA is in discussions with the ESA as to how this is to be connected. However,⌫ the storage device will not, under any circumstances, be eligible to receive FIT prices. Not Responsive Page 9 of 9⌦ Final June 30, 2009⌦ 2001 Sarah Simmons↵ From: Sarah Simmons⇡ Sent: July-20-09 1:17 PM⇡ To: Patricia Lightburn⇡ Subject: Emailing: July 7 presentation to Energy Round Table.ppt⇡ Attachments: July 7 presentation to Energy Round Table.ppt⇡ <>⇡ The message is ready to be sent with the following file or link attachments:⇡ July 7 presentation to Energy Round Table.ppt⇡ Note: To protect against computer viruses, e - mail programs may prevent sending or receiving certain types of file attachments. Check your e - mail security settings to determine how attachments are handled.⇡ 2002 ONTARIO POWER AUTHORITY July 7, 2009 2003 Presentation Overview • Introduction to the FIT Program↵ – – – – • • • Eligibility↵ Contract prerequisites↵ Application↵ Contract Management↵ FIT Price Schedule↵ Program Launch↵ Next Steps↵ 2↵ 2004 I ntroduction to FIT Programs✓ What is a FIT Program?◆ • Generators of renewable energy to large developers – from homeowners↵ – are paid a reasonable price for the electricity they produce over the term of the↵ contract↵ • Allows generators to recover expected cost of the↵ investment plus a reasonable rate of return↵ A FIT Program provides a simple, standardized⌫ procurement method to contract for renewable⌫ energy supply technologies⌫ 3↵ 2005 Introduction to FIT Programs✓ Standardized features of the FIT Program◆ • Open to various renewable energy supply technologies – – – – Wind↵ Waterpower↵ Solar PV↵ Biomass technologies↵ •⌅ Different prices for different technologies and project sizes↵ •⌅ Long-term contracts↵ •⌅ Prices that aim to cover total project costs and provide a↵ reasonable rate of return over the contract term↵ •⌅ Opportunities for promoting community-based and Aboriginal↵ projects↵ • Transmitters and distributors must provide priority connection↵ access to renewable energy facilities that meet relevant regulatory↵ requirements↵ 4↵ 2006 Introduction to FIT Programs Not Responsive 2007 Eligibility Criteria Not Responsive PPR 2008 Eligibility Criteria Not Responsive PPR 2009 Contract Prerequisites Not Responsive PPR 2010 Contract Prerequisites Not Responsive PPR 2011 10 Driving Grid Expansion Not Responsive PPR 2012 FIT Application Process Not Responsive 12 Transmission Availability Test (TAT) Not Responsive 2014 13 Distribution Availability Test (DAT) Not Responsive 2015 14 Economic Connection Test Not Responsive 2016 15 FIT Production Line Not Responsive 2017 16 FIT Reserve Not Responsive 2018 17 Post FIT Contract Steps Not Responsive 2019 18 Post FIT Contract: Project Development Not Responsive 2020 19 Post FIT Contract: Project Development Not Responsive 2021 20 Contract Management and Settlement Not Responsive 2022 21 Contract Management and Settlement Not Responsive 2023 Draft FIT Price Schedule Renewable Fuels Capacity Range Proposed Price Escalation◆ (¢/kWh) Percentage◆ ⌃ 1 0 kW 80.2 0%↵ 71.3 0%↵ Rooftop Solar PV > 1 0 kW ⌃ 250 kW > 250 kW ⌃ 500 kW 63.5 0%↵ Rooftop Solar PV > 500 kW 53.9 0%↵ Ground Mounted > 1 0 kW ⌃ 1 0 MW 44.3 0%↵ On-shore Wind* Any size 13.5 20%↵ Off-shore Wind* Any size 19.0 20%↵ Waterpower * ⌃ 1 0 MW 13.1** 20%↵ Waterpower * 12.2** 20%↵ Biomass * > 1 0 MW ⌃ 50 MW ⌃ 1 0 MW 13.8 20%↵ Biomass* > 10 MW 13.0 20%↵ Biogas * 16.0 20%↵ Biogas * ⌃ 500 kW > 500kW ⌃ 1 0 MW 14.7 20%↵ Biogas * > 10 MW 10.4 20%↵ Landfill gas * ⌃ 1 0 MW 11.1 20%↵ > 10 MW 10.3 20%↵ Rooftop or Ground Mounted Solar PV◆ Rooftop Solar PV Solar PV*◆ *Eligible for Aboriginal or Community Adder↵ **Contract term for water power extended to 40 years↵ 22↵ 2024 Incenting On-peak Production • Technologies that are not intermittent (i.e., dispatchable)↵ will be encouraged to shift production to on-peak periods when the electricity is most needed↵ – – • Waterpower↵ Bio-energy↵ Projects will earn the posted FIT price multiplied by:↵ – – – 0.9 for off-peak periods↵ 1.35 for on-peak periods↵ On-peak periods are 11:00 am to 7:00 pm on business↵ days↵ • Projects that operate 24 X 7 all year will earn the same↵ total revenue as if they were earning the posted FIT price↵ 23↵ 2025 Aboriginal and Community Project Adder • Rules currently require Aboriginal and Community control of↵ projects as majority equity partners↵ • Propose varying adder in proportion to % of equity ownership by↵ Aboriginal or Community Group, for example:↵ – – – – • 50+% » 100% of price adder↵ 40% » 80% of price adder↵ 25% » 50% of price adder↵ 10% » 20% of price adder (minimum level required)↵ Rationale↵ – Stakeholders suggest that many projects likely to be↵ structured as partnerships↵ – Encourages partnerships with local Aboriginal and↵ Community members↵ – Encourages Aboriginal and Community partners to maximize↵ their equity share↵ 24↵ 2026 Aboriginal and Community Adder PV↵ Technology Wind (Ground Water Biogas Biomass↵ Landfill↵ Mounted)↵ Gas↵ Maximum◆ Aboriginal Adder 1.5 1.5 0.9 0.6 0.6 0.6◆ 1.0 1.0 0.6 0.4 0.4 0.4◆ (cents / kWh)◆ Maximum◆ Community Adder (cents / kWh)◆ Adder for Aboriginal and Community projects reflects 10% incremental capital costs◆ Adder for Aboriginal projects reflects incremental cost of debt financing for equity portion◆ Adder is available on a sliding scale based on equity interest◆ 25↵ 2027 26 Program Review Not Responsive PPR 2028 Questions??? • OPA website: www.powerauthority.on.ca↵ • MEI website: www.mei.gov.on.ca↵ • OEB website: www.oeb.gov.on.ca↵ Thanks!↵ 2029 Jonathan Cheszes From: Jonathan Cheszes Sent: August-25-09 9:19 AM To: Shawn Cronkwright Subject: FW: presentation for this morning Attachments: solarand Wind pricing review 08-24-2009_V2.ppt Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Jonathan Cheszes Sent: August 25, 2009 8:00 AM To: Jonathan Cheszes Subject: presentation for this morning Jonathan Cheszes Policy Analyst Conservation Bureau P. 416- 969 - 6251 www.conservationbureau.on.ca 2030 April 7, 2009 August 25, 2009 Proposed Feed-in Tariff Price Schedule Review of FIT prices and assumptions Stakeholder Engagement – Session 4 2031 Presentation Overview • • • • • • FIT pricing derivation⌘ Solar and Wind assumptions⌘ FIT model⌘ Scenario Analysis⌘ Solar cost projections and FIT pricing review⌘ Conclusions⌘ 2032 FIT Price Derivation • Prices based on the following elements⌘ – Capital costs⌘ • Reasonable project development, construction, and⌘ equipment costs – Operating and maintenance costs⌘ • Reasonable project staffing and maintenance costs,⌘ including ongoing capital expenditures⌘ 2033 FIT Price Derivation • Prices based on the following elements⌘ – Contract term⌘ • Assumed 20-year contract term⌘ – Reasonable rate of return⌘ – Efficient project financing structure given long-term⌘ power purchase agreement with a credit-worthy⌘ counterparty⌘ 2034 FIT Price Derivation – Location and Resource • Locational-based and resource-based pricing were⌘ also considered⌘ • However, these approaches are not being initially⌘ proposed due to⌘ – Complexity of methodology⌘ – Inconsistency with existing market design⌘ • IESO-administered markets do not have locational⌘ marginal pricing – Potential pricing distortions from current approach for⌘ allocating transmission facility costs⌘ – Objective of stimulating best resource locations first 2035 FIT Price Derivation – Model Overview • Prices developed using a Discounted Cash Flow⌘ (DCF) model⌘ – • DCF models are commonly used in project finance⌘ The DCF model calculates the prices required to⌘ – – – Cover the cost of investment⌘ Cover ongoing operating expenses⌘ Earn a reasonable rate of return over a 20-year contact term⌘ 2036 FIT Price Derivation– Model Overview A seven step process was used to calculate prices⌘ (1) Annual generation output is estimated for a given⌘ project based on the project capacity and assumed⌘ capacity factor⌘ (2) Operating expenses estimated and include fuel cost,⌘ variable operation and maintenance cost, fixed⌘ operation and maintenance cost⌘ (3) Annual depreciation calculated using an appropriate⌘ capital cost allowance rate⌘ 2037 FIT Price Derivation – Model Overview (4) Operating expenses, depreciation, interest, and⌘ income taxes deducted from revenue to arrive at net income⌘ (5) Depreciation added back to net income to estimate actual cash flow⌘ (6) Capital investment, debt borrowing, and debt⌘ repayment added to calculate free cash flow for each year⌘ (7) Free cash flows are then discounted using the target⌘ return on equity⌘ 2038 FIT Price Derivation – Financing Assumptions • Financing assumptions assume that financial⌘ markets stabilize and return to conditions that are⌘ closer to historical norms ⌅ Prices are to be maintained for an extended period,⌘ so a long-term view was taken⌘ 2039 FIT Price Derivation – Financing Assumptions • Non-recourse project finance structure assumed,⌘ based on experience with RESOP⌘ • Experience indicates that this is the most efficient⌘ financing structure⌘ Variable Assumption Percent Equity 30%⌘ After Tax Return on Equity 11%⌘ Percent Debt 70%⌘ Cost of Debt 7%⌘ Income Tax Rate 30.5%⌘ 2040 FIT Price Derivation – Depreciation Assumptions • The majority of project capital costs were assumed⌘ to qualify for Class 43.2 Capital Cost Allowance⌘ treatment⌘ ⌅ Ranged from 60 to 80%, with more modular⌘ technologies (e.g., solar PV) assumed to have higher⌘ proportion of capital costs covered by Class 43.2⌘ ⌅ The remaining portion of project costs assumed to be⌘ 8% declining balance⌘ 2041 FIT Price Derivation - Solar and Wind Assumptions Solar Wind Typical Size (MW) 10 100⌘ Construction Lead 2 2⌘ Time⌘ Capacity Factor (%) 14 Capital Cost ($/kW) 4540 Fixed O&M ($/kW/yr) 15 30 (1) (1) (2) 2710 (1) 55 (3) (4) Sources: 1) Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 2) Based on actual performance in Ontario.⌘ 3) OPA analysis of various sources including Cambridge Energy Research, Black and Veatch,⌘ Energy Information Administration, and Ontario based developers⌘ 4) Energy Information Administration of the US Department of Energy, Annual Energy Outlook 2009.⌘ 2042 FIT model 2043 Scenario Analysis - Ground Mounted Solar PV • Range of reasonable assumptions could significantly improve⌘ Return on Equity.⌘ A B C⌘ 4540 4300 4400 4300⌘ 15 15 15 25⌘ Capacity Factor 14% 14% 14% 14%⌘ Percent Debt 70% 75% 80% 75%⌘ Interest Rate 7% 8% 7% 6%⌘ 11% 12% 15% 15.75%⌘ 44.3 44.4 44.1 Scenario⌘ Capital Cost Fixed O&M⌘ ($/kW/year)⌘ Return on Equity Derived FIT price (cents/kWh) Base Case⌘ 44.2 2044 Scenario Analysis –Wind • Range of reasonable assumptions could increase or maintain⌘ Return on Equity. A B C⌘ 2710 2650 2600 2710⌘ 55 55 55 55⌘ Capacity Factor 30% 31% 28% 30%⌘ Percent Debt 70% 75% 80% 80%⌘ Interest Rate 7% 8% 7% 6%⌘ 11% 12% 11% 16.5%⌘ 13.5 13.5 13.5 Scenario⌘ Capital Cost Fixed O&M⌘ ($/kW/year)⌘ Return on Equity Derived FIT price (cents/kWh) Base Case⌘ 13.5 2045 Cost Projections for Ground Mounted Solar PV Dollars per Watt installed 6.00⌘ 5.00⌘ 4.00⌘ 3.00⌘ 2.00⌘ 1.00⌘ 0.00⌘ 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026⌘ Year Source: Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 2046 Cost Trends and Pricing Review • Costs are expected to continue to fall⌘ • Ontario’s FIT does not include Solar PV price⇢ degression like Germany or Spain⌘ • FIT pricing will be updated at two year review to⌘ reflect current market prices⌘ 2047 Conclusions • FIT prices were derived to incent development of⌘ best resources first⌘ • Actual project parameters will vary and FIT pricing⌘ allows for higher returns⌘ • Pricing for both solar and wind sufficient to incent⌘ new development in Ontario⌘ 2048 Glenna Ford↵ From: Glenna Ford⇣ Sent: September-11-09 11:05 AM⇣ To: Patricia Lightburn⇣ Subject: RE: addition⇣ Can I edit this online?✏ From: Patricia Lightburn Sent: September 11, 2009 11:03 AM To: Glenna Ford Subject: addition I added some content to the bottom of the price table http://64.34.71.251/Page.asp?✏ PageID=122&ContentID=10202&SiteNodeID=1103&BL_ExpandID=✏ For your review✏ Peak/off-peak pricing⇣ Technologies that are not intermittent (i.e., dispatchable) will be encouraged to shift production to peak periods when the electricity is most needed (ex: Bio -energy, waterpower). These technologies will recieve payments that are 35 percent higher from 11am to 7pm on business days, and a 10 percent lower price during off-peak hours. Projects will earn the posted FIT price multiplied by: l 0.9 for off-peak periods l 1.35 for on -peak periods This means that if these projects were to operate 24 X 7 all year, they would earn the same total revenue as if they were earning the posted FIT price. Patricia Lightburn Analyst, Distributed Generation Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2049 Glenna Ford↵ From: Glenna Ford↵ Sent: September-11-09 11:33 AM↵ To: Patricia Lightburn↵ Subject: RE: addition↵ Oh …… ( and thanks!) From: Patricia Lightburn Sent: September 11, 2009 11:19 AM To: Glenna Ford Subject: RE: addition Fyi, I took a look at adding those questions to the aboriginal section, and it didn ’ t fit very well – I propose to leave it as is …⇧ From: Glenna Ford Sent: Friday, September 11, 2009 11:05 AM To: Patricia Lightburn Subject: RE: addition Can I edit this online? From: Patricia Lightburn Sent: September 11, 2009 11:03 AM To: Glenna Ford Subject: addition I added some content to the bottom of the price table http://64.34.71.251/Page.asp? PageID=122&ContentID=10202&SiteNodeID=1103&BL_ExpandID= For your review Peak/off-peak pricing⇣ Technologies that are not intermittent (i.e., dispatchable) will be encouraged to shift production to peak periods when the electricity is most needed (ex: Bio -energy, waterpower). These technologies will recieve payments that are 35 percent higher from 11am to 7pm on business days, and a 10 percent lower price during off-peak hours. Projects will earn the posted FIT price multiplied by: l 0.9 for off-peak periods l 1.35 for on -peak periods This means that if these projects were to operate 24 X 7 all year, they would earn the same total revenue as if they were earning the posted FIT price. Patricia Lightburn Analyst, Distributed Generation 2050 Analyst, Distributed Generation Ontario Power Authority↵ 120 Adelaide Street West↵ Suite 1600↵ Toronto ON M5H 1T1↵ 416 - 969 - 6267↵ patricia . lightburn @ powerauthority . on . ca↵ 2051 Jason Chee-Aloy From: Jason Chee-Aloy Sent: September-24-09 1:21 PM To: Electricity Resources Group Subject: FW: FIT Communications Materials Attachments: Green Energy Act Will Attract Investment Create Jobs.htm; Ontario's Ten Steps to Green Energy.htm; Ontario Makes It Easier, Faster To Grow Green Energy.htm; OPA WEB FAQs - FIT and microFIT - Sept 24th (C).doc FYI …⇥ From: Tim Taylor⌦ Sent: Thursday, September 24, 2009 1:08 PM⌦ To: OPA Executive⌦ Cc: Bani Bawa; Bob Chow; Bob Gibbons; Chuck Farmer; D. Brian Hay; Ed Nelimarkka; Elizabeth Squissato; Guy⌦ Raffaele; Jason Chee-Aloy; Joe Toneguzzo; John Zych; Kristin Jenkins; Murray Campbell; Ruth Covich; Sean Brady;⌦ Sorana Ionescu; Terry Gabriele; Vipin Prasad⌦ Subject: FIT Communications Materials⌦ Please find attached communications materials —both ours and the Ministry ’ s —that surround today ’ s FIT⇡ announcement:⇡ 1. The government ’ s news release from this morning ’ s announcement, 2. Two useful backgrounders (in addition to those noted at the bottom of the release), and 3. The OPA Frequently-Asked-Questions document prepared for use by all stakeholders and partners. The new FIT/microFIT website will go live on September 30 at http://fit.powerauthority.on.ca .⇡ However, the current site www.powerauthority.on.ca/FIT will work now and the URL will be linked to the new site on September 30.⇡ Timothy N. Taylor⇡ Manager, Media and Public Relations⇡ 416 -969 -6353⇡ www.powerauthority.on.ca⇡ tim.taylor@powerauthority.on.ca⇡ 2052 From: Ontario News [newsroom@ontario.ca]◆ Sent: September 24, 2009 10:26 AM◆ To: Tim Taylor◆ Subject: Green Energy Act Will Attract Investment, Create Jobs◆ Green Energy Act Will Attract Investment, Create Jobs⇡ September 24, 2009 Green Energy Rules Make Ontario A North American Leader⇡ New regulations introduced today will create thousands of jobs in the new green economy under Ontario's Green Energy Act. Ontario's new regulations provide a stable investment environment where companies know what the rules are -- giving them the confidence to invest in Ontario, hire workers, and produce and sell renewable energy. The major components of Ontario's Green Energy Act include: l A Feed - In - Tariff program, which allows individuals and companies to sell renewable energy -- like solar, wind, water, biomass, biogas and landfill gas -- into the grid at set rates. l Domestic content requirements, which would ensure at least 25 per cent of wind projects and 50 per cent of solar projects be produced in Ontario -- requirements for solar will increase by January 1, 2011 and wind will increase by January 1, 2012. l A streamlined approvals process and a service guarantee to bring developers greater certainty. l Regulations for setting wind turbines certain distances from houses, roadways and property lines. l A new Ontario Renewable Energy Facilitation Office -- a one - stop shop to help renewable energy projects get off the ground faster. More than 50,000 direct and indirect jobs will be created under the Act. Investments in new renewable energy projects already in place or under construction in Ontario since 2003 exceed $4 billion. QUOTES "Ontario has taken the lead in Canada and set the ground rules for doing green business. Now investors, renewable energy companies and skilled workers can really move our green economy forward." – Dalton McGuinty Premier of Ontario "Ontario wants green energy business. These regulations will help ensure industry and municipalities that jobs will be created, investment is committed and that the renewable energy industry grows across the province." – George Smitherman Deputy Premier and Minister of Energy and Infrastructure 2053 "These changes not only give us an economic advantage, they will protect our environment, combat climate change and create a healthier future for Ontarians." – John Gerretsen Minister of the Environment QUICK FACTS⇡ l l l Ontario is Canada's leading province in wind power, producing enough electricity to power more than 300,000 homes -- or a city the size of Markham. The Green Energy Act will aid Ontario's commitment to eliminate coal - fired power by 2014 -- the single largest climate change initiative in Canada. Ontario has gone from 10 turbines in 2003, to more than 670 spinning today and will have 975 by 2012. LEARN MORE⇡ l⇤ Read more about the major components of Ontario's Green Energy Act l⇤ Find out how Ontario is helping Aboriginal communities get involved in green energy l⇤ See Ontario's Ten Steps to Green Energy Questions about your subscription? Contact us. Unsubscribe from News on Demand . Visit the Newsroom. © Queen's Printer for Ontario, 2008 - 2009⇡ 2054 Ontario Skip to content Skip to local navigation Ontario.ca Français GO⌦ Search Home Newsroom Services Your Government About Ontario⌧ l⇥ For Residents⌧ l⇥ For Business⌧ l⇥ For Visitors⌧ l⇥ l⇥ Delicious⌧ l⇥ Digg⌧ l⇥ Facebook⌧ l⇥ l⇥ Print⌧ l ⇥ Accessibility⌧ Ontario Makes It Easier, Faster To Grow Green Energy September 24, 2009 9:51 AM⌧ Ontario has launched a series of bold measures to attract new investment in renewable energy projects and⌧ build a green economy that will promote the creation of 50,000 jobs over the next three years. Today's⌧ announcement completes the final four steps of Ontario's momentous "Ten Steps to Green Energy," which⌧ will create green jobs and open green energy investment opportunities throughout the province. STEP 7: Ontario has established the Renewable Energy Facilitation Office (REFO), a one-window access⌧ point to assist developers, communities and municipalities obtain information on developing renewable energy⌧ projects in Ontario, and help them navigate through the regulatory approvals necessary to bring their projects⌧ to life. STEP 8: Establishing minimum setbacks for wind turbine projects, as part of the Renewable Energy⌧ Approval (REA) process, which became law on Sept. 24, 2009. The REA is designed to ensure that⌧ 2055 Approval (REA) process, which became law on Sept. 24, 2009. The REA is designed to ensure that⌧ renewable energy projects are developed in a way that is protective of human health, the environment, and⌧ Ontario's cultural and natural heritage.⌧ STEP 9: Ontario develops domestic content requirements which would ensure at least 25 per cent of wind⌧ project costs and 50 per cent of large solar project costs come from Ontario goods and labour.⌧ Requirements for solar will increase on Jan. 1, 2011 and requirements for wind will increase on Jan. 1, 2012.⌧ STEP 10: The Green Energy Act introduces North America's first comprehensive feed -in tariff program that⌧ guarantees specific rates for energy generated from renewable sources. It is designed to encourage the⌧ development of renewable energy projects by a range of generators including Aboriginal communities,⌧ homeowners, farmers, schools, stores, factories, co -ops, offices and larger-scale commercial generators.⌧ With certainty in the rules and regulations, guarantees in prices for energy generated from renewable sources⌧ and domestic content requirements in support of the growth of new "green collar" jobs, companies will have⌧ the confidence to invest in Ontario, hire workers, and produce and sell renewable energy.⌧ Feed-in Tariff Program The Feed -in Tariff (FIT) program offers long -term price guarantees for renewable electricity generators,⌧ which will increase investor confidence and make it easier to finance projects. Ontario's FIT program will⌧ encourage billions of dollars in investment to help Ontario's energy supply mix become one of the cleanest in⌧ North America. The FIT has several key features:⌧ l allows all sizes of generators, from homeowners to large developers to participate;⌧ l has prices that are intended to cover total project costs and provide a reasonable rate of return over a⌧ 20 -year contract (40 years for waterpower);⌧ l is open to various renewable energy technologies: biogas, biomass, landfill gas, solar photovoltaic⌧ l provides incentives for Aboriginal projects;⌧ (PV), wind and waterpower;⌧ l provides incentives for community -based projects;⌧ l provides a straightforward way to obtain a contract for renewable electricity generation;⌧ l has different prices for different technologies and different project sizes; and⌧ l includes domestic content requirements.⌧ FIT payments can range from 10.3 cents per kilowatt-hour (c/kWh) for landfill gas projects larger than 10⌧ MW to 80.2 c/kWh for residential solar rooftop projects 10 kW or smaller. The FIT also includes a "price⌧ adder" for Aboriginal and community projects to encourage participation.⌧ Domestic Content Developers will be required to have a certain percentage of their project costs come from Ontario goods and⌧ labour at the time they reach commercial operation.⌧ For wind, the requirement will start at 25% and increase to 50% on Jan. 1, 2012.⌧ For micro solar PV (10 kW or smaller), the requirement will start at 40% and increase to 60% on Jan. 1,⌧ 2011.⌧ For larger solar PV, the requirement will start at 50% and increase to 60% on Jan. 1, 2011.⌧ 2056 The domestic content regulations will encourage investment, green manufacturing, construction and⌧ installation jobs in Ontario.⌧ The Ontario Power Authority will begin accepting FIT applications on Oct. 1, 2009 and expects to sign the⌧ first contracts in early December.⌧ Ontario will direct the OPA that there is to be no ground-mounted solar procurement above 100 kilowatts⌧ on class 1 and 2 or Specialty Crop Areas to provide continued protection of such lands. Some ground mounted solar procurement, up to 500 megawatts, will be allowed on Class 3 lands, allocated on a regional⌧ basis.⌧ Renewable Energy Approval (REA)⌧ The Renewable Energy Approval (REA) process becomes law today, Sept. 24, 2009, and is designed to⌧ ensure that renewable energy projects are developed in a way that is protective of human health, the⌧ environment, and Ontario's cultural and natural heritage. While the FIT program simplifies the contracts and⌧ pricing for new projects, a streamlined approvals process makes it easier to bring renewable energy projects⌧ to life.⌧ The REA:⌧ l Takes a cautious approach to setbacks and noise limits by establishing the largest setback⌧ requirements in Canada, the United States and eight European countries -- a minimum setback of 550⌧ metres for one to five wind turbines, with setbacks increasing with the number and the sound level⌧ rating of turbines⌧ l Integrates environmental approvals, providing clear provincial rules and requirements, transparent⌧ decision -making and certainty for stakeholders and proponents.⌧ l Integrates the former regulatory approval requirements, including: municipal planning approvals,⌧ Environmental Assessments, Certificates of Approval, Permissions to Take Water and other provincial⌧ approvals and permits.⌧ l Establishes consultation processes for municipalities and communities in relation to project site⌧ l Encourages Aboriginal consultation early in the process with communities identified by the Crown.⌧ l Is coordinated with other provincial approvals to ensure a streamlined approach, providing a six - requirements and local infrastructure.⌧ month service guarantee per project.⌧ Renewable Energy Facilitation Office The newly created Renewable Energy Facilitation Office (REFO) is a one-window access point for⌧ information on renewable energy project requirements, and can connect Ontarians with the appropriate⌧ resources to assist them in navigating through the approvals and Feed - in Tariff processes. The REFO functions as a source of information for renewable energy developers, communities, and⌧ municipalities, and can act as a liaison between these parties and Ontario's ministries and agencies. The⌧ REFO can assist in setting up a coordinated orientation meeting to discuss your project's requirements. This⌧ meeting can help clarify various requirements related to your renewable energy project.⌧ As an umbrella body with no regulatory responsibilities, REFO has a unique understanding of the renewable⌧ energy regime and serves to educate all its parties based on its understanding.⌧ More information 2057 Read more about Ontario's Green Energy Act⌧ For details about the Feed -in Tariff Program visit www.powerauthority.on.ca/FIT⌧ For details on the new approvals process, visit the Ministry of Environment at⌧ www.ene.gov.on.ca/en/business/green-energy⌧ To learn more about renewable energy in Ontario visit http://www.mei.gov.on.ca/en/energy/renewable/⌧ Visit the Renewable Energy Facilitation Office at http://www.mei.gov.on.ca/en/energy/renewable/index.php?⌧ page=refo_about⌧ Amy Tang, Minister's Office, 416 -327 -6747⌧ Eric Pelletier, Communications Branch, 416 -325 -1810⌧ John Karapita, Minister's Office, 416 -314 -6736⌧ Kate Jordan, Ministry of the Environment, 416-314 -6666⌧ Get News⌧ l l⇥ l Today's News⌧ Communities Topics News on Demand⌧ l Email Alerts⌧ l RSS Feeds⌧ l News Archive⌧ l News by Ministry⌧ Multimedia⌧ l Photos⌧ l Videos⌧ Find Your Local News⌧ Find Your Local News Explore Government⌧ Resources⌧ l Forms⌧ l Publications⌧ l Laws⌧ Contacts⌧ l Telephone Directory⌧ l ServiceOntario Locations⌧ 2058 ServiceOntario Locations⌧ l MPPs⌧ l Have a Question?⌧ HELP CONTACT US PRIVACY IMPORTANT NOTICES⌧ © Queen's Printer for Ontario, 2008 - 2009 - Last Modified:September 24, 2009⌧ 2059 Ontario Skip to content Skip to local navigation Ontario.ca Français GO⌦ Search Home Newsroom Services Your Government About Ontario⌧ l⇥ For Residents⌧ l⇥ For Business⌧ l⇥ For Visitors⌧ l⇥ l⇥ Delicious⌧ l⇥ Digg⌧ l⇥ Facebook⌧ l⇥ l⇥ Print⌧ l ⇥ Accessibility⌧ Ontario's Ten Steps to Green Energy◆ September 24, 2009 10:00 AM⌧ Throughout September the Ontario government took ten steps to bring the Green Energy Act to life. These⌧ milestones helped transition the province to more electricity generated from green energy, which will create⌧ 50,000 jobs over the next three years, open investment opportunities in Ontario's green economy and⌧ establish the province as North America's leader in renewable energy.⌧ The steps include:⌧ 1. Ontario makes landmark progress on Canada's largest climate change initiative as the province prepares⌧ to close four coal-fuelled power units in 2010 - four years ahead of the 2014 target. The announcement⌧ advances the province's transition to electricity generated from green energy which will open investment and⌧ opportunities in Ontario's green economy.⌧ 2. Ontario launches an Aboriginal Energy Partnerships Program. This initiative will build capacity and⌧ participation through support for community energy plans, funding for feasibility studies and the development⌧ 2060 participation through support for community energy plans, funding for feasibility studies and the development⌧ of an Aboriginal Renewable Energy Network.⌧ 3. Ontario announces the $250 million Aboriginal Loan Guarantee program (ALGP). Under the program,⌧ Aboriginal communities will be eligible for loan guarantees to take on equity participation in renewable⌧ generation and transmission projects. The AGLP will facilitate Aboriginal participation in energy projects by⌧ providing loan guarantees for up to 75% of an Aboriginal corporation's equity in an eligible project.⌧ 4. In a historic move, Ontario gives the go -ahead to Hydro One to begin work on 20 transmission projects⌧ that are expected to create about 20,000 jobs and spur green economic development across the province⌧ over the next three years. Six core transmission network upgrades are moving forward, including North South lines from Sudbury to Barrie and Barrie to the Greater Toronto Area and an East-West line from⌧ Nipigon to Wawa. Another series of core -supporting transmission projects and distribution upgrades are⌧ also moving ahead.⌧ 5. Ontario makes it easier for communities in Ontario, including farmers, co -ops and non -profit organizations,⌧ to bring green energy projects to life. Through the Community Energy Partnerships Program the province will⌧ provide one-time support to community groups to assist with the "soft" or developmental costs associated⌧ with new renewable energy projects.⌧ 6. Ontario makes it easier for municipalities to bring green energy projects to their communities. Through the⌧ Municipal Renewable Energy Program, the province will provide support to municipalities for costs⌧ associated with new renewable energy projects. While many of these costs are, and will continue to be,⌧ appropriately charged to the developers themselves, it is expected some additional costs may arise.⌧ 7. Ontario establishes the Renewable Energy Facilitation Office (REFO), a one-window access point to⌧ assist developers, communities and municipalities obtain information on developing renewable energy⌧ projects in Ontario, and help them navigate through the regulatory approvals necessary to bring their projects⌧ to life.⌧ 8. The Renewable Energy Approval (REA) process becomes law and is designed to ensure that renewable⌧ energy projects are developed in a way that is protective of human health, the environment, and Ontario's⌧ cultural and natural heritage.⌧ 9. Ontario develops domestic content requirements which would ensure at least 25 per cent of wind projects⌧ and 50 per cent of large solar projects be produced in Ontario. Requirements for solar will increase on Jan.⌧ 1, 2011 and requirements for wind will increase on Jan. 1, 2012.⌧ 10. The Green Energy Act introduces North America's first comprehensive feed -in tariff program that⌧ guarantees specific rates for energy generated from renewable sources. It is designed to encourage the⌧ development of renewable energy projects by a range of generators including First Nations and Métis communities, homeowners, farmers, schools, stores, factories, co-ops, offices and larger-scale commercial⌧ generators.⌧ Amy Tang, Minister's Office, 416 -327 -6747⌧ Eric Pelletier, Communications Branch 416 -325 -1810⌧ Get News⌧ l l l Today's News⌧ Communities Topics 2061 News on Demand⌧ l Email Alerts⌧ l RSS Feeds⌧ l News Archive⌧ l News by Ministry⌧ Multimedia⌧ l Photos⌧ l Videos⌧ Find Your Local News⌧ Find Your Local News Explore Government⌧ Resources⌧ l Forms⌧ l Publications⌧ l Laws⌧ Contacts⌧ l Telephone Directory⌧ l ServiceOntario Locations⌧ l MPPs⌧ l Have a Question?⌧ HELP CONTACT US PRIVACY IMPORTANT NOTICES⌧ © Queen's Printer for Ontario, 2008 - 2009 - Last Modified:September 24, 2009⌧ 2062 Confidential – not for distribution⇣ FIT and microFIT Frequently Asked Questions (FAQs) for Developers (for searchable website tool) Draft September 24, 2009& Not Responsive 2063 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario. Projects must have a generating capacity of 10 kW or less. Additions to existing facilities (incremental projects) may be eligible as long as they use the same renewable fuel and the combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for microFIT prices. A project must be connected to the province’s electricity distribution system through the local⇡ distribution company and must be separately metered for data gathering and payment purposes. September 24, 2009✏ 2068 Not Responsive Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program, regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will receive the same price for electricity produced. 2069 What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the conditional offer of microFIT contract was made (i.e. at the time your microFIT application was approved). If your project is not connected within 12 months of receiving a conditional offer of micro FIT contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. Not Responsive 2070 How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected directly to the distribution system or load embedded. The load customer (i.e., the consumer of electricity such as a home) will be billed separately for all of the power consumed. Therefore, payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with your local distribution company and your generator account. Not Responsive 2071 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive What do you mean by a “reasonable” rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not, however, guarantee that every project will earn 11 percent on its investment since project costs and operation and maintenance vary from one project to another. Is there an incentive for peak production? Yes. • Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and waterpower, will be encouraged to shift production to peak periods when the electricity is most needed. • Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10 percent lower during off-peak hours. – Projects will earn the posted FIT price multiplied by: September 24, 2009✏ 2076 Confidential – not for distribution 15of 31✏ • • • 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if they had been paid the posted FIT price. Pricing and Payment – FIT and microFIT How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract over the 20-year term of the contract (40 years for waterpower). The price will not change for the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed every two years. It is expected that prices for new projects will drop over time if project costs decrease. This means that if you sign a contract today, you will receive today’s⇡ price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two years from now, you will receive the price applicable at that time. Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules about reporting business income and about collecting and remitting GST on business income. Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-959-5525 for information on GST registration and collection. How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover facility construction and operating and maintenance costs and allow for a reasonable return on investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA’s stakeholder engagement sessions.⇡ The OPA incorporated much of the feedback from stakeholders into the price schedule. For greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12, 2009 stakeholder engagement sessions under the FIT Program Archive link. If I enter into a contract, how much will I be paid for the electricity my project produces? A range of standardized prices has been established under the FIT and microFIT Programs based on the OPA’s knowledge of typical project costs, stakeholder input and experience in other⇡ jurisdictions where FIT programs operate. These prices have been differentiated by project size and type of renewable energy technology being used in the project. They are intended to cover equipment, installation, operation and maintenance costs over the term of the contract and to provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. September 24, 2009✏ 2077 Confidential – not for distribution 16of 31✏ You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). How are payments made? For projects connected to the distribution system – this includes all microFIT and some FIT Program projects – payments will be made by the local electricity distribution company (LDC) to the generator on a regular basis according to the LDC’s normal billing cycle. Payments will⇡ begin when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register with the IESO as a “metered market participant” and will settle the “actual energy quantity⇡ injected” commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⇡ schedules are in accordance with the IESO market rules and settlement calendar found at http://www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. The OPA will settle any contractual incremental payments directly with the contracted generator. Once a FIT project is built and in-service, payments will be made on a regular basis, usually monthly. Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic Development and Trade to understand the rules about reporting business income and business registration. Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-959-5525 for information on GST registration and collection and http://www.ontario.ca/en/services_for_business/index.htm for information on business registration in Ontario. Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may not be great than 50 MW in size. For other technologies, there is no limit on project size. Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are different capital, installation, building and maintenance costs associated with different technologies and project sizes. Why are solar photovoltaic (PV) prices higher than other technologies?* September 24, 2009✏ 2078 Confidential – not for distribution 17of 31✏ FIT Program prices are designed to allow a renewable energy project developer to recover the cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return on investment over the contract period. Prices account for capital costs (e.g., purchasing, building, acquiring land, etc.), operating and maintenance costs, connection costs and a reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy solar PV systems. Technologies associated with solar PV are rapidly advancing and the current market is still small. The FIT Program prices are designed to kick-start the solar PV industry in Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is expected to decrease to reflect technological advances and growing market supply. How do Ontario’s prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable rate of return. Each renewable technology has different costs and provides different amounts of energy in different timelines. Wind and biomass projects have different prices since their cost components and performance characteristics differ. The intent is not to favour wind over biomass – the intent is to provide an incentive for each of these technologies. Prices are set so that each technology can earn the same reasonable rate of return on their investment. What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of construction, operations and maintenance and a reasonable rate of return on the investment over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario. How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes. The OPA’s experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies and project sizes. Almost all existing and proposed FIT programs in Europe and the United States take this approach. They set specific rates for a particular technology in relation to project size to account for variations in generation costs depending on project size. Projects are September 24, 2009✏ 2079 Confidential – not for distribution 18of 31✏ separated into size categories by capacity and the rate is set at different levels for smaller and larger projects. The size categories are generally consistent with the Ontario Energy Board’s⇡ Distribution System Code. Will contract prices change over time? For some technologies, the price schedule includes an annual increase based on a percentage of the consumer price index (CPI). This increase will help protect developers against inflationary pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that may lead to cost decreases. Changes in prices related to the two-year review will only apply to new projects and the OPA will give due notice before any price changes take effect. Not Responsive 2080 Not Responsive Not Responsive Not Responsive What is a connection request? A connection request is the application to your local distribution company (LDC) to connect your generation project to the distribution system. You must use the LDC’s existing form, or the⇡ connection request form that is provided to the OPA. You must submit your connection request form to your LDC and you must provide your FIT or microFIT reference number on the connection request form to the LDC. We recommend that you consult your LDC prior to submitting a connection request form to learn about potential fees and charges that might be applied under different connection configurations. For microFIT projects, the date of the connection request is a very important date that will be used to determine the microFIT contract price. 2083 Not Responsive Not Responsive What are the implications of the FIT Program for smart meters? Do they work together? While generation contracted under the FIT Program will have its own meter, the program itself complements the province’s installation of smart meters to enhance the efficiency of Ontario’s⇡ electricity system. The FIT Program is designed to encourage and promote greater use of renewable energy sources. Smart meters record total electricity consumption by hour, as compared to the old-style meter that only measures the total electricity used between meter readings. This means that different prices can be applied at different times of the day. Together, the two initiatives will promote a change in how we generate electricity and when we use it – resulting in a positive impact on Ontario’s climate change strategy. For additional information on smart meters, please visit the government of Ontario’s http://www.smartmetersontario.ca. website at⇡ 2085 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive September 24, 2009 2093 Jonathan Cheszes From: Jonathan Cheszes Sent: September-24-09 1:29 PM To: Patricia Lightburn Subject: revised price schedule Couldn ’ t figure out symbols, so I went with numbers.⌫ N:\Procurement\Domestic Supply\Feed In Tariff (FIT)\Program Rules\FIT Price Schedule\FIT Pricing Schedule Final_September 24_2009.doc⌫ Jonathan Cheszes⌫ Business Analyst⌫ Electricity Resources⌫ 120 Adelaide St. West, Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 41 6.969.6251 Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ 2094 Jonathan Cheszes From: Jonathan Cheszes Sent: October-05-09 2:23 PM To: Jill Medley; Patricia Lightburn; Mark Dodick Cc: Jim MacDougall Subject: Error in footnote of Price Schedule on-line Attachments: FIT Pricing Schedule - Final_September 30_2009_PV_10MW.doc Importance: High Hello all, Footnote of price schedule on- line reads: ” 2 - Aboriginal price adder and community price adder eligible as outlined in Appendix A of FIT Rules. ”⇥ The FIT rules have an Exhibit A, no Appendix A, and Exhibit A refers to Application Security not the community or Aboriginal price adders. The adders were in a table, Appendix A, to the Price Schedule. I don ’ t know if this got changed on the night of the solar cap being reintroduced, but the price schedule should include this appendix. Attached is the most recent version of the price schedule. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca 2095 September 30, 2009 Feed⌅ -In⌅ Tariff Prices⌅ for Renewable⌅ Energy Projects⌅ in⌅ Ontario⌅ Base Date: September 30, 2009 Contract Price ¢/kWh Escalation⌅ Percentage4 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% > 500 kW 53.9 0% 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Size tranches Biomass1,2 Biogas 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Any type 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted2 250 kW 500 kW Wind2 1✏ - Peak✏ Performance Factor applies. 2✏ - Aboriginal✏ Price✏ Adder✏ and Community✏ Price✏ Adder✏ eligible✏ as✏ outlined✏ in Appendix A✏ below. 3✏ - In✏ the✏ case✏ of an✏ incremental✏ Waterpower✏ project,✏ the✏ Incremental✏ Project✏ together with the✏ Existing✏ Generating✏ Facility to which✏ it is✏ incremental✏ cannot✏ exceed 50✏ MW.✏ 4✏ - Escalation✏ Percentage will be✏ applied✏ to✏ eligible✏ Renewable✏ Fuels as✏ calculated✏ in✏ Exhibit✏ B of✏ FIT✏ Contract.✏ 2096 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV⌅ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌅ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules.✏ 2097 Mark Dodick↵ From: Mark Dodick↵ Sent: October-05-09 2:26 PM↵ To: Brian Shields; Andrew Yates; Connie Ellison-Johnson↵ Cc: Jonathan Cheszes; Jill Medley; Patricia Lightburn; Tim Taylor; Ben Chin; Kristin↵ Jenkins; Murray Campbell; 'deb@reidandassociates.ca'; Tim Butters↵ Subject: FW: Error in footnote of Price Schedule on-line↵ Attachments: FIT Pricing Schedule - Final_September 30_2009_PV_10MW.doc↵ Importance: High↵ All,⌅ Take note of the message below and the attached and correct ASAP as required please. If anyone else should be⌅ on this string, please share it.⌅ Thanks,⌅ MD⌅ From: Jonathan Cheszes Sent: October 5, 2009 2:23 PM To: Jill Medley; Patricia Lightburn; Mark Dodick Cc: Jim MacDougall Subject: Error in footnote of Price Schedule on-line Importance: High Hello all,⌅ Footnote of price schedule on- line reads: ” 2 - Aboriginal price adder and community price adder eligible as outlined in Appendix A of FIT Rules. ”⇥ The FIT rules have an Exhibit A, no Appendix A, and Exhibit A refers to Application Security not the community or Aboriginal price adders.⌅ The adders were in a table, Appendix A, to the Price Schedule. I don ’ t know if this got changed on the night of the solar cap being reintroduced, but the price schedule should include this appendix.⌅ Attached is the most recent version of the price schedule.⌅ Jonathan Cheszes⌅ Business Analyst⌅ Electricity Resources⌅ 120 Adelaide St. West, Suite 1600⌅ Toronto , ON , M5H 1T1⌅ Tel 41 6.969.6251 Fax 416.967.1947⌅ www.powerauthority.on.ca⌅ 2098 September 30, 2009 Feed⌅ -In⌅ Tariff Prices⌅ for Renewable⌅ Energy Projects⌅ in⌅ Ontario⌅ Base Date: September 30, 2009 Contract Price ¢/kWh Escalation⌅ Percentage4 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% > 500 kW 53.9 0% 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Size tranches Biomass1,2 Biogas 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Any type 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted2 250 kW 500 kW Wind2 1✏ - Peak✏ Performance Factor applies. 2✏ - Aboriginal✏ Price✏ Adder✏ and Community✏ Price✏ Adder✏ eligible✏ as✏ outlined✏ in Appendix A✏ below. 3✏ - In✏ the✏ case✏ of an✏ incremental✏ Waterpower✏ project,✏ the✏ Incremental✏ Project✏ together with the✏ Existing✏ Generating✏ Facility to which✏ it is✏ incremental✏ cannot✏ exceed 50✏ MW.✏ 4✏ - Escalation✏ Percentage will be✏ applied✏ to✏ eligible✏ Renewable✏ Fuels as✏ calculated✏ in✏ Exhibit✏ B of✏ FIT✏ Contract.✏ 2099 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV⌅ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌅ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules.✏ 2100 Glenna Ford↵ From: Glenna Ford↵ Sent: October-05-09 3:07 PM↵ To: 'Deb Reid'; Mark Dodick; Brian Shields; Andrew Yates; Connie Ellison-Johnson↵ Cc: Jonathan Cheszes; Jill Medley; Patricia Lightburn; Tim Taylor; Ben Chin; Kristin↵ Jenkins; Murray Campbell; Tim Butters↵ Subject: RE: Error in footnote of Price Schedule on-line↵ I have changed the note in the table. Please note that the price adder (Appendix A) actually appears in the “ next ”⇤ section of the website, called Price adder. The table has just been split in two. From: Deb Reid [mailto:deb@reidandassociates.ca] Sent: October 5, 2009 2:33 PM To: Mark Dodick; Brian Shields; Andrew Yates; Connie Ellison-Johnson Cc: Jonathan Cheszes; Jill Medley; Patricia Lightburn; Tim Taylor; Ben Chin; Kristin Jenkins; Murray Campbell; Tim Butters; Glenna Ford Subject: RE: Error in footnote of Price Schedule on-line Thanks Mark:# I have added Glenna to the distribution list and will also call her to let her know about the needed amendment as she is the point person for the web content. Deb# Deb@ReidandAssociates.ca# Tel: 41 6 - 698 - 5459# Fax: 41 6 - 698 - 0377# Cell: 41 6 - 729 - 0240# ----- Original Message----From: Mark Dodick [mailto:Mark.Dodick@powerauthority.on.ca] Sent: Monday, October 05, 2009 2:26 PM To: Brian Shields; Andrew Yates; Connie Ellison-Johnson Cc: Jonathan Cheszes; Jill Medley; Patricia Lightburn; Tim Taylor; Ben Chin; Kristin Jenkins; Murray Campbell; deb@reidandassociates.ca; Tim Butters Subject: FW: Error in footnote of Price Schedule on-line Importance: High All,# Take note of the message below and the attached and correct ASAP as required please. If anyone else# should be on this string, please share it.# Thanks,# MD# From: Jonathan Cheszes Sent: October 5, 2009 2:23 PM To: Jill Medley; Patricia Lightburn; Mark Dodick Cc: Jim MacDougall Subject: Error in footnote of Price Schedule on-line 2101 Subject: Error in footnote of Price Schedule on-line Importance: High Hello all,# Footnote of price schedule on- line reads: ” 2 - Aboriginal price adder and community price adder eligible as outlined in Appendix A of FIT Rules. ”⇥ The FIT rules have an Exhibit A, no Appendix A, and Exhibit A refers to Application Security not the community or Aboriginal price adders.# The adders were in a table, Appendix A, to the Price Schedule. I don ’ t know if this got changed on the night of the solar cap being reintroduced, but the price schedule should include this appendix.# Attached is the most recent version of the price schedule.# Jonathan Cheszes# Business Analyst# Electricity Resources# 120 Adelaide St. West, Suite 1600# Toronto , ON , M5H 1T1# Tel 41 6.969.6251⇤ Fax 416.967.1947# www.powerauthority.on.ca# This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2102 Jonathan Cheszes From: Jonathan Cheszes Sent: October-09-09 4:31 PM To: Patricia Lightburn; Glenna Ford Cc: Jim MacDougall Subject: RE: website content Although it is not explicit, we do list which technologies are subject to Peak Performance factor in the first footnote on the price schedule. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Patricia Lightburn Sent: October 9, 2009 4:23 PM To: Glenna Ford Cc: Jonathan Cheszes; Jim MacDougall Subject: website content Hi Glenna, we do not actually have the info about the on- peak incentive anywhere on the website. It should be added to here http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260 this needs cleaning up, but essentially we need the following information – we can discuss on Monday. Incenting on- peak production⌘ Technologies that are not intermittent (i.e., dispatchable) are encouraged to shift production to on - peak periods when the electricity is most needed. Projects that use Renewable Biomass, Bio - gas, landfill gas or waterpower as their Renewable Fuel will receive a time differentiated price under the FIT Contract. The application of the Peak Performance Factor will result in higher payments during On- Peak Hours and lower payments during Off- Peak Hours to encourage such Projects to schedule their production during On- Peak Hours to the extent practicable. These projects will be paid 35% higher from 11am to 7pm on business days, and a 10% lower price during off- peak hours (including weekends). – Projects will earn the posted FIT price multiplied by: • • 0.9 for off- peak periods 1.35 for on- peak periods Projects that operate 24 X 7 all year will earn the same total revenue as if they were earning the posted FIT price Patricia Lightburn⌘ 2103 Analyst, Distributed Generation⌘ Ontario Power Authority 120 Adelaide Street West Suite 1600 Toronto ON M5H 1T1 416 - 969 - 6267 patricia . lightburn @ powerauthority . on . ca 2104 Glenna Ford↵ From: Glenna Ford⇠ Sent: October-09-09 7:31 PM⇠ To: Patricia Lightburn⇠ Subject: Re: website content⇠ I thought we drafted this text a while ago. We must have dropped it at some point.⇠ I can add the text on Tuesday.⇠ ----- Original Message ----From: Patricia Lightburn⇠ To: Glenna Ford⇠ CC: Jonathan Cheszes; Jim MacDougall⇠ Sent: Fri Oct 09 16:22:59 2009⇠ Subject: website content⇠ Hi Glenna,⇠ we do not actually have the info about the on - peak incentive anywhere on the website. It should be added to here http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260⇠ this needs cleaning up, but essentially we need the following information – we can discuss on Monday.⇠ Incenting on - peak production⇠ Technologies that are not intermittent (i.e., dispatchable) are encouraged to shift production to on - peak periods when the electricity is most needed. Projects that use Renewable Biomass, Bio - gas, landfill gas or waterpower as their Renewable Fuel will receive a time differentiated price under the FIT Contract. The application of the Peak Performance Factor will result in higher payments during On - Peak Hours and lower payments during Off - Peak Hours to encourage such Projects to schedule their production during On - Peak Hours to the extent practicable.⇠ These projects will be paid 35% higher from 11am to 7pm on business days, and a 10% lower price during off - peak hours (including weekends).⇠ – Projects will earn the posted FIT price multiplied by:⇠ • 0.9 for off - peak periods⇠ • 1.35 for on - peak periods⇠ Projects that operate 24 X 7 all year will earn the same total revenue as if they were earning the posted FIT price! 2105 Patricia Lightburn⇠ Analyst, Distributed Generation⇠ Ontario Power Authority⇠ 120 Adelaide Street West⇠ Suite 1600⇠ Toronto ON M5H 1T1⇠ 416 - 969 - 6267⇠ patricia.lightburn@powerauthority.on.ca < mailto:patricia.lightburn@powerauthority.on.ca >⇠ 2106 Glenna Ford↵ From: Glenna Ford⇣ Sent: October-13-09 2:06 PM⇣ To: Patricia Lightburn⇣ Cc: Jim MacDougall; Jonathan Cheszes⇣ Subject: RE: website content⇣ The new text is up now.✏ From: Patricia Lightburn Sent: October 9, 2009 4:23 PM To: Glenna Ford Cc: Jonathan Cheszes; Jim MacDougall Subject: website content Hi Glenna,✏ we do not actually have the info about the on- peak incentive anywhere on the website. It should be added to here http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260✏ this needs cleaning up, but essentially we need the following information – we can discuss on Monday.✏ Incenting on- peak production⌘ Technologies that are not intermittent (i.e., dispatchable) are encouraged to shift production to on - peak periods when the electricity is most needed. Projects that use Renewable Biomass, Bio - gas, landfill gas or waterpower as their Renewable Fuel will receive a time differentiated price under the FIT Contract. The application of the Peak Performance Factor will result in higher payments during On- Peak Hours and lower payments during Off- Peak Hours✏ to encourage such Projects to schedule their production during On- Peak Hours to the extent practicable.✏ These projects will be paid 35% higher from 11am to 7pm on business days, and a 10% lower price during off- peak✏ hours (including weekends).✏ – Projects will earn the posted FIT price multiplied by:✏ • • 0.9 for off- peak periods✏ 1.35 for on- peak periods✏ Projects that operate 24 X 7 all year will earn the same total revenue as if they were earning the posted FIT price Patricia Lightburn⌘ Analyst, Distributed Generation⌘ Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2107 Jonathan Cheszes From: Jonathan Cheszes Sent: October-13-09 3:02 PM To: Patricia Lightburn; Glenna Ford Cc: Jim MacDougall Subject: RE: website content Patricia, Glenna, I was in a meeting today and noticed an error in the required equity level needed for a Designated equity provider. The level is 15% of the proposed equity with $500,000 / MW. This was changed for the final version of the FIT rules. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Patricia Lightburn Sent: October 13, 2009 2:19 PM To: Glenna Ford Cc: Jim MacDougall; Jonathan Cheszes Subject: RE: website content Another addition: Under eligibility requirements http://fit.powerauthority.on.ca/Page.asp? PageID=122&ContentID=10203&SiteNodeID=1104&BL_ExpandID=260 Under the bullet: · not be greater than 50 megawatts (MW) if it is a waterpower project. Can you add: - not be greater than 10 MW if it is a solar PV ground- mounted project. From: Glenna Ford Sent: Tuesday, October 13, 2009 2:06 PM To: Patricia Lightburn Cc: Jim MacDougall; Jonathan Cheszes Subject: RE: website content The new text is up now. From: Patricia Lightburn Sent: October 9, 2009 4:23 PM To: Glenna Ford Cc: Jonathan Cheszes; Jim MacDougall Subject: website content 2108 Hi Glenna, we do not actually have the info about the on- peak incentive anywhere on the website. It should be added to here http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260 this needs cleaning up, but essentially we need the following information – we can discuss on Monday. Incenting on- peak production⌘ Technologies that are not intermittent (i.e., dispatchable) are encouraged to shift production to on - peak periods when the electricity is most needed. Projects that use Renewable Biomass, Bio - gas, landfill gas or waterpower as their Renewable Fuel will receive a time differentiated price under the FIT Contract. The application of the Peak Performance Factor will result in higher payments during On- Peak Hours and lower payments during Off- Peak Hours to encourage such Projects to schedule their production during On- Peak Hours to the extent practicable. These projects will be paid 35% higher from 11am to 7pm on business days, and a 10% lower price during off- peak hours (including weekends). – Projects will earn the posted FIT price multiplied by: • • 0.9 for off- peak periods 1.35 for on- peak periods Projects that operate 24 X 7 all year will earn the same total revenue as if they were earning the posted FIT price Patricia Lightburn⌘ Analyst, Distributed Generation⌘ Ontario Power Authority 120 Adelaide Street West Suite 1600 Toronto ON M5H 1T1 416 - 969 - 6267 patricia . lightburn @ powerauthority . on . ca 2109 Glenna Ford↵ From: Glenna Ford↵ Sent: October-13-09 3:10 PM↵ To: Jonathan Cheszes; Patricia Lightburn↵ Cc: Jim MacDougall↵ Subject: RE: website content↵ Jonathan: What page is this on? I have added the bullet as requested by Patricia. From: Jonathan Cheszes Sent: October 13, 2009 3:02 PM To: Patricia Lightburn; Glenna Ford Cc: Jim MacDougall Subject: RE: website content Patricia, Glenna, I was in a meeting today and noticed an error in the required equity level needed for a Designated equity provider. The level is 15% of the proposed equity with $500,000 / MW. This was changed for the final version of the FIT rules. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Patricia Lightburn Sent: October 13, 2009 2:19 PM To: Glenna Ford Cc: Jim MacDougall; Jonathan Cheszes Subject: RE: website content Another addition: Under eligibility requirements http://fit.powerauthority.on.ca/Page.asp? PageID=122&ContentID=10203&SiteNodeID=1104&BL_ExpandID=260 Under the bullet: · not be greater than 50 megawatts (MW) if it is a waterpower project. Can you add: - not be greater than 10 MW if it is a solar PV ground - mounted project. From: Glenna Ford 2110 Sent: Tuesday, October 13, 2009 2:06 PM To: Patricia Lightburn Cc: Jim MacDougall; Jonathan Cheszes Subject: RE: website content The new text is up now. From: Patricia Lightburn Sent: October 9, 2009 4:23 PM To: Glenna Ford Cc: Jonathan Cheszes; Jim MacDougall Subject: website content Hi Glenna, we do not actually have the info about the on- peak incentive anywhere on the website. It should be added to here http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260 this needs cleaning up, but essentially we need the following information – we can discuss on Monday. Incenting on- peak production⌘ Technologies that are not intermittent (i.e., dispatchable) are encouraged to shift production to on - peak periods when the electricity is most needed. Projects that use Renewable Biomass, Bio - gas, landfill gas or waterpower as their Renewable Fuel will receive a time differentiated price under the FIT Contract. The application of the Peak Performance Factor will result in higher payments during On- Peak Hours and lower payments during Off- Peak Hours to encourage such Projects to schedule their production during On- Peak Hours to the extent practicable. These projects will be paid 35% higher from 11am to 7pm on business days, and a 10% lower price during off- peak hours (including weekends). – Projects will earn the posted FIT price multiplied by: • • 0.9 for off- peak periods 1.35 for on- peak periods Projects that operate 24 X 7 all year will earn the same total revenue as if they were earning the posted FIT price Patricia Lightburn⌘ Analyst, Distributed Generation⌘ Ontario Power Authority↵ 120 Adelaide Street West↵ Suite 1600↵ Toronto ON M5H 1T1↵ 416 - 969 - 6267↵ patricia . lightburn @ powerauthority . on . ca↵ 2111 Glenna Ford↵ From: Glenna Ford↵ Sent: November-05-09 2:02 PM↵ To: Patricia Lightburn↵ Subject: Quick review needed↵ Patricia: Could you please take a quick look at the following text. It ’ s for a web listing and I want to make sure I haven ’ t missed anything important. Many thanks. Select Government Programs for Businesses⌫ Feed-in Tariff Program – Ontario Power Authority⌫ Program Responsibility:⌫ Ontario Power Authority Program Description:⌫ Ontario's feed - in tariff or FIT Program is North America's first comprehensive guaranteed pricing structure for renewable electricity production. It offers stable prices under long- term contracts for energy generated from renewable sources, including biomass, biogas, landfill gas, on- shore and off- shore wind, solar photovoltaic (PV) and waterpower. The FIT Program was enabled by the Green Energy and Green Economy Act, 2009, which was passed into law on May 14, 2009. By encouraging the development of renewable energy in Ontario, the FIT Program will help Ontario phase out coal- fired electricity generation by 2014 – the largest climate - change initiative in North America. It will also help boost economic activity and the development of renewable energy technologies, and create new green industries and jobs. The FIT Program is open to renewable energy projects of all sizes; however, projects 10 kW or less in size can apply to the microFIT Program, a streamlined version of the FIT Program. Program Eligibility⌫ Developers of renewable energy projects will receive a FIT or microFIT contract if they meet all program requirements. FIT Program To be eligible for the FIT Program, projects must: l be located in Ontario, at a location over which the project proponent has control l use one of the eligible renewable energy sources l connect to an eligible local distribution system, host facility or the IESO - controlled grid l be separately metered for data collection and settlement purposes. The following projects are not eligible for the FIT Program: l waterpower projects greater than 50 megawatts (MW) l solar PV ground- mounted projects greater than 10 MW l existing generating facilities at the time of application to the program 2112 l solar PV ground- mounted projects greater than 100 kW located on Canada Land Inventory Class 1 or 2 lands for agriculture or designated specialty crop areas, unless otherwise designated by a municipal zoning by- law l projects with contracts under the OPA's Renewable Energy Standard Offer Program (RESOP). There are options to allow certain projects with a RESOP contract to transition to the FIT Program. microFIT Program To be eligible for the microFIT Program, projects must: l be 10 kW or less in size and located in Ontario l use one of the renewable energy sources l be connected, directly or indirectly, to the distribution system l have metering suitable for data collection and payment calculation. All microFIT projects require a separate meter so that the amount of electricity produced by the project can be accurately measured. l not be the subject of an existing OPA contract. For example, a project must not have a contract through the OPA ’ s Renewable Energy Standard Offer Program (RESOP). There are options to allow certain projects with a RESOP contract to transition to the microFIT Program. There are additional eligibility requirements for microFIT projects that are expansions of existing facilities. Projects under both programs must also meet certain domestic content requirements. Program Pricing⌫ FIT and microFIT contract holders receive a fixed price for the electricity they produce over a 20- year contract period (except for waterpower projects, for which the contract period is 40 years). The prices paid for electricity produced vary according to the renewable energy source used and the size of the project. The payments are designed to cover typical capital and operating costs and to provide a reasonable return on the investment over the term of the contract. To view the program price schedule, click here . Aboriginal and community- based projects are eligible to receive a payment ("price adder") in addition to the contract price. Miscellaneous/Other Information:⌫ The application process for both the FIT and microFIT Programs are electronic. The program websites provide extensive information about the programs, including access to the online application form and all program documentation. Click here to visit the FIT website. Click here to visit the microFIT website. Program Category:⌫ Renewable Energy, Renewable Energy Incentives Contact Information:⌫ FIT Program/microFIT Program Ontario Power Authority Suite 1600 , 120 Adelaide Street West Toronto , ON M5H 1T1 Tel: 888 - 833 - 7978 (toll- free) Websites: FIT: http://www.powerauthority.on.ca/fit/✓ microFIT: http://microfit.powerauthority.on.ca✓ Email: FIT: FIT@powerauthority.on.ca✓ microFIT: microFIT@powerauthority.on.ca✓ Last Reviewed:⌫ November 2009/AW 2113 Glenna Ford⌫ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 2114 Richard Duffy From: Richard Duffy Sent: November-11-09 6:38 PM To: 'Maureen Lafortune' Subject: RE: Net metering #'s Attachments: 10718_FIT_Pricing_Schedule_-_Final_September_30_2009_PV_10MW.pdf Hey Moses, I assume you are referring to the feed- in - tariff (FIT) program, so yes I do. I ’ve attached a copy for you. The price schedule can be found at the following link: http://fit.powerauthority.on.ca/Storage/98/10718_FIT_Pricing_Schedule_ -_ Final_September_30_2009_% PV_10MW.pdf% By the way, net metering is a different program. It essentially allows someone to generate and “ spin ” their meter backwards. You don ’t get paid for it, you just reduce your Hydro bill. Just be careful about the distinction if you are talking with people regarding. Hope this helps. Richard From: Maureen Lafortune [mailto:MLafortune@powertel.ca]⌫ Sent: Wednesday, November 11, 2009 5:08 PM⌫ To: Richard Duffy⌫ Subject: Net metering #'s⌫ Hey Rich … do you have the #'s that the net metering program will pay if power is sold back to the grid? Maureen Lafortune, CA% POWERTEL UTILITIES CONTRACTORS LIMITED% voice (705) 866 -2828 Ext. 236% fax (705) 866 -0435% mlafortune@powertel.ca⇣ www.powertel.ca⇣ ü Please consider the environment and don't print this email unless necessary. 2115 September 30, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009' Renewable Fuel Size tranches 4 Contract Price ¢/kWh Escalation Percentage 1 0 MW 1 3.8 20% > 1 0 MW 1 3.0 20% 1 00 kW 1 9.5 20% 1 8.5 20% 1 6.0 20% 1 4.7 20% > 1 0 MW 1 0.4 20% 1 0 MW 1 3.1 20% 1 2.2 20% 1 0MW 1 1 .1 20% > 1 0 MW 1 0.3 20% 1 0 kW 80.2 0% 1,2 Biomass 1,2 Biogas On-Farm On-Farm > 1 00 kW Biogas 250 kW 500 kW Biogas >500 kW Biogas 1 0 MW 1,2,3 Waterpower > 1 0 MW 50 MW 1,2 Landfill gas Solar PV Any type Rooftop > 10 250 kW 71 .3 0% Rooftop > 250 500 kW 63.5 0% > 500 kW 53.9 0% 1 0 MW 44.3 0% Onshore Any size 1 3.5 20% Offshore Any size 1 9.0 20% Rooftop Ground Mounted 2 2 Wind 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 1 0 MW. 2116 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel' Maximum' Aboriginal Price Adder Wind PV' (Ground Mounted) Water Biogas 1 .5 1 .5 0.9 0.6 0.6 0.6 1 .0 1 .0 0.6 0.4 0.4 0.4 Biomass' Landfill' Gas (¢/kWh) Maximum' Community Price Adder' (¢/kWh) * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 2117 Jim MacDougall From: Jim MacDougall Sent: November-18-09 7:38 PM To: Patricia Lightburn; 'Jordan.Penic@ontario.ca' Cc: 'Ing, Pearl (MEI)'; Slawner, Karen (MEI) Subject: RE: Updated Rules - Project Splitting Jordan; Further to our discussion on Friday, we have modified the project splitting rules to make them very clear. The general restriction against project splitting is found in the Contract Pricing section in the Rules S 7.3, but we have brought forward very clear and specific language in Section 2.1 Eligibility: Sections b) and c) contain the major edits. We had a few back and forths with Pearl and Karen and feel that we have reigned in the opportunity to game the FIT pricing, Let us know if you have any concerns or questions: To be eligible to participate in the FIT Program,a proposed generating facility must: (i)constitute a Renewable Generating Facility; (ii)be located in the Province of Ontario; (iii)not have a Contract Capacity of more than 10 MW in the case of solar (PV) Projects and 50 MW in the case of waterpower Projects.In the case of an Incremental Project,the Incremental Project together with the Existing Generating Facility to which it is incremental shall not exceed these size limits; (b)For any single property,the total Gross Nameplate Capacity of all solar (PV) generating facilities participating in the FIT Program and located on such property may not exceed 10 MW. For any single property, the total Gross Nameplate Capacity of all waterpower generating facilities participating in the FIT Program and located on 2118 such property may not exceed 50 MW. (c)With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted on any single property.For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property,so long as the total capacity of the Generating Equipment located on the property is reflected in a single Application and shares a common Connection Point. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 2119 Penic, Jordan (MEI)✓ From: Penic, Jordan (MEI)✓ Sent: November-19-09 11:27 AM✓ To: Jim MacDougall; Patricia Lightburn✓ Cc: Ing, Pearl (MEI); Slawner, Karen (MEI); Tang, Amy (MEI)✓ Subject: RE: Updated Rules - Project Splitting✓ Thanks Jim. They look good. If you haven’t already posted, go ahead an post. Can you make sure that you send Qs and As to⌧ Amy Tang and Tom Arnold and our comms department. In case any questions come in, I ’ d like to make sure that they ’ re capable of answering. From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: November 18, 2009 7:38 PM⇢ To: Patricia Lightburn; Penic, Jordan (MEI)⇢ Cc: Ing, Pearl (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Updated Rules - Project Splitting⇢ Jordan ; Further to our discussion on Friday, we have modified the project splitting rules to make them very clear. The general restriction against project splitting is found in the Contract Pricing section in the Rules S 7.3, but we⌧ have brought forward very clear and specific language in Section 2.1 Eligibility: Sections b) and c) contain the major edits. We had a few back and forths with Pearl and Karen and feel that we have reigned in the opportunity to game the FIT pricing, Let us know if you have any concerns or questions: To be eligible to participate in the FIT Program,a proposed generating facility must: (i)constitute a Renewable Generating Facility; (ii)be located in the Province of Ontario ; (iii)not have a Contract Capacity of more than 10 MW in the case of solar (PV) Projects and 50 MW in the case of waterpower Projects.In the case of an Incremental Project,the Incremental Project together with the Existing Generating Facility to which it is incremental shall not exceed these size limits; 2120 (b)For any single property,the total Gross Nameplate Capacity of all solar (PV) generating facilities participating in the FIT Program and located on such property may not exceed 10 MW. For any single property, the total Gross Nameplate Capacity of all waterpower generating facilities participating in the FIT Program and located on such property may not exceed 50 MW. (c)With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted on any single property.For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property,so long as the total capacity of the Generating Equipment located on the property is reflected in a single Application and shares a common Connection Point. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2121 Jim MacDougall From: Jim MacDougall Sent: November-19-09 11:35 AM To: 'jordan.penic@ontario.ca'; Patricia Lightburn Cc: 'Pearl.Ing@ontario.ca'; 'Karen.slawner@ontario.ca'; 'Amy.Tang@ontario.ca'; Jason Chee-Aloy Subject: Re: Updated Rules - Project Splitting Awesome - will do. We will post later this afternoon. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Penic, Jordan (MEI) To: Jim MacDougall; Patricia Lightburn CC: Ing, Pearl (MEI) ; Slawner, Karen (MEI) ; Tang, Amy (MEI) Sent: Thu Nov 19 11:27:14 2009 Subject: RE: Updated Rules - Project Splitting Thanks Jim. They look good. If you haven ’t already posted, go ahead an post. Can you make sure that you send Qs and As to Amy Tang⌧ and Tom Arnold and our comms department. In case any questions come in, I ’ d like to make sure that they ’ re capable of answering. _________________________ _____ __ From: Jim MacDougall [ mailto:Jim.MacDougall@powerauthority.on.ca ] Sent: November 18, 2009 7:38 PM To: Patricia Lightburn; Penic, Jordan (MEI) Cc: Ing, Pearl (MEI); Slawner, Karen (MEI) Subject: RE: Updated Rules - Project Splitting Jordan; Further to our discussion on Friday, we have modified the project splitting rules to make them very clear. The general restriction against project splitting is found in the Contract Pricing section in the Rules S 7.3, but we have 2122 brought forward very clear and specific language in Section 2.1 Eligibility: Sections b) and c) contain the major edits. We had a few back and forths with Pearl and Karen and feel that we have reigned in the opportunity to game the FIT pricing, Let us know if you have any concerns or questions: To be eligible to participate in the FIT Program,a proposed generating facility must: (i)constitute a Renewable Generating Facility; (ii)be located in the Province of Ontario; (iii)not have a Contract Capacity of more than 10 MW in the case of solar (PV) Projects and 50 MW in the case of waterpower Projects.In the case of an Incremental Project,the Incremental Project together with the Existing Generating Facility to which it is incremental shall not exceed these size limits; (b)For any single property,the total Gross Nameplate Capacity of all solar (PV) generating facilities participating in the FIT Program and located on such property may not exceed 10 MW. For any single property, the total Gross Nameplate Capacity⌧ of all waterpower generating facilities participating in the FIT Program and located on such property may not exceed 50 MW. (c)With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted on any single property.For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property,so long as the total capacity of the Generating Equipment located on the property is reflected in a single Application and shares a common Connection Point. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 2123 _________________________ _____ __ _________________________ _____ __ This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2124 Jonathan Cheszes From: Jonathan Cheszes Sent: December-01-09 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Attachments: FIT Pricing Schedule - Final_November 19.doc Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an⇠ updated Price schedule reflecting the change.⇠ I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page,⇠ which should be fixed in the next round of clean ups.⇠ 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes⇠ Business Analyst⇠ Electricity Resources⇠ 120 Adelaide St. West, Suite 1600⇠ Toronto , ON , M5H 1T1⇠ Tel 41 6.969.6251 Fax 416.967.1947⇠ www.powerauthority.on.ca⇠ From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( Thanks,( Elliot( Elliot Smith⌦ Associate⇠ Ext. 6435⇠ 2125 ********************************************************************⇠ This e - mail message is privileged, confidential and subject to⇠ copyright. Any unauthorized use or disclosure is prohibited.⇠ Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation.⇠ ********************************************************************⇠ 2126 November 19, 2009 Feed⌅ -In⌅ Tariff Prices⌅ for Renewable⌅ Energy Projects⌅ in⌅ Ontario⌅ Base Date: November 19, 2009 Contract Price ¢/kWh Percentage⌅ Escalated4 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% > 500 kW 53.9 0% 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Size tranches Biomass1,2 Biogas 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Any type 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted2 250 kW 500 kW Wind2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 2127 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV⌅ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌅ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 2128 Glenna Ford↵ From: Glenna Ford↵ Sent: December-01-09 2:27 PM↵ To: Jonathan Cheszes; Patricia Lightburn↵ Subject: RE: Escalation Percentage↵ The note needs to be changed too (note 4). I knew of the change, but didn ’ t realize where it needed to be changed –⇤ sorry about that. I will have to get the changes posted through Damian as I don ’ t believe I can effect this change on the web page as it ’ s an image. Do you want the new date to appear as well? I shall also have to create a new PDF for downloading in the resources section. From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an updated Price schedule reflecting the change. I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page, which should be fixed in the next round of clean ups. 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251⇤ Fax 416.967.1947 www.powerauthority.on.ca From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( 2129 Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( Thanks,( Elliot( Elliot Smith⌦ Associate Ext. 6435 ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et⇤ soumis à des droits d'auteur. Il est interdit de l'utiliser ou⇤ de le divulguer sans autorisation. ******************************************************************** 2130 Glenna Ford↵ From: Glenna Ford↵ Sent: December-01-09 2:28 PM↵ To: Patricia Lightburn; Jonathan Cheszes↵ Subject: RE: Escalation Percentage↵ So keep it as September 30?⌘ From: Patricia Lightburn Sent: December 1, 2009 2:28 PM To: Glenna Ford; Jonathan Cheszes Subject: RE: Escalation Percentage Please remember not to change the date of the price schedule From: Glenna Ford Sent: Tuesday, December 01, 2009 2:27 PM To: Jonathan Cheszes; Patricia Lightburn Subject: RE: Escalation Percentage The note needs to be changed too (note 4). I knew of the change, but didn ’ t realize where it needed to be changed –⇤ sorry about that.⌘ I will have to get the changes posted through Damian as I don ’ t believe I can effect this change on the web page as⌘ it ’ s an image. Do you want the new date to appear as well? I shall also have to create a new PDF for downloading in⌘ the resources section. From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an⌘ updated Price schedule reflecting the change.⌘ I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page,⌘ which should be fixed in the next round of clean ups.⌘ 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes⌘ Business Analyst⌘ Electricity Resources⌘ 2131 Electricity Resources⌘ 120 Adelaide St. West, Suite 1600⌘ Toronto , ON , M5H 1T1⌘ Tel 41 6.969.6251⇤ Fax 416.967.1947⌘ www.powerauthority.on.ca⌘ From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( Thanks,( Elliot( Elliot Smith⌦ Associate⌘ Ext. 6435⌘ ********************************************************************⌘ This e - mail message is privileged, confidential and subject to⌘ copyright. Any unauthorized use or disclosure is prohibited.⌘ Le contenu du présent courriel est privilégié, confidentiel et⇤ soumis à des droits d'auteur. Il est interdit de l'utiliser ou⇤ de le divulguer sans autorisation.⌘ ********************************************************************⌘ 2132 Glenna Ford↵ From: Glenna Ford↵ Sent: December-01-09 2:48 PM↵ To: Jonathan Cheszes; Patricia Lightburn↵ Subject: RE: Escalation Percentage↵ Patricia: How do you want to deal with the cover page? From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an updated Price schedule reflecting the change. I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page, which should be fixed in the next round of clean ups. 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( 2133 Thanks,( Elliot( Elliot Smith⌦ Associate Ext. 6435 ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 2134 Glenna Ford↵ From: Glenna Ford↵ Sent: December-01-09 3:07 PM↵ To: Patricia Lightburn↵ Subject: RE: Escalation Percentage↵ The problem is that the rule change was not in effect on September 30 … ..⇡ From: Patricia Lightburn Sent: December 1, 2009 2:29 PM To: Glenna Ford; Jonathan Cheszes Subject: RE: Escalation Percentage yes⇡ From: Glenna Ford Sent: Tuesday, December 01, 2009 2:28 PM To: Patricia Lightburn; Jonathan Cheszes Subject: RE: Escalation Percentage So keep it as September 30?⇡ From: Patricia Lightburn Sent: December 1, 2009 2:28 PM To: Glenna Ford; Jonathan Cheszes Subject: RE: Escalation Percentage Please remember not to change the date of the price schedule From: Glenna Ford Sent: Tuesday, December 01, 2009 2:27 PM To: Jonathan Cheszes; Patricia Lightburn Subject: RE: Escalation Percentage The note needs to be changed too (note 4). I knew of the change, but didn ’ t realize where it needed to be changed –⌅ sorry about that.⇡ I will have to get the changes posted through Damian as I don ’ t believe I can effect this change on the web page as⇡ it ’ s an image. Do you want the new date to appear as well? I shall also have to create a new PDF for downloading in⇡ the resources section. From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High 2135 The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an⇡ updated Price schedule reflecting the change.⇡ I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page,⇡ which should be fixed in the next round of clean ups.⇡ 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes⇡ Business Analyst⇡ Electricity Resources⇡ 120 Adelaide St. West, Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 41 6.969.6251⌅ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( Thanks,( Elliot( Elliot Smith⌦ Associate⇡ Ext. 6435⇡ ********************************************************************⇡ This e - mail message is privileged, confidential and subject to⇡ copyright. Any unauthorized use or disclosure is prohibited.⇡ Le contenu du présent courriel est privilégié, confidentiel et⌅ soumis à des droits d'auteur. Il est interdit de l'utiliser ou⌅ de le divulguer sans autorisation.⇡ ********************************************************************⇡ 2136 Glenna Ford↵ From: Glenna Ford↵ Sent: December-02-09 2:48 PM↵ To: Jonathan Cheszes; Patricia Lightburn↵ Subject: RE: Escalation Percentage↵ Jonathan: I have reposted the FIT price schedule and will now update the microFIT price schedule. The online table is in the hands of NMA for updating. Patricia: If you ever come up for air, can you please send me the Word version of the Standard Definitions document? I will then fix, PDF, secure and post it. Thank you. From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an updated Price schedule reflecting the change. I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page, which should be fixed in the next round of clean ups. 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage 2137 Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( Thanks,( Elliot( Elliot Smith⌦ Associate Ext. 6435 ******************************************************************** This e - mail message is privileged, confidential and subject to copyright. Any unauthorized use or disclosure is prohibited. Le contenu du présent courriel est privilégié, confidentiel et soumis à des droits d'auteur. Il est interdit de l'utiliser ou de le divulguer sans autorisation. ******************************************************************** 2138 Glenna Ford↵ From: Glenna Ford↵ Sent: December-02-09 3:15 PM↵ To: Jonathan Cheszes; Patricia Lightburn↵ Subject: RE: Escalation Percentage↵ All done, except for the online table (NMA ’ s bailiwick). Thanks.⌧ From: Jonathan Cheszes Sent: December 1, 2009 2:22 PM To: Patricia Lightburn Cc: Glenna Ford Subject: FW: Escalation Percentage Importance: High The price schedule on line still says “ Escalation Percentage ” and not “ Percentage Escalated ” . I have attached an⌧ updated Price schedule reflecting the change.⌧ I have also found a reference to Escalation Percentage in the standard definitions under, FIT Contract Cover Page,⌧ which should be fixed in the next round of clean ups.⌧ 1. FIT Contract Cover Page means the front page of the FIT Contract setting out specific features of the Facility, including its classification as an Automatic NTP Facility (as applicable), its Connection Point, Renewable Fuel, Contract Capacity, Contract Price, Escalation Percentage, applicability of the Peak Performance Factor and the applicable versions of Exhibits A and B.( Jonathan Cheszes⌧ Business Analyst⌧ Electricity Resources⌧ 120 Adelaide St. West, Suite 1600⌧ Toronto , ON , M5H 1T1⌧ Tel 41 6.969.6251✏ Fax 416.967.1947⌧ www.powerauthority.on.ca⌧ From: Smith, Elliot [mailto:ESmith@osler.com] Sent: November 2, 2009 6:20 PM To: Jonathan Cheszes Cc: Jim MacDougall; Jill Medley; Sadikman, Jacob Subject: Escalation Percentage Jon,( Pursuant to our discussions with Jill last week, we ’ ve renamed “ Escalation Percentage ” to “ Percentage( Escalated ” to provide greater clarity in what the term actually represents. We’ ll update the( rules/contract/definitions, but since we ’ re not the keepers of the price schedule, I wanted to pass this on to you( so you could make the conforming changes.( 2139 Thanks,( Elliot( Elliot Smith⌦ Associate⌧ Ext. 6435⌧ ********************************************************************⌧ This e - mail message is privileged, confidential and subject to⌧ copyright. Any unauthorized use or disclosure is prohibited.⌧ Le contenu du présent courriel est privilégié, confidentiel et✏ soumis à des droits d'auteur. Il est interdit de l'utiliser ou✏ de le divulguer sans autorisation.⌧ ********************************************************************⌧ 2140 Jonathan Cheszes From: Jonathan Cheszes Sent: January-08-10 3:01 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit I think it would get 44.3. That is what our price schedule says.⇡ Jonathan Cheszes⇡ Business Analyst⇡ Electricity Resources⇡ 120 Adelaide St. West, Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 41 6.969.6251 Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ From: Patricia Lightburn Sent: January 8, 2010 3:00 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under⇡ microFIT – does it get 80.2 even though it is ground mount?⇡ From: Jonathan Cheszes Sent: Friday, January 08, 2010 2:58 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit So you are okay, with two 1 0 kW projects getting 80.2 cents? Isn ’ t this like gaming the intent of the 10 kW limit?⇡ Jonathan Cheszes⇡ Business Analyst⇡ Electricity Resources⇡ 120 Adelaide St. West, Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 41 6.969.6251 Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ From: Patricia Lightburn Sent: January 8, 2010 2:56 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks Subject: RE: microFit I agree with Sarah ’ s comment that the mFIT project should not affect the price of the FIT project.⇡ From: Jim MacDougall Sent: Friday, January 08, 2010 2:52 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks 2141 Subject: RE: microFit I would love your comments or edits.⇡ Q: Will the OPA permit an Applicant to locate a microFIT property? Specifically, two 1 0 kW solar PV projects. and a FIT project - of the same technology - on the same A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT project at time of their first appliction to one of these programs. If an Applicant were to receive a microFIT contract and build their project, and subsequently request permission to build a FIT project, the OPA would consider such a request. The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT Rules. The OPA would consider the timing of the second application, the relative location of the second project to the first, and the proposed connection point of the second project.⇡ The first project will have to have reached Commercial Operation and have received payments under the first⇡ contract, prior to the second project's Application being considered. A second project on a different part of the property would likely be acceptable - for example one project on the ground and the second on a roof. Both projects would have to metered separately and be settled independently by the LDC.⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Jim MacDougall Sent: Tue 22/12/2009 12:11 PM To: Sarah Simmons; Jonathan Cheszes Subject: RE: microFit I understand and agree that this creates terrible complexity that we really don't want.⇡ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⇡ Separation in time?⇡ Require the first to reach COD before the second is allowed to apply, and get the contract?⇡ We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that we will⇡ prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⇡ Sarah?⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Sarah Simmons Sent: Tue 22/12/2009 11:19 AM To: Jim MacDougall; Jonathan Cheszes Subject: RE: microFit I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW)” .⇡ 2142 For the record, I think that the price should be for the capacity that is installed at the time. I don ’ t think that the first project influences the economics of the second projects. If you do what to proceed in the manor you ’ ve described, you should tell the application team asap so that they can build this functionality into the “ contract offer ” tool.⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email↵ From: Jim MacDougall Sent: December 22, 2009 11:11 AM To: Jonathan Cheszes Cc: Sarah Simmons Subject: RE: microFit Guys;⇡ I'd like your advice on this response before I send it. Pls edit my draft with your thoughts. Hi Frank;⇡ 1.⇡ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit that option as a means of allowing projects to develop over time. For example - gain experience with microFIT now and some⇡ time later choose to go bigger and do a FIT project. Whatever te capacity of the FIT project, if the first microFIT was⇡ 1 0 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW) We would reject a FIT and microFIT application if they both were proposed to be developed on the same property at⇡ the same time. We would want that to be a single project and the rejection would be on the basis of project splitting for taking advantage of the higher price.⇡ 2.⇡ Yes, the key there would be simply to work with the LDC to identify a single and appropriate connection point for the aggregate 150 kW project.⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] 2143 Sent: Tue 22/12/2009 10:49 AM To: Jim MacDougall Subject: RE: microFit Hi Jim I wanted to clarify some of the points in the email chain below 1) We can have a MicroFIT PV 2) ONE FIT contract per property, can the PV be split on several buildings on the property. For example I and a FIT PV project on one property✓ have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the same property ( approximately 30KW each). Thanks Frank Ruffolo⇡ Systems Engineering Manager⇡ ARISE Technologies Corporation⇡ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⇡ cell: 705 772 7909⇡ www.arisetech.com⇡ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM To: Frank Ruffolo; Jim MacDougall Subject: RE: microFit You can have one of each.⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email↵ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: November 27, 2009 11:16 AM To: Jim MacDougall; Sarah Simmons Subject: RE: microFit Hi Jim, Sarah I did not think you could have a microFIT contract AND a FIT contract on one property with the same✓ resource. 2144 Frank⇡ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: November 27, 2009 8:55 AM To: Sarah Simmons; Frank Ruffolo Subject: Re: microFit Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Sarah Simmons⇧ To: 'Frank Ruffolo' ⇧ CC: Jim MacDougall⇧ Sent: Fri Nov 27 08:26:07 2009⇧ Subject: RE: microFit⇧ For microFIT , it ’ s 10kW per RE per property.⇧ Under FIT, it ’ s one PV rooftop per property.⇧ You could have one FIT and one microFIT , but, if they were constructed at the same time, they would be considered one project.⇧ Jim, do you agree?⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ 2145 P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:45 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ I didn ’ t think you could have a FIT and a MicroFIT on the same property?⇧ Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:20 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Ok. So, the 2kW could go Contract per property ” .⇧ microFIT . Then the 40 kW would go FIT. UofW should be told the rule “ one rooftop PV FIT⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:06 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ 2146 It ’s not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental building going up and they have plans for a 40KW system … two different buildings, same property⇧ studies) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:04 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Yes. It gets a bit tricky.) Really, if they are constructing everything at about the same time, it should be one project/contract.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:01 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks Sarah⇧ This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s⇧ 2147 This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s⇧ ability to build a larger system due to the one roof top rule.⇧ I ’ ll probably pause on this for the moment.⇧ Thanks again for your help.⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:59 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ So, it ’ s 10 kW per renewable fuel per property.⇧ Above that would go to FIT, and it ’ s only ONE rooftop PV project in the FIT per property.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ 2148 _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:56 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks⇧ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation of Students. I have a concern, if the university builds another system on campus would it be another system or an add on ?) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:47 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ But, not at the same time J⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:44 PM⇧ To: Sarah Simmons⇧ Subject: microFit⇧ 2149 Hi Sarah⇧ Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇧ Thanks⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇧ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇧ 2150 Patricia Lightburn From: Patricia Lightburn Sent: January-08-10 3:02 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit No it doesn ’ t – 10 and under (ANY TYPE) gets 80.2⇢ From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:01 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit I think it would get 44.3. That is what our price schedule says.⇢ Jonathan Cheszes⇢ Business Analyst⇢ Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 41 6.969.6251 Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ From: Patricia Lightburn Sent: January 8, 2010 3:00 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under⇢ microFIT – does it get 80.2 even though it is ground mount?⇢ From: Jonathan Cheszes Sent: Friday, January 08, 2010 2:58 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit So you are okay, with two 1 0 kW projects getting 80.2 cents? Isn ’ t this like gaming the intent of the 10 kW limit?⇢ Jonathan Cheszes⇢ Business Analyst⇢ Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 41 6.969.6251 Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ From: Patricia Lightburn Sent: January 8, 2010 2:56 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks 2151 Subject: RE: microFit I agree with Sarah ’ s comment that the mFIT project should not affect the price of the FIT project.⇢ From: Jim MacDougall Sent: Friday, January 08, 2010 2:52 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks Subject: RE: microFit I would love your comments or edits.⇢ Q: Will the OPA permit an Applicant to locate a microFIT property? Specifically, two 1 0 kW solar PV projects. and a FIT project - of the same technology - on the same A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT project at time of their first appliction to one of these programs. If an Applicant were to receive a microFIT contract and build their project, and subsequently request permission to build a FIT project, the OPA would consider such a request. The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT Rules. The OPA would consider the timing of the second application, the relative location of the second project to the first, and the proposed connection point of the second project.⇢ The first project will have to have reached Commercial Operation and have received payments under the first⇢ contract, prior to the second project's Application being considered. A second project on a different part of the property would likely be acceptable - for example one project on the ground and the second on a roof. Both projects would have to metered separately and be settled independently by the LDC.⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969 - 6415⇢ From: Jim MacDougall Sent: Tue 22/12/2009 12:11 PM To: Sarah Simmons; Jonathan Cheszes Subject: RE: microFit I understand and agree that this creates terrible complexity that we really don't want.⇢ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⇢ Separation in time?⇢ Require the first to reach COD before the second is allowed to apply, and get the contract?⇢ We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that we will⇢ prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⇢ Sarah?⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969 - 6415⇢ 2152 From: Sarah Simmons Sent: Tue 22/12/2009 11:19 AM To: Jim MacDougall; Jonathan Cheszes Subject: RE: microFit I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW)” .⇢ For the record, I think that the price should be for the capacity that is installed at the time. I don ’ t think that the first project influences the economics of the second projects. If you do what to proceed in the manor you ’ ve described, you should tell the application team asap so that they can build this functionality into the “ contract offer ” tool.⇢ Sarah Simmons↵ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email↵ From: Jim MacDougall Sent: December 22, 2009 11:11 AM To: Jonathan Cheszes Cc: Sarah Simmons Subject: RE: microFit Guys;⇢ I'd like your advice on this response before I send it. Pls edit my draft with your thoughts. Hi Frank;⇢ 1.⇢ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit that option as a means of allowing projects to develop over time. For example - gain experience with microFIT now and some⇢ time later choose to go bigger and do a FIT project. Whatever te capacity of the FIT project, if the first microFIT was⇢ 1 0 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW) We would reject a FIT and microFIT application if they both were proposed to be developed on the same property at⇢ the same time. We would want that to be a single project and the rejection would be on the basis of project splitting for taking advantage of the higher price.⇢ 2.⇢ Yes, the key there would be simply to work with the LDC to identify a single and appropriate connection point for the aggregate 150 kW project.⇢ 2153 Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969 - 6415⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: Tue 22/12/2009 10:49 AM To: Jim MacDougall Subject: RE: microFit Hi Jim I wanted to clarify some of the points in the email chain below 1) 2) We can have a MicroFIT PV and a FIT PV project on one property✓ ONE FIT contract per property, can the PV be split on several buildings on the property. For example I have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the same property ( approximately 30KW each). Thanks Frank Ruffolo⇢ Systems Engineering Manager⇢ ARISE Technologies Corporation⇢ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⇢ cell: 705 772 7909⇢ www.arisetech.com⇢ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM To: Frank Ruffolo; Jim MacDougall Subject: RE: microFit You can have one of each.⇢ Sarah Simmons↵ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email↵ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: November 27, 2009 11:16 AM To: Jim MacDougall; Sarah Simmons Subject: RE: microFit 2154 Hi Jim, Sarah I did not think you could have a microFIT contract AND a FIT contract on one property with the same✓ resource. Frank⇢ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: November 27, 2009 8:55 AM To: Sarah Simmons; Frank Ruffolo Subject: Re: microFit Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Sarah Simmons⇧ To: 'Frank Ruffolo' ⇧ CC: Jim MacDougall⇧ Sent: Fri Nov 27 08:26:07 2009⇧ Subject: RE: microFit⇧ For microFIT , it ’ s 10kW per RE per property.⇧ Under FIT, it ’ s one PV rooftop per property.⇧ You could have one FIT and one microFIT , but, if they were constructed at the same time, they would be considered one project.⇧ Jim, do you agree?⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ 2155 Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:45 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ I didn ’ t think you could have a FIT and a MicroFIT on the same property?⇧ Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:20 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Ok. So, the 2kW could go Contract per property ” .⇧ microFIT . Then the 40 kW would go FIT. UofW should be told the rule “ one rooftop PV FIT⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ 2156 From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:06 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ It ’s not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental building going up and they have plans for a 40KW system … two different buildings, same property⇧ studies) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:04 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Yes. It gets a bit tricky.) Really, if they are constructing everything at about the same time, it should be one project/contract.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:01 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ 2157 Thanks Sarah⇧ This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s⇧ ability to build a larger system due to the one roof top rule.⇧ I ’ ll probably pause on this for the moment.⇧ Thanks again for your help.⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:59 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ So, it ’ s 10 kW per renewable fuel per property.⇧ Above that would go to FIT, and it ’ s only ONE rooftop PV project in the FIT per property.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ 2158 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:56 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks⇧ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation of Students. I have a concern, if the university builds another system on campus would it be another system or an add on ?) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:47 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ But, not at the same time J⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ 2159 _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:44 PM⇧ To: Sarah Simmons⇧ Subject: microFit⇧ Hi Sarah⇧ Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇧ Thanks⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇧ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇧ 2160 Jonathan Cheszes From: Jonathan Cheszes Sent: January-08-10 3:17 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit Sorry, I think I read your question backwards.⌫ Just to be clear, The 10 kW ground mount FIT gets 44.3.⌫ The 10 kW microFIT (roof top or ground mount) gets 80.2.⌫ Jonathan Cheszes⌫ Business Analyst⌫ Electricity Resources⌫ 120 Adelaide St. West, Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 41 6.969.6251 Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ From: Patricia Lightburn Sent: January 8, 2010 3:02 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit No it doesn ’ t – 10 and under (ANY TYPE) gets 80.2⌫ From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:01 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit I think it would get 44.3. That is what our price schedule says.⌫ Jonathan Cheszes⌫ Business Analyst⌫ Electricity Resources⌫ 120 Adelaide St. West, Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 41 6.969.6251 Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ From: Patricia Lightburn Sent: January 8, 2010 3:00 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under⌫ 2161 My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under⌫ microFIT – does it get 80.2 even though it is ground mount?⌫ From: Jonathan Cheszes Sent: Friday, January 08, 2010 2:58 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit So you are okay, with two 1 0 kW projects getting 80.2 cents? Isn ’ t this like gaming the intent of the 10 kW limit?⌫ Jonathan Cheszes⌫ Business Analyst⌫ Electricity Resources⌫ 120 Adelaide St. West, Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 41 6.969.6251 Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ From: Patricia Lightburn Sent: January 8, 2010 2:56 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks Subject: RE: microFit I agree with Sarah ’ s comment that the mFIT project should not affect the price of the FIT project.⌫ From: Jim MacDougall Sent: Friday, January 08, 2010 2:52 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks Subject: RE: microFit I would love your comments or edits.⌫ Q: Will the OPA permit an Applicant to locate a microFIT property? Specifically, two 1 0 kW solar PV projects. and a FIT project - of the same technology - on the same A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT project at time of their first appliction to one of these programs. If an Applicant were to receive a microFIT contract and build their project, and subsequently request permission to build a FIT project, the OPA would consider such a request. The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT Rules. The OPA would consider the timing of the second application, the relative location of the second project to the first, and the proposed connection point of the second project.⌫ The first project will have to have reached Commercial Operation and have received payments under the first⌫ contract, prior to the second project's Application being considered. A second project on a different part of the property would likely be acceptable - for example one project on the ground and the second on a roof. Both projects would have to metered separately and be settled independently by the LDC.⌫ Jim MacDougall, P.Eng.⌫ Manager, Distributed Generation⌫ Ontario Power Authority⌫ (416) 969 - 6415⌫ From: Jim MacDougall Sent: Tue 22/12/2009 12:11 PM 2162 To: Sarah Simmons; Jonathan Cheszes Subject: RE: microFit I understand and agree that this creates terrible complexity that we really don't want.⌫ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⌫ Separation in time?⌫ Require the first to reach COD before the second is allowed to apply, and get the contract?⌫ We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that we will⌫ prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⌫ Sarah?⌫ Jim MacDougall, P.Eng.⌫ Manager, Distributed Generation⌫ Ontario Power Authority⌫ (416) 969 - 6415⌫ From: Sarah Simmons Sent: Tue 22/12/2009 11:19 AM To: Jim MacDougall; Jonathan Cheszes Subject: RE: microFit I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW)” .⌫ For the record, I think that the price should be for the capacity that is installed at the time. I don ’ t think that the first project influences the economics of the second projects. If you do what to proceed in the manor you ’ ve described, you should tell the application team asap so that they can build this functionality into the “ contract offer ” tool.⌫ Sarah Simmons↵ Analyst⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St. W. Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 416.969.6213⌫ Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ P please consider the environment before printing this email↵ From: Jim MacDougall Sent: December 22, 2009 11:11 AM To: Jonathan Cheszes Cc: Sarah Simmons Subject: RE: microFit Guys;⌫ 2163 I'd like your advice on this response before I send it. Pls edit my draft with your thoughts. Hi Frank;⌫ 1.⌫ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit that option as a means of allowing projects to develop over time. For example - gain experience with microFIT now and some⌫ time later choose to go bigger and do a FIT project. Whatever te capacity of the FIT project, if the first microFIT was⌫ 1 0 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW) We would reject a FIT and microFIT application if they both were proposed to be developed on the same property at⌫ the same time. We would want that to be a single project and the rejection would be on the basis of project splitting for taking advantage of the higher price.⌫ 2.⌫ Yes, the key there would be simply to work with the LDC to identify a single and appropriate connection point for the aggregate 150 kW project.⌫ Jim MacDougall, P.Eng.⌫ Manager, Distributed Generation⌫ Ontario Power Authority⌫ (416) 969 - 6415⌫ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: Tue 22/12/2009 10:49 AM To: Jim MacDougall Subject: RE: microFit Hi Jim I wanted to clarify some of the points in the email chain below 1) We can have a MicroFIT PV 2) ONE FIT contract per property, can the PV be split on several buildings on the property. For example I and a FIT PV project on one property✓ have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the same property ( approximately 30KW each). Thanks Frank Ruffolo⌫ Systems Engineering Manager⌫ ARISE Technologies Corporation⌫ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⌫ cell: 705 772 7909⌫ www.arisetech.com⌫ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] 2164 Sent: November 27, 2009 11:18 AM To: Frank Ruffolo; Jim MacDougall Subject: RE: microFit You can have one of each.⌫ Sarah Simmons↵ Analyst⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St. W. Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 416.969.6213⌫ Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ P please consider the environment before printing this email↵ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: November 27, 2009 11:16 AM To: Jim MacDougall; Sarah Simmons Subject: RE: microFit Hi Jim, Sarah I did not think you could have a microFIT contract AND a FIT contract on one property with the same✓ resource. Frank⌫ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: November 27, 2009 8:55 AM To: Sarah Simmons; Frank Ruffolo Subject: Re: microFit Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Sarah Simmons⇧ To: 'Frank Ruffolo' ⇧ CC: Jim MacDougall⇧ Sent: Fri Nov 27 08:26:07 2009⇧ Subject: RE: microFit⇧ For microFIT , it ’ s 10kW per RE per property.⇧ Under FIT, it ’ s one PV rooftop per property.⇧ 2165 You could have one FIT and one microFIT , but, if they were constructed at the same time, they would be considered one project.⇧ Jim, do you agree?⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:45 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ I didn ’ t think you could have a FIT and a MicroFIT on the same property?⇧ Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:20 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Ok. So, the 2kW could go Contract per property ” .⇧ microFIT . Then the 40 kW would go FIT. UofW should be told the rule “ one rooftop PV FIT⇧ 2166 Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:06 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ It ’s not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental building going up and they have plans for a 40KW system … two different buildings, same property⇧ studies) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:04 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Yes. It gets a bit tricky.) Really, if they are constructing everything at about the same time, it should be one project/contract.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ 2167 Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:01 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks Sarah⇧ This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s⇧ ability to build a larger system due to the one roof top rule.⇧ I ’ ll probably pause on this for the moment.⇧ Thanks again for your help.⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:59 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ So, it ’ s 10 kW per renewable fuel per property.⇧ 2168 So, it ’ s 10 kW per renewable fuel per property.⇧ Above that would go to FIT, and it ’ s only ONE rooftop PV project in the FIT per property.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:56 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks⇧ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation of Students. I have a concern, if the university builds another system on campus would it be another system or an add on ?) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:47 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ But, not at the same time J⇧ 2169 Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:44 PM⇧ To: Sarah Simmons⇧ Subject: microFit⇧ Hi Sarah⇧ Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇧ Thanks⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇧ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately 2170 Patricia Lightburn From: Patricia Lightburn Sent: January-08-10 3:18 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit Nope⇧ I think both should get 80.2⇧ From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:17 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit Sorry, I think I read your question backwards.⇧ Just to be clear, The 10 kW ground mount FIT gets 44.3.⇧ The 10 kW microFIT (roof top or ground mount) gets 80.2.⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ From: Patricia Lightburn Sent: January 8, 2010 3:02 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit No it doesn ’ t – 10 and under (ANY TYPE) gets 80.2⇧ From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:01 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit I think it would get 44.3. That is what our price schedule says.⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ 2171 Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ From: Patricia Lightburn Sent: January 8, 2010 3:00 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under⇧ microFIT – does it get 80.2 even though it is ground mount?⇧ From: Jonathan Cheszes Sent: Friday, January 08, 2010 2:58 PM To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks Subject: RE: microFit So you are okay, with two 1 0 kW projects getting 80.2 cents? Isn ’ t this like gaming the intent of the 10 kW limit?⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ From: Patricia Lightburn Sent: January 8, 2010 2:56 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks Subject: RE: microFit I agree with Sarah ’ s comment that the mFIT project should not affect the price of the FIT project.⇧ From: Jim MacDougall Sent: Friday, January 08, 2010 2:52 PM To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks Subject: RE: microFit I would love your comments or edits.⇧ Q: Will the OPA permit an Applicant to locate a microFIT property? Specifically, two 1 0 kW solar PV projects. and a FIT project - of the same technology - on the same A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT project at time of their first appliction to one of these programs. If an Applicant were to receive a microFIT contract and build their project, and subsequently request permission to build a FIT project, the OPA would consider such a request. The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT Rules. The OPA would consider the timing of the second application, the relative location of the second project to the first, and the proposed connection point of the second project.⇧ The first project will have to have reached Commercial Operation and have received payments under the first⇧ contract, prior to the second project's Application being considered. A second project on a different part of the property would likely be acceptable - for example one project on the ground and the second on a roof. Both projects 2172 property would likely be acceptable would have to metered separately and be settled independently by the LDC.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969 - 6415⇧ From: Jim MacDougall Sent: Tue 22/12/2009 12:11 PM To: Sarah Simmons; Jonathan Cheszes Subject: RE: microFit I understand and agree that this creates terrible complexity that we really don't want.⇧ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⇧ Separation in time?⇧ Require the first to reach COD before the second is allowed to apply, and get the contract?⇧ We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that we will⇧ prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⇧ Sarah?⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969 - 6415⇧ From: Sarah Simmons Sent: Tue 22/12/2009 11:19 AM To: Jim MacDougall; Jonathan Cheszes Subject: RE: microFit I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW)” .⇧ For the record, I think that the price should be for the capacity that is installed at the time. I don ’ t think that the first project influences the economics of the second projects. If you do what to proceed in the manor you ’ ve described, you should tell the application team asap so that they can build this functionality into the “ contract offer ” tool.⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ 2173 www.powerauthority.on.ca⇧ P please consider the environment before printing this email↵ From: Jim MacDougall Sent: December 22, 2009 11:11 AM To: Jonathan Cheszes Cc: Sarah Simmons Subject: RE: microFit Guys;⇧ I'd like your advice on this response before I send it. Pls edit my draft with your thoughts. Hi Frank;⇧ 1.⇧ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit that option as a means of allowing projects to develop over time. For example - gain experience with microFIT now and some⇧ time later choose to go bigger and do a FIT project. Whatever te capacity of the FIT project, if the first microFIT was⇧ 1 0 kW then regardless of the second FIT project, it would earn the 1 0 - 250 kW price. (even if it were also 1 0 kW) We would reject a FIT and microFIT application if they both were proposed to be developed on the same property at⇧ the same time. We would want that to be a single project and the rejection would be on the basis of project splitting for taking advantage of the higher price.⇧ 2.⇧ Yes, the key there would be simply to work with the LDC to identify a single and appropriate connection point for the aggregate 150 kW project.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969 - 6415⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: Tue 22/12/2009 10:49 AM To: Jim MacDougall Subject: RE: microFit Hi Jim I wanted to clarify some of the points in the email chain below 1) 2) We can have a MicroFIT PV and a FIT PV project on one property✓ ONE FIT contract per property, can the PV be split on several buildings on the property. For example I have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the same property ( approximately 30KW each). Thanks 2174 Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM To: Frank Ruffolo; Jim MacDougall Subject: RE: microFit You can have one of each.⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email↵ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: November 27, 2009 11:16 AM To: Jim MacDougall; Sarah Simmons Subject: RE: microFit Hi Jim, Sarah I did not think you could have a microFIT contract AND a FIT contract on one property with the same✓ resource. Frank⇧ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: November 27, 2009 8:55 AM To: Sarah Simmons; Frank Ruffolo Subject: Re: microFit Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Sarah Simmons⇧ To: 'Frank Ruffolo' ⇧ 2175 To: 'Frank Ruffolo' ⇧ CC: Jim MacDougall⇧ Sent: Fri Nov 27 08:26:07 2009⇧ Subject: RE: microFit⇧ For microFIT , it ’ s 10kW per RE per property.⇧ Under FIT, it ’ s one PV rooftop per property.⇧ You could have one FIT and one microFIT , but, if they were constructed at the same time, they would be considered one project.⇧ Jim, do you agree?⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:45 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ I didn ’ t think you could have a FIT and a MicroFIT on the same property?⇧ Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ 2176 From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:20 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Ok. So, the 2kW could go Contract per property ” .⇧ microFIT . Then the 40 kW would go FIT. UofW should be told the rule “ one rooftop PV FIT⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:06 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ It ’s not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental building going up and they have plans for a 40KW system … two different buildings, same property⇧ studies) Frank⇧ From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 4:04 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Yes. It gets a bit tricky.) 2177 Really, if they are constructing everything at about the same time, it should be one project/contract.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 4:01 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks Sarah⇧ This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s⇧ ability to build a larger system due to the one roof top rule.⇧ I ’ ll probably pause on this for the moment.⇧ Thanks again for your help.⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ 2178 From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:59 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ So, it ’ s 10 kW per renewable fuel per property.⇧ Above that would go to FIT, and it ’ s only ONE rooftop PV project in the FIT per property.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:56 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks⇧ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation of Students. I have a concern, if the university builds another system on campus would it be another system or an add on ?) Frank⇧ 2179 From: Sarah Simmons [ mailto:Sarah.Simmons@powerauthority.on.ca ]⇧ Sent: November 26, 2009 2:47 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ But, not at the same time J⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ _________________________ _____ __⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com ]⇧ Sent: November 26, 2009 2:44 PM⇧ To: Sarah Simmons⇧ Subject: microFit⇧ Hi Sarah⇧ Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇧ Thanks⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo , Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ 2180 Jim MacDougall From: Jim MacDougall⇧ Sent: January-08-10 3:43 PM⇧ To: Patricia Lightburn; Jonathan Cheszes; Sarah Simmons; Cindy Roks⇧ Subject: Re: microFit⇧ Yes.⇧ Can anyone edit my text to make that clearer?⇧ Jim MacDougall, P.Eng.⇧ Manager, FIT Program⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ -----Original Message----From: Patricia Lightburn⇧ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Sent: Fri Jan 08 15:18:13 2010⇧ Subject: RE: microFit⇧ Nope⇧ I think both should get 80.2⇧ ________________________________⇧ From: Jonathan Cheszes⇧ Sent: Friday, January 08, 2010 3:17 PM⇧ To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Subject: RE: microFit⇧ Sorry, I think I read your question backwards.⇧ Just to be clear,⇧ 2181 The 10 kW ground mount FIT gets 44.3.⇧ The 10 kW microFIT (roof top or ground mount) gets 80.2.⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6251⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ ________________________________⇧ From: Patricia Lightburn⇧ Sent: January 8, 2010 3:02 PM⇧ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Subject: RE: microFit⇧ No it doesn't - 10 and under (ANY TYPE) gets 80.2⇧ ________________________________⇧ From: Jonathan Cheszes⇧ Sent: Friday, January 08, 2010 3:01 PM⇧ To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Subject: RE: microFit⇧ I think it would get 44.3. That is what our price schedule says.⇧ 2182 Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6251⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ ________________________________⇧ From: Patricia Lightburn⇧ Sent: January 8, 2010 3:00 PM⇧ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Subject: RE: microFit⇧ My main question is what if you had a ground mounted 10kW under FIT (after having used up your⇧ 10kW) under microFIT - does it get 80.2 even though it is ground mount?⇧ ________________________________⇧ From: Jonathan Cheszes⇧ Sent: Friday, January 08, 2010 2:58 PM⇧ To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇧ Subject: RE: microFit⇧ So you are okay, with two 10 kW projects getting 80.2 cents? Isn't this like gaming the intent of the 10⇧ kW limit?⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 2183 120 Adelaide St. West, Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6251⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ ________________________________⇧ From: Patricia Lightburn⇧ Sent: January 8, 2010 2:56 PM⇧ To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks⇧ Subject: RE: microFit⇧ I agree with Sarah's comment that the mFIT project should not affect the price of the FIT project.⇧ ________________________________⇧ From: Jim MacDougall⇧ Sent: Friday, January 08, 2010 2:52 PM⇧ To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks⇧ Subject: RE: microFit⇧ I would love your comments or edits.⇧ Q: Will the OPA permit an Applicant to locate a microFIT and a FIT project - of the same technology on the same property? Specifically, two 10 kW solar PV projects.⇧ A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT⇧ project at time of their first appliction to one of these programs. If an Applicant were to receive a⇧ microFIT contract and build their project, and subsequently request permission to build a FIT project,⇧ the OPA would consider such a request.⇧ The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT⇧ Rules. The OPA would consider the timing of the second application, the relative location of the second⇧ 2184 project to the first, and the proposed connection point of the second project.⇧ The first project will have to have reached Commercial Operation and have received payments under⇧ the first contract, prior to the second project's Application being considered. A second project on a⇧ different part of the property would likely be acceptable - for example one project on the ground and⇧ the second on a roof. Both projects would have to metered separately and be settled independently by⇧ the LDC.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969-6415⇧ ________________________________⇧ From: Jim MacDougall⇧ Sent: Tue 22/12/2009 12:11 PM⇧ To: Sarah Simmons; Jonathan Cheszes⇧ Subject: RE: microFit⇧ I understand and agree that this creates terrible complexity that we really don't want.⇧ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⇧ Separation in time?⇧ Require the first to reach COD before the second is allowed to apply, and get the contract?⇧ We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that⇧ we will prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⇧ 2185 Sarah?⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969-6415⇧ ________________________________⇧ From: Sarah Simmons⇧ Sent: Tue 22/12/2009 11:19 AM⇧ To: Jim MacDougall; Jonathan Cheszes⇧ Subject: RE: microFit⇧ I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then⇧ regardless of the second FIT project, it would earn the 10-250 kW price. (even if it were also 10 kW) ” .⇧ For the record, I think that the price should be for the capacity that is installed at the time. I don't think⇧ that the first project influences the economics of the second projects.⇧ If you do what to proceed in the manor you've described, you should tell the application team asap so⇧ that they can build this functionality into the “ contract offer ” tool.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ 2186 Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca ⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Jim MacDougall⇧ Sent: December 22, 2009 11:11 AM⇧ To: Jonathan Cheszes⇧ Cc: Sarah Simmons⇧ Subject: RE: microFit⇧ Guys;⇧ I'd like your advice on this response before I send it. Pls edit my draft with your thoughts.⇧ Hi Frank;⇧ 1.⇧ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit⇧ that option as a means of allowing projects to develop over time. For example - gain experience with⇧ microFIT now and some time later choose to go bigger and do a FIT project. Whatever te capacity of⇧ the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn⇧ the 10-250 kW price. (even if it were also 10 kW)⇧ We would reject a FIT and microFIT application if they both were proposed to be developed on the⇧ same property at the same time. We would want that to be a single project and the rejection would be⇧ on the basis of project splitting for taking advantage of the higher price.⇧ 2187 2.⇧ Yes, the key there would be simply to work with the LDC to identify a single and appropriate⇧ connection point for the aggregate 150 kW project.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ (416) 969-6415⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: Tue 22/12/2009 10:49 AM⇧ To: Jim MacDougall⇧ Subject: RE: microFit⇧ Hi Jim⇧ I wanted to clarify some of the points in the email chain below⇧ 1) We can have a MicroFIT PV and a FIT PV project on one property⇧ 2) ONE FIT contract per property, can the PV be split on several buildings on the property. For example I⇧ have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the⇧ same property ( approximately 30KW each).⇧ Thanks⇧ 2188 Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⇧ cell: 705 772 7909⇧ www.arisetech.com⇧ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM⇧ To: Frank Ruffolo; Jim MacDougall⇧ Subject: RE: microFit⇧ You can have one of each.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca ⇧ P please consider the environment before printing this email⇧ ________________________________⇧ 2189 From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 27, 2009 11:16 AM⇧ To: Jim MacDougall; Sarah Simmons⇧ Subject: RE: microFit⇧ Hi Jim, Sarah⇧ I did not think you could have a microFIT contract AND a FIT contract on one property with the same⇧ resource.⇧ Frank⇧ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇧ Sent: November 27, 2009 8:55 AM⇧ To: Sarah Simmons; Frank Ruffolo⇧ Subject: Re: microFit⇧ Yes.⇧ Jim MacDougall, P.Eng.⇧ Manager, Distributed Generation⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ -----Original Message----From: Sarah Simmons⇧ To: 'Frank Ruffolo' ⇧ CC: Jim MacDougall⇧ Sent: Fri Nov 27 08:26:07 2009⇧ Subject: RE: microFit⇧ For microFIT, it's 10kW per RE per property.⇧ Under FIT, it's one PV rooftop per property.⇧ 2190 You could have one FIT and one microFIT, but, if they were constructed at the same time, they would⇧ be considered one project.⇧ Jim, do you agree?⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 26, 2009 4:45 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ I didn't think you could have a FIT and a MicroFIT on the same property?⇧ Frank⇧ 2191 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇧ Sent: November 26, 2009 4:20 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Ok. So, the 2kW could go microFIT. Then the 40 kW would go FIT. UofW should be told the rule “ one⇧ rooftop PV FIT Contract per property ” .⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 26, 2009 4:06 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ It's not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental studies building going up and they have plans for a 40KW system … two different⇧ buildings, same property⇧ 2192 Frank⇧ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇧ Sent: November 26, 2009 4:04 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ Yes. It gets a bit tricky.⇧ Really, if they are constructing everything at about the same time, it should be one project/contract.⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 26, 2009 4:01 PM⇧ To: Sarah Simmons⇧ 2193 Subject: RE: microFit⇧ Thanks Sarah⇧ This is going to take more time to think thru what the best approach would be. I don't want to⇧ jeopardize the university's ability to build a larger system due to the one roof top rule.⇧ I'll probably pause on this for the moment.⇧ Thanks again for your help.⇧ Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8 cell: 705 772 7909 www.arisetech.com⇧ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇧ Sent: November 26, 2009 2:59 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ So, it's 10 kW per renewable fuel per property.⇧ Above that would go to FIT, and it's only ONE rooftop PV project in the FIT per property.⇧ Sarah Simmons⇧ Analyst⇧ 2194 Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 26, 2009 2:56 PM⇧ To: Sarah Simmons⇧ Subject: RE: microFit⇧ Thanks⇧ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation⇧ of Students. I have a concern, if the university builds another system on campus would it be another⇧ system or an add on ?⇧ Frank⇧ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇧ Sent: November 26, 2009 2:47 PM⇧ To: Frank Ruffolo⇧ Subject: RE: microFit⇧ 2195 But, not at the same time J⇧ Sarah Simmons⇧ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto, ON, M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email⇧ ________________________________⇧ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇧ Sent: November 26, 2009 2:44 PM⇧ To: Sarah Simmons⇧ Subject: microFit⇧ Hi Sarah⇧ Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇧ Thanks⇧ 2196 Frank Ruffolo⇧ Systems Engineering Manager⇧ ARISE Technologies Corporation⇧ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8 cell: 705 772 7909 www.arisetech.com⇧ This e-mail message and any files transmitted with it are intended only for the named recipient(s)⇧ above and may contain information that is privileged, confidential and/or exempt from disclosure⇧ under applicable law. If you are not the intended recipient(s), any dissemination, distribution or⇧ copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately⇧ and delete this e-mail message.⇧ 2197 Patricia Lightburn From: Patricia Lightburn⇢ Sent: January-08-10 3:50 PM⇢ To: Jim MacDougall; Jonathan Cheszes; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ Jim can we talk more about this on Monday - I do not think we have reached a resolution...⇢ -----Original Message----From: Jim MacDougall⇢ Sent: Friday, January 08, 2010 3:43 PM⇢ To: Patricia Lightburn; Jonathan Cheszes; Sarah Simmons; Cindy Roks⇢ Subject: Re: microFit⇢ Yes.⇢ Can anyone edit my text to make that clearer?⇢ Jim MacDougall, P.Eng.⇢ Manager, FIT Program⇢ Ontario Power Authority⇢ 416 969 6415⇢ Sent from my BB⇢ -----Original Message----From: Patricia Lightburn⇢ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Sent: Fri Jan 08 15:18:13 2010⇢ Subject: RE: microFit⇢ Nope⇢ I think both should get 80.2⇢ ________________________________⇢ From: Jonathan Cheszes⇢ Sent: Friday, January 08, 2010 3:17 PM⇢ To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ 2198 Sorry, I think I read your question backwards.⇢ Just to be clear,⇢ The 10 kW ground mount FIT gets 44.3.⇢ The 10 kW microFIT (roof top or ground mount) gets 80.2.⇢ Jonathan Cheszes⇢ Business Analyst⇢ Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6251⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ ________________________________⇢ From: Patricia Lightburn⇢ Sent: January 8, 2010 3:02 PM⇢ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ No it doesn't - 10 and under (ANY TYPE) gets 80.2⇢ ________________________________⇢ From: Jonathan Cheszes⇢ Sent: Friday, January 08, 2010 3:01 PM⇢ 2199 To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ I think it would get 44.3. That is what our price schedule says.⇢ Jonathan Cheszes⇢ Business Analyst⇢ Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6251⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ ________________________________⇢ From: Patricia Lightburn⇢ Sent: January 8, 2010 3:00 PM⇢ To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ My main question is what if you had a ground mounted 10kW under FIT (after having used up your⇢ 10kW) under microFIT - does it get 80.2 even though it is ground mount?⇢ ________________________________⇢ From: Jonathan Cheszes⇢ Sent: Friday, January 08, 2010 2:58 PM⇢ To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks⇢ Subject: RE: microFit⇢ So you are okay, with two 10 kW projects getting 80.2 cents? Isn't this like gaming the intent of the 10⇢ kW limit?⇢ 2200 Jonathan Cheszes⇢ Business Analyst⇢ Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6251⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ ________________________________⇢ From: Patricia Lightburn⇢ Sent: January 8, 2010 2:56 PM⇢ To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks⇢ Subject: RE: microFit⇢ I agree with Sarah's comment that the mFIT project should not affect the price of the FIT project.⇢ ________________________________⇢ From: Jim MacDougall⇢ Sent: Friday, January 08, 2010 2:52 PM⇢ To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks⇢ Subject: RE: microFit⇢ I would love your comments or edits.⇢ Q: Will the OPA permit an Applicant to locate a microFIT and a FIT project - of the same technology on the same property? Specifically, two 10 kW solar PV projects.⇢ A. In general, Applicants are required to make decisions on the appropriately sized FIT or microFIT⇢ 2201 project at time of their first appliction to one of these programs. If an Applicant were to receive a⇢ microFIT contract and build their project, and subsequently request permission to build a FIT project,⇢ the OPA would consider such a request.⇢ The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT⇢ Rules. The OPA would consider the timing of the second application, the relative location of the second⇢ project to the first, and the proposed connection point of the second project.⇢ The first project will have to have reached Commercial Operation and have received payments under⇢ the first contract, prior to the second project's Application being considered. A second project on a⇢ different part of the property would likely be acceptable - for example one project on the ground and⇢ the second on a roof. Both projects would have to metered separately and be settled independently by⇢ the LDC.⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969-6415⇢ ________________________________⇢ From: Jim MacDougall⇢ Sent: Tue 22/12/2009 12:11 PM⇢ To: Sarah Simmons; Jonathan Cheszes⇢ Subject: RE: microFit⇢ I understand and agree that this creates terrible complexity that we really don't want.⇢ How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?⇢ Separation in time?⇢ Require the first to reach COD before the second is allowed to apply, and get the contract?⇢ 2202 We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that⇢ we will prevent gaming ... and the perception that the real size tranche is 0 - 20 kW at 80.2 c/kWh.⇢ Sarah?⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969-6415⇢ ________________________________⇢ From: Sarah Simmons⇢ Sent: Tue 22/12/2009 11:19 AM⇢ To: Jim MacDougall; Jonathan Cheszes⇢ Subject: RE: microFit⇢ I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then⇢ regardless of the second FIT project, it would earn the 10-250 kW price. (even if it were also 10 kW) ” .⇢ For the record, I think that the price should be for the capacity that is installed at the time. I don't think⇢ that the first project influences the economics of the second projects.⇢ If you do what to proceed in the manor you've described, you should tell the application team asap so⇢ that they can build this functionality into the “ contract offer ” tool.⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ 2203 Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca ⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Jim MacDougall⇢ Sent: December 22, 2009 11:11 AM⇢ To: Jonathan Cheszes⇢ Cc: Sarah Simmons⇢ Subject: RE: microFit⇢ Guys;⇢ I'd like your advice on this response before I send it. Pls edit my draft with your thoughts.⇢ Hi Frank;⇢ 1.⇢ Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit⇢ that option as a means of allowing projects to develop over time. For example - gain experience with⇢ microFIT now and some time later choose to go bigger and do a FIT project. Whatever te capacity of⇢ the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn⇢ the 10-250 kW price. (even if it were also 10 kW)⇢ 2204 We would reject a FIT and microFIT application if they both were proposed to be developed on the⇢ same property at the same time. We would want that to be a single project and the rejection would be⇢ on the basis of project splitting for taking advantage of the higher price.⇢ 2.⇢ Yes, the key there would be simply to work with the LDC to identify a single and appropriate⇢ connection point for the aggregate 150 kW project.⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ (416) 969-6415⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: Tue 22/12/2009 10:49 AM⇢ To: Jim MacDougall⇢ Subject: RE: microFit⇢ Hi Jim⇢ I wanted to clarify some of the points in the email chain below⇢ 1) We can have a MicroFIT PV and a FIT PV project on one property⇢ 2) ONE FIT contract per property, can the PV be split on several buildings on the property. For example I⇢ have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the⇢ same property ( approximately 30KW each).⇢ 2205 Thanks⇢ Frank Ruffolo⇢ Systems Engineering Manager⇢ ARISE Technologies Corporation⇢ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8⇢ cell: 705 772 7909⇢ www.arisetech.com⇢ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM⇢ To: Frank Ruffolo; Jim MacDougall⇢ Subject: RE: microFit⇢ You can have one of each.⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ 2206 Fax 416.967.1947⇢ www.powerauthority.on.ca ⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 27, 2009 11:16 AM⇢ To: Jim MacDougall; Sarah Simmons⇢ Subject: RE: microFit⇢ Hi Jim, Sarah⇢ I did not think you could have a microFIT contract AND a FIT contract on one property with the same⇢ resource.⇢ Frank⇢ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: November 27, 2009 8:55 AM⇢ To: Sarah Simmons; Frank Ruffolo⇢ Subject: Re: microFit⇢ Yes.⇢ Jim MacDougall, P.Eng.⇢ Manager, Distributed Generation⇢ Ontario Power Authority⇢ 416 969 6415⇢ Sent from my BB⇢ -----Original Message----From: Sarah Simmons⇢ To: 'Frank Ruffolo' ⇢ CC: Jim MacDougall⇢ Sent: Fri Nov 27 08:26:07 2009⇢ Subject: RE: microFit⇢ 2207 For microFIT, it's 10kW per RE per property.⇢ Under FIT, it's one PV rooftop per property.⇢ You could have one FIT and one microFIT, but, if they were constructed at the same time, they would⇢ be considered one project.⇢ Jim, do you agree?⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 26, 2009 4:45 PM⇢ To: Sarah Simmons⇢ Subject: RE: microFit⇢ 2208 I didn't think you could have a FIT and a MicroFIT on the same property?⇢ Frank⇢ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇢ Sent: November 26, 2009 4:20 PM⇢ To: Frank Ruffolo⇢ Subject: RE: microFit⇢ Ok. So, the 2kW could go microFIT. Then the 40 kW would go FIT. UofW should be told the rule “ one⇢ rooftop PV FIT Contract per property ” .⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 26, 2009 4:06 PM⇢ To: Sarah Simmons⇢ 2209 Subject: RE: microFit⇢ It's not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental studies building going up and they have plans for a 40KW system … two different⇢ buildings, same property⇢ Frank⇢ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇢ Sent: November 26, 2009 4:04 PM⇢ To: Frank Ruffolo⇢ Subject: RE: microFit⇢ Yes. It gets a bit tricky.⇢ Really, if they are constructing everything at about the same time, it should be one project/contract.⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ 2210 www.powerauthority.on.ca⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 26, 2009 4:01 PM⇢ To: Sarah Simmons⇢ Subject: RE: microFit⇢ Thanks Sarah⇢ This is going to take more time to think thru what the best approach would be. I don't want to⇢ jeopardize the university's ability to build a larger system due to the one roof top rule.⇢ I'll probably pause on this for the moment.⇢ Thanks again for your help.⇢ Frank Ruffolo⇢ Systems Engineering Manager⇢ ARISE Technologies Corporation⇢ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8 cell: 705 772 7909 www.arisetech.com⇢ From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇢ Sent: November 26, 2009 2:59 PM⇢ To: Frank Ruffolo⇢ Subject: RE: microFit⇢ So, it's 10 kW per renewable fuel per property.⇢ 2211 Above that would go to FIT, and it's only ONE rooftop PV project in the FIT per property.⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 26, 2009 2:56 PM⇢ To: Sarah Simmons⇢ Subject: RE: microFit⇢ Thanks⇢ We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation⇢ of Students. I have a concern, if the university builds another system on campus would it be another⇢ system or an add on ?⇢ Frank⇢ 2212 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]⇢ Sent: November 26, 2009 2:47 PM⇢ To: Frank Ruffolo⇢ Subject: RE: microFit⇢ But, not at the same time J⇢ Sarah Simmons⇢ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email⇢ ________________________________⇢ From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]⇢ Sent: November 26, 2009 2:44 PM⇢ To: Sarah Simmons⇢ Subject: microFit⇢ Hi Sarah⇢ 2213 Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.⇢ Thanks⇢ Frank Ruffolo⇢ Systems Engineering Manager⇢ ARISE Technologies Corporation⇢ 65 Northland Rd. Waterloo, Ontario, N2V 1Y8 cell: 705 772 7909 www.arisetech.com⇢ This e-mail message and any files transmitted with it are intended only for the named recipient(s)⇢ above and may contain information that is privileged, confidential and/or exempt from disclosure⇢ under applicable law. If you are not the intended recipient(s), any dissemination, distribution or⇢ copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately⇢ and delete this e-mail message.⇢ 2214 Sarah Simmons↵ From: Sarah Simmons↵ Sent: January-08-10 4:01 PM↵ To: Patricia Lightburn; Jim MacDougall; Jonathan Cheszes; Cindy Roks↵ Subject: RE: microFit↵ I have some thoughts here … but I don ’ t have time to write it down j ust yet. I⌫ will think about it over the weekend …⌫ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email↵ -----Original Message----From: Patricia Lightburn Sent: January 8, 2010 3:50 PM' To: Jim MacDougall; Jonathan Cheszes; Sarah Simmons; Cindy Roks' Subject: RE: microFit' Jim can we talk more about this on Monday - I do not think we have reached a resolution...' -----Original Message----From: Jim MacDougall Sent: Friday, January 08, 2010 3:43 PM' To: Patricia Lightburn; Jonathan Cheszes; Sarah Simmons; Cindy Roks' Subject: Re: microFit' Yes.' Can anyone edit my text to make that clearer?' Jim MacDougall, P.Eng.' Manager, FIT Program' Ontario Power Authority' 416 969 6415' Sent from my BB' -----Original Message----From: Patricia Lightburn' To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks' Sent: Fri Jan 08 15:18:13 2010' Subject: RE: microFit' Nope' 2215 I think both should get 80.2' _________________________ _______' From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:17 PM' To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks' Subject: RE: microFit' Sorry, I think I read your question backwards.' Just to be clear, The 10 kW ground mount FIT gets 44.3.' The 10 kW microFIT (roof top or ground mount) gets 80.2. Jonathan Cheszes' Business Analyst' Electricity Resources' 120 Adelaide St. West, Suite 1600' Toronto, ON, M5H 1T1' Tel 416. 969. 6251⌫ Fax 416.967.1947' www.powerauthority.on.ca _________________________ _______' From: Patricia Lightburn Sent: January 8, 2010 3:02 PM' To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks' Subject: RE: microFit' No it doesn ’ t – 10 and under (ANY TYPE) gets 80.2' 2216 _________________________ _______' From: Jonathan Cheszes Sent: Friday, January 08, 2010 3:01 PM' To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks' Subject: RE: microFit' I think it would get 44.3. That is what our price schedule says.' Jonathan Cheszes' Business Analyst' Electricity Resources' 120 Adelaide St. West, Suite 1600' Toronto, ON, M5H 1T1' Tel 416. 969. 6251⌫ Fax 416.967.1947' www.powerauthority.on.ca _________________________ _______' From: Patricia Lightburn Sent: January 8, 2010 3:00 PM' To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons; Cindy Roks' Subject: RE: microFit' My main question is what if you had a ground mounted 10kW under FIT (after having used up your 10kW) under microFIT – does it get 80.2 even though it is ground mount?' _________________________ _______' From: Jonathan Cheszes Sent: Friday, January 08, 2010 2:58 PM' To: Patricia Lightburn; Jim MacDougall; Sarah Simmons; Cindy Roks' Subject: RE: microFit' So you are okay, with two 10 kW proj ects getting 80. 2 cents? Isn ’ t this like gaming the intent of the 10 kW limit?' Jonathan Cheszes' 2217 Business Analyst' Electricity Resources' 120 Adelaide St. West, Suite 1600' Toronto, ON, M5H 1T1' Tel 416. 969. 6251⌫ Fax 416.967.1947' www.powerauthority.on.ca _________________________ _______' From: Patricia Lightburn Sent: January 8, 2010 2:56 PM' To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Cindy Roks' Subject: RE: microFit' I agree with Sarah ’ s comment that the mFIT project should not affect the price of the FIT project.' _________________________ _______' From: Jim MacDougall Sent: Friday, January 08, 2010 2:52 PM' To: Jim MacDougall; Sarah Simmons; Jonathan Cheszes; Patricia Lightburn; Cindy Roks' Subject: RE: microFit' I would love your comments or edits.' Q: Will the OPA permit an Applicant to locate a microFIT and a FIT proj ect - of' on the same property? Specifically, two 10 kW solar PV⌫ the same technology projects.' A. In general, Applicants are required to make decisions on the appropriately⌫ sized FIT or microFIT project at time of their first appliction to one of these programs. If an Applicant were to receive a microFIT contract and build their⌫ project, and subsequently request permission to build a FIT project, the OPA would consider such a request.' The OPA would have to be satisfied that the Applicant was not project splitting, as prohibited in the FIT Rules. The OPA would consider the timing of the second⌫ application, the relative location of the second project to the first, and the proposed connection point of the second project.' 2218 The first project will have to have reached Commercial Operation and have received payments under the first contract, prior to the second project's Application being considered. acceptable - A second proj ect on a different part of the property would likely be⌫ for example one proj ect on the ground and the second on a roof. Both⌫ projects would have to metered separately and be settled independently by the LDC.' Jim MacDougall, P.Eng.' Manager, Distributed Generation' Ontario Power Authority' (416) 969-6415' _________________________ _______' From: Jim MacDougall' Sent: Tue 22/12/2009 12:11 PM' To: Sarah Simmons; Jonathan Cheszes' Subject: RE: microFit' I understand and agree that this creates terrible complexity that we really don't want.' How would you suggest mitigating against allowing 2 X 10 kW projects to get 80.2 c?' Separation in time?' Require the first to reach COD before the second is allowed to apply, and get the contract?' We need to spell out how / if they are allowed to do 2 X 10 kW - one under uFIT and one under FIT that we will prevent gaming . . . and the perception that the real⌫ size tranche is 0 - 20 kW at 80.2 c/kWh.' Sarah?' Jim MacDougall, P.Eng.' Manager, Distributed Generation' Ontario Power Authority' 2219 Ontario Power Authority' (416) 969-6415' _________________________ _______' From: Sarah Simmons' Sent: Tue 22/12/2009 11:19 AM' To: Jim MacDougall; Jonathan Cheszes' Subject: RE: microFit' I disagree with: “ Whatever te capacity of the FIT project, if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 10-250 kW price. ( even if it were also 10 kW) ” .' For the record, I think that the price should be for the capacity that is installed at the time. I don ’ t second proj ects. ⌫ think that the first project influences the economics of the If you do what to proceed in the manor you ’ ve described, you should tell the application team asap so that they can build this functionality into the “ contract offer ” tool.' Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca P please consider the environment before printing this email' _________________________ _______' From: Jim MacDougall Sent: December 22, 2009 11:11 AM' 2220 Sent: December 22, 2009 11:11 AM' To: Jonathan Cheszes' Cc: Sarah Simmons' Subject: RE: microFit' Guys;' I' d like your advice on this response before I send it. Pls edit my draft with⌫ your thoughts.' Hi Frank;' 1.' Our principles on one FIT and one microFIT are still evolving, but as indicated below, we want to permit that option as a means of allowing projects to develop over time. For example - gain experience choose to go bigger and do a FIT proj ect. with microFIT now and some time later Whatever te capacity of the FIT proj ect, ⌫ if the first microFIT was 10 kW then regardless of the second FIT project, it would earn the 10- 250 kW price. ( even if it were also 10 kW)⌫ We would reject a FIT and microFIT application if they both were proposed to be developed on the same property at the same time. We would want that to be a single⌫ project and the rejection would be on the basis of project splitting for taking advantage of the higher price.' 2.' Yes, the key there would be simply to work with the LDC to identify a single and⌫ appropriate connection point for the aggregate 150 kW project.' Jim MacDougall, P.Eng.' Manager, Distributed Generation' Ontario Power Authority' (416) 969-6415' 2221 _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: Tue 22/12/2009 10:49 AM' To: Jim MacDougall' Subject: RE: microFit' Hi Jim I wanted to clarify some of the points in the email chain below' 1) We can have a MicroFIT PV and a FIT PV proj ect on one property⌫ 2) ONE FIT contract per property, can the PV be split on several buildings on⌫ the property. For example I have a potential 150KW project ( one FIT contract) which will have PV arrays on 5 roof tops all on the same property ( approximately 30KW each).' Thanks' Frank Ruffolo Systems Engineering Manager ARISE Technologies Corporation 65 Northland Rd. Waterloo , Ontario, N2V 1Y8' cell: 705 772 7909' www.arisetech.com From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: November 27, 2009 11:18 AM' To: Frank Ruffolo; Jim MacDougall' Subject: RE: microFit' You can have one of each.' Sarah Simmons' Analyst' Electricity Resources' 2222 Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com] Sent: November 27, 2009 11:16 AM' To: Jim MacDougall; Sarah Simmons' Subject: RE: microFit' Hi Jim, Sarah' I did not think you could have a microFIT contract AND a FIT contract on one⌫ property with the same resource. Frank From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca] Sent: November 27, 2009 8:55 AM' To: Sarah Simmons; Frank Ruffolo' Subject: Re: microFit' Yes.' Jim MacDougall, P.Eng.' Manager, Distributed Generation' Ontario Power Authority' 416 969 6415' Sent from my BB' -----Original Message----From: Sarah Simmons' To: 'Frank Ruffolo' ' CC: Jim MacDougall' 2223 CC: Jim MacDougall' Sent: Fri Nov 27 08:26:07 2009' Subject: RE: microFit' For microFIT, it ’ s 10kW per RE per property.' Under FIT, it ’ s one PV rooftop per property.' You could have one FIT and one microFIT, but, if they were constructed at the same time, they would be considered one project.' Jim, do you agree?' Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca' P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: November 26, 2009 4:45 PM' To: Sarah Simmons' Subject: RE: microFit' I didn ’ t think you could have a FIT and a MicroFIT on the same property?' Frank' 2224 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]' Sent: November 26, 2009 4:20 PM' To: Frank Ruffolo' Subject: RE: microFit' Ok. So, the 2kW could go microFIT. Then the 40 kW would go FIT. “ one rooftop PV FIT Contract per property ” .' UofW should be⌫ told the rule Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca' P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: November 26, 2009 4:06 PM' To: Sarah Simmons' Subject: RE: microFit' It’ s not at the same time, the 2KW system on the fed building is an existing system. But there is a new environmental studies building going up and they have⌫ plans for a 40KW system … two different buildings, same property' Frank' From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]' Sent: November 26, 2009 4:04 PM' 2225 Sent: November 26, 2009 4:04 PM' To: Frank Ruffolo' Subject: RE: microFit' Yes. It gets a bit tricky.⌫ Really, if they are constructing everything at about the same time, it should be one project/contract.' Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca' P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: November 26, 2009 4:01 PM' To: Sarah Simmons' Subject: RE: microFit' Thanks Sarah' This is going to take more time to think thru what the best approach would be. I don ’ t want to jeopardize the university ’ s ability to build a larger system due to the one roof top rule.' I ’ ll probably pause on this for the moment.' 2226 Thanks again for your help.' Frank Ruffolo' Systems Engineering Manager' ARISE Technologies Corporation' 65 Northland Rd. Waterloo , Ontario, N2V 1Y8' cell: 705 772 7909' www.arisetech.com' From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]' Sent: November 26, 2009 2:59 PM' To: Frank Ruffolo' Subject: RE: microFit' So, it ’ s 10 kW per renewable fuel per property.' Above that would go to FIT, and it ’ s only ONE rooftop PV project in the FIT per property.' Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca' P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' 2227 From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: November 26, 2009 2:56 PM' To: Sarah Simmons' Subject: RE: microFit' Thanks' We have been asked to apply for microFIT contract for the 2kw system at U of W owned by Federation of Students. I have a concern, if the university builds another system on campus would it be another system or an add on ?⌫ Frank' From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca]' Sent: November 26, 2009 2:47 PM' To: Frank Ruffolo' Subject: RE: microFit' But, not at the same time J' Sarah Simmons' Analyst' Electricity Resources' Ontario Power Authority' 120 Adelaide St. W. Suite 1600' Toronto, ON, M5H 1T1' Tel 416.969.6213' Fax 416.967.1947' www.powerauthority.on.ca' P please consider the environment before printing this email' _________________________ _______' From: Frank Ruffolo [mailto:Frank.Ruffolo@arisetech.com]' Sent: November 26, 2009 2:44 PM' 2228 Sent: November 26, 2009 2:44 PM' To: Sarah Simmons' Subject: microFit' Hi Sarah' Is it possible for a customer to go from a microFIT now to a FIT contract later if the system size is increased beyond 10KW.' Thanks' Frank Ruffolo' Systems Engineering Manager' ARISE Technologies Corporation' 65 Northland Rd. Waterloo , Ontario, N2V 1Y8' cell: 705 772 7909' www.arisetech.com' This e-mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e-mail' message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e-mail message.' 2229 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: January-15-10 11:25 AM↵ To: Jim MacDougall; Jonathan Cheszes↵ Cc: Ben Chin; Tim Butters↵ Subject: OPAResponsesJan14↵ Attachments: OPAResponsesJan14.doc↵ MEI did a little editing. Can you live with the changes?⇠ 2230 1. In calculating what tariff would produce an 11 per cent return on investment, what assumptions were made about how much income AD operators would⌧ receive as tipping fees for taking in off-farm material? How long was it assumed⌧ that those fees would continue to be received at whatever rate OPA/Navigant⌧ consultants used in the calculation? No tipping fees were assumed in the calculations of tariffs for AD operators with the exception of projects greater than 10 MW in size, or very large commercial⌧ scale projects. For these projects a tipping fee of $ 2.5 / MMBTU was assumed⌧ for the life of the contract. This works out to a $20 / tonne (with an 80% moisture⌧ content) tipping fee. 2. Was the tariff rate adjusted to incorporate grants from the Ontario Ministry of Agriculture and Food -- up to $400,000 toward capital costs? If so, what impact⌧ did that have on the tariff rate? No adjustment was made for grants coming from the OMAFRA program.⌧ Installed costs were based on a range of inputs from actual projects. Any⌧ received grants would make projects more profitable. 3. Ben mentioned that there is a special peak rate for biogas producers.⌧ However, I'm told that the off-peak rate is less than the published tariff of 16 or⌧ 14.7 cents. The result is that for an AD operation running 24 hours a day, the actual tariff works out to 16 or 14.7 cents; the peak premium disappears when combined with the off-peak rate. Is that correct? If a project did run 100% of the time, which is not practical, then the average price paid for the project would equal almost exactly the posted FIT prices. The on-peak rate is 135% of the contract price and the off-peak rate is 90% of the⌧ contract price, so if maintenance is scheduled during off-peak hours the effective contract price will be higher. More importantly, the OPA only assumed 75%⌧ availability for these systems when they may be able to run and operate as much as 90 to 95% of the time. If a 500 kW digester operates 90% of the time it will⌧ earn an additional $ 105,000 in revenue per year (20% more annual revenue)⌧ which is equivalent to a contract price of 19.0 cents per kWh if it operates 75 %⌧ of the year. 4. People I've talked with who are directly involved in trying to develop biogas⌧ projects complain that they haven't been shown the cost and income assumptions used by Navigant consultants to calculate the tariff rates that it⌧ recommended for the FIT program. Are they available? If so, how can they be obtained? If they're not available, why is that? Yes. The reason they were not made public already is that they were finalized after the May 12 stakeholder session which updated the original price schedule.⌧ The prices came from a range of data sources including Navigant, OMAFRA, and 2231 industry (namely Ag Energy Producers of Ontario (Nicole Foss), Organic⌧ Resource Management (a private company that sells fats, oils and grease to farmers), Garry Fortune, and Clare Riepma (a biogas developer). The OPA used the following assumptions to determine the final numbers that were used in the pricing model.⌧ They are: On-farm (< 100 kW) Capital cost: 8500, Variable O&M: $40 / MWh, Fixed O&M:⌧ $60 / kW / year On-farm (100 – 250 kW) Capital Cost: 8100, Variable O&M: $38 / MWh, Fixed O&M: $55 / kW / year Biogas (< 500 kW) Capital cost: 7000, Variable O&M: $33 / MWh, Fixed O&M:⌧ $45 / kW / year 5. What are the precise regulations or definitions determining whether the OPA will take back 80 per cent of the revenue from future products from AD projects? I'm told that the rule will not apply to products and processes with existing⌧ markets, but that's somewhat vague. For example, if a project comes up with a new way to generate ethanal using AD liquid digestate,would that be exempt⌧ from the 80 per cent rule? What is the exact cutoff? The requirement actually refers to 80 per cent of any profits made through the⌧ sale of by-products of renewable energy production that do not currently have a⌧ market. This would not apply to ethanol because a market for this product⌧ currently exists. However, we understand the concerns of biogas developers⌧ regarding profits from future products. The OPA will rectify this and the⌧ requirement will not apply to biogas. 2232 Claire Willison From: Claire Willison Sent: January-15-10 3:53 PM To: Jim MacDougall Subject: FIT/microFIT Questions - Batch No. 3 Not Responsive Ticket No. 3040 – Jan 15 Question: For the ground -mount solar systems, the price schedule says that it pays 44.3 cents/kWh... is that in AC or DC energy? Response: Claire Willison Program Response Analyst/Coordinator Corporate Communications Direct: 416- 969 - 6080 Fax: 416- 967 - 1947 claire.willison@powerauthority.on.ca www.powerauthority.on.ca 2233 Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 2234 Jim MacDougall From: Jim MacDougall Sent: January-22-10 12:45 PM To: Sarah Simmons; Patricia Lightburn; Jonathan Cheszes Subject: Fw: FIT/microFIT Questions - Jan 1-13, 2009 Questions Same ask... Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB -----Original Message----From: Claire Willison To: Jim MacDougall Sent: Thu Jan 14 13:13:58 2010 Subject: FIT/microFIT Questions - Jan 1-13, 2009 Questions Jim the second batch of questions for your review/revision of my suggested response or the provision of a response. Many thanks. Ticket No. 2844 - Jan 7 Question: I am writing today to inquire if there are planned scheduled reviews for the microFIT program. If so could you please forward me a schedule. If there is no formal schedule, could you give me some indication as to generally when you are planning reviews ( 1year? 2 year? etc), and the what the scope of the 'review' will be. Response: In response to your query, as mentioned in the MicroFIT Program Overview document, the OPA intends to review and amend the microFIT Program at periodic intervals. It may also amend the program at any time in response to government direction, changes in laws and regulation, significant changes in market conditions or other circumstances. Future changes or amendments to the program will not affect existing microFIT contracts or applicants who have received a conditional offer of microFIT contract. As well, under the Program Resources - FAQ section, you will find the following Q&A: How long are the prices under the FIT and microFIT Programs guaranteed? 2235 Once a contract has been signed, the generator will receive the price specified in the contract over the 20-year term of the contract (40 years for waterpower). The price will not change for the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed every two years. It is expected that prices for new projects will drop over time if project costs decrease. This means that if you sign a contract today, you will receive today's price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two years from now, you will receive the price applicable at that time. Ticket No. 2904 - Jan 9 Question: I was wondering if a homeowner doing the entire install of a grid tied solar electric system would qualify for the 27% domestic content, under the install and labour section. Response: Ticket No. 2827 - Jan 6 (GO Transit) Question: Further to my previous question, could you please confirm that a solar PV system installed on the top of a multilevel parking structure roof meets the definition of a rooftop installation? Suggested Response: Yes, a solar PV system installed on the top of a multilevel parking structure roof meets the definition of a rooftop installation ??? Ticket No. 2926 - Jan 11 Original Question: My husband and I are filling out the application for the FIT program to have a PV system consisting of 4.2 kW of solar panels. My husband, who is self-employed, will be the "legal applicant". He is currently registered for GST however as of this year he is in the process of retiring and will most likely be making under $30,000 at which time he will de-register for GST. Regaring question #6, do I assume he must answer "yes" because he is registered at this time? Does this mean he will be paid GST on top of the 80.2 cents? Will it be difficult to change his GST status once we are a year or so into the program? Response sent advising them to contact CRA. 2236 They replied: “ I had contacted the CRA before writing you. They told me to contact the OPA with my question. No one there that I was connected to knows anything about the FIT program. So now what? Surely the OPA knows what will be involved to change things on your end when we de-register for the GST? That is not something the CRA could possibly know the answer to. As well my first question. If my husband is GST registered, will he be getting the 80.2 cents plus GST? Surely the OPA should know the answer to this question - the OPA or affinities will have to be paying it, or not. ”⇤ Suggested Response: Regarding Question 6 on the application, please answer “ yes ” and provide the GST number. The project will be paid the 80.2 cents plus GST. When the GST number is de-registered at a later date, please send a copy of the notice of de-registration to the Ontario Power Authority - FIT Contract Management Ticket No. 2969 - Jan 13 Question: I was wondering if it was possible for me to do a ground mounted system bigger than 10kW but be put on the same scale as residential roof mounted array. I noticed that if you go with a roof mounted array bigger than 10kW and less than 250kW the pricing is 71.3. I own 1.5 acres of land and was interested in putting up a bigger ground array, I estimate approx 20 to 30kW range. I guess my question is, why does the ground mounted array get reduced to 44.3 cents. Is it possible for me to get the price of 71.3 cents for a ground mounted array? Is there any special allowances for my particular case? My property is in the country just on the outskirts of ST. Thomas Ont, my address is 44177 Elm line if you want to Response: Ticket No. 2936 - Jan 11 Question: 1: For Solar PC Technology, I notice that the rate is not connected to the Consumer Price Index. Does this mean that there's some risk regarding rates not being increased and a delay in real dollar break-even? 2: Are most people installing residential solar PV technology at this point doing this more out of novelty or for concern for the environment right now? Seems like a really interesting idea but with the example given where installation costs $30,000 and it takes 12+ years to break-even on a 20 year contract (assuming no or limited repair costs), there doesn't seem to be a whole lot of business case for it quite yet. 2237 Response: Ticket No. 2938 - Jan 12 Question: Last Friday the Hydro One line crew came and connected my client's microFIT system (FITMWI4CYN). Everything is running and feeding back power into the grid. I was wondering what happens from here. If my understanding is correct, my client has to accept the official contract. When will that take place and will electricity produced in the interim be counted towards my client's first payment? Suggested Response: Hydro One will advise the OPA that the connection is made, and the OPA will issue the contract to the client for acceptance. Ticket No. 2698 - Jan 4 Question: I have received another request for the installation of a microfit project for Southern Ontario on a dormant greenhouse. It is a factory built greenhouse 40'*90' still in very good condition (not homebuilt) that was overengineered (we will confirm with building dept.) for snowload conditions in that area. They just wanted to confirm that installation for roof mount micro of fit on a greenhouse is acceptable. Suggested Response: Yes, the installation of a roof mounted microFIT project on a greenhouse is acceptable ?? Ticket No. 2940 - Jan 12 Question: A prospect has approached our company about trying to maximize the size of their roof top solar installation. They have asked whether it is possible to have a portion of the racking for the solar panels on the roof and the rest supported from the ground... in effect producing a canopy over a portion of their parking lot. Would this still qualify as a roof mounted system? Response: 2238 Ticket No. 2999 - Jan 14 Question: I have a few questiona that I need to get answered, I have a customer that would like to install roof mounted pv on his garage. He would like to install them on a tracker with a pole through the roof, over his building, to achieve enough electricity to make it financially viable because of his location. Is this acceptable for microfit $0.80+ per kw? Another customer has a house that can only handle a limited number of panels and he would like to know if he extended the panels to overhand over one side of the roof by 10 feet, supported it to be a sun sheltered deck on the side of his house, if this is acceptable. Again, is this acceptable for microfit $0.80+ per kw? One person has 1 acre of land, can he apply and ground mount or does there have to be a structure somewhere on the property? Response: Ticket No. 2942 - Jan 12 Question: I have the following questions pertaining to the Domestic Content requirements for Solar / Wind Projects. 1. When does the OPA certify a project as compliant with the FIT and eligible for FIT pricing with ? 2. And if it is post COD, how long after COD should a 'Supplier" expect to receive it? Also, I understand that the Supplier shall provide ii) a "Consent to Verify" in the Prescribed Form, signed by the service provider corresponding to the Designated Activity, authorizing the OPA to verify such service provider performed the Designated Activity. Can you please make available this "Consent to Verify" form as I was unable to find it online. Ticket No.2981 - Jan 13 Question: Your manual "microFIT rules, version 1.3" in point 5.2.(e) states: "Settlement of the Generation Payments will be net of station service and any loss factors that may be applied by the LDC consistent with the Retail Settlement Code. ..."Would you, please, explain this in more user-friendly 2239 terms ? In particular: 1. What is 'station service' in this context ? 2. Would the 'loss factors' have anything in common with extra 9% I am paying to Hydro 1 as a consumer ? (on my bill this 9% is explained as covering losses in transmission and transformers)3. Assuming my account with Hydro1 functions the same way as presently and I am paying for my own consumption the same way as presently, will I get precisely $0.802 for each kWh from my PV installation as indicated by the Generator Meter, or something less ? Response: Ticket No. 2983 - Jan 13 Question: MICROFIT - Under the domestic content can you clarify section 8 when it states (on and off site labor ) does this pertain to the labor for the other components used in the system. And also in section 7 you now include section 8 why? Response: Ticket No. 2987 - Jan 13 Question: I am a consultant of GPEKS construction company based in Ottawa, I am in charged of a feasibility study regarding the installation of a carport at the St. Paul University parking lot in Ottawa. On the roof of the carports PV panels will be installed to produce electricity to be fed to the grid system, the project will be under the FIT program rules. I reviewed the OPA document 10759 FIT Program Overview v 1.1 page 12 "price schedule" and OPA document 10863 FIT Pricing schedule; in these documents I have only found mention of PV installed on rooftop and ground mounted, nothing regarding other type of installations. By definition a carport is "a roofed structure for automobile storage; differs from a garage in that it has no walls", how OPA considers this type of installation and in what type of price schedule will be applied for a PV system producing between 250Kw and 1Mw. Response: Ticket No. 2990 - Jan 13 Question: Could someone define the max output of 50MW for a renewable water project Under the FIT tariffs. Is this defined as the annual output total of 50MW for a qualified project? Response: Ticket No. 2992 - Jan 13 Question: If we use aluminum racks to mount our panels to and the aluminum racks are sourced here in Ontario, and meet the Domestic Content requirements, does the structure that the racks are 2240 attached to have to meet the Domestic content requirements as well? For example, if the aluminum racks are mounted to a concrete pillar, metal post, or a wooden support structure, would the concrete, metal and wood need to meet the domestic content requirements? If I read the rules correctly it seems to me that only the material that the panels are directly connected to needs to meet the domestic content requirements. Is this correct? Response: Ticket No. 2993 - Jan 13 Question: I was wondering about a specific application being used to supply the power to the grid. Lets say I have a battery source that gets charged up from the array during the day. Once the Sun goes down and the solar panels are no longer putting out any power, if a battery source could Continue to supply power to the grid would that be acceptable. I ask because there is a battery technology out there that is soon to be released and it can store 56kw hours in a 1 cubic foot battery and they only take 5 minutes to charge up. So you can see What I am getting at, lets say with a 10kw project and just 2 of these batteries it would be enough To supply the 10kW 24/7. ( my math may be wrong but you can see where I am going). Would this be acceptable? Response: MicroFIT Projects cannot be connected to a back-up battery supply. See program rules. Ticket No. 2998 - Jan 14 Question: 1. Is the Canadian content policy different for Thin Film solar technology versus traditional silicon based PV panels? Response: Claire Willison Program Response Analyst/Coordinator Corporate Communications Direct: 416-969-6080 Fax: 416-967-1947 2241 claire.willison@powerauthority.on.ca www.powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 2242 Jim MacDougall From: Jim MacDougall Sent: January-25-10 3:28 PM To: Patricia Lightburn Cc: Jonathan Cheszes; Sarah Simmons; Claire Willison Subject: FW: FIT/microFIT Questions - Jan 1-13, 2009 Questions Patricia – can you please?⌘ Jim MacDougall , P.Eng.✓ Manager, Distributed Generation⌘ Electricity Resources⌘ Ontario Power Authority⌘ 120 Adelaide St W, Suite 1600⌘ Toronto , ON M5H 1T1 , Canada⌘ tel 416.969.6415⌘ From: Claire Willison Sent: January 14, 2010 1:14 PM To: Jim MacDougall Subject: FIT/microFIT Questions - Jan 1-13, 2009 Questions Jim the second batch of questions for your review/revision of my suggested response✓ or the provision of a response. Many thanks.✓ Ticket No. 2844 – Jan 7⌘ Question: I am writing today to inquire if there are planned scheduled reviews for the microFIT program. If so could you please forward me a schedule.⌘ If there is no formal schedule, could you give me some indication as to generally when you are⌘ planning reviews ( 1year? 2 year? etc), and the⌘ what the scope of the 'review' will be.⌘ Response: In response to your query, as mentioned in the MicroFIT Program Overview⌘ document, the OPA intends to review and amend the microFIT Program at periodic intervals. It⌘ may also amend the program at any time in response to government direction, changes in laws⌘ and regulation, significant changes in market conditions or other circumstances. Future changes⌘ or amendments to the program will not affect existing microFIT contracts or applicants who have⌘ received a conditional offer of microFIT contract. As well, under the Program Resources - FAQ⌘ section, you will find the following Q&A:⌘ How long are the prices under the FIT and microFIT Programs guaranteed?⇡ Once a contract has been signed, the generator will receive the price specified in the contract over the 20-year term of the contract (40 years for waterpower). The price will not change for the generator once the contract has been signed except for applicable inflation adjustments.# The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed every two years. It is expected that prices for new projects will drop over time if project costs 2243 decrease. This means that if you sign a contract today, you will receive today ’s price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two years from now, you will receive the price applicable at that time.# Ticket No. 2904 – Jan 9⌘ Question: I was wondering if a homeowner doing the entire install of a grid tied solar electric⌘ system would qualify for the 27% domestic content, under the install and labour section. Response:⌘ Ticket No. 2827 – Jan 6 (GO Transit)⌘ Question: Further to my previous question, could you please confirm that a solar PV system⌘ installed on the top of a multilevel parking structure roof meets the definition of a rooftop⌘ installation?⌘ Suggested Response: Yes, a solar PV system installed on the top of a multilevel parking structure⌘ roof meets the definition of a rooftop installation ???⌘ Ticket No. 2926 – Jan 11⌘ Original Question: My husband and I are filling out the application for the FIT program to have a PV system consisting of 4.2 kW of solar panels. My husband, who is self-employed, will be⌘ the "legal applicant". He is currently registered for GST however as of this year he is in the process of retiring and will most likely be making under $30,000 at which time he will de-register⌘ for GST. Regaring question #6, do I assume he must answer "yes" because he is registered at this time? Does this mean he will be paid GST on top of the 80.2 cents? Will it be difficult to change his GST status once we are a year or so into the program? Response sent advising them to contact CRA.⌘ They replied: “I had contacted the CRA before writing you. They told me to contact the OPA with my question. No one there that I was connected to knows anything about the FIT program. So now what? Surely the OPA knows what will be involved to change things on your end when we de register for the GST? That is not something the CRA could possibly know the answer to. As well my first question. If my husband is GST registered, will he be getting the 80.2 cents plus GST? Surely the OPA should know the answer to this question - the OPA or affinities will have to⌘ be paying it, or not. ” Suggested Response: Regarding Question 6 on the application, please answer “ yes ” and provide⌘ the GST number. The project will be paid the 80.2 cents plus GST. When the GST number is deregistered at a later date, please send a copy of the notice of de-registration to the Ontario Power⌘ Authority – FIT Contract Management⌘ Ticket No. 2969 - Jan 13⌘ Question: I was wondering if it was possible for me to do a ground mounted system bigger than 10kW but be put on the same scale as residential roof mounted array.⌘ I noticed that if you go with a roof mounted array bigger than 10kW and less than 250kW the⌘ pricing is 71.3.⌘ I own 1.5 acres of land and was interested in putting up a bigger ground array, I estimate approx⌘ 20 to 30kW range. I guess my question is, why does the ground mounted array get reduced to 44.3 cents.⌘ 2244 I guess my question is, why does the ground mounted array get reduced to 44.3 cents.⌘ Is it possible for me to get the price of 71 .3 cents for a ground mounted array? Is there any special allowances for my particular case?⌘ My property is in the country just on the outskirts of ST. Thomas Ont, my address is 44177 Elm⌘ line if you want to Response:✓ Ticket No. 2936 – Jan 11⌘ Question: 1 : For Solar PC Technology, I notice that the rate is not connected to the Consumer Price Index. Does this mean that there's some risk regarding rates not being increased and a delay in real dollar break-even?⌘ 2: Are most people installing residential solar PV technology at this point doing this more out of⌘ novelty or for concern for the environment right now? Seems like a really interesting idea but with the example given where installation costs $30,000 and it takes 12+ years to break-even on a 20⌘ year contract (assuming no or limited repair costs), there doesn't seem to be a whole lot of⌘ business case for it quite yet.⌘ Response:⌘ Ticket No. 2938 – Jan 12⌘ Question: Last Friday the Hydro One line crew came and connected my client's microFIT system⌘ (FIT- MWI4CYN). Everything is running and feeding back power into the grid. I was wondering what happens from here. If my understanding is correct, my client has to accept the official contract. When will that take place and will electricity produced in the interim be counted towards my client's first payment?⌘ Suggested Response: Hydro One will advise the OPA that the connection is made, and the OPA⌘ will issue the contract to the client for acceptance.⌘ Ticket No. 2698 – Jan 4⌘ Question: I have received another request for the installation of a microfit project for Southern⌘ Ontario on a dormant greenhouse. It is a factory built greenhouse 40'*90' still in very good condition (not homebuilt) that was⌘ overengineered (we will confirm with building dept.) for snowload conditions in that area. They just⌘ wanted to confirm that installation for roof mount micro of fit on a greenhouse is acceptable.⌘ Suggested Response: Yes, the installation of a roof mounted microFIT project on a greenhouse is⌘ acceptable ??⌘ Ticket No. 2940 – Jan 12⌘ Question: A prospect has approached our company about trying to maximize the size of their roof⌘ top solar installation. They have asked whether it is possible to have a portion of the racking for the solar panels on the roof and the⌘ rest supported from the ground... in effect producing a canopy over a portion of their parking⌘ lot. Would this still qualify as a roof mounted system? Response:⌘ Ticket No. 2999 – Jan 14⌘ Question: I have a few questiona that I need to get answered, I have a customer that would like to install roof mounted pv on his garage. He would like to install them on a tracker with a pole 2245 install roof mounted pv on his garage. He would like to install them on a tracker with a pole through the roof, over his building, to achieve enough electricity to make it financially viable⌘ because of his location.⌘ Is this acceptable for microfit $0.80+ per kw?⌘ Another customer has a house that can only handle a limited number of panels and he would like⌘ to know if he extended the panels to overhand over one side of the roof by 10 feet, supported it to⌘ be a sun sheltered deck on the⌘ side of his house, if this is acceptable.⌘ Again, is this acceptable for microfit $0.80+ per kw?⌘ One person has 1 acre of land, can he apply and ground mount or does there have to be a⌘ structure somewhere on the property?⌘ Response:⌘ Ticket No. 2942 – Jan 12⌘ Question: I have the following questions pertaining to the Domestic Content requirements for⌘ Solar / Wind Projects.⌘ 1. When does the OPA certify a project as compliant with the FIT and eligible for FIT pricing⌘ with ? 2. And if it is post COD, how long after COD should a 'Supplier" expect to receive it?⌘ Also, I understand that the Supplier shall provide ii) a "Consent to Verify" in the Prescribed Form, signed by the service provider corresponding to the Designated Activity, authorizing the OPA to verify such service provider performed the⌘ Designated Activity.⌘ Can you please make available this "Consent to Verify" form as I was unable to find it online.⌘ Ticket No.2981 – Jan 13⌘ Question: Your manual "microFIT rules, version 1 .3" in point 5.2.(e) states: "Settlement of the Generation Payments will be net of station service and any loss factors that may be applied by the LDC consistent with the Retail Settlement Code. ..."Would you, please, explain this in more⌘ user-friendly terms ? In particular: 1. What is 'station service' in this context ? 2. Would the 'loss⌘ factors' have anything in common with extra 9% I am paying to Hydro 1 as a consumer ? (on my bill this 9% is explained as covering losses in transmission and transformers)3. Assuming my⌘ account with Hydro1 functions the same way as presently and I am paying for my own consumption the same way as presently, will I get precisely $0.802 for each kWh from my PV⌘ installation as indicated by the Generator Meter, or something less ? Response:⌘ Ticket No. 2983 – Jan 13⌘ Question: MICROFIT - Under the domestic content can you clarify section 8 when it states (on and⌘ off site labor ) does this pertain to the labor for the other components used in the system.⌘ And also in section 7 you now include section 8 why?⌘ Response:⌘ Ticket No. 2987 – Jan 13⌘ Question: I am a consultant of GPEKS construction company based in Ottawa, I am in charged of⌘ 2246 Question: I am a consultant of GPEKS construction company based in Ottawa, I am in charged of⌘ a feasibility study regarding the installation of a carport at the St. Paul University parking lot in⌘ Ottawa. On the roof of the carports PV panels will be installed to produce electricity to be fed to⌘ the grid system, the project will be under the FIT program rules. I reviewed the OPA document⌘ 1 0759 FIT Program Overview v 1 .1 page 1 2 "price schedule" and OPA document 1 0863 FIT Pricing schedule; in these documents I have only found mention of PV installed on rooftop and⌘ ground mounted, nothing regarding other type of installations. By definition a carport is "a roofed structure for automobile storage; differs from a garage in that it has no walls", how OPA considers⌘ this type of installation and in what type of price schedule will be applied for a PV system⌘ producing between 250Kw and 1Mw.⌘ Response:⌘ Ticket No. 2990 – Jan 13⌘ Question: Could someone define the max output of 50MW for a renewable water project Under⌘ the FIT tariffs. Is this defined as the annual output total of 50MW for a qualified project?⌘ Response:⌘ Ticket No. 2992 – Jan 13⌘ Question: If we use aluminum racks to mount our panels to and the aluminum racks are sourced⌘ here in Ontario, and meet the Domestic Content requirements, does the structure that the racks⌘ are attached to have to meet the Domestic content requirements as well?⌘ For example, if the aluminum racks are mounted to a concrete pillar, metal post, or a wooden⌘ support structure, would the concrete, metal and wood need to meet the domestic content⌘ requirements?⌘ If I read the rules correctly it seems to me that only the material that the panels are directly⌘ connected to needs to meet the domestic content requirements. Is this correct? Response:⌘ Ticket No. 2993 – Jan 13⌘ Question: I was wondering about a specific application being used to supply the power to the grid.⌘ Lets say I have a battery source that gets charged up from the array during the day. Once the Sun goes down and the solar panels are no longer putting out any power, if a battery source could⌘ Continue to supply power to the grid would that be acceptable.⌘ I ask because there is a battery technology out there that is soon to be released and it can store⌘ 56kw hours in a 1 cubic foot battery and they only take 5 minutes to charge up. So you can see What I am getting at, lets say with a 1 0kw project and just 2 of these batteries it would be enough To supply the 1 0kW 24/7. ( my math may be wrong but you can see where I am going). Would this be acceptable?⌘ Response: MicroFIT Projects cannot be connected to a back-up battery supply. See program⌘ rules.⌘ Ticket No. 2998 – Jan 14⌘ Question: 1. Is the Canadian content policy different for Thin Film solar technology versus⌘ traditional silicon based PV panels?⌘ Response:⌘ Claire Willison⌘ Program Response Analyst/Coordinator Corporate Communications Direct: 416- 969 - 6080⌘ Fax: 416- 967 - 1947⌘ claire.willison@powerauthority.on.ca⌘ 2247 claire.willison@powerauthority.on.ca⌘ www.powerauthority.on.ca⌘ Ontario Power Authority⌘ 120 Adelaide Street West, Suite 1600⌘ Toronto , ON M5H 1T1⌘ 2248 Jonathan Cheszes From: Jonathan Cheszes Sent: January-27-10 12:31 PM To: Sarah Simmons; Sandy Yuen; Jim MacDougall Cc: Patricia Lightburn Subject: FW: Clarification on multiple connection points Attachments: Clarification on multiple connection points_V2_JC_01_27_2010.doc Importance: High Attached is an updated Q&A on allowing multiple applications for rooftop PV projects for a single legal property.⌧ I added in a condition that requires the multiple applications to be submitted in the same business day to ensure we would be able to identify that there multiple projects on one legal property.⌧ Please provide comments or edits via track changes.⌧ We need to communicate this to Sky OZZ shortly.⌧ Thanks,⌧ Jonathan Cheszes⌧ Business Analyst⌧ Electricity Resources⌧ 120 Adelaide St. West, Suite 1600⌧ Toronto , ON , M5H 1T1⌧ Tel 41 6.969.6251 Fax 416.967.1947⌧ www.powerauthority.on.ca⌧ From: Patricia Lightburn Sent: January 25, 2010 12:36 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons Subject: RE: Clarification on multiple connection points I think the language should be less definitive – We only really want to allow projects to do this if it is unfeasible for them to have one connection point. I would perhaps say:⌧ A: Despite section 2.1 (c) of the FIT rules, where the OPA deems a solar pv rooftop project does not# constitute project splitting and where a single connection point is not feasible for the project, the OPA will take# into consideration a request to have multiple connection points for one project. This would be the case where# there a multiple buildings on one municipal property and are developed as a single project, under a single# application, therefore the aggregate capacity will be used to determine the Contract Price. For greater clarity,# this would not allow a second application on the same property at a later date.# From: Jonathan Cheszes Sent: Monday, January 25, 2010 12:31 PM To: Jim MacDougall; Patricia Lightburn; Sarah Simmons 2249 Subject: Clarification on multiple connection points Attached is a Q&A on allowing a rooftop solar pv project to have multiple connection points despite section 2.1 (c) of the FIT rules.⌧ Jim, do we need to send this to Michael or Perry before giving the go a head to Toronto Community Housing?⌧ Please let me know what you think.⌧ Jonathan Cheszes⌧ Business Analyst⌧ Electricity Resources⌧ 120 Adelaide St. West, Suite 1600⌧ Toronto , ON , M5H 1T1⌧ Tel 41 6.969.6251 Fax 416.967.1947⌧ www.powerauthority.on.ca⌧ 2250 Clarification on section 2.1(c) of FIT rules: Q: Will multiple solar (PV) rooftop FIT applications be permitted where there are" multiple buildings on a single legal property? A: Not withstanding section 2.1 (c) of the FIT rules, where the OPA deems a solar (PV)" rooftop project does not constitute project splitting and where a single connection point is" not feasible for the project, the OPA will accept multiple solar (PV) project applications" located on a single property where the following conditions are met: i) ii) The individual capacity of each application as well as the aggregate capacity" all applications, fall into a single price tranche on the FIT Price Schedule. All applications on a single property are made in the same business day. This will allow solar (PV) rooftop projects to be developed on multiple buildings located" on one legal property under multiple applications and will ensure the aggregate capacity" will be used to determine the Contract Price. For greater clarity, this would not allow" additional applications on the same property at a later date Examples: Permitted: 2 x 100 kW PV systems, applied for at the same time, located on two buildings in the" same industrial park. Total capacity 200 kW, 10 – 250 kW price tranche. 3 x 70 kW PV systems, applied for at the same time, located on two buildings on a" college campus. Total capacity 210 kW, 10 – 250 kW price tranche. Not permitted: One 100 kW PV system and a second 200 kW PV system, applied for at the same time" located on two buildings in an industrial park. Each project is in the 10 – 250 kW price tranche but the total capacity of 300 kW exceeds" it and therefore it is not permitted. Section 2.1 (c) of the FIT rules: (c) With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted" on any single property. For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property, so long" 2251 as the total capacity of the Generating Equipment located on the property is" reflected in a single Application and shares a common Connection Point. 2252 Sandy Yuen⌦ From: Sandy Yuen⌦ Sent: January-27-10 12:58 PM⌦ To: Jonathan Cheszes; Sarah Simmons; Jim MacDougall⌦ Cc: Patricia Lightburn⌦ Subject: RE: Clarification on multiple connection points⌦ Attachments: Clarification on multiple connection points_SY.doc⌦ Some suggestions in blue.✏ I also added in an excerpt of the FIT pricing table as it relates to solar PV, for ease of comparison. Sandy From: Jonathan Cheszes Sent: January 27, 2010 12:31 PM To: Sarah Simmons; Sandy Yuen; Jim MacDougall Cc: Patricia Lightburn Subject: FW: Clarification on multiple connection points Importance: High Attached is an updated Q&A on allowing multiple applications for rooftop PV projects for a single legal property. I added in a condition that requires the multiple applications to be submitted in the same business day to ensure we would be able to identify that there multiple projects on one legal property. Please provide comments or edits via track changes. We need to communicate this to Sky OZZ shortly. Thanks, Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca From: Patricia Lightburn Sent: January 25, 2010 12:36 PM To: Jonathan Cheszes; Jim MacDougall; Sarah Simmons Subject: RE: Clarification on multiple connection points I think the language should be less definitive – We only really want to allow projects to do this if it is unfeasible for them to have one connection point. I would perhaps say: 2253 A: Despite section 2.1 (c) of the FIT rules, where the OPA deems a solar pv rooftop project does not✏ constitute project splitting and where a single connection point is not feasible for the project, the OPA will take✏ into consideration a request to have multiple connection points for one project. This would be the case where✏ there a multiple buildings on one municipal property and are developed as a single project, under a single✏ application, therefore the aggregate capacity will be used to determine the Contract Price. For greater clarity,✏ this would not allow a second application on the same property at a later date.✏ From: Jonathan Cheszes Sent: Monday, January 25, 2010 12:31 PM To: Jim MacDougall; Patricia Lightburn; Sarah Simmons Subject: Clarification on multiple connection points Attached is a Q&A on allowing a rooftop solar pv project to have multiple connection points despite section 2.1 (c) of the FIT rules. Jim, do we need to send this to Michael or Perry before giving the go a head to Toronto Community Housing? Please let me know what you think. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca 2254 Clarification on section 2.1(c) of FIT rules: Q: Will multiple solar (PV) rooftop FIT applications be permitted where there are" multiple buildings on a single legal property? A: Not withstanding section 2.1 (c) of the FIT rules, where the OPA deems a solar (PV)" rooftop project does not constitute project splitting and where a single connection point is" not feasible for the project, the OPA will accept multiple solar PV (rooftop) FIT applications located on a single property where the following conditions are met: i) ii) The individual capacity of each FIT application and the aggregate capacity of" all FIT applications must fall into the same price tranche as outlined in the" excerpt of the FIT Price Schedule shown below. All FIT applications on a single property are made in the same business day. This will allow solar PV (rooftop) projects to be developed on multiple buildings located" on one legal property under multiple FIT applications. The aggregate capacity will be" used to determine the Contract Price. For greater clarity, this would not allow additional" applications on the same property at a later date. If projects have different transmission" and feeders, this is irrelevant. Examples: Permitted: 2 x 100 kW solar PV rooftop project, applied for at the same time, located on two separate buildings in the same industrial park and under one legal property description. Total capacity is 200 kW, and within the 10 – 250 kW price tranche @ 70.3 cents / kWh." 3 x 70 kW solar PV rooftop project, applied for at the same time, located on two separate" buildings on a college campus, both located under one legal property description.. Total capacity is 210 kW, and within the 10 – 250 kW price tranche @ 70.3 cents/ kWh." One 250 kW, and one 250 kW solar PV rooftop projects, applied for at the same time," located on two separate commercial buildings, both located under one legal property" description. 2255 Total capacity is 500 kW, and within the 250-500 kW price tranche @ 63.5 cents/ kWh. Not permitted: One 100 kW PV system and one 200 kW solar PV rooftop project, applied for at the" same time, located on two separate buildings in an industrial park. Each project is in the 10 – 250 kW price tranche but the total capacity of 300 kW exceeds" the 10-250 price tranche and therefore, is not permitted. Section 2.1 (c) of the FIT rules: (c) With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted" on any single property. For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property, so long" as the total capacity of the Generating Equipment located on the property is" reflected in a single Application and shares a common Connection Point. 2256 Jonathan Cheszes↵ From: Jonathan Cheszes Sent: January-27-10 3:00 PM To: Jim MacDougall Cc: Sarah Simmons; Sandy Yuen Subject: RE: did jim give his opinion re: the q&A? Attachments: Clarification on multiple connection points_SY_JC.doc Importance: High Jim,⇧ We are lost without you … please provide comments or your okay.⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ From: Sarah Simmons Sent: January 27, 2010 2:20 PM To: Jim MacDougall Cc: Jonathan Cheszes Subject: FW: did jim give his opinion re: the q&A? Can you way- in on Jon ’ s doc … we are waiting to send out the clarification.. Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Jonathan Cheszes Sent: January 27, 2010 2:19 PM To: Sarah Simmons Subject: RE: did jim give his opinion re: the q&A? no⇧ Jonathan Cheszes⇧ Business Analyst⇧ 2257 Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ From: Sarah Simmons Sent: January 27, 2010 2:09 PM To: Jonathan Cheszes Subject: did jim give his opinion re: the q&A? Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email 2258 Clarification on section 2.1(c) of FIT rules: Q: Will multiple solar (PV) rooftop FIT applications be permitted where there are" multiple buildings on a single legal property? A: Not withstanding section 2.1 (c) of the FIT rules, where the OPA deems a solar (PV)" rooftop project does not constitute project splitting and where a single connection point is" not feasible for the project, the OPA will accept multiple solar PV (rooftop) FIT applications located on a single property where the following conditions are met: i) ii) The individual capacity of each FIT application and the aggregate capacity of" all FIT applications must fall into the same price tranche as outlined in the" excerpt of the FIT Price Schedule shown below. All FIT applications on a single property are made in the same business day. This will allow solar PV (rooftop) projects to be developed on multiple buildings located" on one legal property under multiple FIT applications with multiple connection points." The aggregate capacity will be used to determine the Contract Price. For greater clarity," this would not allow additional applications on the same property at a later date. Examples: Permitted: 2 x 100 kW solar PV rooftop project, applied for at the same time, located on two separate buildings in the same industrial park and under one legal property description. Total capacity is 200 kW, and within the 10 – 250 kW price tranche @ 71.3 cents / kWh." 3 x 70 kW solar PV rooftop project, applied for at the same time, located on three" separate buildings on a college campus, both located under one legal property" description.. Total capacity is 210 kW, and within the 10 – 250 kW price tranche @ 71.3 cents/ kWh." One 250 kW, and one 250 kW solar PV rooftop projects, applied for at the same time," located on two separate commercial buildings, both located under one legal property" description. 2259 Total capacity is 500 kW, and within the 250-500 kW price tranche @ 63.5 cents/ kWh. Not permitted: One 100 kW PV system and one 200 kW solar PV rooftop project, applied for at the" same time, located on two separate buildings in an industrial park. Each project is in the 10 – 250 kW price tranche but the total capacity of 300 kW exceeds" the 10-250 price tranche and therefore, is not permitted. Section 2.1 (c) of the FIT rules: (c) With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted" on any single property. For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property, so long" as the total capacity of the Generating Equipment located on the property is" reflected in a single Application and shares a common Connection Point. 2260 Sandy Yuen⌦ From: Sandy Yuen⌦ Sent: January-27-10 3:38 PM⌦ To: Miriam Heinz; Marianne de Munnik; Jonathan Cheszes; Elvina Chow; Cindy Roks⌦ Cc: Jim MacDougall; Sheri Bizarro⌦ Subject: FW: Project Splitting concerns⌦ Attachments: Clarification on multiple connection points_Final.doc⌦ Importance: High⌦ After some internal debate, this is where we landed, and what I have communicated to Sky Ozz. The attachment will be posted on our website as an FAQ for clarification going forward to other FIT applicants. Jim –⇥ pls confirm, and I can work with Glenna to have it posted.$ Sandy$ From: Sandy Yuen⌦ Sent: January 27, 2010 3:34 PM⌦ To: 'Kyle Rees'; Sarah Simmons⌦ Cc: rlu@ozzsolar.com⌦ Subject: RE: Project Splitting concerns⌦ Importance: High⌦ Hi Kyle,$ Where a single connection point is not feasible for the project, the OPA is willing to accept multiple solar PV (rooftop) FIT applications with multiple connection points.$ Please see attached clarification. This may require you to change the capacity of some of your FIT applications and/or withdraw other applications to meet the conditions within the clarification. We need this information, along with revised COD dates, no later than Thursday at 5pm (tomorrow).$ If you have any questions, please give me a call.$ Sandy Yuen, MA Electricity Resources$ Ontario Power Authority$ 120 Adelaide Street West, Suite 1600$ T: 41 6 - 969 - 6418$ sandy.yuen@powerauthority.on.ca$ www.powerauthority.on.ca$ From: Kyle Rees [mailto:krees@ozzsolar.com] Sent: January 26, 2010 5:25 PM⌦ To: Sandy Yuen; Sarah Simmons⌦ Cc: rlu@ozzsolar.com⌦ Subject: RE: Project Splitting concerns⌦ 2261 Hi Sandy, I just want to touch base with you before the day is out.⌦ The issues around the property description caused some unexpected delays in getting the COD date list back to you. We need to compensate for the potential removal of several large projects pending the final⇠ decision from your senior staff on this.⌦ My team have been working diligently using MPAC and real estate lawyers to verify the legal descriptions of each building that is in duplicate. It would appear many are not exactly as provided by the building owners⇠ and prove to be different from each other.⌦ I anticipate have the COD list back to you in the morning tomorrow.⌦ Further to our meeting I reviewed many of the building on the list, as discussed they are clearly different building served in some cases by different utility feeders. It would be very helpful if the OPA allowed us to resubmit as a single project with multiple connection points keeping each project in line with our objective of allocation exemption and non-host facility or parallel connection.⌦ We should have the property description list back to you by Friday.⌦ Thanks you,⌦ Kyle Rees⌦ VP, Operations⌦ 416-627-7555⌦ krees@ozzsolar.com⌦ Sky OZZ International Inc.⌦ From: Sandy Yuen [mailto:Sandy.Yuen@powerauthority.on.ca]⌦ Sent: January-26-10 8:41 AM⌦ To: krees@ozzsolar.com⌦ Subject: RE: Project Splitting concerns⌦ sure$ From: krees@ozzsolar.com [mailto:krees@ozzsolar.com] Sent: January 26, 2010 8:41 AM⌦ To: Sandy Yuen⌦ Subject: Re: Project Splitting concerns⌦ Sandy good morning. Can you give me an extra 10min before calling Kyle Kyle Rees VP Operations 416 -627 -7555 krees@ozzsolar.com www.ozzsolar.com From: "Sandy Yuen" Date: Mon, 25 Jan 2010 16:22:46 -0500 To: Subject: RE: Project Splitting concerns 2262 Ok, how about 8:45am. I don ’ t anticipate we need any more than half an hour.$ Shall I call you at 416-627-7555?⌦ Sandy$ From: krees@ozzsolar.com [mailto:krees@ozzsolar.com] Sent: January 25, 2010 4:18 PM⌦ To: Sandy Yuen⌦ Subject: Re: Project Splitting concerns⌦ I have a meeting at 9:30. 8am ok. I understand the rule refers to Municipal address not property legal discription. Kyle Rees VP Operations 416 -627 -7555 krees@ozzsolar.com www.ozzsolar.com From: "Sandy Yuen" Date: Mon, 25 Jan 2010 16:12:59 -0500 To: Subject: RE: Project Splitting concerns Can we meet first thing in the morning? I don ’ t want to delay.$ Essentially, based on the legal description of the property you provided in your FIT applications, several project$ appears to be on a similar piece of property as another FIT application. The OPA would like to confirm that this⇥ project meets the eligibility requirements set out in the FIT rules. Specifically, the OPA would like to ensure that⇥ this project complies with Section 2.1(c), which states that there cannot be more than one rooftop solar PV project located on a single property.⇥ Sandy$ From: krees@ozzsolar.com [mailto:krees@ozzsolar.com] Sent: January 25, 2010 4:08 PM⌦ To: Sandy Yuen⌦ Subject: Re: Project Splitting concerns⌦ Hi Sandy Can we discuss at 11? Could you share some specifics so I am prepaired? Kyle Kyle Rees VP Operations 416 -627 -7555 krees@ozzsolar.com www.ozzsolar.com From: "Sandy Yuen" Date: Mon, 25 Jan 2010 15:57:08 -0500 To: Kyle Rees Subject: Project Splitting concerns 2263 Hi Kyle,$ Are you available tomorrow morning for a quick conference call? There are some concerns internally regarding$ project splitting which we need to discuss ASAP$ How ’ s 9:30am or 10am?$ Sandy Yuen, MA Electricity Resources$ Ontario Power Authority$ 120 Adelaide Street West, Suite 1600$ T: 41 6 - 969 - 6418$ sandy.yuen@powerauthority.on.ca$ www.powerauthority.on.ca$ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2264 Clarification on section 2.1(c) of FIT rules: Q: Will multiple solar (PV) rooftop FIT applications be permitted where there are" multiple buildings on a single legal property? A: Not withstanding section 2.1 (c) of the FIT rules, where the OPA deems a solar (PV)" rooftop project does not constitute project splitting and where a single connection point is" not feasible for the project, the OPA will accept multiple solar PV (rooftop) FIT applications located on a single legal property where the following conditions are met: i) ii) The individual capacity of each FIT application and the aggregate capacity of" all FIT applications must fall into the same price tranche as outlined in the" excerpt of the FIT Price Schedule shown below. All FIT applications on a single property are made in the same business day. This will allow solar PV (rooftop) projects to be developed on multiple buildings located" on one legal property under multiple FIT applications with multiple connection points." The aggregate capacity will be used to determine the Contract Price. For greater clarity," this would not allow additional applications on the same property at a later date. Examples: Permitted: 2 x 100 kW solar PV rooftop project, applied for at the same time, located on two separate buildings in the same industrial park and under one legal property description. Total capacity is 200 kW, and within the 10 – 250 kW price tranche @ 71.3 cents / kWh." 3 x 70 kW solar PV rooftop project, applied for at the same time, located on three" separate buildings on a college campus, both located under one legal property" description.. Total capacity is 210 kW, and within the 10 – 250 kW price tranche @ 71.3 cents/ kWh." One 250 kW, and one 250 kW solar PV rooftop projects, applied for at the same time," located on two separate commercial buildings, both located under one legal property" description. 2265 Total capacity is 500 kW, and within the 250-500 kW price tranche @ 63.5 cents/ kWh. Not permitted: One 100 kW PV system and one 200 kW solar PV rooftop project, applied for at the" same time, located on two separate buildings in an industrial park. Each project is in the 10 – 250 kW price tranche but the total capacity of 300 kW exceeds" the 10-250 price tranche and therefore, is not permitted. Section 2.1 (c) of the FIT rules: (c) With respect to solar (PV) Projects, only one Rooftop Facility shall be permitted" on any single property. For greater certainty, a single Rooftop Facility may have Generating Equipment located on multiple buildings on a single property, so long" as the total capacity of the Generating Equipment located on the property is" reflected in a single Application and shares a common Connection Point. 2266 Jonathan Cheszes From: Jonathan Cheszes Sent: February-01-10 11:23 AM To: Jim MacDougall Subject: Maintaining one project per property rule Attachments: One solar PV rooftop per property.doc Jim,⇧ Sorry about the delay in getting this to you.⇧ Let me know if you want it shorter.⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ 2267 Issue: Should the MUSH sector be exempt from the limitation of one solar PV rooftop project per' legal property, section 2.1(c) of the FIT rules? Background: Section 2.1(c) of the FIT rules limits one solar PV rooftop project per legal property even if' there are multiple buildings and multiple electricity accounts. This rule was created to avoid' project splitting that would allow Suppliers to access a higher FIT price by splitting up a large' project into multiple applications, on multiple buildings located on one legal property like a' school campus or an industrial park. This rule prevents this behaviour and requires all rooftop' projects to be commissioned at the same time. This creates challenges for the MUSH sector' who want to develop solar rooftop projects in stages. However, the FIT prices were derived' on a cost plus basis, assuming higher capital costs, and commensurate higher FIT rates, for' smaller sized projects. Exempting the MUSH sector from this rule would create significant' opportunity for project splitting and windfall profits for project owners when the FIT already' provides a reasonable rate of return of 11% and solar PV equipments costs have fallen' significantly [30%] since the FIT prices were established. Proponents who are uncertain about' the technology should be aware that this rule will be re-examined at program review at which' point the OPA will assess it appropriateness. Recommendation: Maintain rule 2.1(c) but highlight that it will be re-examined in less than two years at program' review.' jonathan.cheszes Page 1 3/7/2018 2268 Claire Willison From: Claire Willison Sent: February-01-10 5:04 PM To: Jim MacDougall Subject: FIT/microFIT Questions - Batch 7 Jim, responses needed, please. Thank you. Not Responsive 2269 Not Responsive Ticket No. 3385 – Jan 29 (refer also 3422) Question: Today, Jan 28th , I spoke with one of your representatives regarding a 1 0KW roof" mount system combined with a 10KW ground mount . I was told that this would require two separate contracts and meters and that each system would have a price schedule of .802 cents" per KW/hr. Can you please confirm this for my records. Response: Not Responsive 2270 Ticket No. 3422 – Feb 1 Question: My questions are;if you indicate on your application that you will be installed a fixed tilt solar array and you end up wanting a tracking array at the same Kw is that an issue. 2. If you apply for 100kw inFIT and end up installing 30k with the idea yo will install more later can you do that? Response: Ticket No. 3423 – Feb 1 Question: Could you please provide us with specifics regarding solar module facts in order to meet your "domestic content" requirement for the FIT program. For over a year, we tried to acquire financing to start a panel manufacturing plant in southern Ontario. The cost was over $100,000,000 and we could not arrange financing. We have arranged a possible distributorship arrangement with a panel manufacturer in the US. We are very interested in proceeding with this arrangement and want to satisfy your "domestic content" requirement. We are aware that Suntech and Akeena Solar have been able to satisfy this requirement. If we can find out a way to satisfy the "domestic content" requirement we will try to adjust our plan and assemble part of the module in Ontario and source the material in Ontario. We would appreciate your advice. Response: Ticket No. 3425 – Feb 1 Question: Are solar concentrators and DIY solar panels admissible into the program? Response: Claire Willison Program Response Analyst/Coordinator⌫ Corporate Communications⌫ Direct: 416- 969 - 6080 Fax: 416- 967 - 1947 claire.willison@powerauthority.on.ca www.powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 2271 Sandy Yuen⌦ From: Sandy Yuen⇣ Sent: February-11-10 4:16 PM⇣ To: Jim MacDougall; Patricia Lightburn; Sarah Simmons; Jonathan Cheszes; Cindy⇣ Roks; Sheri Bizarro⇣ Cc: Ana Maria Mejia; Nadeem Anwar; Julia Moshkin; Rebecca Mallinson⇣ Subject: RE: Multiple FIT Projects on One Property⇣ Attachments: Multiple FIT Projects on One Property 2010-02-05 PLJMSY.doc⇣ My comments attached Sandy From: Jim MacDougall Sent: February 10, 2010 4:59 PM To: Patricia Lightburn; Sandy Yuen; Sarah Simmons; Jonathan Cheszes; Cindy Roks; Sheri Bizarro Cc: Ana Maria Mejia; Nadeem Anwar; Julia Moshkin; Rebecca Mallinson Subject: RE: Multiple FIT Projects on One Property Some changes proposed …⇥ Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Patricia Lightburn Sent: February 9, 2010 2:19 PM To: Sandy Yuen; Sarah Simmons; Jonathan Cheszes; Jim MacDougall; Cindy Roks; Sheri Bizarro Cc: Ana Maria Mejia; Nadeem Anwar; Julia Moshkin; Rebecca Mallinson Subject: Multiple FIT Projects on One Property Sorry for the delay in sending this out folks. Please see attached – let me know of your comments and suggestions. Patricia Lightburn✓ FIT Program✓ Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2272 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Issue⇧ Are multiple FIT contracts of the same technology permitted on the same property, and if& so, how are they treated in regards to pricing? Background⇧ Section 7.3 (e) prohibits applicants from splitting one project into smaller projects for the& purpose of obtaining a higher price or any other benefit (ex: splitting into multiple CAE& projects).& FIT and microFIT A FIT contract and a microFIT contract of the same fuel on the same property shall not be permitted. Rooftop Solar PV Section 2.1 (c) allows only one rooftop solar PV FIT contract for each legal property During the application review process, an exception to this rule was developed: o Not withstanding section 2.1 (c) of the FIT rules, where the OPA deems a& solar (PV) rooftop project does not constitute project splitting and where a& single connection point is not feasible for the project, the OPA will accept multiple solar PV (rooftop) FIT applications located on a single property& where the following conditions are met: The aggregate capacity of all FIT applications on a single legal& property will be used to establish the appropriate FIT contract price Other technologies& The rules are silent on how incremental projects, or multiple projects of the same& technology on a single property, should be treated in regards to pricing Recommendation For all technologies: 1) A FIT and a microFIT contract of the same renewable fuel will not be permitted on& the same property& 2) In general, only one FIT contract permitted for each technology on a single legal property. 3) Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a& single legal property will be used to establish the appropriate FIT contract price. This& 2273 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 permission would also allow multiple connection points where a single connection& point is not feasible for the project. 4) Projects with aggregate capacity above the highest project size threshold (ex: >500kW rooftop solar) may submit limitless FIT applications, as long as the& aggregate capacity of each of the initial FIT applications is greater than 500 kW.& For example: Where an applicant wishes to apply to the FIT program for multiple& projects whose individual size is less than 500kW but whose aggregate size is 500kW or greater, the applicant may submit all of the initial FIT applications at the same time& (same business day) and the OPA will use the aggregate capacity of all individual& projects for the purpose of establishing the appropriate FIT contract price. This would& allow the applicant to apply for additional projects of the same technology at a later& date. For greater clarity, all individual projects in this case would qualify for the 53.9& cents/kWh price. The FIT Program will be reviewed in two years. At that time, OPA will explore the& possibility of allowing applications of the same fuel source on the same property. The& OPA want to make sure that we are confident that proponents are not taking advantage of& splitting projects to obtain higher prices, but still appropriately encourage incremental& renewable energy capacity in a manner that makes sense. Examples FIT and microFIT/RESOP 1) A school raises money to construct a 2 kW solar rooftop project and then wants to& add an additional 10 kW on the roof. The School Board then announces that all schools in their district will host a CAE rooftop project. OR One existing RESOP project is a solar PV rooftop @ 10kW, and a new FIT project is solar⌧ ground mount @ 60 kW. RESPONSE: The 2 kW project is eligible for a microFIT contract. The 10kW proposed& project should be downsized to an 8 kW project, in which case it would also qualify for a& microFIT contract. The CAE School Board project is not eligible for a FIT contract. Alternatively, the school could apply for a 10 kW @ 80.2 cents / kWh and the School& Board could apply for a 240 kW @ 71.3 cents / kWh project at the same time. 2) One rooftop under microFIT and one 100 kW under FIT on the same legal property. RESPONSE: microFIT and FIT of the same fuel source are not permitted on the same& property, therefore only one of these projects is eligible. The applicant could apply for a& 2274 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 110 kW project @ @ 71.3 cents / kWh , made up of a 10 kW and a 100 kW at the same& time.& 3) One ground-mount 10kW under microFIT and an additional 10kW ground-mount under FIT on the same legal property. RESPONSE: Both projects are eligible as long as the FIT project applies as a groundmounted project under FIT – which would identify it as a different fuel source (groundmount rather than ‘any type’). The FIT project would qualify in this case for the& 44.3cents/kWh. Solar PV Rooftop and Ground mount One contract is installing a 158 kW solar PV project on a rooftop, and proposes an additional 6 KW ground mount.⇧ 1) A FIT and a microFIT contract of the same renewable fuel will not be permitted& on the same property& RESPONSE: Pick FIT or microFIT. 2) In general, only one FIT contract permitted for each technology on a single legal& property. RESPONSE: Offer 1 FIT contract at 164 kW @ 71.3 cents/ kWh, but do not& differentiate how it shall be mounted. 3) Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on& a single legal property provided that the aggregate capacity of all FIT applications& on a single legal property will be used to establish the appropriate FIT contract& price. This permission would also allow multiple connection points where a& single connection point is not feasible for the project. RESPONSE: Aggregate is 164 kW @ 71.3 cents/ kWh but do not differentiate how it shall be mounted. Solar PV Rooftop 1) University campus with many buildings but only one legal property wants to have& projects on many buildings, with separate FIT contracts, constructed over time. OR 2275 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Shopping centre has one very large roof and wants multiple small projects, each with& separate connection points and FIT contracts RESPONSE: The owner should submit one FIT application for the property. If the owner& wanted to install projects in a phased approach, FIT applications totalling at least 500kW should be submitted @ 53.9 cents/kWh, which would allow each phase of the to& reach commercial operation on its own schedule and allow future FIT applications. Alternatively, the owner could submit multiple smaller applications whose aggregate& capacity is equal to or greater than 500kW projects on the same business day. Each& project would be eligible for the 53.9cents/kWh price and the owner would be able to& submit subsequent projects on the property at a later date. 2) One small property has two buildings. Applicant wants panels on both buildings,& constructed at the same time; however a shared connection point is not feasible. RESPONSE: Fine, provided that the individual capacity of each FIT application and the& aggregate capacity of all FIT applications fall into the same price tranche. If the projects& do not fall within the same price tranche, the second project will likely have to wait until& after the program review. Other technologies 1) Landfill gas project wants to apply for a 9 MW project, and later apply for a 6 MW incremental project to accommodate additional fuel supply& RESPONSE: The price threshold is 10MW. Therefore the project has two options: Submit a 9 MW application. Options for the 6MW application will be explored& during the program review. Submit a 10MW application, which would allow the applicant to submit a& subsequent 5 MW application after the program review 2) Biogas project has one FIT small project already and wants to build a new separate& small project at another location on the farm OR Waterpower project has an existing FIT project and wants to upgrade the project to& increase capacity, and apply for an incremental project. RESPONSE: Fine, provided that the individual capacity of each FIT application and the& aggregate capacity of all FIT applications fall into the same price tranche. If the projects& do not fall within the same price tranche, the second project will likely have to wait until& after the program review. 2276 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Permitted: 2 x 100 kW solar PV rooftop project, applied for at the same time, located on two& separate buildings in the same industrial park and under one legal property description. Total capacity is 200 kW, and within the 10 – 250 kW price tranche @ 71.3 cents / kWh. 3 x 70 kW solar PV rooftop project, applied for at the same time, located on three& separate buildings on a college campus, both located under one legal property& description.. Total capacity is 210 kW, and within the 10 – 250 kW price tranche @ 71.3 cents/ kWh. One 250 kW, and one 250 kW solar PV rooftop projects, applied for at the same time,& located on two separate commercial buildings, both located under one legal property& description. Total capacity is 500 kW, and within the 250-500 kW price tranche @ 63.5 cents/ kWh. Not permitted: One 100 kW PV system and one 200 kW solar PV rooftop project, applied for at the& same time, located on two separate buildings in an industrial park (i.e. same legal& property). Each project is in the 10 – 250 kW price tranche but the total capacity of 300 kW exceeds& the 10-250 price tranche and therefore, is not permitted.& 2277 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix - FIT Price Schedule Text size: 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in the table provided in the price adder section of this website. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 2278 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit⌧ B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. 2279 Patricia Lightburn From: Patricia Lightburn⇣ Sent: February-16-10 4:17 PM⇣ To: Jim MacDougall; Jonathan Cheszes; Sarah Simmons; Sandy Yuen; Cindy Roks;⇣ Sheri Bizarro⇣ Cc: Ana Maria Mejia; Nadeem Anwar⇣ Subject: Multiple projects on same property⇣ Attachments: Multiple FIT Projects on One Property 2010-02-05 v2.doc⇣ Hi all,⌥ This is my second crack at this – I have tried to take your earlier comments into consideration. Please let me know if you have any further comments/suggestions. Also, is it clear/ comprehensible – if we put it on the website would⌥ the public get it!? Patricia Lightburn FIT Program Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2280 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Issue⇧ Are multiple FIT contracts of the same technology permitted on the same property, and if& so, how are they treated in regards to pricing? Background⇧ Section 7.3 (e) prohibits applicants from splitting one project into smaller projects for the& purpose of obtaining a higher price or any other benefit. In order to provide greater guidance to applicants on how this rule is applied by the OPA,& a FIT program rule change was introduced in November 2009 that allows only one& rooftop solar PV project on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only" one rooftop facility shall be permitted on any single property. For greater certainty, a& single rooftop facility may have generating equipment located on multiple buildings& on a single property so long as the total capacity of the generating equipment located& on the property is reflected in a single application and shares a common connection& point." In order to allow greater flexibility to applicants who are unable to submit a single& application with a common connection point (for example when multiple buildings are& located on a single property), and for applicants that wish to install their projects in a& phased approach the OPA has developed an alternative approach, which is explained& below.& Other technologies& Currently the rules are silent on how incremental projects, or multiple projects of the& same technology on a single property, should be treated in regards to pricing. The approach explained below provides clarity on how the OPA will apply Section 7.3& (e) to all technologies, including solar, wind, water and bioenergy. 2281 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Recommendation For all technologies: 1) A FIT and a microFIT contract of the same renewable fuel will not be permitted on a& single legal property. For greater clarity, ground-mounted solar PV and rooftop solar PV are treated as& separate renewable fuels under the FIT Program. microFIT solar PV (any type) shall be treated as the same fuel source as FIT rooftop solar PV. This means that a microFIT contract and a FIT rooftop solar PV contract on a single& legal property shall not be permitted. However a microFIT contract and a FIT solar PV ground-mounted contract is acceptable. 2) In general, only one FIT contract permitted for each technology on a single legal property. 3) Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a& single legal property will be used to establish the appropriate FIT contract price. This& permission will allow multiple connection points where a single connection point is& not feasible for the project.& Applications must be submitted within the same business day. Subsequent applications may be submitted provided that the additional capacity& does not exceed the price tranche established by the aggregate capacity of the& initial applications. It is not permitted to combine the capacities of multiple FIT and microFIT& applications. In order to submit multiple applications and qualify for the aggregate& price, all applications must be submitted under the microFIT program. If the aggregate capacity of the initial group of applications (which are submitted& within the same business day) is equal to or less than 500kW, subsequent applications& may be submitted provided that the aggregate capacity of all of the FIT applications& does not exceed the price tranche established by the initial group of applications& submitted. For example: If the project is 400 kW but is submitted as an initial group of 4 X& 100kW applications, the contract price would be determined based on the& aggregate 400kW capacity. At a later date, a subsequent 100kW application (or& multiple applications totalling 100kW) could be submitted, since the total& capacity would remain within the 500kW price tranche. 2282 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 If the aggregate capacity of the initial group of applications is greater than 500kW,& there is no limit on the number or size of subsequent applications. The FIT Program will be reviewed in two years. At that time, OPA will explore the& possibility of allowing additional applications of the same fuel source on the same& property. The OPA want to make sure that we are confident that proponents are not& taking advantage of splitting projects to obtain higher prices, but still appropriately& encourage incremental renewable energy capacity in a manner that makes sense. 2283 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix A – FIT Price Schedule 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in the table provided in the price adder section of this website. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit( B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. 2284 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix B: Examples FIT and microFIT 1) An applicant wishes to install a 158 kW solar PV project on a rooftop, and proposes& an additional 6 KW ground mount.& RESPONSE: The applicant would not be permitted to apply for 158kW project under FIT& as well as a 6kW under microFIT. The applicant may however submit a 158 kW rooftop solar PV application under FIT and& submit an additional 6 kW ground mount under FIT 2) A school raises money to construct a 2 kW solar rooftop project and then wants to& add an additional 10 kW. The School Board then announces that all schools in their& district will host a capacity allocation exempt (CAE) rooftop project. RESPONSE: The 2 kW project is eligible for a microFIT contract. The 10kW proposed& project could be downsized to an 8 kW project, in which case it would also qualify for a& microFIT contract. Both would be eligible for the 80.2 cents/kWh price. In this case the& CAE School Board project is not eligible for a FIT contract. Alternatively, the school could apply for a 2kW and a 10 kW and the School Board could& apply for a 240 kW project on the same business day – all would have to be applications✓ submitted under the FIT Program. All three projects would fall into the 250-500kW price& tranche (63.5 cents/kWh). 3) One rooftop PV under microFIT and one 100 kW rooftop PV under FIT on the same legal property. RESPONSE: microFIT and FIT of the same fuel source are not permitted on the same& property, therefore only one of these projects is eligible. Alternatively, the applicant could apply for a 110 kW project, made up of a 10 kW and a& 100 kW at the same time, and both applied through the FIT Program. . 4) One ground-mount or rooftop 10kW under microFIT and an additional 10kW groundmount under FIT on the same legal property. RESPONSE: Both projects are eligible as long as the FIT project applies as a groundmounted project under FIT – which would identify it as a different fuel source (groundmount rather than ‘any type’). The FIT project would qualify in this case for the& 44.3cents/kWh and the microFIT for 80.2 cents/kWh. 5) 100kW solar rooftop PV under FIT and 10 kW ground mount under microFIT. 2285 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 RESPONSE: Not permitted. The applicant has the option to apply through the FIT program for 10kW ground mount and would receive the ground-mount price of 44.3 cents/kWh. Solar PV Rooftop 1) An applicant submits a 200 kW solar rooftop PV application. The next day an& application for 100 kW is submitted. RESPONSE: This would not be permitted. The second application would be rejected. 2) University campus with many buildings but only one legal property wants to have& projects on many buildings, with separate FIT contracts, constructed over time. OR A shopping centre has one very large roof and wants multiple small projects, each& with separate connection points and FIT contracts RESPONSE: The owner should submit one FIT application for the property. If the owner wants to install projects in a phased approach, or install projects located on& different buildings on the same legal property, multiple applications should be submitted& on the same business day, which would allow each phase of the project to reach& commercial operation on its own schedule. The aggregate capacity will be used to& determine the appropriate contract price. If the aggregate capacity of the initial group is equal to or less than 500kW, subsequent& applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of& applications submitted. For example, if the initial group of applications includes 4 X 100kW projects,& the contract price would be determined based on the aggregate 400kW capacity. At a later date, a subsequent 100kW application (or multiple& applications totalling 100kW) could be submitted, since the total capacity& would remain within the 500kW price tranche. If the aggregate capacity of the initial group of applications is greater than 500kW, there& is no limit on the number or size of subsequent applications. 3) One small property has two buildings. Applicant wants panels on both buildings,& constructed at the same time; however a shared connection point is not feasible. RESPONSE: Fine, provided that both applications are submitted in the same business& day and the aggregate capacity will be used to determine the FIT Price. 2286 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Other technologies 1) Landfill gas project wants to apply for a 9 MW project, and later apply for a 6 MW incremental project to accommodate additional fuel supply RESPONSE: The price tranche is 10MW. Therefore the project has two options: Submit a 9 MW application. Options for the 6MW application will be explored& during the program review. Submit a >10MW application, which would allow the applicant to submit subsequent incremental applications at any time 2) Biogas project has one FIT small project already and wants to build a new separate& small project at another location on the farm. OR Waterpower project has an existing FIT project and wants to upgrade the project to& increase capacity, and apply for an incremental project. RESPONSE: Fine, provided that the total project capacity (of the existing project and the& new project) does not exceed the price tranche established by the first project. If the& aggregate capacity exceeds the price tranche, the second project will likely have to wait until after the program review.& 2287 Sarah Simmons↵ From: Sarah Simmons⇣ Sent: February-17-10 8:24 AM⇣ To: Patricia Lightburn; Jim MacDougall; Jonathan Cheszes; Sandy Yuen; Cindy Roks;⇣ Sheri Bizarro⇣ Cc: Ana Maria Mejia; Nadeem Anwar⇣ Subject: RE: Multiple projects on same property⇣ Attachments: Multiple FIT Projects on One Property 2010-02-05 v2_SScomments.doc⇣ Great work Patricia, You seem to have incorporated all the comments and concerns from the group. I have very minor revisions. Please⇡ see attached. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Patricia Lightburn Sent: February 16, 2010 4:17 PM To: Jim MacDougall; Jonathan Cheszes; Sarah Simmons; Sandy Yuen; Cindy Roks; Sheri Bizarro Cc: Ana Maria Mejia; Nadeem Anwar Subject: Multiple projects on same property Hi all, This is my second crack at this – I have tried to take your earlier comments into consideration. Please let me know if you have any further comments/suggestions. Also, is it clear/ comprehensible – if we put it on the website would the public get it!? Patricia Lightburn FIT Program Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2288 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Issue⇧ Are multiple FIT contracts of the same technology permitted on the same property, and if& so, how are they treated in regards to pricing? Background⇧ Section 7.3 (e) prohibits applicants from splitting one project into smaller projects for the& purpose of obtaining a higher price or any other benefit. In order to provide greater guidance to applicants on how this rule is applied by the OPA,& a FIT program rule change was introduced in November 2009 that allows only one& rooftop solar PV project on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only" one rooftop facility shall be permitted on any single property. For greater certainty, a& single rooftop facility may have generating equipment located on multiple buildings& on a single property so long as the total capacity of the generating equipment located& on the property is reflected in a single application and shares a common connection& point." In order to allow greater flexibility to applicants who are unable to submit a single& application with a common connection point (for example when multiple buildings are& located on a single property), and for applicants that wish to install their projects in a& phased approach the OPA has developed an alternative approach, which is explained& below.& Other technologies& Currently the rules are silent on how incremental projects, or multiple projects of the& same technology on a single property, should be treated in regards to pricing. The approach explained below provides clarity on how the OPA will apply Section 7.3& (e) to all technologies, including solar, wind, water and bioenergy. 2289 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Recommendation For all technologies: 1) A FIT and a microFIT contract of the same renewable fuel will not be permitted on a& single legal property. For greater clarity, ground-mounted solar PV and rooftop solar PV are treated as& separate renewable fuels under the FIT Program. microFIT solar PV (any type) shall be treated as the same fuel source as FIT rooftop solar PV. This means that a microFIT contract and a FIT rooftop solar PV contract on a single& legal property shall not be permitted. However a microFIT contract and a FIT solar PV ground-mounted contract is acceptable. 2) In general, only one FIT contract permitted for each technology on a single legal property. 3) Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a& single legal property will be used to establish the appropriate FIT contract price. This& permission will allow multiple connection points where a single connection point is& not feasible for the project.& Applications must be submitted within the same business day. Subsequent applications may be submitted provided that the additional capacity& does not exceed the price tranche established by the aggregate capacity of the& initial applications. It is not permitted to combine the capacities of multiple FIT and microFIT& applications. In order to submit multiple applications and qualify for the aggregate& price, all applications must be submitted under the FIT program. If the aggregate capacity of the initial group of applications (which are submitted& within the same business day) is equal to or less than 500kW, subsequent applications& may be submitted provided that the aggregate capacity of all of the FIT applications& does not exceed the price tranche established by the initial group of applications& submitted. For example: If the project is 400 kW but is submitted as an initial group of 4 X& 100kW applications, the contract price would be determined based on the& aggregate 400kW capacity. At a later date, a subsequent 100kW application (or& multiple applications totalling 100kW) could be submitted, since the total& capacity would remain within the 500kW price tranche. 2290 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 If the aggregate capacity of the initial group of applications is greater than 500kW,& there is no limit on the number or size of subsequent applications. Each subsequent& application would receive the prices associated with the above 500 kW price tranche& regardless of the size of the project. The FIT Program will be reviewed in two years. At that time, OPA will explore the& possibility of allowing additional applications of the same fuel source on the same& property. The OPA want to make sure that we are confident that proponents are not& taking advantage of splitting projects to obtain higher prices, but still appropriately& encourage incremental renewable energy capacity in a manner that makes sense. 2291 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix A – FIT Price Schedule 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in the table provided in the price adder section of this website. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit( B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. 2292 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix B: Examples FIT and microFIT 1) An applicant wishes to install a 158 kW solar PV project on a rooftop, and proposes& an additional 6 KW ground mount.& RESPONSE: The applicant would not be permitted to apply for 158kW project under FIT& as well as a 6kW under microFIT. The applicant may however submit a 158 kW rooftop solar PV application under FIT and& submit an additional 6 kW ground mount under FIT 2) A school raises money to construct a 2 kW solar rooftop project and then wants to& add an additional 10 kW. The School Board then announces that all schools in their& district will host a capacity allocation exempt (CAE) rooftop project. RESPONSE: The 2 kW project is eligible for a microFIT contract. The 10kW proposed& project could be downsized to an 8 kW project, in which case it would also qualify for a& microFIT contract. Both would be eligible for the 80.2 cents/kWh price. In this case the& CAE School Board project is not eligible for a FIT contract. Alternatively, the school could apply for a 2kW and a 10 kW and the School Board could& apply for a 240 kW project on the same business day – all would have to be applications✓ submitted under the FIT Program. All three projects would fall into the 250-500kW price& tranche (63.5 cents/kWh). 3) One rooftop PV under microFIT and one 100 kW rooftop PV under FIT on the same& legal property. RESPONSE: microFIT and FIT of the same fuel source are not permitted on the same& property, therefore only one of these projects is eligible. Alternatively, the applicant could apply for a 110 kW project, made up of a 10 kW and a& 100 kW at the same time, and both applied through the FIT Program. . 4) One ground-mount or rooftop 10kW under microFIT and an additional 10kW groundmount under FIT on the same legal property. RESPONSE: Both projects are eligible as long as the FIT project applies as a groundmounted project under FIT – which would identify it as a different fuel source (groundmount rather than ‘any type’). The FIT project would qualify in this case for the& 44.3cents/kWh and the microFIT for 80.2 cents/kWh. 5) 100kW solar rooftop PV under FIT and 10 kW ground mount under microFIT. 2293 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 RESPONSE: Not permitted. The applicant has the option to apply through the FIT program for 10kW ground mount and would receive the ground-mount price of 44.3 cents/kWh. Solar PV Rooftop 1) An applicant submits a 200 kW solar rooftop PV application. The next day an& application for 100 kW is submitted. RESPONSE: This would not be permitted. The second application would be rejected. 2) University campus with many buildings but only one legal property wants to have& projects on many buildings, with separate FIT contracts, constructed over time. OR A shopping centre has one very large roof and wants multiple small projects, each& with separate connection points and FIT contracts RESPONSE: The owner should submit one FIT application for the property. If the owner wants to install projects in a phased approach, or install projects located on& different buildings on the same legal property, multiple applications should be submitted& on the same business day, which would allow each phase of the project to reach& commercial operation on its own schedule. The aggregate capacity will be used to& determine the appropriate contract price. If the aggregate capacity of the initial group is equal to or less than 500kW, subsequent& applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of& applications submitted. For example, if the initial group of applications includes 4 X 100kW projects,& the contract price would be determined based on the aggregate 400kW capacity. At a later date, a subsequent 100kW application (or multiple& applications totalling 100kW) could be submitted, since the total capacity& would remain within the 500kW price tranche. If the aggregate capacity of the initial group of applications is greater than 500kW, there& is no limit on the number or size of subsequent applications. 3) One small property has two buildings. Applicant wants panels on both buildings,& constructed at the same time; however a shared connection point is not feasible. RESPONSE: Fine, provided that both applications are submitted in the same business& day and the aggregate capacity will be used to determine the FIT Price. 2294 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Other technologies 1) Landfill gas project wants to apply for a 9 MW project, and later apply for a 6 MW incremental project to accommodate additional fuel supply& RESPONSE: The price tranche is 10MW. Therefore the project has two options: Submit a 9 MW application. Options for the 6MW application will be explored& during the program review. Submit a >10MW application, which would allow the applicant to submit subsequent incremental applications at any time 2) Biogas project has one FIT small project already and wants to build a new separate& small project at another location on the farm. OR Waterpower project has an existing FIT project and wants to upgrade the project to& increase capacity, and apply for an incremental project. RESPONSE: Fine, provided that the total project capacity (of the existing project and the& new project) does not exceed the price tranche established by the first project. If the& aggregate capacity exceeds the price tranche, the second project will likely have to wait until after the program review. 2295 Glenna Ford↵ From: Glenna Ford↵ Sent: February-18-10 11:52 AM↵ To: Patricia Lightburn↵ Subject: Next week↵ Attachments: FIT website FAQs Feb 12 10.doc↵ Patricia: I am trying to set up a meeting to review the FIT FAQs as soon as possible. Are you out of the office all next week? If so, would you have time to review the attached FAQs and add your comments before you go so that we can still have the meeting? We met to discuss the microFIT FAQs yesterday and would like to update the FIT version in the near future. Please let me know. Thank you. Glenna Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 2296 Not Responsive Not Responsive Not Responsive 2299 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2300 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2301 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 13 2309 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 16 2312 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 17 2313 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 18 2314 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 19 2315 Not Responsive Not Responsive Not Responsive 22 2318 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 28 2324 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. 34 2330 Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project4 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. 35 2331 Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top 36 2332 Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. 37 2333 Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 38 2334 Not Responsive Not Responsive Not Responsive 41 2337 Not Responsive Not Responsive 43 2339 Not Responsive Not Responsive Not Responsive Not Responsive Aboriginal Participation Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 48 2344 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal4 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 49 2345 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to4 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities 2. Support through funding project pre-feasibility and feasibility studies, development of⌧ business cases, resource assessment, environmental and technical studies, as well as⌧ other soft costs for First Nation and Métis energy projects 3. Support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 50 2346 Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 51 2347 Community Participation Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to community-based projects to help ensure they are⌧ 52 2348 financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the "soft" or developmental costs associated with new⌧ renewable energy projects. This will help communities in Ontario, including farmers, co-ops and⌧ non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in4 the FIT Program? Through the Municipal Renewable Energy Program, the province will provide support to⌧ municipalities for costs associated with new renewable energy projects. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 53 2349 Not Responsive Glenna Ford↵ From: Glenna Ford↵ Sent: February-19-10 11:33 AM↵ To: Patricia Lightburn; Jonathan Cheszes; Sandy Yuen; Sarah Simmons; Claire↵ Willison; Linda Filippi; Cindy Roks↵ Subject: FIT FAQs↵ Attachments: FIT website FAQs Feb 12 10.doc↵ Please find attached the version of the FAQs that we will be working through at the meeting. Comments in advance⌧ are welcome too.⌧ Regards,⌧ Glenna⌧ Glenna Ford↵ Senior Regulatory Communications Advisor⌧ Direct: 416- 969 - 6305⌧ Cell: 416- 392 - 9905⌧ Email: glenna.ford@powerauthority.on.ca⌧ Ontario Power Authority⌧ 120 Adelaide Street West, Suite 1600⌧ Toronto , ON M5H 1T1⌧ www.powerauthority.on.ca⌧ P Please consider the environment before printing this email. 2351 Not Responsive Not Responsive Not Responsive 2354 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2355 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2356 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 13 2364 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 16 2367 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 17 2368 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 18 2369 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 19 2370 Not Responsive Not Responsive Not Responsive 22 2373 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 28 2379 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. 34 2385 Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project4 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. 35 2386 Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top 36 2387 Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. 37 2388 Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 38 2389 Not Responsive Not Responsive Not Responsive 41 2392 Not Responsive Not Responsive 43 2394 Not Responsive Not Responsive Not Responsive Not Responsive Aboriginal Participation Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 48 2399 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal4 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 49 2400 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to4 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities 2. Support through funding project pre-feasibility and feasibility studies, development of⌧ business cases, resource assessment, environmental and technical studies, as well as⌧ other soft costs for First Nation and Métis energy projects 3. Support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 50 2401 Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 51 2402 Community Participation Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to community-based projects to help ensure they are⌧ 52 2403 financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the "soft" or developmental costs associated with new⌧ renewable energy projects. This will help communities in Ontario, including farmers, co-ops and⌧ non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in4 the FIT Program? Through the Municipal Renewable Energy Program, the province will provide support to⌧ municipalities for costs associated with new renewable energy projects. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 53 2404 Not Responsive Jonathan Cheszes Jonathan Cheszes February-23-10 4:34 PM Jim MacDougall; Viviana von Bertoldi; Perry Cecchini; Sarah Simmons;& 'elliot.smith@osler.com'; Susan Kennedy; Patricia Lightburn; 'Ron Clark' Cc: 'Smith, Elliot'; Richard Duffy Subject: RE: FIT and uFIT changes Attachments: Multiple FIT Projects on One Property 2010-02-05 v3.doc From: Sent: To: No he didn’t. It is attached. Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6251 Fax 416.967.1947 www.powerauthority.on.ca _____________________________________________ From: Jim MacDougall Sent: February 23, 2010 3:47 PM To: Jim MacDougall; Jonathan Cheszes; Viviana von Bertoldi; Perry Cecchini; Sarah Simmons; 'elliot.smith@osler.com'; Susan Kennedy; Patricia Lightburn; 'Ron Clark' Cc: 'Smith, Elliot'; Richard Duffy Subject: RE: FIT and uFIT changes Updated table – for use as a communications tool – comments welcome. Eliott – did Jonathan ever send you the “project splitting Rules and Contract to v 1.4 Feb 21.doc >> policy paper”? << File: Changes to FIT! Jim MacDougall, P.Eng. Manager, Feed-In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 -----Original Appointment----From: Jim MacDougall Sent: February 18, 2010 3:58 PM To: Jim MacDougall; Jonathan Cheszes; Viviana von Bertoldi; Perry Cecchini; Sarah Simmons;9 'elliot.smith@osler.com'; Susan Kennedy; Patricia Lightburn; 'Ron Clark' 2406 Cc: Smith, Elliot Subject: FIT and uFIT changes When: February 22, 2010 9:30 AM-11:00 AM (GMT-05:00) Eastern Time (US & Canada). Where: 1806 Meeting Room Importance: High Hi all;7 I'd like to go over this document with Elliot on Monday so as to get the next draft in place for7 posting later that week. Please review as there are some required follow ups from some of you as noted. Please send any documents to Elliot and copy me. If you cant attend the entire time, that's fine - we can cover your items when you are there. Thanks ! <> <> << File: station service issue for v 1.3 of FIT Feb 10.doc >> <<7 File: Changes to FIT Rules and Contract to v 1.3 Feb 17.doc >> 2407 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Issue⇧ Are multiple FIT contracts of the same technology permitted on the same property, and if& so, how are they treated in regards to pricing? Background⇧ Section 7.3 (e) prohibits applicants from splitting one project into smaller projects for the& purpose of obtaining a higher price or any other benefit. In order to provide greater guidance to applicants on how this rule is applied by the OPA,& a FIT program rule change was introduced in November 2009 that allows only one& rooftop solar PV project on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only" one rooftop facility shall be permitted on any single property. For greater certainty, a& single rooftop facility may have generating equipment located on multiple buildings& on a single property so long as the total capacity of the generating equipment located& on the property is reflected in a single application and shares a common connection& point." In order to allow greater flexibility to applicants who are unable to submit a single& application with a common connection point (for example when multiple buildings are& located on a single property), and for applicants that wish to install their projects in a& phased approach the OPA has developed an alternative approach, which is explained& below.& Other technologies& Currently the rules are silent on how incremental projects, or multiple projects of the& same technology on a single property, should be treated in regards to pricing. The approach explained below provides clarity on how the OPA will apply Section 7.3& (e) to all technologies, including solar, wind, water and bioenergy. 2408 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Recommendation For all technologies: 1) A FIT and a microFIT contract of the same renewable fuel will not be permitted on a& single legal property, except in the case of solar PV, where rooftop and groundmounted solar PV will be permitted on a single legal property. For greater clarity, ground-mounted solar PV and rooftop solar PV are treated as& separately under the FIT price schedule. microFIT solar PV (any type) shall be treated& as the same as FIT rooftop solar PV. This means that a microFIT contract and a FIT rooftop solar PV contract on a single& legal property shall not be permitted. However a microFIT contract and a FIT solar PV ground-mounted contract is acceptable. 2) In general, only one FIT contract permitted for each technology on a single legal property. 3) Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a& single legal property will be used to establish the appropriate FIT contract price. This& permission will allow multiple connection points where a single connection point is& not feasible for the project.& Applications must be submitted within the same business day. Subsequent applications may be submitted provided that the additional capacity& does not exceed the price tranche established by the aggregate capacity of the& initial applications. It is not permitted to combine the capacities of multiple FIT and microFIT& applications. In order to submit multiple applications and qualify for the aggregate& price, all applications must be submitted under the FIT program. If the aggregate capacity of the initial group of applications (which are submitted& within the same business day) is equal to or less than 500kW, subsequent applications& may be submitted provided that the aggregate capacity of all of the FIT applications& does not exceed the price tranche established by the initial group of applications& submitted. For example: If the project is 400 kW but is submitted as an initial group of 4 X& 100kW applications, the contract price would be determined based on the& aggregate 400kW capacity. At a later date, a subsequent 100kW application (or& multiple applications totalling 100kW) could be submitted, since the total& capacity would remain within the 500kW price tranche. 2409 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 If the aggregate capacity of the initial group of applications is greater than 500kW,& there is no limit on the number or size of subsequent applications. Each subsequent& application would receive the prices associated with the above 500 kW price tranche& regardless of the size of the project. The FIT Program will be reviewed in two years. At that time, OPA will explore the& possibility of allowing additional applications of the same fuel source on the same& property. The OPA want to make sure that we are confident that proponents are not& taking advantage of splitting projects to obtain higher prices, but still appropriately& encourage incremental renewable energy capacity in a manner that makes sense. 2410 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix A – FIT Price Schedule 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in the table provided in the price adder section of this website. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit( B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. 2411 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix B: Examples FIT and microFIT 1) An applicant wishes to install a 158 kW solar PV project on a rooftop, and proposes& an additional 6 KW ground mount.& RESPONSE: The applicant would not be permitted to apply for 158kW project under FIT& as well as a 6kW under microFIT. The applicant may however submit a 158 kW rooftop solar PV application under FIT and& submit an additional 6 kW ground mount under FIT 2) A school raises money to construct a 2 kW solar rooftop project and then wants to& add an additional 10 kW. The School Board then announces that all schools in their& district will host a capacity allocation exempt (CAE) rooftop project. RESPONSE: The 2 kW project is eligible for a microFIT contract. The 10kW proposed& project could be downsized to an 8 kW project, in which case it would also qualify for a& microFIT contract. Both would be eligible for the 80.2 cents/kWh price. In this case the& CAE School Board project is not eligible for a FIT contract. Alternatively, the school could apply for a 2kW and a 10 kW and the School Board could& apply for a 240 kW project on the same business day – all would have to be applications✓ submitted under the FIT Program. All three projects would fall into the 250-500kW price& tranche (63.5 cents/kWh). 3) One rooftop PV under microFIT and one 100 kW rooftop PV under FIT on the same& legal property. RESPONSE: microFIT and FIT of the same fuel source are not permitted on the same& property, therefore only one of these projects is eligible. Alternatively, the applicant could apply for a 110 kW project, made up of a 10 kW and a& 100 kW at the same time, and both applied through the FIT Program. . 4) One ground-mount or rooftop 10kW under microFIT and an additional 10kW groundmount under FIT on the same legal property. RESPONSE: Both projects are eligible as long as the FIT project applies as a groundmounted project under FIT – which would identify it as a different fuel source (groundmount rather than ‘any type’). The FIT project would qualify in this case for the& 44.3cents/kWh and the microFIT for 80.2 cents/kWh. 5) 100kW solar rooftop PV under FIT and 10 kW ground mount under microFIT. 2412 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 RESPONSE: Not permitted. The applicant has the option to apply through the FIT program for 10kW ground mount and would receive the ground-mount price of 44.3 cents/kWh. Solar PV Rooftop 1) An applicant submits a 200 kW solar rooftop PV application. The next day an& application for 100 kW is submitted. RESPONSE: This would not be permitted. The second application would be rejected. 2) University campus with many buildings but only one legal property wants to have& projects on many buildings, with separate FIT contracts, constructed over time. OR A shopping centre has one very large roof and wants multiple small projects, each& with separate connection points and FIT contracts RESPONSE: The owner should submit one FIT application for the property. If the owner wants to install projects in a phased approach, or install projects located on& different buildings on the same legal property, multiple applications should be submitted& on the same business day, which would allow each phase of the project to reach& commercial operation on its own schedule. The aggregate capacity will be used to& determine the appropriate contract price. If the aggregate capacity of the initial group is equal to or less than 500kW, subsequent& applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of& applications submitted. For example, if the initial group of applications includes 4 X 100kW projects,& the contract price would be determined based on the aggregate 400kW capacity. At a later date, a subsequent 100kW application (or multiple& applications totalling 100kW) could be submitted, since the total capacity& would remain within the 500kW price tranche. If the aggregate capacity of the initial group of applications is greater than 500kW, there& is no limit on the number or size of subsequent applications. 3) One small property has two buildings. Applicant wants panels on both buildings,& constructed at the same time; however a shared connection point is not feasible. RESPONSE: Fine, provided that both applications are submitted in the same business& day and the aggregate capacity will be used to determine the FIT Price. 2413 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Other technologies 1) Landfill gas project wants to apply for a 9 MW project, and later apply for a 6 MW incremental project to accommodate additional fuel supply RESPONSE: The price tranche is 10MW. Therefore the project has two options: Submit a 9 MW application. Options for the 6MW application will be explored& during the program review. Submit a >10MW application, which would allow the applicant to submit subsequent incremental applications at any time 2) Biogas project has one FIT small project already and wants to build a new separate& small project at another location on the farm. OR Waterpower project has an existing FIT project and wants to upgrade the project to& increase capacity, and apply for an incremental project. RESPONSE: Fine, provided that the total project capacity (of the existing project and the& new project) does not exceed the price tranche established by the first project. If the& aggregate capacity exceeds the price tranche, the second project will likely have to wait until after the program review. 2414 Cindy Roks↵ From: Cindy Roks⇢ Sent: March-01-10 3:51 PM⇢ To: Sheri Bizarro⇢ Subject: FW: FIT FAQs⇢ Attachments: FIT website FAQs Feb 12 10.doc⇢ I forwarded to Julia last week and she will be discussing her comments with Glenna directly.⇢ - Cindy⇢ From: Glenna Ford↵ Sent: February 19, 2010 11:33 AM↵ To: Patricia Lightburn; Jonathan Cheszes; Sandy Yuen; Sarah Simmons; Claire Willison; Linda Filippi; Cindy Roks↵ Subject: FIT FAQs↵ Please find attached the version of the FAQs that we will be working through at the meeting. Comments in advance⌧ are welcome too.⌧ Regards,⌧ Glenna⌧ Glenna Ford↵ Senior Regulatory Communications Advisor⌧ Direct: 416- 969 - 6305⌧ Cell: 416- 392 - 9905⌧ Email: glenna.ford@powerauthority.on.ca⌧ Ontario Power Authority⌧ 120 Adelaide Street West, Suite 1600⌧ Toronto , ON M5H 1T1⌧ www.powerauthority.on.ca⌧ P Please consider the environment before printing this email. 2415 Not Responsive Not Responsive Not Responsive 2418 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 22 2437 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 28 2443 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract over the 20-year term of the contract (40 years for waterpower). The price will not change for the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed every two years. It is expected that prices for new projects will drop over time if project costs decrease. This means that if you sign a contract today, you will receive today's price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules about reporting business income and about collecting and remitting GST on business income. Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. 34 2449 Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover facility construction and operating and maintenance costs and allow for a reasonable return on investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions. The OPA incorporated much of the feedback from stakeholders into the price schedule. For greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12, 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project produces? A range of standardized prices has been established under the FIT and microFIT Programs based on the OPA's knowledge of typical project costs, stakeholder input and experience in other jurisdictions where FIT programs operate. These prices have been differentiated by project size and type of renewable energy technology being used in the project. They are intended to cover equipment, installation, operation and maintenance costs over the term of the contract and to provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT Program projects - payments will be made by the local electricity distribution company (LDC) to the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register with the IESO as a "metered market participant" and will settle the "actual energy quantity injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement schedules are in accordance with the IESO market rules and settlement calendar found at http://www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. The OPA will settle any contractual incremental payments directly with the contracted generator. Once a FIT project is built and in-service, payments will be made on a regular basis, usually monthly. 35 2450 Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic Development and Trade to understand the rules about reporting business income and business registration. Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-959-5525 for information on GST registration and collection and http://www.ontario.ca/en/services_for_business/index.htm for information on business registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are different capital, installation, building and maintenance costs associated with different technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return on investment over the contract period. Prices account for capital costs (e.g., purchasing, building, acquiring land, etc.), operating and maintenance costs, connection costs and a reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy solar PV systems. Technologies associated with solar PV are rapidly advancing and the current market is still small. The FIT Program prices are designed to kick-start the solar PV industry in Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is expected to decrease to reflect technological advances and growing market supply. Back to Top How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top 36 2451 Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable rate of return. Each renewable technology has different costs and provides different amounts of energy in different timelines. Wind and biomass projects have different prices since their cost components and performance characteristics differ. The intent is not to favour wind over biomass - the intent is to provide an incentive for each of these technologies. Prices are set so that each technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of construction, operations and maintenance and a reasonable rate of return on the investment over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes. The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies and project sizes. Almost all existing and proposed FIT programs in Europe and the United States take this approach. They set specific rates for a particular technology in relation to project size to account for variations in generation costs depending on project size. Projects are separated into size categories by capacity and the rate is set at different levels for smaller and larger projects. The size categories are generally consistent with the Ontario Energy Board's Distribution System Code. Back to Top Will contract prices change over time? For some technologies, the price schedule includes an annual increase based on a percentage of the consumer price index (CPI). This increase will help protect developers against inflationary pressures. Click here to see specific prices and CPI factors. 37 2452 Prices will be reviewed every two years to consider technological advances and other factors that may lead to cost decreases. Changes in prices related to the two-year review will only apply to new projects and the OPA will give due notice before any price changes take effect. 38 2453 Not Responsive Not Responsive Not Responsive 41 2456 Not Responsive Not Responsive 43 2458 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 51 2466 Not Responsive Not Responsive 53 2468 Not Responsive Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-02-10 11:16 AM↵ To: Glenna Ford↵ Cc: Claire Willison; Glenna Ford; Sandy Yuen; Jonathan Cheszes; Nadeem Anwar; Ana↵ Maria Mejia; Julia Moshkin; Patricia Lightburn↵ Subject: FIT website FAQs March 2 - group review↵ Attachments: FIT website FAQs March 2 - group review.doc↵ from today.↵ Sandy, can you review ag land and resop transition info?↵ 2470 Not Responsive Not Responsive 2472 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 3 2473 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 4 2474 Not Responsive Not Responsive Not Responsive Not Responsive 2478 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 13 2483 Not Responsive 14 2484 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 17 2487 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 18 2488 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 19 2489 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 20 2490 Not Responsive Not Responsive Not Responsive 23 2493 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 30 2499 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 36 2505 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project4 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 37 2506 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 38 2507 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 39 2508 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 40 2509 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 48 2517 Not Responsive Not Responsive Not Responsive Not Responsive 52 2521 Not Responsive Not Responsive Not Responsive Sandy Yuen⌦ From: Sandy Yuen⌦ Sent: March-02-10 5:59 PM⌦ To: Sarah Simmons⌦ Cc: Claire Willison; Glenna Ford; Jonathan Cheszes; Nadeem Anwar; Ana Maria⌦ Mejia; Julia Moshkin; Patricia Lightburn⌦ Subject: RE: FIT website FAQs March 2 - group review⌦ Attachments: FIT website FAQs March 2 - group review_SY edits.doc⌦ Not Responsive From: Sarah Simmons Sent: March 2, 2010 11:16 AM To: Glenna Ford Cc: Claire Willison; Glenna Ford; Sandy Yuen; Jonathan Cheszes; Nadeem Anwar; Ana Maria Mejia; Julia Moshkin; Patricia Lightburn Subject: FIT website FAQs March 2 - group review from today. Sandy, can you review ag land and resop transition info? 2525 Not Responsive Not Responsive Not Responsive 2528 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2529 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2530 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 14 2539 Not Responsive 15 2540 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 18 2543 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 19 2544 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 20 2545 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 21 2546 Not Responsive Not Responsive Not Responsive 24 2549 Not Responsive Not Responsive 27 2552 Not Responsive Not Responsive Not Responsive Not Responsive 31 2556 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 37 2562 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project8 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 38 2563 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 39 2564 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 40 2565 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 41 2566 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 49 2574 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 50 2575 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal8 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 51 2576 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to8 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities 2. Support through funding project pre-feasibility and feasibility studies, development of⌧ business cases, resource assessment, environmental and technical studies, as well as⌧ other soft costs for First Nation and Métis energy projects 3. Support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 52 2577 Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 53 2578 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [what about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 54 2579 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the "soft" or developmental costs associated with new⌧ renewable energy projects. This will help communities in Ontario, including farmers, co-ops and⌧ non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in8 the FIT Program? Through the Municipal Renewable Energy Program, the province will provide support to⌧ municipalities for costs associated with new renewable energy projects. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 55 2580 Not Responsive Patricia Lightburn From: Patricia Lightburn⇣ Sent: March-03-10 4:18 PM⇣ To: Jim MacDougall; Jonathan Cheszes; Sarah Simmons⇣ Cc: Cindy Roks; Sheri Bizarro⇣ Subject: Project Splitting⇣ Attachments: Multiple FIT Projects on One Property 2010-02-05 v4.doc⇣ Ok here is another attempt! I think we are getting very close. Please, if you wouldn ’ t mind, review this closely – we have gone around in circles so many times now I fear it may not all be consistent P Patricia Lightburn FIT Program Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2582 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Issue⇧ Are multiple FIT contracts of the same technology permitted on the same property, and if& so, how are they treated in regards to pricing? Background⇧ Section 7.3 (e) of the FIT Rules prohibits applicants from splitting one project into& smaller projects for the purpose of obtaining a higher price or any other benefit. The& guidelines below provide greater clarity on how this rule is applied by the OPA Solar PV Rooftop In order to provide greater clarity to applicants on how rooftop solar PV projects are& evaluated under Section 7. 3 (e), an addition was made to Section 2.1 (Eligibility& Requirements) in November 2009, which specifies that only one rooftop solar PV project& will be permitted on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only one rooftop facility shall be permitted on any single property. For greater certainty,⌫ a single rooftop facility may have generating equipment located on multiple buildings on a single property so long as the total capacity of the generating equipment located⌫ on the property is reflected in a single application and shares a common connection⌫ point." The guidelines provided below are intended to provide greater flexibility to applicants& who are unable to submit a single application with a common connection point (for& example when multiple buildings are located on a single property), and for applicants that& wish to install their projects in a phased approach. Other Technologies Currently the rules are silent on how incremental projects, or multiple projects of the& same technology on a single property, should be treated in regards to pricing. The approach explained below provides clarity on how the OPA will apply Section 7.3& (e) to all technologies, including solar, wind, water and bioenergy. 2583 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Guidelines For all technologies: 1. Only one FIT project per renewable fuel will be permitted on a single property.& Multiple projects of the same fuel source will only be permitted in accordance with& the Guidelines on multiple projects on a single property, which is posted on FIT& website. For greater clarity, if the sum of the nameplate capacity of a proposed FIT project and& an existing microFIT project is greater than 10kW, the FIT project is ineligible. 2. In general, only one FIT contract is permitted for each renewable fuel on a single& legal property. For greater clarity, rooftop solar PV under FIT and ground-mount solar PV under FIT& are permitted on the same property. 3. Where the OPA deems a series of projects does not constitute project splitting, the& OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a& single legal property will be used to establish the appropriate FIT contract price. This& permission will allow for phased in-service dates, as well as multiple connection& points where a single connection point is not feasible for the project. The following provisions must be met: (a) Applications must be submitted within the same business day. (b) It is not permitted to combine the capacities of multiple FIT and microFIT& applications. In order to submit multiple applications and qualify for the& aggregate price, all applications must be submitted under the FIT program. (c) If the aggregate capacity of the initial group of applications is equal to or less& than the highest project size tranche (for example in the case of solar PV, than& 500kW or less), subsequent applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price& tranche established by the initial group of applications submitted. o For example: If a 400 kW project is submitted as an initial group of& four 100kW applications, the contract price for all applications would& be determined based on the aggregate (400kW at 63.5 cents/kWh) capacity. At a later date, a subsequent 100kW application (or multiple& applications totalling 100kW) could be submitted, since the total& capacity would remain within the 500kW price tranche. The& 2584 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 subsequent application would also qualify for the 63.5 cents/kWh& price. (d) o If the aggregate capacity of the initial group of applications is in the highest& project size tranche (for example, in the case of solar PV rooftop, greater than& 500kW), there is no limit on the number or size of subsequent applications. Each subsequent application would receive the prices associated with the& highest project size tranche regardless of the size of the project. For example: Three 200 kW applications for solar PV rooftop are submitted. The& aggregate capacity is 600 kW. Each would qualify for the > 500kW size tranche at& 53.9 cents/kWh. Subsequent applications for 100 kW each are submitted. All projects would be eligible and would qualify for the 5.39 cents/kWh price. The FIT Program will be reviewed in two years. At that time, OPA will explore the& possibility of allowing additional applications of the same renewable fuel on the same& property. This will allow the OPA to ensure that proponents are not taking advantage of& splitting projects to obtain higher prices, while still appropriately encourage incremental& renewable energy capacity in a manner that makes sense. 2585 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix A – FIT Price Schedule 2586 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 Appendix B: Examples QUESTION FIT and microFIT 1. Can I put a 5 kW FIT solar PV project and then a 5 kW microFIT solar PV project on& the same property? 2. Can I put a 10 kW microFIT solar PV rooftop project and& then later add a 200 kW FIT& solar PV ground-mounted& project on the same property? 3. Can I install a 10 kW solar PV rooftop project under microFIT and one 100 kW rooftop PV under FIT on the same legal property. RESPONSE Yes. No. No. Alternatively, you could submit two applications at& the same to under the FIT program, made up of a& 10 kW and a 100 kW at the same time. Both& projects would be eligible for the 110 kW price of 71.3 cents/kWh. This scenario also applies of both of the projects& are ground-mounted. 4. Can I install a 100kW solar rooftop PV under FIT and a 10 kW ground-mounted project under microFIT at the same time? No. In order for both projects to be eligible, you could& submit both applications under the FIT program.& The 10 kW project would be eligible for the& ground-mount price of 44.3 cents/kWh. 5. Can I install a 158 kW solar PV project on the roof, and later an additional 6 kW ground mount? The 6 kW project would not be eligible for a& contract under the microFIT program. However, you could apply to the FIT program as a 6kW ground-mounted project and be eligible for& the 44.3 cents/kWh price. 6. Can I put a microFIT solar PV and a FIT project of a different renewable fuel on the& same property? Yes. 7. If the owner's land is leased to Yes. an outside company for wind turbines can a homeowner put a& microFIT solar PV on their& property? 8. A school raises money to The 2 kW project is eligible for a microFIT& 2587 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 construct a 2 kW solar rooftop project and then wants to add an additional 10 kW. The School Board then announces that all schools in their district will host a capacity allocation exempt (CAE) rooftop project. contract. The 10kW proposed project could be& downsized to an 8 kW project, in which case it would also qualify for a microFIT contract.& Both would be eligible for the 80.2 cents/kWh& price. In this case the CAE School Board& project is not eligible for a FIT contract. Alternatively, the school could apply for a& 2kW and a 10 kW and the School Board could& apply for a 240 kW project on the same& business day – all would have to be⌫ applications submitted under the FIT Program.⌫ All three projects would fall into the 250500kW price tranche (63.5 cents/kWh). FIT Solar PV 9. Can I put a FIT solar PV Yes rooftop project and a FIT solar PV ground-mounted project on& the same property? 10. Can I submit a 200 kW solar PV rooftop application and apply for a 100 kW solar PV rooftop project on the next day? No, the second application would not be eligible. 11. I have a property with two buildings; unfortunately one connection point is not possible. Can I have panels on both buildings, constructed at the& same time? Yes, both applications must be submitted in the& same business day and the aggregate capacity will be used to determine the FIT price. 12. A university campus with many& buildings but only one legal& property wants to have 10 solar& PV rooftop projects, 100kW each, on different buildings,& with separate FIT contracts,& constructed over time. 10 applications should be submitted on the& same business day. The aggregate capacity of& all of the applications is 1,000kW. Each project& would be eligible for the 53.9 cents/kWh price. In this case, since the aggregate capacity of the& initial applications exceeds the 500kW project& size tranche, there is no limit on the number or& size of projects that can be submitted at a later& date. Each of the subsequent projects would be& eligible for the 53.9 cents/kWh. 13. A shopping centre has one very 10 applications should be submitted on the& 2588 ISSUE NOTE – Multiple Projects on One Property and Incremental Projects February 5, 2010 large roof and wants 10 solar PV rooftop projects, 20kW each, located at different connection points. FIT – Other Technologies 14. Can I apply for a 5 MW landfill gas project and subsequently apply for a 10 MW incremental landfill gas project? same business day. The aggregate capacity of& all of the applications is 200kW. Each project& would be eligible for the 71.3 cents/kWh price. In this case, subsequent applications may be& submitted. However the aggregate capacity of& the existing projects and the new projects must& not exceed the 250 kW project size tranche (for& example, two additional 25 kW applications& may be submitted). The subsequent& applications would also be eligible for the 71.3& cents/kWh price. No. In this case, you could submit two applications& for both projects at the same time. Both would& qualify for the 10.3cents/kWh price. Each project& would have a separate contract and would be& allowed to come into service at different dates. 15. I have an existing FIT biogas project already. Can I build a new separate small biogas project at another location on the farm? Yes, but only if the total project capacity (of the& existing project and the new project) does not exceed the price tranche established by the first& project. If the aggregate capacity exceeds the price& tranche, the second project is not eligible. 16. Can I add an expansion (incremental project) to an existing FIT waterpower project? Yes, but only if the total project capacity (of the& existing project and the incremental project) does& not exceed the price tranche established by the first& project. If the aggregate capacity exceeds the price& tranche, the incremental project is not eligible. 17. Can I put a FIT solar PV project and a FIT project of a different& renewable fuel on the& same property? Yes. 2589 Glenna Ford↵ From: Glenna Ford↵ Sent: March-03-10 4:50 PM↵ To: Sheri Bizarro↵ Subject: FW: FIT website FAQs March 2 - group review↵ Attachments: FIT website FAQs March 2 - group review_SY edits.doc↵ From: Sandy Yuen⌦ Sent: March 2, 2010 5:59 PM⌦ To: Sarah Simmons⌦ Cc: Claire Willison; Glenna Ford; Jonathan Cheszes; Nadeem Anwar; Ana Maria Mejia; Julia Moshkin; Patricia⌦ Lightburn⌦ Subject: RE: FIT website FAQs March 2 - group review⌦ Sure, see attached. Not Responsive 2590 Not Responsive Not Responsive Not Responsive 2593 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2594 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2595 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 14 2604 Not Responsive 15 2605 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 18 2608 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 19 2609 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 20 2610 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 21 2611 Not Responsive Not Responsive Not Responsive 24 2614 Not Responsive Not Responsive 27 2617 Not Responsive Not Responsive Not Responsive Not Responsive 31 2621 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 37 2627 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project8 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 38 2628 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 39 2629 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 40 2630 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 41 2631 Not Responsive Not Responsive Not Responsive 44 2634 Not Responsive Not Responsive 46 2636 Not Responsive Not Responsive Not Responsive 49 2639 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 50 2640 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal8 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 51 2641 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to8 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities 2. Support through funding project pre-feasibility and feasibility studies, development of⌧ business cases, resource assessment, environmental and technical studies, as well as⌧ other soft costs for First Nation and Métis energy projects 3. Support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 52 2642 Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 53 2643 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [what about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 54 2644 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the "soft" or developmental costs associated with new⌧ renewable energy projects. This will help communities in Ontario, including farmers, co-ops and⌧ non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in8 the FIT Program? Through the Municipal Renewable Energy Program, the province will provide support to⌧ municipalities for costs associated with new renewable energy projects. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 55 2645 Not Responsive Patricia Lightburn From: Patricia Lightburn⇣ Sent: March-04-10 10:05 AM⇣ To: Jim MacDougall⇣ Subject: Guidelines⇣ Attachments: Multiple FIT Projects on One Property 2010-02-05 v4.doc⇣ Do we need to send this to Jason for review?✓ Patricia Lightburn FIT Program Ontario Power Authority⇣ 120 Adelaide Street West⇣ Suite 1600⇣ Toronto ON M5H 1T1⇣ 416 - 969 - 6267⇣ patricia . lightburn @ powerauthority . on . ca⇣ 2647 FIT Rules Version 1.3 March 2010 Guidelines: Multiple Projects on One Property and Incremental Projects March 2009 Issue Are multiple FIT contracts of the same technology permitted on the same property, and if% so, how are they treated in regards to pricing? Background Section 7.3 (e) of the FIT Rules prohibits applicants from splitting one project into% smaller projects for the purpose of obtaining a higher price or any other benefit. The% guidelines below provide greater clarity on how this rule is applied by the OPA Solar PV Rooftop In order to provide greater clarity to applicants on how rooftop solar PV projects are% evaluated under Section 7. 3 (e), an addition was made to Section 2.1 (Eligibility% Requirements) in November 2009, which specifies that only one rooftop solar PV project% will be permitted on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only one rooftop facility shall be permitted on any single property. For greater certainty,⌫ a single rooftop facility may have generating equipment located on multiple buildings on a single property so long as the total capacity of the generating equipment located⌫ on the property is reflected in a single application and shares a common connection⌫ point." The guidelines provided below are intended to provide greater flexibility to applicants% who are unable to submit a single application with a common connection point (for% example when multiple buildings are located on a single property), and for applicants that% wish to install their projects in a phased approach. Other Technologies Currently the rules are silent on how incremental projects, or multiple projects of the% same renewable fuel on a single property, should be treated in regards to pricing. The guidelines below provide clarity on how the OPA will apply Section 7.3 (e) to all technologies, including solar, wind, water and bioenergy. Guidelines – Multiple Projects on One Property and Incremental Projects 1 2648 FIT Rules Version 1.3 March 2010 Guidelines For all technologies: 1. In general, only one FIT project per renewable fuel will be permitted on a single% property. Notwithstanding the above, rooftop solar PV under FIT and ground-mount solar PV% under FIT are permitted on the same property. 2. The sum of the nameplate capacity of any microFIT and FIT project (or projects) of% the same renewable fuel on the same legal property must not be greater than 10 kW.% For greater clarity, if the sum of the nameplate capacity of a proposed FIT project and% an existing microFIT project is greater than 10kW, the FIT project is ineligible. 3. Where the OPA deems a series of projects does not constitute project splitting, the% OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a% single legal property will be used to establish the appropriate FIT contract price. This permission allows for phased in-service dates, as well as multiple connection% points where a single connection point is not feasible. The following provisions must be met: (a) Applications must be submitted within the same business day. (b) It is not permitted to combine the capacities of multiple FIT and microFIT% applications. In order to submit multiple applications and qualify for the% aggregate price, all applications must be submitted under the FIT program. (c) If the aggregate capacity of the initial group of applications is equal to or less% than the highest project size tranche (for example in the case of solar PV,% 500kW or less), subsequent applications may be submitted provided that the% aggregate capacity of all of the FIT applications does not exceed the price% tranche established by the initial group of applications submitted. Each% subsequent application would receive the price associated with the project size% tranche established by the initial group of applications, regardless of the size% of the project. o Guidelines For example: If a 400 kW project is submitted as an initial group of% four 100kW applications, the contract price for all applications would% be determined based on the aggregate capacity (400kW at 63.5% cents/kWh). At a later date, a subsequent 100kW application (or% – Multiple Projects on One Property and Incremental Projects 2 2649 FIT Rules Version 1.3 March 2010 multiple applications totalling 100kW) could be submitted, since the% total capacity would remain within the 500kW% project size% tranche.% The subsequent application(s) would also qualify for the 63.5% cents/kWh price. (d) If the aggregate capacity of the initial group of applications is in the highest% project size tranche (for example, in the case of solar PV rooftop, greater than% 500kW), there is no limit on the number or size of subsequent applications. Each subsequent application would receive the price associated with the% highest project size tranche regardless of the size of the project. o For example: Three 200 kW applications for solar PV rooftop are% submitted. The aggregate capacity is 600 kW. Each would qualify for% the greater than 500kW size tranche at 53.9 cents/kWh. Subsequent% applications of any size may be submitted. All projects would be% eligible and would qualify for the 53.9 cents/kWh price. The FIT Program will be reviewed in two years. At that time, OPA will explore the% possibility of allowing additional applications of the same renewable fuel on the same% property. This will allow the OPA to ensure that proponents are not taking advantage of% splitting projects to obtain higher prices, while still appropriately encourage incremental% renewable energy capacity in a manner that makes sense. Guidelines One Property and% Incremental Projects – Multiple Projects on% 3 2650 FIT Rules Version 1.3 March 2010 Appendix A – FIT Price Schedule Guidelines – Multiple Projects on One Property and Incremental Projects 4 2651 FIT Rules Version 1.3 March 2010 Appendix B: Examples QUESTION FIT and microFIT 1. Can I put a 5 kW FIT solar PV project and then a 5 kW microFIT solar PV project on% the same property? 2. Can I put a 10 kW microFIT solar PV rooftop project and% then later add a 200 kW FIT% solar PV ground-mounted% project on the same property? 3. Can I install a 10 kW solar PV rooftop project under microFIT and one 100 kW rooftop PV under FIT on the same legal property. RESPONSE Yes. No. No. Alternatively, you could% submit% two applications at% the same to under the FIT program, made up of a% 10 kW and a 100 kW at the same time. Both% projects would be eligible for the 110 kW% price of 71.3 cents/kWh. This scenario also applies of both of the projects% are ground-mounted. 4. Can I install a 100kW solar rooftop PV under FIT and a 10 kW ground-mounted project under microFIT at the same time? No. In order for both projects to be eligible, you could% submit both applications under the FIT program.% The 10 kW project would be eligible for the% ground-mount price of 44.3 cents/kWh. 5. Can I install a 158 kW solar PV project on the roof, and later an additional 6 kW ground mount? The 6 kW project would not be eligible for a% contract under the microFIT program. However, you could apply to the FIT program as a 6kW ground-mounted project and be eligible for% the 44.3 cents/kWh price. 6. Can I put a microFIT solar PV and a FIT project of a different renewable fuel on the% same property? Yes. 7. If the owner's land is leased to Yes. an outside company for wind turbines can a homeowner put a% microFIT solar PV on their% property? 8. A school raises money to Guidelines The 2 kW project is eligible for a microFIT% One Property% and% Incremental Projects% – Multiple Projects on% 5 2652 FIT Rules Version 1.3 March 2010 construct a 2 kW solar rooftop% project and then wants to add an% additional 10 kW. The School% Board then announces that all schools in their district will host a capacity allocation exempt (CAE) rooftop project. contract. The 10kW proposed project could be% downsized to an 8 kW project, in which case it would also qualify for a microFIT contract.% Both would be eligible for the 80.2 cents/kWh% price. In this case the CAE School Board% project is not eligible for a FIT contract. Alternatively, the school could apply for a% 2kW and a 10 kW and the School Board could% apply for a 240 kW project on the same% business day – all would have to be⌫ applications submitted under the FIT Program.⌫ All three projects would fall into the 250500kW price tranche (63.5 cents/kWh). FIT Solar PV 9. Can I put a FIT solar PV Yes rooftop project and a FIT solar PV ground-mounted project on% the same property? 10. Can I submit a 200 kW solar PV rooftop application and apply for a 100 kW solar PV rooftop% project on the next day? No, the second application would not be eligible. 11. I have a property with two buildings; unfortunately one connection point is not possible. Can I have panels on both buildings, constructed at the% same time? Yes, both applications must be submitted in the% same business day and the aggregate capacity will be used to determine the FIT price. 12. A university campus with many buildings but only one legal property wants to have 10 solar PV rooftop projects, 100kW each, on different buildings, with separate FIT contracts, constructed over time. 10 applications should be submitted on the% same business day. The aggregate capacity of% all of the applications is 1,000kW. Each project% would be eligible for the 53.9 cents/kWh price. In this case, since the aggregate capacity of the% initial applications exceeds the 500kW project% size tranche, there is no limit on the number or% size of projects that can be submitted at a later% date. Each of the subsequent projects would be% eligible for the 53.9 cents/kWh. 13. A shopping centre has one very 10 applications should be submitted on the% Guidelines One Property and Incremental Projects – Multiple Projects on% 6 2653 FIT Rules Version 1.3 March 2010 large roof and wants 10 solar% PV rooftop projects, 20kW each, located at different% connection points. FIT – Other Technologies 14. Can I apply for a 5 MW landfill gas project and subsequently apply for a 10 MW incremental landfill gas project? same business day. The aggregate capacity of% all of the applications is 200kW. Each project% would be eligible for the 71.3 cents/kWh price. In this case, subsequent applications may be% submitted. However the aggregate capacity of% the existing projects and the new projects must% not exceed the 250 kW project size tranche (for% example, two additional 25 kW applications% may be submitted). The subsequent% applications would also be eligible for the 71.3% cents/kWh price. No. In this case, you could submit two applications% for both projects at the same time. Both would% qualify for the 10.3cents/kWh price. Each project% would have a separate contract and would be% allowed to come into service at different dates. 15. I have an existing FIT biogas project already. Can I build a new separate small biogas project at another location on the farm? Yes, but only if the total project capacity (of the% existing project and the new project) does not exceed the price tranche established by the first% project. If the aggregate capacity exceeds the price% tranche, the second project is not eligible. 16. Can I add an expansion (incremental project) to an existing FIT waterpower project? Yes, but only if the total project capacity (of the% existing project and the incremental project) does% not exceed the price tranche established by the first% project. If the aggregate capacity exceeds the price% tranche, the incremental project is not eligible. 17. Can I put a FIT solar PV project and a FIT project of a different% renewable fuel on the% same property? Yes. Guidelines One Property and Incremental Projects – Multiple Projects on% 7 2654 Jennifer Tidmarsh From: Jennifer Tidmarsh Sent: March-04-10 10:37 AM To: Sheri Bizarro; Glenna Ford Cc: Shannon McCabe; Barbara Ellard Subject: FW: FIT website FAQs March 2 - group review Attachments: FIT website FAQs March 2 - group review_SM edits.doc Hi Sheri & Glenna, Here are edits from Shannon and I. Please let us know if there is anything more you need, Jennifer Jennifer Tidmarsh Policy and Analysis, Electricity Resources Ontario Power Authority 1 Please consider the environment before printing this email. From: Sheri Bizarro↵ Sent: March 3, 2010 5:01 PM↵ To: Jennifer Tidmarsh↵ Cc: Barbara Ellard↵ Subject: FIT website FAQs March 2 - group review↵ Hey There Here is the FAQ ’ s that we are currently updating for the FIT web -page. Not Responsive Now is the time to provide updates, remove old Q&A ’ s and add anything new that people should know. If you wanted to make those edits and send them to me or to Glenna that would be great !! I think we were aiming to have this FAQ all updated by early next week. Sheri 2655 Not Responsive Not Responsive Not Responsive 2658 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2659 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2660 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 14 2669 Not Responsive 15 2670 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 18 2673 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 19 2674 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 20 2675 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 21 2676 Not Responsive Not Responsive Not Responsive 24 2679 Not Responsive Not Responsive 27 2682 Not Responsive Not Responsive Not Responsive Not Responsive 31 2686 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 37 2692 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project8 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 38 2693 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 39 2694 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 40 2695 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 41 2696 Not Responsive Not Responsive Not Responsive 44 2699 Not Responsive Not Responsive 46 2701 Not Responsive Not Responsive Not Responsive 49 2704 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 50 2705 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal8 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 51 2706 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to8 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. establish the Aboriginal Renewable Energy Fund to assist First Nation and Métis⌧ communities in paying for some of the costs associated with pre-feasibility and feasibility⌧ studies, development of business cases, resource assessment, environmental and⌧ technical studies, as well as other soft costs for renewable energy projects 2. support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 3. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ 52 2707 energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 53 2708 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [What about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 54 2709 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the developmental costs associated with new renewable⌧ energy projects. This will help communities in Ontario, including farmers, municipalities, co-ops⌧ and non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in8 the FIT Program? Through the Municipal Renewable Energy Program, the province will reimburse municipalities for⌧ some direct costs associated with hosting new renewable energy facilities. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 55 2710 Not Responsive Glenna Ford↵ From: Glenna Ford↵ Sent: March-04-10 11:38 AM↵ To: Patricia Lightburn; Sarah Simmons; Sandy Yuen; Jonathan Cheszes; Cindy Roks;↵ Sheri Bizarro↵ Subject: FW: FIT website FAQs March 2 - group review↵ Attachments: FIT website FAQs March 2 - group review_SM edits.doc↵ Dear all: Can people please try to update the FIT FAQs document in sequence so that we don ’ t end up with multiple versions that have to be combined? It ’ s a big document and that would create extra work. This version has been edited by Jennifer Tidmarsh and Shannon McCabe. Please do your bit this week if possible so that we can update the site next week. Thanks. Not Responsive 2712 Not Responsive 2713 Not Responsive Not Responsive Not Responsive 2716 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2717 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2718 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 14 2727 Not Responsive 15 2728 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 18 2731 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 19 2732 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 20 2733 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 21 2734 Not Responsive Not Responsive Not Responsive 24 2737 Not Responsive Not Responsive 27 2740 Not Responsive Not Responsive Not Responsive Not Responsive 31 2744 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 37 2750 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project8 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 38 2751 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 39 2752 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 40 2753 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 41 2754 Not Responsive Not Responsive Not Responsive 44 2757 Not Responsive Not Responsive 46 2759 Not Responsive Not Responsive Not Responsive 49 2762 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 50 2763 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal8 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 51 2764 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to8 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. establish the Aboriginal Renewable Energy Fund to assist First Nation and Métis⌧ communities in paying for some of the costs associated with pre-feasibility and feasibility⌧ studies, development of business cases, resource assessment, environmental and⌧ technical studies, as well as other soft costs for renewable energy projects 2. support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 3. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ 52 2765 energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 53 2766 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [What about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 54 2767 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the developmental costs associated with new renewable⌧ energy projects. This will help communities in Ontario, including farmers, municipalities, co-ops⌧ and non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in8 the FIT Program? Through the Municipal Renewable Energy Program, the province will reimburse municipalities for⌧ some direct costs associated with hosting new renewable energy facilities. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 55 2768 Not Responsive Sandy Yuen⌦ From: Sandy Yuen⌦ Sent: March-08-10 2:42 PM⌦ To: Glenna Ford; Patricia Lightburn; Sarah Simmons; Jonathan Cheszes; Cindy Roks;⌦ Sheri Bizarro⌦ Subject: RE: FIT website FAQs March 2 - group review⌦ Attachments: FIT website FAQs March 2 - group review_SMSY edits.doc⌦ Hi Glenna,⌦ Attached are RESOP to Not Respon... /FIT transition FAQs added in. Changes Tracked.⌦ Sandy⌦ Not Responsive 2770 Not Responsive Not Responsive 2772 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 5 2777 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 6 2778 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 15 2787 Not Responsive 16 2788 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 19 2791 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 20 2792 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 21 2793 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 22 2794 Not Responsive Not Responsive Not Responsive 25 2797 Not Responsive Not Responsive 28 2800 Not Responsive Not Responsive Not Responsive Not Responsive 32 2804 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 38 2810 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project4 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 39 2811 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 40 2812 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 41 2813 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 42 2814 Not Responsive Not Responsive Not Responsive 45 2817 Not Responsive Not Responsive 47 2819 Not Responsive Not Responsive Not Responsive 50 2822 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 51 2823 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal4 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 52 2824 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to4 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. establish the Aboriginal Renewable Energy Fund to assist First Nation and Métis⌧ communities in paying for some of the costs associated with pre-feasibility and feasibility⌧ studies, development of business cases, resource assessment, environmental and⌧ technical studies, as well as other soft costs for renewable energy projects 2. support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 3. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ 53 2825 energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 54 2826 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [What about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 55 2827 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the developmental costs associated with new renewable⌧ energy projects. This will help communities in Ontario, including farmers, municipalities, co-ops⌧ and non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in4 the FIT Program? Through the Municipal Renewable Energy Program, the province will reimburse municipalities for⌧ some direct costs associated with hosting new renewable energy facilities. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 56 2828 Not Responsive Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: March-09-10 12:11 PM↵ To: Travis Lusney↵ Cc: Glenna Ford↵ Subject: FIT website FAQs March 2 - group review↵ Attachments: FIT website FAQs March 2 - group review_SM edits.doc↵ Hi Travis !!⌦ We are currently updating the FIT FAQ document that is posted on the web-site (attached).⌦ Not Responsive Can you kindly take a look and then let Glenna know directly which FAQ ’ s should stay/be⌦ removed/or be updated.⌦ Thanks!!⌦ Sheri⌦ Not Responsive 2830 Not Responsive Not Responsive Not Responsive 2833 Not Responsive What is a feed-in-tariff and how does it work? A feed-in-tariff (or FIT) is a straightforward way to contract for renewable energy generation. It⌧ provides standardized program rules, prices and contracts. Feed-in tariffs refer to the specific⌧ prices paid to renewable energy suppliers for the electricity produced by the generating facility.⌧ The pricing structure provides a reasonable return on investment and is differentiated by project⌧ 4 2834 size and technology type. Ontario's FIT Program is the first of its kind in North America. While it incorporates lessons⌧ learned in several European countries and other jurisdictions, it has been specifically tailored to⌧ meet the unique needs of Ontario's electricity system and situation. Not Responsive Back to Top What are the key features of Ontario's Feed-in-Tariff (FIT) Program? Ontario's FIT Program has a number of key features. It: provides a straightforward way to contract for generation is open to various renewable energy technologies, including biogas, biomass, landfill gas,⌧ solar photovoltaic (PV), wind and waterpower allows all types of generators, from homeowners to large developers, to participate has different prices for different technologies and different project sizes has prices that are intended to cover total project costs and provide a reasonable rate of⌧ return over a 20-year contract (40 years for waterpower) provides incentives for First Nation and Métis projects provides incentives for community-based projects offers long-term price guarantees to increase investor confidence and access to financing drives the expansion of the distribution and transmission systems, which allows⌧ generators to connect to the grid. 5 2835 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Back to Top What do you mean by a "reasonable" rate of return? FIT contract prices were developed to include an 11 percent return on equity. This does not,⌧ however, guarantee that every project will earn 11 percent on its investment since project costs⌧ and operation and maintenance vary from one project to another. Back to Top Is there an incentive for peak production? Yes. Technologies that are not intermittent (i.e., dispatchable), such as bioenergy and⌧ waterpower, will be encouraged to shift production to peak periods when the electricity is⌧ most needed. Payments will be 35 percent higher from 11 a.m. to 7 p.m. on business days, and 10⌧ percent lower during off-peak hours. o Projects will earn the posted FIT price multiplied by: 0.9 for off-peak periods 1.35 for peak periods Projects that operate 24 x 7 every day of the year will earn the same total revenue as if⌧ they had been paid the posted FIT price. 14 2844 Not Responsive 15 2845 Not Responsive Not Responsive Not Responsive Back to Top What projects are eligible for a microFIT contract? The microFIT Program is available to very small renewable energy projects located in Ontario.⌧ Projects must have a generating capacity of 10 kW or less. Additions to existing facilities⌧ (incremental projects) may be eligible as long as they use the same renewable fuel and the⌧ combined capacity does not exceed 10 kW. Only the additional capacity will be eligible for⌧ microFIT prices. A project must be connected to the province's electricity distribution system through the local⌧ distribution company and must be separately metered for data gathering and payment purposes.⌧ The project must not have a RESOP contract. To see all eligibility requirements please click here. 18 2848 Not Responsive Back to Top Is the definition of solar PV limited to rooftop panels only? No, any solar PV project 10 kW or less in size will be eligible for the microFIT Program,⌧ regardless of whether it is mounted on a roof or on the ground. All eligible solar PV projects will⌧ receive the same price for electricity produced. 19 2849 Not Responsive Back to Top What price will I receive? The price that you will receive will be consistent with the FIT price schedule at the time the⌧ conditional offer of microFIT contract was made (i.e. at the time your microFIT application was⌧ approved). If your project is not connected within 12 months of receiving a conditional offer of microFIT⌧ contract, the conditional offer will expire and you will have to re-apply to the microFIT Program. To view the current price schedule, please click here. 20 2850 Not Responsive Back to Top How are microFIT payments calculated? Generators will be paid for all of the electricity produced by their project, whether it is connected⌧ directly to the distribution system or load embedded. The load customer (i.e., the consumer of⌧ electricity such as a home) will be billed separately for all of the power consumed. Therefore,⌧ payment equals electricity production (kWh) multiplied by the microFIT contract price. Note that you will be responsible for paying for all ongoing account fees that are associated with⌧ your local distribution company and your generator account. 21 2851 Not Responsive Not Responsive Not Responsive 24 2854 Not Responsive Not Responsive 27 2857 Not Responsive Not Responsive Not Responsive Not Responsive 31 2861 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Pricing and Payment Text size: - How long are the prices under the FIT and microFIT Programs guaranteed? - Do I have to pay income tax and/or collect GST on the payments I receive? - How were the FIT Program prices determined? - If I enter into a contract, how much will I be paid for the electricity my project produces? - How are payments made? - Do I have to register as a business if I participate in the FIT or microFIT Programs? - Is there a limit to the amount of power I can generate and the payments I can receive? - Why are the prices different for different renewable energy technologies? - Why are solar photovoltaic (PV) prices higher than other technologies? - How do Ontario's prices compare to other places where FIT programs are offered? - Why is the payment for some biomass lower than for wind? - What is cost-based generation pricing? - How were the generation project size categories selected? - Will contract prices change over time? - what is the difference between “on-farm biogas” and biogas? [for JC] [add HST from microFIT] How long are the prices under the FIT and microFIT Programs guaranteed? Once a contract has been signed, the generator will receive the price specified in the contract⌧ over the 20-year term of the contract (40 years for waterpower). The price will not change for⌧ the generator once the contract has been signed except for applicable inflation adjustments. The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed⌧ every two years. It is expected that prices for new projects will drop over time if project costs⌧ decrease. This means that if you sign a contract today, you will receive today's price for the⌧ contract term. If, on the other hand, you wait for two years to apply and sign a contract two⌧ years from now, you will receive the price applicable at that time. Back to Top Do I have to pay income tax and/or collect GST on the payments I receive? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules⌧ about reporting business income and about collecting and remitting GST on business income. 37 2867 Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-9595525 for information on GST registration and collection. Back to Top How were the FIT Program prices determined? The FIT Program prices were developed based on experience in Ontario and other jurisdictions.⌧ Prices differ based on project size and type of renewable energy technology. They cover facility⌧ construction and operating and maintenance costs and allow for a reasonable return on⌧ investment over a 20-year contract term (40 years for waterpower projects). The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions.⌧ The OPA incorporated much of the feedback from stakeholders into the price schedule. For⌧ greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12,⌧ 2009 stakeholder engagement sessions under the FIT Program Archive link. Back to Top If I enter into a contract, how much will I be paid for the electricity my project8 produces? A range of standardized prices has been established under the FIT and microFIT Programs based⌧ on the OPA's knowledge of typical project costs, stakeholder input and experience in other⌧ jurisdictions where FIT programs operate. These prices have been differentiated by project size⌧ and type of renewable energy technology being used in the project. They are intended to cover⌧ equipment, installation, operation and maintenance costs over the term of the contract and to⌧ provide a reasonable rate of return on investment. Click here for the FIT Program price schedule. You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh). Back to Top How are payments made? For projects connected to the distribution system - this includes all microFIT and some FIT⌧ Program projects - payments will be made by the local electricity distribution company (LDC) to⌧ the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin⌧ when a project is built, is in-service and has a contract. FIT Program projects connected directly to the high-voltage transmission system will be settled⌧ directly by the OPA for contract settlement amounts only. Any FIT generator connected to the transmission system who is a market participant will register⌧ with the IESO as a "metered market participant" and will settle the "actual energy quantity⌧ injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement⌧ schedules are in accordance with the IESO market rules and settlement calendar found at⌧ http: //www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9. 38 2868 The OPA will settle any contractual incremental payments directly with the contracted generator.⌧ Once a FIT project is built and in-service, payments will be made on a regular basis, usually⌧ monthly. Back to Top Do I have to register as a business if I participate in the FIT or microFIT Programs? By participating in the FIT and/or microFIT Programs you are entering into a business⌧ relationship with the OPA and will be receiving business income. We strongly advise all interested⌧ parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic⌧ Development and Trade to understand the rules about reporting business income and business⌧ registration. Please visit http: //www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call⌧ 1-800-959-5525 for information on GST registration and collection and⌧ http: //www.ontario.ca/en/services_for_business/index.htm for information on business⌧ registration in Ontario. Back to Top Is there a limit to the amount of power I can generate and the payments I can receive? There is no limit on generation output. However, payments vary depending on technology and⌧ project size. Click here for the FIT price schedule. In addition, solar projects may not be greater than 10 MW in size and waterpower projects may⌧ not be great than 50 MW in size. For other technologies, there is no limit on project size. Back to Top Why are the prices different for different renewable energy technologies? Prices differ by type of technology and are based on the size of the project because there are⌧ different capital, installation, building and maintenance costs associated with different⌧ technologies and project sizes. Back to Top Why are solar photovoltaic (PV) prices higher than other technologies? FIT Program prices are designed to allow a renewable energy project developer to recover the⌧ cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return⌧ on investment over the contract period. Prices account for capital costs (e.g., purchasing,⌧ building, acquiring land, etc.), operating and maintenance costs, connection costs and a⌧ reasonable rate of return. Solar PV prices are higher than prices for other technologies because of the high costs to buy⌧ solar PV systems. Technologies associated with solar PV are rapidly advancing and the current⌧ market is still small. The FIT Program prices are designed to kick-start the solar PV industry in⌧ Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is⌧ expected to decrease to reflect technological advances and growing market supply. Back to Top 39 2869 How do Ontario's prices compare to other places where FIT programs are offered? Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top Why is the payment for some biomass lower than for wind? The FIT Program prices cover the typical costs to install the specific technology plus a reasonable⌧ rate of return. Each renewable technology has different costs and provides different amounts of⌧ energy in different timelines. Wind and biomass projects have different prices since their cost⌧ components and performance characteristics differ. The intent is not to favour wind over biomass⌧ - the intent is to provide an incentive for each of these technologies. Prices are set so that each⌧ technology can earn the same reasonable rate of return on their investment. Back to Top What is cost-based generation pricing? The FIT Program prices are designed to enable renewable energy projects to recover the costs of⌧ construction, operations and maintenance and a reasonable rate of return on the investment⌧ over the term of the FIT contract. Prices account for the following: capital costs (e.g., building, acquiring land, connection costs, etc.) operating and maintenance costs cost of debt and percent of debt return on equity. Experience from other places where a FIT program is offered served as input to the prices for⌧ Ontario. These prices take into account experience in other countries (such as Germany and⌧ Spain); they also specifically reflect the economic and resource conditions unique to Ontario. Back to Top How were the generation project size categories selected? The project size categories were based on the different costs associated with the different sizes.⌧ The OPA's experience with contracting for small and large generators was also considered. Setting technology-specific FIT prices helps ensure development across a range of technologies⌧ and project sizes. Almost all existing and proposed FIT programs in Europe and the United States⌧ take this approach. They set specific rates for a particular technology in relation to project size to⌧ account for variations in generation costs depending on project size. Projects are separated into⌧ size categories by capacity and the rate is set at different levels for smaller and larger projects.⌧ The size categories are generally consistent with the Ontario Energy Board's Distribution System⌧ Code. Back to Top Will contract prices change over time? 40 2870 For some technologies, the price schedule includes an annual increase based on a percentage of⌧ the consumer price index (CPI). This increase will help protect developers against inflationary⌧ pressures. Click here to see specific prices and CPI factors. Prices will be reviewed every two years to consider technological advances and other factors that⌧ may lead to cost decreases. Changes in prices related to the two-year review will only apply to⌧ new projects and the OPA will give due notice before any price changes take effect. 41 2871 Not Responsive Not Responsive Not Responsive 44 2874 Not Responsive Not Responsive 46 2876 Not Responsive Not Responsive Not Responsive 49 2879 Aboriginal Participation – Glenna to follow-up with JT and dBH Text size: - Are there incentives for Aboriginal projects? - How does a project qualify for the FIT Program Aboriginal adder? - Is the Aboriginal price adder available for microFIT projects? - Why do Aboriginal projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the Aboriginal community? - What is the Aboriginal Loan Guarantee Program? - How does the program work? - Why is this program being made available now? - What is the Aboriginal Energy Partnerships Program? - What type of support will the Aboriginal Energy Partnerships Program provide to Aboriginal⌧ communities? - What is a community energy plan? - What is the Aboriginal Renewable Energy Network? Are there incentives for Aboriginal projects? Yes, there are a number of incentives to encourage participation in the FIT Program by Aboriginal⌧ groups. Within the FIT Program there are two incentives: 1. reduced security payments - projects for which an Aboriginal group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if an Aboriginal group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. In addition to the FIT Program, the government recently announced two new programs to⌧ support First Nation and Métis communities involved in green energy development: 1. Aboriginal Loan Guarantee Program 2. Aboriginal Energy Partnerships Program Information on these programs can be found at: ⌧ http: //www.mei.gov.on.ca.wsd6.korax.net/english/news/?page=newsreleases&body=yes&news_id=59. Back to Top 50 2880 How does a project qualify for the FIT Program Aboriginal adder? For the purposes of the FIT Program, an Aboriginal community is defined to include: 1. a First Nation that is a "Band" as defined in the Indian Act (Canada); 2. the Métis Nation of Ontario or any of its active Chartered Community Councils; 3. a Person, other than a natural person, that is determined by the Government of⌧ Ontario for the purposes of FIT Program to represent the collective interests of a⌧ community that is composed of Métis or other aboriginal individuals; or 4. a corporation that is wholly-owned by one or more Aboriginal Communities as⌧ described in (1), (2) or (3). Back to Top Is the Aboriginal price adder available for microFIT projects? No, to qualify for the adder you would have to apply to the FIT Program. Back to Top Why do Aboriginal projects receive price adders? First Nation and Métis projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ An additional price incentive is available to Aboriginal projects to help ensure they are financially⌧ viable. Additional incentives and support mechanisms are intended to help level the playing field⌧ for groups that would otherwise be excluded from developing renewable energy projects Back to Top What is the rationale for the structure of the FIT Program incentives? FIT Program incentives to encourage the participation of Aboriginal groups are structured to⌧ encourage partnerships with local Aboriginal communities and to encourage Aboriginal⌧ community partners to maximize their equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the Aboriginal8 community? Yes. The adder is available on a sliding scale based on the equity interest of a First Nation, Métis⌧ or Aboriginal group. The contract is structured to allow for increases in the economic interest of⌧ an Aboriginal community over time. Back to Top What is the Aboriginal Loan Guarantee Program? The Aboriginal Loan Guarantee Program is a $250 million government program that will facilitate⌧ Aboriginal ownership in energy projects. The program will provide loan guarantees to Aboriginal⌧ communities for up to 75 percent of an Aboriginal corporation's equity in an eligible renewable⌧ generation and transmission project. Back to Top How does the program work? 51 2881 The government would provide loan guarantees to eligible Aboriginal communities. Loan⌧ guarantees would only be granted to commercially viable projects following an extensive due⌧ diligence process. The government would guarantee up to 75 percent, to a maximum of $50 million per project.⌧ Projects would be required to have: agreements in place to pre-purchase energy in the case of a generation project or⌧ regulated rates in the case of a transmission project experienced proponents and project partners with track records in construction and⌧ operation commercial financing arrangements in place. Back to Top Why is this program being made available now? Aboriginal communities have expressed interest in participating in renewable infrastructure, but⌧ have identified access to capital as a barrier. The program is designed to overcome this barrier⌧ by guaranteeing loans to commercially viable projects. It complements the government's new Green Energy and Green Economy Act, which has made⌧ the development of renewable energy and Aboriginal participation in electricity projects a⌧ priority. Back to Top What is the Aboriginal Energy Partnerships Program? The Aboriginal Energy Partnerships Program will help to maximize the participation of First⌧ Nation and Métis communities in renewable energy projects. This program will provide funds for⌧ community energy plans, feasibility studies, technical research and business cases and create an⌧ Aboriginal Renewable Energy Network. Back to Top What type of support will the Aboriginal Energy Partnerships Program provide to8 Aboriginal communities? Through the Aboriginal Energy Partnerships Program (AEPP), the province will provide support to⌧ Aboriginal communities considering renewable generation projects. It will assist in the following⌧ three areas: 1. establish the Aboriginal Renewable Energy Fund to assist First Nation and Métis⌧ communities in paying for some of the costs associated with pre-feasibility and feasibility⌧ studies, development of business cases, resource assessment, environmental and⌧ technical studies, as well as other soft costs for renewable energy projects 2. support to establish the Aboriginal Renewable Energy Network (AREN), an online based⌧ centre for sharing of knowledge and best practices related to First Nation and Métis green⌧ energy projects. 3. support for community energy plans. A community energy plan will allow First Nation and⌧ Métis communities to determine local interests, needs and opportunities for renewable⌧ 52 2882 energy development, conservation, grid connection and reducing reliance on diesel in⌧ remote communities Back to Top What is a community energy plan? A community energy plan is a concept that was presented by Aboriginal leaders during outreach⌧ sessions earlier this year. It is a tool that will identify local energy opportunities, while allowing⌧ the community to determine options and plans for local energy use and needs. A community⌧ energy plan could help to identify local opportunities for conservation measures and⌧ opportunities for renewable generation. Back to Top What is the Aboriginal Renewable Energy Network? The Aboriginal Renewable Energy Network (AREN) is an online information sharing and gathering⌧ centre of resources, and services for Aboriginal community participation in renewable⌧ development. AREN will provide Aboriginal communities with a network to share information,⌧ knowledge and advice relating to renewable energy project development. Details of how the⌧ network will work and be administered will be forthcoming and driven by the advice of Aboriginal⌧ energy experts. 53 2883 Community Participation – Glenna with JT Text size: - Is there an incentive for community-based projects? - How does a project qualify for the community adder? - Is the community-based price adder available for microFIT project? - Why do community-based projects receive price adders? - What is the rationale for the structure of the FIT Program incentives? - Is the price adder geared to the percentage of the equity put in by the community? - What grants or loans are available to communities to help them participate in FIT? - What grants or loans are available for Ontario municipalities wishing to participate in the FIT⌧ Program? [What about municipalities?] Is there an incentive for community-based projects? Yes, there are two incentives to encourage participation in the FIT Program by community⌧ groups: 1. reduced security payments - projects for which a community group has a 50 percent⌧ interest are eligible for reduced application security ($5 per kW, regardless of the⌧ renewable fuel type) 2. price adders - if a community group has 10 percent or more of an economic interest in a⌧ project, a proportionate share of an applicable price adder applies. Back to Top How does a project qualify for the community adder? For the purposes of the FIT Program, a community will have to meet community participation⌧ requirements found in the FIT Rules. Community is defined to include: 1. one or more Ontario residents directly investing in any size renewable energy project 2. an Ontario-based registered charity 3. an Ontario-based not for profit organization 4. a co-operative owned by residents of Ontario. Back to Top Is the community-based price adder available for microFIT project? No, to qualify for the adder you would have to apply to the FIT program. Back to Top Why do community-based projects receive price adders? Community-based projects receive incentives to participate because these projects have⌧ additional barriers and higher project costs than other projects driven by commercial developers.⌧ 54 2884 An additional price incentive is available to community-based projects to help ensure they are⌧ financially viable. Additional incentives and support mechanisms are intended to help level the⌧ playing field for groups that would otherwise be excluded from developing renewable energy⌧ projects. Back to Top What is the rationale for the structure of the FIT Program incentives? Incentives to encourage the participation of community groups were structured to encourage⌧ partnerships with local communities and to encourage community partners to maximize their⌧ equity share. Back to Top Is the price adder geared to the percentage of the equity put in by the community? Yes. The adder is available on a sliding scale based on the equity interest of a community group.⌧ The contract is structured to allow for increases in the economic interest of a community over⌧ time. Back to Top What grants or loans are available to communities to help them participate in FIT? Through the Community Energy Partnerships Program the province will provide one-time support⌧ to community groups to assist with the developmental costs associated with new renewable⌧ energy projects. This will help communities in Ontario, including farmers, municipalities, co-ops⌧ and non-profit organizations bring green energy projects to life. Back to Top What grants or loans are available for Ontario municipalities wishing to participate in8 the FIT Program? Through the Municipal Renewable Energy Program, the province will reimburse municipalities for⌧ some direct costs associated with hosting new renewable energy facilities. While many of these costs are, and will continue to be, appropriately charged to the developers⌧ themselves, it is expected some additional costs may arise. 55 2885 Not Responsive Nadeem Anwar↵ From: Nadeem Anwar Sent: March-10-10 11:24 AM To: Patricia Lightburn Subject: RE: Small Scale PV-FIT Prices from other Jurisdictions Hi Patricia Thanks for the input, prices are in Canadian dollars. The data gather from all countries on the basis of assumption (if they have a separate category for 0 - 10kW ground mount or rooftop system). In case of Korea the price will drop in 2010 as they have more in house solar panel generation as compared to other countries. In case of Germany/France and Spain they don ’ t have any categories specifically for 0 - 10 kW Systems. But I have numbers from these countries where they have category range from 0 - 30 kW. In case of UK, these are FIT prices, the FIT price schedule ( http://www.fitariffs.co.uk/eligible/levels/ ). Cheers Nadeem ----- Original Message ----From: Patricia Lightburn Sent: Wednesday, March 10, 2010 11:12 AM To: Nadeem Anwar; Ana Maria Mejia Subject: RE: Small Scale PV - FIT Prices from other Jurisdictions Thanks for this. Couple of questions Are these prices in Canadian dollars? Is the Korean price supposed to be for less than 3 kW? Right now it says more... Could you find the same data for Germany France and Spain specifically? Also, from what I have read about the UK proposal/ new scheme, it sounds like a net - metering program rather than a FIT could you confirm? Thanks! ----- Original Message ----From: Nadeem Anwar Sent: Wednesday, March 10, 2010 10:01 AM To: Ana Maria Mejia; Patricia Lightburn Subject: FW: Small Scale PV - FIT Prices from other Jurisdictions As per discussion, please find attached FIT prices for small scale Solar PV (Ground Mount & Rooftop) in other jurisdictions. Regards Nadeem 2887 Nadeem Anwar↵ From: Nadeem Anwar Sent: March-10-10 11:34 AM To: Patricia Lightburn Subject: RE: Small Scale PV-FIT Prices from other Jurisdictions Hi Patricia You are right with reference to UK; but as they are claiming on the website that they will be paying for total generation. I will dig further and will send you an updated version of this and will include the Germany, France & Spain. Thank you, Nadeem ----- Original Message ----From: Patricia Lightburn Sent: Wednesday, March 10, 2010 11:28 AM To: Nadeem Anwar Subject: RE: Small Scale PV - FIT Prices from other Jurisdictions Yes but in the case of the UK, are they paying for excess generation or total generation - there is a big difference, and in the past, the UK has been quick to claim they have a FIT, without really having one. My question on Korea was what the price tranche is? Is it 0 - 3kW? Or only 3kW and greater? I understand that the price drops. Please also add Germany France and Spain - whatever the lowest tranche is. ----- Original Message ----From: Nadeem Anwar Sent: Wednesday, March 10, 2010 11:25 AM To: Patricia Lightburn Subject: RE: Small Scale PV - FIT Prices from other Jurisdictions Hi Patricia Thanks for the input, prices are in Canadian dollars. The data gather from all countries on the basis of assumption (if they have a separate category for 0 - 10kW ground mount or rooftop system). In case of Korea the price will drop in 2010 as they have more in house solar panel generation as compared to other countries. In case of Germany/France and Spain they don ’ t have any categories specifically for 0 - 10 kW Systems. But I have numbers from these countries where they have category range from 0 - 30 kW. In case of UK, these are FIT prices, the FIT price schedule ( http://www.fitariffs.co.uk/eligible/levels/ ). Cheers Nadeem ----- Original Message ----From: Patricia Lightburn Sent: Wednesday, March 10, 2010 11:12 AM To: Nadeem Anwar; Ana Maria Mejia Subject: RE: Small Scale PV - FIT Prices from other Jurisdictions Thanks for this. Couple of questions Are these prices in Canadian dollars? Is the Korean price supposed to be for less than 3 kW? Right now it says more... 2888 Could you find the same data for Germany France and Spain specifically? Also, from what I have read about the UK proposal/ new scheme, it sounds like a net - metering program rather than a FIT could you confirm? Thanks! ----- Original Message ----From: Nadeem Anwar Sent: Wednesday, March 10, 2010 10:01 AM To: Ana Maria Mejia; Patricia Lightburn Subject: FW: Small Scale PV - FIT Prices from other Jurisdictions As per discussion, please find attached FIT prices for small scale Solar PV (Ground Mount & Rooftop) in other jurisdictions. Regards Nadeem 2889 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: March-11-10 1:34 PM↵ To: Patricia Lightburn; Sarah Simmons; Ana Maria Mejia↵ Cc: Jim MacDougall↵ Subject: Small Scale Solar PV FIT Prices from other Jursidictions- Attachments: Small Scale Solar PV-Feed-in-Tariffs in other Jurisdictions.pptx↵ Please find enclosed the revised small scale PV- FIT prices from other jurisdictions which include ground mount and⌧ rooftop prices, now I have included information from Germany, Spain & France.⌧ Regards⌧ Nadeem⌧ 2890 Small Scale Solar PV-Feed-in-Tariffs in other Jurisdictions⇠ COUNTRY CAPACITY AUSTRIA < 5 kW 5-10 kW > 10 kW BELGIUM Any Size BULGARIA < 5 kW > 5 kW < 10 kW CROTIA FRANCE Commercial Building TERM PRICE C/kWh in REMARKS⇠ Canadian Dollars⇠ 10 10 10 20 25 25 12 20 0.6496 0.5648 0.4235 0.4945 0.5945 0.5454 0.6499 0.6849 20 20 20 08371⇠ 0.4566⇠ 0.4566 GERMANY 0-30 kW 20 0.574 GREECE ITALY 25 20 0.7777 0.70636 20 0.6781056 21 15 15 0.4938 0.918 0.707 Program Cap 1200 MW by 2012 & 3000 MW by⇠ 2016⇠ Any Solar Type⇠ Program Cap: 50 MW⇠ Program Cap: 50 MW⇠ 15 0.494 Program Cap: 150 MW⇠ BIPV Ground mount Residential* < 10 kW Rooftop* 1-3 kW (ground mount)⇠ 3-20 kW MALAYSIA Any Size PORTUGAL < 3.68 Rooftop < 5 kW Ground Mount⇠ >5 kW < 5 MW Any Solar Type⇠ Any Solar Type⇠ Any Solar Type⇠ Any Solar Type⇠ Any Solar Type⇠ Any Solar Type⇠ Any Solar Type⇠ Tariff raised in Feb 2010 and remain in effect until⇠ for 2012⇠ * Qualifies for 50 % tax credit if system is less⇠ than 3kW (40 % of the total French Installation)⇠ Proposed cut in Solar FIT price in Feb 2010 to 3343 c/kWh for 2010 and reduce 9 % p.a. after⇠ 2011. (It’s postponed for 2011)◆ * No Program Cap⇠ Program Cap: 50 MW⇠ 2891 Small Scale Solar PV-Feed-in-Tariffs in other Jurisdictions⇠ COUNTRY CAPACITY SERBIA ANY SOLAR 12 0.3249 Program Cap: 5 MW⇠ SOUTH KOREA < 3 kW 15 0.8002 The cost of installations are subsidized under “1◆ million green homes project”◆ 2009 > 3 kW 15 0.8002 Any Solar Type⇠ 2010 > 3 kW 20 0.4662 Any Solar Type⇠ < 10 kW Ground Mount 25 0.6237 Ground Mount⇠ < 10 kW Rooftop 25 0.7197 Rooftop⇠ < 10 kW 20 0.3332 With 50,000 TWD Subsidy⇠ < 10 kW 20 0.4349 Without Subsidy⇠ TURKEY < 10 kW 7 0.6357 Any Solar Type⇠ SPAIN < 20 kW Rooftop 25 0.4803 Quota system for both solar categories for a year⇠ but no Program CAP⇠ < 10 MW Ground Mount 25 0.4521 Quota system for both solar categories for a year⇠ but no Program CAP⇠ " 4 kW (New Building) 25 0.555218 New Construction⇠ " 4 kW (Retrofit) 25 0.635194 Old/Existing Building⇠ > 4 kW- 10 kW 25 0.555218 Standalone 25 0.450634 Not attached to any building⇠ SWITZERLAND TAIWAN UNITED KINGDOM TERM PRICE C/kWh REMARKS⇠ Any Solar Type⇠ 2892 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: March-11-10 5:55 PM✏ To: Tasca, Leo (MEI); Patricia Lightburn; Sarah Simmons✏ Cc: Slawner, Karen (MEI); Jim MacDougall✏ Subject: RE: ground-mounted microFIT solar PV projects✏ Sarah, I just received Jim ’ s auto- reply indicating that you are the microFIT contact. Would you be available to discuss the matter below? Leo" From: Tasca, Leo (MEI)✏ Sent: March 11, 2010 5:50 PM✏ To: Patricia Lightburn✏ Cc: Slawner, Karen (MEI); Jim MacDougall✏ Subject: ground-mounted microFIT solar PV projects✏ Patricia, I understand from Jim ’ s voicemail that is likely on an extremely well - deserved vacation! Section 13 2893 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-22-10 3:54 PM↵ To: Jim MacDougall; Patricia Lightburn↵ Cc: Cindy Roks; Sheri Bizarro↵ Subject: Briefing Note - Ground mounted solar PV 22Mar10.doc↵ Attachments: Briefing Note - Ground mounted solar PV 22Mar10.doc↵ First stab at microFIT briefing note and recommendation. Comments/edits welcome! 2894 microFIT Program Briefing Note: Ground-mounted solar PV March 22, 2010 Background: The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a microFIT developer with more than 900 applications, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV 3400 (47%) applications are for applicants that self identify as “homeowner” 1 2 Numbers are rounded and excluded terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2895 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. E.g., 80.2c/kWh for rooftop solar PV projects 10 kW and under, and 44.3c/kWh for all ground-mounted projects. Pros Cons - Mitigates price impact of ground- Many companies have made a mounted projects “business case” around 10 kW - Curves the growth of groundground-mounted solar PV at mounted projects (only more 80.2c/kWh - Farm and rural communities may economically viable projects would proceed) feel like they have lost an - Reduces the number of “project opportunity to participate in the splitting” issues currently seen in microFIT program microFIT application review and - Creates a sense of instability in the would help speed up the review market (e.g., “early program process review”) - Re-focuses the microFIT program more towards rooftop solar PV as was originally intended. OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and make, the first price tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons - Mitigation price impact of ground- May increase the number of mounted projects (if there are applications and “project splitting” fewer applications.) issues - Limits project size to “rooftop scale” - Creates a sense of instability in the projects only market (e.g., “early program review”) - Many companies have made a “business case” around 10 kW ground-mounted solar PV at 80.2c/kWh - Inconsistent with OEB/industry definition of “micro-scale” 2 2896 OPTION 3: Require that all microFIT projects for solar PV are connected on properties, with an associated load customer Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons - Ensures that projects are not built - Adds complexity to the microFIT on vacant lots program and the review process - Ensures that the microFIT program - Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ - Will not significantly decrease the number of microFIT applications Recommendation: - The microFIT program team recommends Option 1 o This option would require introduction of “rooftop” in the microFIT rules o The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. - The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current price schedule. 3 2897 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-23-10 10:56 AM↵ To: Jim MacDougall; Patricia Lightburn; Cindy Roks↵ Subject: Briefing Note - Ground mounted solar PV 23Mar10.doc↵ Attachments: Briefing Note - Ground mounted solar PV 23Mar10.doc↵ Thanks for your input.⌘ Small revisions attached.⌘ We should then send on to Jason etc.⌘ Cheers,⌘ Sarah⌘ 2898 microFIT Program Briefing Note: Ground-mounted solar PV March 23, 2010 Background: The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a microFIT developer with more than 900 applications for ground-mounted projects, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV 3400 (47%) applications are for applicants that self identify as “homeowner”. This suggests that less than half of the projects are individual projects - as opposed to aggregated projects or projects submitted by a commercial corporation. 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas 1 2 Numbers are rounded and excluded terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2899 OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. E.g., 80.2 c/kWh for rooftop solar PV projects 10 kW and under, and 44.3 c/kWh for all ground-mounted projects. Ground-mounted projects would still be permitted in the microFIT program, however the price would be 44.3 c/kWh. Pros Cons - Mitigates price impact of ground- Many companies have made a mounted projects “business case” around 10 kW - Curbs the growth of groundground-mounted solar PV at mounted projects (only more 80.2c/kWh economically viable projects would - Farm and rural communities may proceed) feel like they have lost an opportunity to participate in the - Reduces the number of “project splitting” issues currently seen in microFIT program - Creates a sense of instability in the microFIT application review and would help speed up the review market (e.g., “early program process review”) - Re-focuses the microFIT program more towards rooftop solar PV as was originally intended. OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and makethe first price tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons - Mitigation price impact of ground- May increase the number of mounted projects (if there are applications and “project splitting” fewer applications.) issues - Limits the first price tranche to - Creates a sense of instability in the “rooftop scale” projects only market (e.g., “early program review”) - Many companies have made a “business case” around 10 kW ground-mounted solar PV at 80.2c/kWh - Inconsistent with OEB/industry definition of “micro-scale” - May not curb the growth of the ground-mounted projects 2 2900 OPTION 3:-Require that all microFIT projects for solar PV are connected on propertieswith an associated load customer Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons - Ensures that projects are not built - Adds complexity to the microFIT on vacant lots program and the review process - Ensures that the microFIT program - Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ - Will not significantly decrease the number of microFIT applications Recommendation: - The microFIT program team recommends Option 1 o This option is consistent with the intent of the microFIT program o The revision will ensure that all ground mounted projects are paid the same price. o The revision will limit the number of rural applications where transmission and distribution constraints may already exist. o This option would require introduction of “rooftop” in the microFIT rules o The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. - The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current rules and price schedule. 3 2901 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-23-10 1:05 PM↵ To: Jason Chee-Aloy↵ Cc: Jim MacDougall; Patricia Lightburn; Cindy Roks↵ Subject: Briefing Note - Ground mounted solar PV 23Mar10.doc↵ Attachments: Briefing Note - Ground mounted solar PV 23Mar10.doc↵ Jason,⌥ Please find attached briefing note with recommendations for the microFIT program. Feel free to follow- up with me if⌥ you have any questions or suggestions.⌥ Cheers,⌥ Sarah⌥ Sarah Simmons↵ Analyst⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St. W. Suite 1600⌥ Toronto , ON , M5H 1T1⌥ Tel 416.969.6213⌥ Fax 416.967.1947⌥ www.powerauthority.on.ca⌥ P please consider the environment before printing this email↵ 2902 microFIT Program Briefing Note: Ground-mounted solar PV March 23, 2010 Background: The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a microFIT developer with more than 900 applications for ground-mounted projects, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV 3400 (47%) applications are for applicants that self identify as “homeowner”. This suggests that less than half of the projects are individual projects - as opposed to aggregated projects or projects submitted by a commercial corporation. 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas 1 2 Numbers are rounded and excluded terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2903 OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. E.g., 80.2 c/kWh for rooftop solar PV projects 10 kW and under, and 44.3 c/kWh for all groundmounted projects. Ground-mounted projects would still be permitted in the microFIT program, however the price would be 44.3 c/kWh. Pros Cons Mitigates price impact of groundMany companies have made a mounted projects “business case” around 10 kW groundCurbs the growth of ground-mounted mounted solar PV at 80.2c/kWh projects (only more economically Farm and rural communities may feel viable projects would proceed) like they have lost an opportunity to Reduces the number of “project participate in the microFIT program splitting” issues currently seen in Creates a sense of instability in the microFIT application review and would market (e.g., “early program review”) help speed up the review process Reduces the economic viability of Re-focuses the microFIT program more micro-scale ground-mounted projects towards rooftop solar PV as was for homeowners. originally intended. Does not reduce the economic viability of micro-scale rooftop PV systems. OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and make the firstprice tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons Mitigation price impact of groundMay increase the number of mounted projects (if there are fewer applications and “project splitting” applications.) issues Limits the first price tranche to Creates a sense of instability in the “rooftop scale” projects only market (e.g., “early program review”) Many companies have made a “business case” around 10 kW groundmounted solar PV at 80.2c/kWh Inconsistent with OEB/industry definition of “micro-scale” May not curb the growth of the ground-mounted projects 2 2904 OPTION 3: Require that all microFIT projects for solar PV are connected on properties with anassociated load customer Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons Ensures that projects are not built on Adds complexity to the microFIT vacant lots program and the review process Ensures that the microFIT program Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ Will not significantly decrease the number of microFIT applications Recommendation: - The microFIT program team recommends Option 1 o This option is consistent with the intent of the microFIT program. o The revision will reduce the number of project splitting concerns and will help to speed up the review process. o The revision will help ensure that growth of the microFIT program remains at a sustainable level. o The revision will limit the number of rural applications where transmission and distribution constraints may already exist. o This option would require introduction of “rooftop” in the microFIT rules The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. - The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current rules and price schedule. 3 2905 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: March-24-10 10:05 AM✏ To: Sarah Simmons; Jim MacDougall✏ Subject: RE: Ground-mounted micro-FIT solar PV options✏ Attachments: GroundmountedMicroFITOptionsREVISED(3).doc✏ Section 13 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: March 16, 2010 9:02 AM To: Tasca, Leo (MEI) Cc: Jason Chee-Aloy Subject: FW: Ground-mounted micro-FIT solar PV options Good morning Leo, I will investigate this. Section 13 Best, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca] Sent: March 16, 2010 9:00 AM To: Sarah Simmons Subject: FW: Ground-mounted micro-FIT solar PV options Section 13 2906 Section 13 From: Tasca, Leo (MEI) Sent: March 12, 2010 2:50 PM To: Ing, Pearl (MEI) Cc: Sarah Simmons; Jason Chee-Aloy Subject: Ground-mounted micro-FIT solar PV options Pearl, here is the options paper as requested. My thanks to Sarah Simmons at OPA for her comments and assistance. Leo This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2907 Issue: What is the Ministry’s response to the aggregation of ground-mounted microFIT solar PV projects where lease payments are made to owners of private properties in rural areas? Background: Aggregation of microFIT solar PV projects occurs when a firm installs and operates microFIT ground-mounted solar PV arrays on rural properties (including vacant lots) and then makes lease payments to the property owner. It appears that most of these installations are ground-mounted with a smaller percentage of pole-mounted. The 80.2 cents/kWh prices was originally designed micro-scale rooftop PV projects only. With stakeholder feedback, it was decided that both rooftop and ground mounted PV would have access to this higher price. The "rooftop price" of 80.2 cents/kWh is now primarily being developed for projects on the ground made from concrete foundations, a metal frame and a panel array in a farmer’s⇠ field. These ground-mounted arrays cost between $70,000 and $80,000 to construct rather than the $100,000 estimated for roof-top solar microFIT projects. Section 17 It should be noted that there is also some aggregation of rooftop solar PV projects, but roof-top aggregation is not at issue since it promotes the development of rooftop solar PV. It is also important to note that according to the current FIT price schedule, the current 80.2 cent/kWh price for solar PV is intended for any solar PV project that has a capacity of 10 kW or less. The following options are being considered: 2908 Section 13 Section 13 Section 13 Section 13 2912 Jason Chee-Aloy From: Jason Chee-Aloy Sent: March-24-10 10:20 AM To: Colin Andersen; JoAnne Butler; Ben Chin Cc: Irene Mauricette; Jim MacDougall; Sarah Simmons; Patricia Lightburn; Sheri Bizarro; Michael Killeavy; Barbara Ellard; Kristin Jenkins; Susan Kennedy Subject: microFIT Program Recommendation, re: ground-mount solar PV Attachments: Briefing Note - Ground mounted solar PV 23Mar10 (2).doc All,⌅ Attached is a note describing the issue of ground-mount/pole-mount solar PV uptake in the microFIT program. Of issue is the high volume of ground- mount solar PV relative to rooftop solar PV. It is creating concern mainly resulting from single entities submitting applications by the hundreds with plans to develop micro projects on vacant lots without an associated load. This issue is triggering or has the potential to trigger other issues: concern over gaming the spirit or intend of the microFIT program; accelerating the uptake of applications, therefore creating workload issues (for OPA and LDCs, including Hydro One); and, as the number of micro projects without associated loads increase, it may put pressure on system limits and may result in aggregate MW restrictions on a locational basis.⌅ This issue has been raised with REFO and REFO has raised concerns with MO and PO . response from PO was ‘ fix it sooner than later if this is really a problem ’ .⌅ The basic In the briefing note we recommend a slight change (i.e., go back to our original proposal from a year ago by affording ground-mount solar PV pricing of 44 cents/kWh to all sizes therefore leaving only rooftop solar PV with 80 cents/kWh).⌅ We are happy to discuss this issue.⌅ Thanks,⌅ Jason 2913 microFIT Program Briefing Note: Ground-mounted solar PV March 23, 2010 Background: The microFIT program was originally envisioned as mainly a rooftop solar PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders and Government, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a single microFIT developer with more than 900 applications for ground-mounted projects, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV. 3400 (47%) applications are for applicants that self identify as “homeowner”. This suggests that less than half of the projects are individual projects - as 1 2 Numbers are rounded and exclude terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2914 opposed to aggregated projects or projects submitted by a commercial corporation. 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas. OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. e.g., 80.2 c/kWh for rooftop solar PV projects 10 kW and under, and 44.3 c/kWh for all groundmounted projects. Ground-mounted projects would still be permitted in the microFIT program, however the price would be 44.3 c/kWh. Pros Cons Mitigates price impact of groundMany companies have made a mounted projects “business case” around 10 kW groundCurbs the growth of ground-mounted mounted solar PV at 80.2c/kWh projects (i.e., only more economically Farm and rural communities may feel viable projects would proceed) like they have lost an opportunity to Reduces the number of “project participate in the microFIT program splitting” issues currently seen in Creates a sense of instability in the microFIT application review and would market (e.g., “early program review”) help speed up the review process Reduces the economic viability of Re-focuses the microFIT program more micro-scale ground-mounted projects towards rooftop solar PV as was for homeowners originally intended Does not reduce the economic viability of micro-scale rooftop PV systems OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and make the firstprice tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons Mitigates price impact of groundMay increase the number of mounted projects (if there are fewer applications and “project splitting” applications) issues Limits the first price tranche to Creates a sense of instability in the “rooftop scale” projects only market (e.g., “early program review”) Many companies have made a “business case” around 10 kW groundmounted solar PV at 80.2c/kWh Inconsistent with OEB/industry definition of “micro-scale” May not curb the growth of the ground-mounted projects 2 2915 OPTION 3: Require that all microFIT projects for solar PV are connected on properties with anassociated load customer. Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons Ensures that projects are not built on Adds complexity to the microFIT vacant lots program and the review process Ensures that the microFIT program Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ Will not significantly decrease the number of microFIT applications Recommendation: - - Generation Procurement recommends Option 1 o This option is consistent with the intent of the microFIT program. o The revision will reduce the number of project splitting concerns and will help to speed up the review process. o The revision will help ensure that growth of the microFIT program remains at a sustainable level. o The revision will limit the number of rural applications where transmission and distribution constraints may already exist. o This option would require introduction of “rooftop” in the microFIT rules The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. o REFO supports some resolution of this issue and has flagged concerns to the Minister’s Office and Premier’s Office. The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current rules and price schedule. 3 2916 Jim MacDougall From: Jim MacDougall Sent: March-24-10 12:56 PM To: Sarah Simmons Subject: FW: Ground-mounted micro-FIT solar PV options Attachments: GroundmountedMicroFITOptionsREVISED v4.doc Can you review and add and send to Leo?✓ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto , ON M5H 1T1 , Canada✓ tel 416.969.6415✓ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 24, 2010 10:05 AM⇢ To: Sarah Simmons; Jim MacDougall⇢ Subject: RE: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: March 16, 2010 9:02 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Jason Chee-Aloy⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Good morning Leo,✓ I will investigate this.✓ Section 13 Best,✓ Sarah Simmons↵ Analyst✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St. W. Suite 1600✓ Toronto , ON , M5H 1T1✓ 2917 Tel 416.969.6213✓ Fax 416.967.1947✓ www.powerauthority.on.ca✓ P please consider the environment before printing this email✓ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 16, 2010 9:00 AM⇢ To: Sarah Simmons⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Tasca, Leo (MEI)⇢ Sent: March 12, 2010 2:50 PM⇢ To: Ing, Pearl (MEI)⇢ Cc: Sarah Simmons; Jason Chee-Aloy⇢ Subject: Ground-mounted micro-FIT solar PV options⇢ Pearl, here is the options paper as requested. My thanks to Sarah Simmons at OPA for her comments and assistance. Leo✓ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2918 Issue: What is the Ministry’s response to the overwhelming uptake of ground-mounted microFIT solar PV projects, particularly in rural areas, as opposed to the original target of rooftop solar PV projects? This has been particularly popular with microFIT solar PV aggregators. Background: Aggregation of microFIT solar PV projects occurs when a firm installs and operates microFIT ground-mounted solar PV arrays on rural properties (including vacant lots) and then makes lease payments to the property owner. Aggregation provides a property owner with a microFIT participation opportunity without the high capital cost of the PV system. It appears that most of the installations under the micrFIT program are being developed by aggregators that are installing ground-mounted solar PV, with a smaller percentage of pole-mounted. The 80.2 cents/kWh price was originally designed for micro-scale rooftop PV projects only. With stakeholder feedback, it was decided that both rooftop and ground mounted PV would have access to this higher price. The "rooftop price" of 80.2 cents/kWh is now primarily being developed for projects on the ground made from concrete foundations, a m etal frame and a panel array in a farmer’s field. These ground-mounted arrays cost between $60,000 and $80,000 to construct rather than the $100,000 estimated for roof-top solar microFIT projects. Section 17 It is also important to note that according to the current FIT price schedule, the current 80.2 cent/kWh price for solar PV is intended for any solar PV project that has a capacity of 10 kW or less, whether it is rooftop or ground-mounted. The following options are being considered: Option 1 2919 Section 13 Section 13 Section 13 Section 13 2923 Sarah Simmons↵ From: Sarah Simmons Sent: March-24-10 1:28 PM To: Jim MacDougall Subject: GroundmountedMicroFITOptionsREVISED v4.doc Attachments: GroundmountedMicroFITOptionsREVISED v4.doc some small revisions, but one comment on your revisions, regarding aligning the price to MW scale projects.. maybe refocus the comment to "Does not reduce the economic viability of micro-scale rooftop PV"... 2924 Issue: What is the Ministry’s response to the overwhelming uptake of ground-mounted microFIT solar PV projects, particularly in rural areas, as opposed to the original target of rooftop solar PV projects? This has been particularly popular with microFIT solar PV aggregators. Background: Aggregation of microFIT solar PV projects occurs when a firm installs and operates microFIT ground-mounted solar PV arrays on rural properties (including vacant lots) and then makes lease payments to the property owner. Aggregation provides a property owner with a microFIT participation opportunity without the high capital cost of the PV system. It appears that most of the installations under the micrFIT program are being developed by aggregators that are installing ground-mounted solar PV, with a smaller percentage of pole-mounted. The aggregation of ground-mounted solar PV is occurring primarily in rural Ontario and farming communities. The 80.2 cents/kWh price was originally designed for micro-scale rooftop PV projects only. With stakeholder feedback, it was decided that both rooftop and ground mounted PV would have access to this higher price. The "rooftop price" of 80.2 cents/kWh is now primarily being developed for projects on the ground made from concrete foundations, a metal frame and a panel array in a farmer’s⌫ field. These 10 kW ground-mounted arrays cost between $60,000 and $80,000 to construct rather than the $100,000 estimated for 10 kW roof-top solar microFIT projects. Section 17 It should be noted that there is also some aggregation of rooftop solar PV projects, but roof-top aggregation is not at issue since it promotes the development of rooftop solar PV and where customers use electricity. It is also important to note that according to the current FIT price schedule, the current 80.2 cent/kWh price for solar PV is intended for any solar PV project that has a capacity of 10 kW or less, whether it is rooftop or ground-mounted. 2925 The following options are being considered: Section 13 Section 13 Section 13 2929 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-24-10 1:46 PM↵ To: 'Tasca, Leo (MEI)'; Jim MacDougall↵ Subject: RE: Ground-mounted micro-FIT solar PV options↵ Attachments: GroundmountedMicroFITOptionsREVISED v4.doc↵ Leo,⇧ Please find the revisions from Jim and myself.⇧ Cheers,⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 24, 2010 10:05 AM⇢ To: Sarah Simmons; Jim MacDougall⇢ Subject: RE: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: March 16, 2010 9:02 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Jason Chee-Aloy⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Good morning Leo,⇧ I will investigate this.⇧ Section 13 Best,⇧ 2930 Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 16, 2010 9:00 AM⇢ To: Sarah Simmons⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Tasca, Leo (MEI)⇢ Sent: March 12, 2010 2:50 PM⇢ To: Ing, Pearl (MEI)⇢ Cc: Sarah Simmons; Jason Chee-Aloy⇢ Subject: Ground-mounted micro-FIT solar PV options⇢ Pearl, here is the options paper as requested. My thanks to Sarah Simmons at OPA for her comments and assistance. Leo⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2931 Issue: What is the Ministry’s response to the overwhelming uptake of ground-mounted microFIT solar PV projects, particularly in rural areas, as opposed to the original target of rooftop solar PV projects? This has been particularly popular with microFIT solar PV aggregators. Background: Aggregation of microFIT solar PV projects occurs when a firm installs and operates microFIT ground-mounted solar PV arrays on rural properties (including vacant lots) and then makes lease payments to the property owner. Aggregation provides a property owner with a microFIT participation opportunity without the high capital cost of the PV system. It appears that most of the installations under the micrFIT program are being developed by aggregators that are installing ground-mounted solar PV, with a smaller percentage of pole-mounted. The aggregation of ground-mounted solar PV is occurring primarily in rural Ontario and farming communities. The 80.2 cents/kWh price was originally designed for micro-scale rooftop PV projects only. With stakeholder feedback, it was decided that both rooftop and ground mounted PV would have access to this higher price. The "rooftop price" of 80.2 cents/kWh is now primarily being developed for projects on the ground made from concrete foundations, a metal frame and a panel array in a farmer’s⌫ field. These 10 kW ground-mounted arrays cost between $60,000 and $80,000 to construct rather than the $100,000 estimated for 10 kW roof-top solar microFIT projects. Section 17 It is also important to note that according to the current FIT price schedule, the current 80.2 cent/kWh price for solar PV is intended for any solar PV project that has a capacity of 10 kW or less, whether it is rooftop or ground-mounted. 2932 The following options are being considered: Section 13 Section 13 Section 13 Section 13 2936 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-25-10 10:47 AM↵ To: 'Smith, Elliot'↵ Cc: Jim MacDougall↵ Subject: microFIT v2.0↵ Attachments: Briefing Note - Ground mounted solar PV 23Mar10.doc↵ Hi Elliot, Per our discussion, please find attached briefing note as well as the current version of the microFIT rules and contract. Please feel free to follow- up with me if you have any questions. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email 2937 microFIT Program Briefing Note: Ground-mounted solar PV March 23, 2010 Background: The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a microFIT developer with more than 900 applications for ground-mounted projects, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV 3400 (47%) applications are for applicants that self identify as “homeowner”. This suggests that less than half of the projects are individual projects - as opposed to aggregated projects or projects submitted by a commercial corporation. 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas 1 2 Numbers are rounded and excluded terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2938 OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. E.g., 80.2 c/kWh for rooftop solar PV projects 10 kW and under, and 44.3 c/kWh for all groundmounted projects. Ground-mounted projects would still be permitted in the microFIT program, however the price would be 44.3 c/kWh. Pros Cons Mitigates price impact of groundMany companies have made a mounted projects “business case” around 10 kW groundCurbs the growth of ground-mounted mounted solar PV at 80.2c/kWh projects (only more economically Farm and rural communities may feel viable projects would proceed) like they have lost an opportunity to Reduces the number of “project participate in the microFIT program splitting” issues currently seen in Creates a sense of instability in the microFIT application review and would market (e.g., “early program review”) help speed up the review process Reduces the economic viability of Re-focuses the microFIT program more micro-scale ground-mounted projects towards rooftop solar PV as was for homeowners. originally intended. Does not reduce the economic viability of micro-scale rooftop PV systems. OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and make the firstprice tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons Mitigation price impact of groundMay increase the number of mounted projects (if there are fewer applications and “project splitting” applications.) issues Limits the first price tranche to Creates a sense of instability in the “rooftop scale” projects only market (e.g., “early program review”) Many companies have made a “business case” around 10 kW groundmounted solar PV at 80.2c/kWh Inconsistent with OEB/industry definition of “micro-scale” May not curb the growth of the ground-mounted projects 2 2939 OPTION 3: Require that all microFIT projects for solar PV are connected on properties with anassociated load customer Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons Ensures that projects are not built on Adds complexity to the microFIT vacant lots program and the review process Ensures that the microFIT program Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ Will not significantly decrease the number of microFIT applications Recommendation: - The microFIT program team recommends Option 1 o This option is consistent with the intent of the microFIT program. o The revision will reduce the number of project splitting concerns and will help to speed up the review process. o The revision will help ensure that growth of the microFIT program remains at a sustainable level. o The revision will limit the number of rural applications where transmission and distribution constraints may already exist. o This option would require introduction of “rooftop” in the microFIT rules The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. - The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current rules and price schedule. 3 2940 Sarah Simmons↵ From: Sarah Simmons↵ Sent: March-30-10 10:35 AM↵ To: 'Tasca, Leo (MEI)'; Jim MacDougall; Cheng, Clarence (MEI)↵ Cc: Jason Chee-Aloy; Kristin Jenkins↵ Subject: RE: further on ground-mounted micro-FIT solar PV options↵ Attachments: Cost Analysis - Ground mounted solar - 30Mar10.doc↵ Leo,⇧ Attached to this email is a summary of our cost analysis. Please let me know if you have any questions.⇡ Cheers,⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 29, 2010 5:36 PM⇢ To: Tasca, Leo (MEI); Sarah Simmons; Jim MacDougall; Cheng, Clarence (MEI)⇢ Subject: RE: further on ground-mounted micro-FIT solar PV options⇢ Sarah/Jim, just following up. We are preparing a deck for MO and they would like to have a new policy in place by⇡ th April 8 . Clarence is incorporating the latest options paper into a deck. Leo⇡ From: Tasca, Leo (MEI)⇢ Sent: March 26, 2010 5:19 PM⇢ To: Tasca, Leo (MEI); 'Sarah Simmons'; 'Jim MacDougall'⇢ Subject: RE:further on ground-mounted micro-FIT solar PV options⇢ Section 13 2941 From: Tasca, Leo (MEI)⇢ Sent: March 25, 2010 4:48 PM⇢ To: Sarah Simmons; Jim MacDougall⇢ Subject: RE: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: March 24, 2010 1:46 PM⇢ To: Tasca, Leo (MEI); Jim MacDougall⇢ Subject: RE: Ground-mounted micro-FIT solar PV options⇢ Leo,⇧ Please find the revisions from Jim and myself.⇧ Cheers,⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 24, 2010 10:05 AM⇢ To: Sarah Simmons; Jim MacDougall⇢ Subject: RE: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Sarah Simmons [mailto:Sarah.Simmons@powerauthority.on.ca] Sent: March 16, 2010 9:02 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Jason Chee-Aloy⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Good morning Leo,⇧ I will investigate this.⇧ Section 13 2942 Best,⇧ Sarah Simmons↵ Analyst⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St. W. Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 416.969.6213⇧ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ P please consider the environment before printing this email From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: March 16, 2010 9:00 AM⇢ To: Sarah Simmons⇢ Subject: FW: Ground-mounted micro-FIT solar PV options⇢ Section 13 From: Tasca, Leo (MEI)⇢ Sent: March 12, 2010 2:50 PM⇢ To: Ing, Pearl (MEI)⇢ Cc: Sarah Simmons; Jason Chee-Aloy⇢ Subject: Ground-mounted micro-FIT solar PV options⇢ Pearl, here is the options paper as requested. My thanks to Sarah Simmons at OPA for her comments and assistance. Leo⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 2943 Not Responsive Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-05-10 10:55 AM↵ To: Jim MacDougall; Sheri Bizarro; Cindy Roks; Patricia Lightburn↵ Cc: Kristin Jenkins; Jason Chee-Aloy↵ Subject: Draft QA for v1.4 - 05April10.doc↵ Attachments: Draft QA for v1.4 - 05April10.doc↵ Simple QA doc to address the changes in the mciroFIT program.⇠ Comments welcome!⇠ Cheers,⇠ Sarah⇠ 2945 microFIT Program Q&A’s for v1.4 April 5, 2010 What changes are being implemented with version 1.4 of the microFIT program rules# and contract? The FIT price for solar PV projects 10 kW and under is available to rooftop projects only. In other words, rooftop solar PV projects 10 kW and under are eligible for 80.2 cents/kWh, and all ground mounted projects solar PV projects are eligible for 44.3 cents/kWh. Ground-mounted solar PV projects are still be permitted in the microFIT program, however the price would be 44.3 cents/kWh. Version 1.4 of the microFIT rules and contract introduces a new defined term - “Rooftop Facility”. Why is the OPA implementing these changes? The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. Since the launch of the program, the uptake of ground-mounted solar PV projects is far greater than expected. In fact, the vast majority of microFIT projects are for ground-mounted solar PV projects. The OPA is implementing this program change to mitigates price impact of ground-mounted projects and to re-focus the microFIT program towards rooftop solar PV, as it was originally intended. This program change will help ensure that growth of the microFIT program remains at a sustainable level for the long-term. [NTD: insert statistics?] What is the definition of rooftop? In the microFIT rules and contract, a “Rooftop Facility” means a facility that is participating in the microFIT Program that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. Will this program change affect projects that have already submitted applications? No, if you have submitted your application before [DATE], then your application will be processed under version 1.3 of the microFIT rules. Only new applications will be affected by this change. 2946 Jason Chee-Aloy From: Jason Chee-Aloy Sent: April-06-10 11:25 AM To: Colin Andersen; JoAnne Butler; Ben Chin; Kristin Jenkins Cc: Jim MacDougall; Irene Mauricette Subject: FW: Ground-mounted micro-FIT solar PV options Attachments: GroundmountedMicroFITOptionsREVISED(2).doc All,⌅ Attached is the last options paper concerning the ground-mount microFIT issue.⌅ Jason⌅ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: Friday, March 12, 2010 2:50 PM⇢ To: Ing, Pearl (MEI)⇢ Cc: Sarah Simmons; Jason Chee-Aloy⇢ Subject: Ground-mounted micro-FIT solar PV options⇢ Pearl, here is the options paper as requested. My thanks to Sarah Simmons at OPA for her comments and assistance. Leo 2947 Issue: What is the Ministry’s response to the aggregation of ground-mounted microFIT solar PV projects where lease payments are made to owners of private properties in rural areas? Background: Aggregation of microFIT solar PV projects occurs when a firm installs and operates microFIT ground-mounted solar PV arrays on rural properties (including vacant lots) and then makes lease payments to the property owner. It appears that most of these installations are ground-mounted with a smaller percentage of pole-mounted. The 80.2 cents/kWh prices was originally designed micro-scale rooftop PV projects only. With stakeholder feedback, it was decided that both rooftop and ground mounted PV would have access to this higher price. The "rooftop price" of 80.2 cents/kWh is now primarily being developed for projects on the ground made from concrete foundations, a metal frame and a panel array in a farmer’s⇠ field. These ground-mounted arrays cost between $70,000 and $80,000 to construct rather than the $100,000 estimated for roof-top solar microFIT projects. Section 17 It should be noted that there is also some aggregation of rooftop solar PV projects, but roof-top aggregation is not at issue since it promotes the development of rooftop solar PV. It is also important to note that according to the current FIT price schedule, the current 80.2 cent/kWh price for solar PV is intended for any solar PV project that has a capacity of 10 kW or less. The following options are being considered: 2948 Section 13 Section 13 Section 13 Section 13 2952 Sarah Simmons↵ From: Sarah Simmons% Sent: April-06-10 12:52 PM% To: Jim MacDougall% Subject: Emailing: Briefing Note - Ground mounted solar PV 23Mar10.doc% Attachments: Briefing Note - Ground mounted solar PV 23Mar10.doc% <> Saved here: N:\Procurement\Domestic Supply\Feed⇢ In Tariff (FIT)\microFIT\Briefings and issues notes% 2953 microFIT Program Briefing Note: Ground-mounted solar PV March 23, 2010 Background: The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. In the draft FIT price schedule released for stakeholder consultation, the 80.2c/kWh price was only available for rooftop solar PV projects 10 kW or less. With feedback from stakeholders, OPA decided to allow both rooftop and ground-mounted solar PV projects access to this higher price o The justification for this change was that certain rooftops were unsuitable for solar PV (e.g., shaded or not structurally sound) and that access to the program should not be restricted if a homeowner had a suitable piece of land to constructed a ground-mounted project. It was expected that ground-mounted solar PV microFIT projects would be the “exception” rather than the majority. After discussion with a microFIT developer with more than 900 applications for ground-mounted projects, it was discovered that 25-30% of their applications were to be installed on vacant lots. Statistics1: Since October 1, 2009, 7300 applications have been submitted to the microFIT program. This level of uptake is far greater than anticipated. o Of these, 6300 (86%) are for projects greater than 8 kW and 750 (10%) are for projects less than 5 kW. o The average capacity of a microFIT application is 8.9 kW. This indicates that the vast majority of microFIT projects are ground-mounted solar PV! project since a typical rooftop would accommodate a 1-3 kW solar PV project. 2 7275 (99%) applications are for solar PV 3400 (47%) applications are for applicants that self identify as “homeowner”. This suggests that less than half of the projects are individual projects - as opposed to aggregated projects or projects submitted by a commercial corporation. 5600 (77%) applications are for projects in Hydro One’s service territory, indicating that the majority of projects are to be located in rural areas 1 2 Numbers are rounded and excluded terminated applications The microFIT application does not distinguish between rooftop solar PV or ground-mount solar PV. 1 2954 OPTION 1: Revise FIT price Schedule Description: The 10 kW and under price for solar PV to rooftop projects only. E.g., 80.2 c/kWh for rooftop solar PV projects 10 kW and under, and 44.3 c/kWh for all groundmounted projects. Ground-mounted projects would still be permitted in the microFIT program, however the price would be 44.3 c/kWh. Pros Cons Mitigates price impact of groundMany companies have made a mounted projects “business case” around 10 kW groundCurbs the growth of ground-mounted mounted solar PV at 80.2c/kWh projects (only more economically Farm and rural communities may feel viable projects would proceed) like they have lost an opportunity to Reduces the number of “project participate in the microFIT program splitting” issues currently seen in Creates a sense of instability in the microFIT application review and would market (e.g., “early program review”) help speed up the review process Reduces the economic viability of Re-focuses the microFIT program more micro-scale ground-mounted projects towards rooftop solar PV as was for homeowners. originally intended. Does not reduce the economic viability of micro-scale rooftop PV systems. OPTION 2: Restrict the microFIT program to projects that are 5 kW or less and make the firstprice tranche for solar PV 0-5kW. Description: Eligibility of the microFIT program would be limited to projects 5 kW or less. The price schedule would be revised – the first tranche would be 0-5kW (Any type), then 5-250 kW (rooftop). Ground mounted projects 5 kW and up would get 44.3c/kWh. Pros Cons Mitigation price impact of groundMay increase the number of mounted projects (if there are fewer applications and “project splitting” applications.) issues Limits the first price tranche to Creates a sense of instability in the “rooftop scale” projects only market (e.g., “early program review”) Many companies have made a “business case” around 10 kW groundmounted solar PV at 80.2c/kWh Inconsistent with OEB/industry definition of “micro-scale” May not curb the growth of the ground-mounted projects 2 2955 OPTION 3: Require that all microFIT projects for solar PV are connected on properties with anassociated load customer Description: Add an additional requirement to the microFIT program rules that specifies that the projects need to be located on properties with an associated load customers Pros Cons Ensures that projects are not built on Adds complexity to the microFIT vacant lots program and the review process Ensures that the microFIT program Lengthens the application review remains a “load displacement” process and may add additional program opportunity for ‘gaming’ Will not significantly decrease the number of microFIT applications Recommendation: - The microFIT program team recommends Option 1 o This option is consistent with the intent of the microFIT program. o The revision will reduce the number of project splitting concerns and will help to speed up the review process. o The revision will help ensure that growth of the microFIT program remains at a sustainable level. o The revision will limit the number of rural applications where transmission and distribution constraints may already exist. o This option would require introduction of “rooftop” in the microFIT rules The term “rooftop” is well defined in the FIT program and could be easily inserted into the microFIT program rules and contract. o This option does not limit the ability of “aggregators” to participate in the microFIT program. Aggregators would be encourage to develop projects on rooftops. - The implementation of the new rule should not affect applicants with submitted applications o Retroactive implementation of the new price schedule would be seen as unfair to project developers moving forward under the current rules and price schedule. 3 2956 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-20-10 10:14 AM↵ To: Jim MacDougall↵ Cc: Patricia Lightburn; Cindy Roks; Sheri Bizarro↵ Subject: RE: microFIT - 1.4↵ Attachments: Draft QA for v1.4 - 05April10.doc↵ Here is the draft Q&A I put together a while a go. I highlighted some text that will need to be changed based.⌧ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Jim MacDougall Sent: April 20, 2010 10:10 AM To: Sarah Simmons Cc: Patricia Lightburn; Cindy Roks; Sheri Bizarro Subject: RE: microFIT - 1.4 Can you make sure Cindy is in this loop? Particularly on web messaging and call centre support. Could you resend any web- posting or Q and A. Also, has anyone reviewed the program docs to ensure that they are up to date? Finally, we are going to insert the “ clarification of the definition of Rooftop ” at the same time, Patricia is finalizing that with A and B. Jim MacDougall , P.Eng. Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Sarah Simmons Sent: April 20, 2010 10:07 AM To: Damian Amole; Glenna Ford; Sheri Bizarro Cc: Jim MacDougall; Richard Duffy 2957 Subject: microFIT - 1.4 Not to get anyone ’ s hopes up.. but I just want to give you a head ’ s up that it seems like MEI is closer to making a decision on the microFIT rule change. When I know a date, I will let you know asap.⌧ I just want to confirm that we will be able to upload the documents and revise the applications form when needed. Please let me know if you have any questions or concerns about this. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email 2958 microFIT Program Q&A’s for v1.4 April 5, 2010 What changes are being implemented with version 1.4 of the microFIT program rules# and contract? The FIT price for solar PV projects 10 kW and under is available to rooftop projects only. In other words, rooftop solar PV projects 10 kW and under are eligible for 80.2 cents/kWh, and all ground mounted projects solar PV projects are eligible for 44.3 cents/kWh. Ground-mounted solar PV projects are still be permitted in the microFIT program, however the price would be 44.3 cents/kWh. Version 1.4 of the microFIT rules and contract introduces a new defined term - “Rooftop Facility”. Why is the OPA implementing these changes? The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. Since the launch of the program, the uptake of ground-mounted solar PV projects is far greater than expected. In fact, the vast majority of microFIT projects are for ground-mounted solar PV projects. The OPA is implementing this program change to mitigates price impact of ground-mounted projects and to re-focus the microFIT program towards rooftop solar PV, as it was originally intended. This program change will help ensure that growth of the microFIT program remains at a sustainable level for the long-term. [NTD: insert statistics?] What is the definition of rooftop? In the microFIT rules and contract, a “Rooftop Facility” means a facility that is participating in the microFIT Program that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. Will this program change affect projects that have already submitted applications? No, if you have submitted your application before [DATE], then your application will be processed under version 1.3 of the microFIT rules. Only new applications will be affected by this change. 2959 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-21-10 10:23 AM↵ To: Jim MacDougall↵ Subject: groundmount microFIT April 20 2010REVISED_with notes from SS.ppt↵ Attachments: groundmount microFIT April 20 2010REVISED_with notes from SS.ppt↵ my comments⌦ 2960 Ministry of Energy and Infrastructure◆ Groundmounted/Polemounted◆ MicroFIT◆ Minister’s Briefing April 20, 2010 Renewables and Energy Efficiency⇥ Division⇥ 1⇥ 2961 Ministry of Energy and Infrastructure◆ Context◆ All microFIT (⌫10 kW) solar PV projects have a tariff of 80.2 ¢/kWh.⇥ This price was originally designed for micro-scale⇥ rooftop PV projects only. With stakeholder feedback, it⇥ was decided that both rooftop and ground mounted⇥ PV would have access to this higher price.⇥ Now, instead of rooftop projects, microFIT solar⇥ Pole-mount system being installed. Spara /⇥ AGRIS is planning on using these.⇥ projects are primarily on the ground, made from⇥ concrete foundations, a metal frame and a panel array⇥ in a farmer’s field. These 10 kW ground-mounted arrays cost between⇥ $60,000 and $80,000 to construct rather than the⇥ $100,000 estimated for 10 kW roof-top solar microFIT⇥ projects.⇥ During the past 3 weeks, the OPA has received an average⇥ of 70 microFIT applications per day. [NTD: may want to⇥ Image of “typical installation” from check to make sure this number is still accurate.]⇥ Gengrowth brochure. As of March 31, 2010,⇥ Gengrowth submitted about 1,000⇥ 2⇥ groundmount microFIT applications. 2962 Ministry of Energy and Infrastructure◆ Context – Solar PV Groundmount microFIT Application Trends◆ ground-mounted solar PV microFIT applications⇥ 2500⇥ Application figures are net of⇥ terminated offers. [NTD: I⇥ think here it he means “net of terminated applications”] 2000⇥ 1500⇥ 1000⇥ 500⇥ 0⇥ October November December January February March⇥ Present value⇥ Estimated⇥ Number of (20 year $ Millions Applications⇥ per year⇥ Contracts offered⇥ Current applications⇥ Status quo after 1 year⇥ 2,300⇥ $ 18⇥ contract)⇥ [$ Million]⇥ Increase to typical⇥ residential bill (all in)⇥ [%] [$/year]⇥ $229 0.11% $ 1.58⇥ 6,857⇥ $ 55⇥ $683 0.33% $ 4.70⇥ 22,000⇥ $ 176⇥ $2,192 1.06% $ 15.08⇥ If the current trend of ~2,500 applications/month continues [NTD: here we are assuming that all⇥ the applications are ground mount.. This may not be true], after 1 year, there will be ~220 MW⇥ of groundmount microFIT. This would cost $176 million per year, (present value of $2.2 billion⇥ over the length of the contract) or about a 1.1% increase to the typical residential electricity bill.⇥ Costs would increase as more contracts are offered in future years.⇥ 29 microFIT groundmount solar PV proponents have 10 or more applications, representing⇥ about 1,880 applications [NTD: again, may want to double check this number, it is a week or⇥ two old.]⇥ 2963 3⇥ 3 ?5 . Ontario . Ministryof Energy and Infrastructure i i? i? Options Summary 2964 We . Ontario . Ministryof Energy and Infrastructure i i? a? Titian 1 (recommended option) 2965 Ty?) 1" Ontario Ministry of Energy and Infrastructure 0 2966 W. F>Ontario Mini-??3? ?f Energy and Infrastructure I S: i 2967 W. F>Ontario Mini-??3? ?f Energy and Infrastructure I S: i 2968 W. F>Ontario Mini-??3? ?f Energy and Infrastructure I S: i 2969 Ministry of Energy Section 13 and Infrastructure◆ Grandfathering◆ ⇥ Aggregators will have paid to prospect for land and sign conditional land leases. However, these costs are much⇥ 2970 if Ontario Ministry of Energy and Infrastructure Appendix 11 2971 Ministry of Energy and Infrastructure◆ What is Aggregation?◆ Aggregation of microFIT solar PV projects occurs when a firm installs and operates⇥ microFIT solar PV arrays on others’ property and then makes lease payments to the property owner.⇥ Aggregation provides a property owner with a microFIT participation opportunity without⇥ the high capital cost of the PV system.⇥ It appears that a large number of the installations under the microFIT program are being⇥ developed by aggregators that are installing:⇥ ground-mounted solar PV , with a smaller percentage of pole-mounted⇥ primarily in rural Ontario and farming communities, including vacant lots⇥ 29 microFIT groundmount solar PV proponents have 10 or more applications,⇥ representing about 1,880 applications [NTD: again, may want to double check these⇥ numbers as they are a couple of weeks old now]⇥ So far, there has been no aggregation of rooftop solar PV projects. [NTD: are we sure???⇥ What about Pur Energy?] However, rooftop aggregation would coincide with the intent of⇥ the microFIT program, promoting the development of rooftop solar PV where the⇥ electricity will be used on-site.⇥ 12⇥ 12 2972 - 2> Ontario ?i A i? Ministry of Energy and Infrastructure i im - ara Ca - Solar Co-o - 13 2973 Jim MacDougall From: Jim MacDougall Sent: April-21-10 3:38 PM To: Susan Kennedy; Sheri Bizarro; Sarah Simmons; Kristin Jenkins; Jason Chee-Aloy Cc: Richard Duffy Subject: RE: Pole-mount microFIT Issue Understood, but could we do it legally? My reading of Section 7 of the Rules is yes. Section 7 a) – Program Review The OPA intends to review and amend as necessary the microFIT Program, the microFIT Rules and the FIT Price Schedule at periodic intervals ( “ Scheduled Program Review ” ). The OPA may make an amendment outside of a Scheduled Program Review in response to ministerial directives, changes in laws and regulations, significant changes in market conditions or other circumstances as required. b) Notice of any amendment as a result of a Scheduled Program Review will be posted on the microFIT Program website at least 90 days before the effective date of the amendment. Notice of any amendment that is not as a result of a Scheduled Program Review will be posted by the OPA on the microFIT website before the effective date of such amendment, as circumstances may permit. c) Any amendment to the microFIT Program, the microFIT Rules and microFIT Contract will not affect existing microFIT Contracts and will not affect Applicants that have a Conditional Offer of microFIT Contract at the time notice of an amendment is given. Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Susan Kennedy Sent: April 21, 2010 8:44 AM To: Sheri Bizarro; Sarah Simmons; Kristin Jenkins; Jason Chee - Aloy; Jim MacDougall Cc: Richard Duffy Subject: RE: Pole- mount microFIT Issue I agree with Sheri and Sarah regarding applications that have already been submitted. Managing the "change date" may need a bit of thought, just to prevent a flood of ground mount applications prior to the rule change deadline. ----- Original Message ----From: Sheri Bizarro Sent: April 21, 2010 8:36 AM To: Sarah Simmons; Kristin Jenkins; Jason Chee - Aloy; Jim MacDougall Cc: Susan Kennedy; Richard Duffy Subject: Re: Pole- mount microFIT Issue 2974 I agree with sarah on this. Not only would it be an administrative nightmare because you would have to withdraw all 5000 + applications and have every one reapply, not only would we have to work with IT to change the tools again but overall I don't know how the opa could justify to the 5000 that this was a fair way to proceed. They submitted applications based on a set of rules and prices. We can't just turn around midway thru and say the rules have changed. I think we need to set a date ie april 30th, and any application from that date forward is subject to new pricing schedule and rules. Just my thoughts ----- Original Message ----From: Sarah Simmons To: Kristin Jenkins; Jason Chee - Aloy; Jim MacDougall; Sheri Bizarro CC: Susan Kennedy; Richard Duffy Sent: Wed Apr 21 08:27:26 2010 Subject: RE: Pole- mount microFIT Issue This is a HUGE problem! We do not have enough data for the applicants that have currently submitted applications under the microFIT program to process them under v1.4 of the rules. We do not know if they are ROOFTOP or not! Basically it would mean that for all 5000 applications that we have not yet processed – we would need to get the applicant to RESUMBIT new information! Also, this approach is counter to the approach that we discussed with our IT group. We need more lead time to implement and to think thru the processing time if this approach is pursued. Sarah Simmons Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email _________________________ _____ __ From: Kristin Jenkins Sent: April 20, 2010 5:26 PM To: Jason Chee- Aloy; Michael Killeavy; JoAnne Butler; Ben Chin; Colin Andersen; Perry Cecchini; Jim MacDougall; Sheri Bizarro; Sarah Simmons 2975 Subject: Pole- mount microFIT Issue Pearl Ing just called me this afternoon to pass on the following information: Ø REFO staff briefed MO staff today. Ø MO staff concerned about price, criticism from farmers and on flipside criticism that government got “ snowed ” and ratepayers now stuck with these contracts for 20 years Ø Major questions raised at today’ s meeting – 1) is it possible to apply a new/lower price to applicants who have not yet received a conditional offer? 2) What ’ s the communications plan? Ø Pearl Ing will send Jim MacDougall slide deck with specific requests for updating Ø Minister will be briefed next week; REFO will likely want OPA to be part of the briefing Ø In the meantime, REFO asked if it is possible to stop processing microFIT applications until there is clarity on this issue; I spoke to Jim and he has asked his staff to stop sending out conditional offers for the time being. Kristin 2976 Jim MacDougall From: Jim MacDougall Sent: April-23-10 11:33 AM To: Nadeem Anwar Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca Subject: analysis Can you run a quick analysis?⇣ can you run the FIT price model assuming for microFIT solar PV:⇣ capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW⇣ and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 1 6,000, 1 6,500 and 1 7,000 kWh per 1 0 kW PV system per year ?⇢ This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours.⇣ Leo / Clarence⇣ I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches.⇣ I hope it keeps us in the 60 cent range ...⇣ Nadeem, pls copy all here wiht results.⇣ Jim MacDougall, P.Eng.⇣ Manager, Distributed Generation⇣ Ontario Power Authority⇣ (416) 969 - 6415⇣ From: Nadeem Anwar↵ Sent: Tue 20/04/2010 4:55 PM↵ To: Jim MacDougall↵ Subject: Accepted: Updated: Weekly FIT Meetings - Jim/Patricia/Sarah/Cindy/Sheri/Nadeem/Rebecca/AnaMaria/Julia↵ 2977 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: April-23-10 11:36 AM↵ To: Jim MacDougall↵ Subject: RE: analysis↵ Hi Jim⌃ I received it and will get back to everyone with results.⌃ Regards⌃ Nadeem⌃ From: Jim MacDougall Sent: Friday, April 23, 2010 11:33 AM To: Nadeem Anwar Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca Subject: analysis Can you run a quick analysis?⌃ can you run the FIT price model assuming for microFIT solar PV:⌃ capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW⌃ and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 1 6,000, 1 6,500 and 1 7,000 kWh per 1 0 kW PV system per year ?⇢ This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours.⌃ Leo / Clarence⌃ I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches.⌃ I hope it keeps us in the 60 cent range ...⌃ Nadeem, pls copy all here wiht results.⌃ Jim MacDougall, P.Eng.⌃ Manager, Distributed Generation⌃ Ontario Power Authority⌃ (416) 969 - 6415⌃ From: Nadeem Anwar Sent: Tue 20/04/2010 4:55 PM To: Jim MacDougall Subject: Accepted: Updated: Weekly FIT Meetings - Jim/Patricia/Sarah/Cindy/Sheri/Nadeem/Rebecca/AnaMaria/Julia 2978 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: April-23-10 12:03 PM↵ To: Jim MacDougall↵ Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca↵ Subject: RE: analysis -microFIT Solar PV↵ Hi Everyone↵ Please see below the FIT Price Model assuming for microFIT Solar- PV based on the assumptions provide in the email.↵ FIT Price Model for microFIT Solar PV◆ Annual Capacity Factor (ACF in %) Capital Cost Notes/Remarks◆ 18.8% 18.3% 19.4%◆ (per KW)◆ 7000 48.7 7500 52.1 8000 55.5 8500 58.9 ¢ kWh ¢ kWh ¢ kWh ¢ kWh 47.4 50.7 54.0 57.3 ¢ kWh ¢ kWh ¢ kWh ¢ kWh 45.9 49.1 52.3 55.6 ¢ kWh↵ ¢ kWh ¢ kWh↵ ¢ kWh↵ Base Case Scenario↵ Regards↵ Nadeem Anwar↵ From: Jim MacDougall Sent: Friday, April 23, 2010 11:33 AM To: Nadeem Anwar Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca Subject: analysis Can you run a quick analysis?↵ can you run the FIT price model assuming for microFIT solar PV:↵ capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW↵ and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 1 6,000, 1 6,500 and 1 7,000 kWh per 1 0 kW PV system per year ?⇢ This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours.↵ Leo / Clarence↵ I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches.↵ I hope it keeps us in the 60 cent range ...↵ 2979 Nadeem, pls copy all here wiht results.↵ Jim MacDougall, P.Eng.↵ Manager, Distributed Generation↵ Ontario Power Authority↵ (416) 969 - 6415↵ From: Nadeem Anwar Sent: Tue 20/04/2010 4:55 PM To: Jim MacDougall Subject: Accepted: Updated: Weekly FIT Meetings - Jim/Patricia/Sarah/Cindy/Sheri/Nadeem/Rebecca/AnaMaria/Julia 2980 Jim MacDougall From: Jim MacDougall Sent: April-23-10 12:09 PM To: Nadeem Anwar Cc: 'leo.tasca@ontario.ca'; Sheri Bizarro; 'Clarence.Cheng@ontario.ca' Subject: Re: analysis-microFIT Solar PV Awesome. I love it when results match desired outcome. 58.8c should be a cap, if we dont go for 44.3! Thx Nadeem! Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Nadeem Anwar To: Jim MacDougall CC: leo.tasca@ontario.ca ; Sheri Bizarro; Clarence.Cheng@ontario.ca Sent: Fri Apr 23 12:03:07 2010 Subject: RE: analysis - microFIT Solar PV Hi Everyone Please see below the FIT Price Model assuming for microFIT Solar - PV based on the assumptions provide in the email. FIT Price Model for microFIT Solar PV Annual Capacity Factor (ACF in %)◆ 2981 Notes/Remarks◆ Capital Cost (per KW) 18.3%◆ 18.8%◆ 19.4%◆ 7000 48.7 ¢ kWh 47.4 ¢ kWh 45.9 ¢ kWh 7500 52.1 ¢ kWh 50.7 ¢ kWh 49.1 ¢ kWh Base Case Scenario◆ 8000 55.5 ¢ kWh 54.0 ¢ kWh 52.3 ¢ kWh 8500 58.9 ¢ kWh 57.3 ¢ kWh 55.6 ¢ kWh Regards 2982 Nadeem Anwar _________________________ _____ __ From: Jim MacDougall Sent: Friday, April 23, 2010 11:33 AM To: Nadeem Anwar Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca Subject: analysis Can you run a quick analysis? can you run the FIT price model assuming for microFIT solar PV: capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 16,000, 16,500 and 17,000 kWh per 10 kW PV system per year ? This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours. Leo / Clarence I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches. I hope it keeps us in the 60 cent range ... Nadeem, pls copy all here wiht results. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 2983 _________________________ _____ __ From: Nadeem Anwar Sent: Tue 20/04/2010 4:55 PM To: Jim MacDougall Subject: Accepted: Updated: Weekly FIT Meetings - Jim/Patricia/Sarah/Cindy/Sheri/Nadeem/Rebecca/Ana - Maria/Julia 2984 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: April-23-10 12:22 PM✏ To: Jim MacDougall; Nadeem Anwar✏ Cc: Sheri Bizarro; Cheng, Clarence (MEI)✏ Subject: RE: analysis -microFIT Solar PV✏ Thank you very much everyone. This is greatly appreciated. Leo⇠ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: April 23, 2010 12:09 PM⇢ To: Nadeem Anwar⇢ Cc: Tasca, Leo (MEI); Sheri Bizarro; Cheng, Clarence (MEI)⇢ Subject: Re: analysis-microFIT Solar PV⇢ Awesome. I love it when results match desired outcome. 58.8c should be a cap, if we dont go for 44.3! Thx Nadeem! Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Nadeem Anwar To: Jim MacDougall CC: leo.tasca@ontario.ca ; Sheri Bizarro; Clarence.Cheng@ontario.ca Sent: Fri Apr 23 12:03:07 2010 Subject: RE: analysis - microFIT Solar PV Hi Everyone Please see below the FIT Price Model assuming for microFIT Solar - PV based on the assumptions provide in the email. FIT Price Model for microFIT Solar PV 2985 Annual Capacity Factor (ACF in %)◆ Notes/Remarks◆ Capital Cost (per KW) 18.3%◆ 18.8%◆ 19.4%◆ 7000 48.7 ¢ kWh 47.4 ¢ kWh 45.9 ¢ kWh 7500 52.1 ¢ kWh 50.7 ¢ kWh 49.1 ¢ kWh Base Case Scenario◆ 8000 55.5 ¢ kWh 54.0 ¢ kWh 52.3 ¢ kWh 8500 58.9 ¢ kWh 57.3 ¢ kWh 55.6 ¢ kWh 2986 Regards Nadeem Anwar _________________________ _____ __ From: Jim MacDougall Sent: Friday, April 23, 2010 11:33 AM To: Nadeem Anwar Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca Subject: analysis Can you run a quick analysis? can you run the FIT price model assuming for microFIT solar PV: capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 16,000, 16,500 and 17,000 kWh per 10 kW PV system per year ? This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours. Leo / Clarence I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches. I hope it keeps us in the 60 cent range ... Nadeem, pls copy all here wiht results. 2987 Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 _________________________ _____ __ From: Nadeem Anwar Sent: Tue 20/04/2010 4:55 PM To: Jim MacDougall Subject: Accepted: Updated: Weekly FIT Meetings - Jim/Patricia/Sarah/Cindy/Sheri/Nadeem/Rebecca/Ana - Maria/Julia 2988 Sarah Simmons↵ From: Sarah Simmons↵ Sent: April-26-10 12:41 PM↵ To: Jason Chee-Aloy↵ Cc: Susan Kennedy; Kristin Jenkins; Michael Killeavy; Jim MacDougall; Sheri Bizarro;↵ Richard Duffy; Cindy Roks; Patricia Lightburn↵ Subject: RE: FIT/microFIT Loose Ends↵ 3. microFIT pole - mount price (Sarah)⇠ The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small⇠ businesses. Uptake to the microFIT program is significantly higher than what was originally expected, and is dominated by ground- mounted projects. This indicates that the price offered for ground - mounted projects is too high (presently all solar PV projects 1 0 kW and less receive $0.802/kWh.) Hydro One and other LDCs have expressed, concern that, due to the volume of connection requests, they may have difficulty connecting these projects to the grid. The OPA recommends taking immediate action to address this issue and is working with MEI to discuss, options to revise the program, as well as logistics for implementation. The OPA’ s preferred approach is to restrict⇠ the $0.802/kWh to rooftop solar PV projects only, and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about,, (1 ) the appropriate price for ground - mounted projects under 10 kW ($0.588/kWh vs. $0.433/kWh), and (2) grandfathering applications that have been submitted to the program. Also of concern, is that the OPA has been, directed to develop TV advertisements for the microFIT program.⇠ *did I cover the points appropriately? I really tried to keep it short., Sarah Simmons↵ Analyst⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St. W. Suite 1600⇠ Toronto , ON , M5H 1T1⇠ Tel 416.969.6213⇠ Fax 416.967.1947⇠ www.powerauthority.on.ca⇠ P please consider the environment before printing this email Not Responsive 2989 Not Responsive Not Responsive From: Jason Chee-Aloy✏ Sent: Monday, April 26, 2010 8:39 AM✏ To: Jim MacDougall; Sheri Bizarro; Richard Duffy; Sarah Simmons; Patricia Lightburn; Cindy Roks✏ Cc: Susan Kennedy; Kristin Jenkins; Michael Killeavy✏ Subject: FW: FIT/microFIT Loose Ends✏ Importance: High✏ Folks, We have asked JoAnne to raise several growing concerns we have about the administration of the FIT/microFIT Program relating to OPA vis- à - vis Government. JoAnne raised these concerns with Colin.⇠ As a result, Colin will be discussing issues with the Deputy Minister. In order to support this future discussion, we have been asked to prepare a briefing note for Colin, re: ‘ loose ends ’ . These are the ‘ loose end ’ items as I see it. 12. microFIT pole-mount price Not Responsive Any others? Let ’ s nail the list down within an hour and then I ’ ll propose a plan to have multiple people help to pull together a note by the end of the day. Thanks, Jason 2991 Jason From: JoAnne Butler✏ Sent: Friday, April 23, 2010 4:47 PM✏ To: Jason Chee-Aloy✏ Cc: Jim MacDougall✏ Subject: FIT/microFIT Loose Ends✏ Jason,⇠ I discussed with Colin today many of the issues that we talked about yesterday in our ER meeting as well as your earlier email, ie. priorities, control, etc. He has committed to set up a meeting with Craig and Fareed next, week. To prepare for this meeting, could you develop a briefing note outlining all of the current issues as you see, them? I am around Monday morning and we can develop the list together or I can review whatever you can get, prepared. Thanks…, JCB⇠ JoAnne C. Butler⇠ Vice President, Electricity Resources⇠ Ontario Power Authority 120 Adelaide Street West, Suite 1600⇠ To ronto , Ontario 416 - 969 - 6005 416 - 969 - 6071 M5H 1T1⇠ Tel., Fax., joanne.butler@powerauthority.on.ca⇠ 2992 Jim MacDougall From: Jim MacDougall Sent: April-26-10 12:44 PM To: Sarah Simmons; Jason Chee-Aloy Cc: Sheri Bizarro Subject: Re: FIT/microFIT Loose Ends I would change 'debate' to 'discussion'. Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB -----Original Message----From: Sarah Simmons To: Jason Chee-Aloy CC: Susan Kennedy; Kristin Jenkins; Michael Killeavy; Jim MacDougall; Sheri Bizarro; Richard Duffy; Cindy Roks; Patricia Lightburn Sent: Mon Apr 26 12:40:32 2010 Subject: RE: FIT/microFIT Loose Ends 3. microFIT pole-mount price (Sarah) The microFIT program was originally envisioned as a rooftop PV program for homeowners, institutions and small businesses. Uptake to the microFIT program is significantly higher than what was originally expected, and is dominated by ground-mounted projects. This indicates that the price offered for ground-mounted projects is too high (presently all solar PV projects 10 kW and less receive $0.802/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, they may have difficulty connecting these projects to the grid. The OPA recommends taking immediate action to address this issue and is working with MEI to discuss options to revise the program, as well as logistics for implementation. The OPA's preferred approach is to restrict the $0.802/kWh to rooftop solar PV projects only, and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about, (1) the appropriate price for ground-mounted projects under 10 kW ($0.588/kWh vs. $0.433/kWh), and (2) grandfathering applications that have been submitted to the program. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT program. *did I cover the points appropriately? I really tried to keep it short. 2993 Sarah Simmons Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email ________________________________ Not Responsive 2994 Not Responsive Not Responsive Not Responsive ________________________________ From: Jason Chee-Aloy Sent: Monday, April 26, 2010 8:39 AM To: Jim MacDougall; Sheri Bizarro; Richard Duffy; Sarah Simmons; Patricia Lightburn; Cindy Roks Cc: Susan Kennedy; Kristin Jenkins; Michael Killeavy Subject: FW: FIT/microFIT Loose Ends Importance: High Folks, We have asked JoAnne to raise several growing concerns we have about the administration of the FIT/microFIT Program relating to OPA vis- à -vis Government. JoAnne raised these concerns with Colin. As a result, Colin will be discussing issues with the Deputy Minister. In order to support this future discussion, we have been asked to prepare a briefing note for Colin, re: ‘ loose ends'. These are the ‘ loose end' items as I see it. 12. microFIT pole -mount price Not Responsive 2997 17. projected rate -payer impact Any others? Let's nail the list down within an hour and then I'll propose a plan to have multiple people help to pull together a note by the end of the day. Thanks, Jason ________________________________ From: JoAnne Butler Sent: Friday, April 23, 2010 4:47 PM To: Jason Chee-Aloy Cc: Jim MacDougall Subject: FIT/microFIT Loose Ends Jason, I discussed with Colin today many of the issues that we talked about yesterday in our ER meeting as well as your earlier email, ie. priorities, control, etc. He has committed to set up a meeting with Craig and Fareed next week. To prepare for this meeting, could you develop a briefing note outlining all of the current issues as you see them? I am around Monday morning and we can develop the list together or I can review whatever you can get prepared. Thanks …⇡ JCB JoAnne C. Butler 2998 Vice President, Electricity Resources Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, Ontario M5H 1T1 416-969-6005 Tel. 416-969-6071 Fax. joanne.butler@powerauthority.on.ca 2999 JoAnne Butler From: JoAnne Butler Sent: April-27-10 2:36 PM To: Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins; Jim MacDougall Subject: FIT/microFIT Loose Ends Attachments: FIT_Loose Ends_Note_April27JCB.doc Colin,⌥ As promised, attached please find a document, completed in collaboration from Jason and his team, Michael and myself, in which we outline the most pressing FIT/microFIT issues at this time. Please let us know if you need anything else or want us to book some time to go through it. Thanks… JCB⌥ JoAnne C. Butler⌥ Vice President, Electricity Resources⌥ Ontario Power Authority⇣ 120 Adelaide Street West, Suite 1600⌥ Toronto, Ontario M5H 1 T1 416 - 969 - 6005 416 - 969 - 6071 Tel. Fax. joanne.butler@powerauthority.on.ca⌥ 3000 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. The motivation for this memorandum really stems from the concern regarding how the OPA will facilitate changes and evolution of the FIT and microFIT Program design (i.e., Program Rules, standard contracts and price schedule) while working with Government towards achieving overarching policy objectives. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive In turn, each ‘loose end’ will be summarized in sub-sections below, including recommendations. Not Responsive 1 3001 Not Responsive microFIT Pole-Mount Price The microFIT Program was originally envisioned as primarily (as some other energy sources were expected to comprise of applicant projects) a rooftop solar PV program for homeowners, institutions and small businesses. Uptake to this program is significantly higher than was originally expected and is dominated by pole-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about: 1) the appropriate price for polemounted projects under 10 kW (58.8 cents/kWh vs. $43.3 cents/kWh); and, 2) “grandfathering” applications that have been submitted. If there is no “grandfathering”,# this will be a heavy administrative burden as at this time there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. Not Responsive 2 3002 Not Responsive Not Responsive Not Responsive Not Responsive 3006 Susan Kennedy Section 19 Minister of Energy and Infrastructure Ministre de l’Énergie et de l’Infrastructure Office of the Deputy Premier Bureau du vice-premier ministre 4th Floor, Hearst Block 900 Bay Street Toronto ON M7A 2E1 Tel.: 416-327-6758 Fax: 416-327-6754 www.ontario.ca/MEI 4e étage, édifice Hearst 900, rue Bay Toronto ON M7A 2E1 Tél. : 416 327-6758 Téléc. : 416 327-6754 www.ontario.ca/MEI Sept 24, 2009 Mr. Colin Andersen Chief Executive Officer Ontario Power Authority 1600–120 Adelaide Street West Toronto ON M5H 1T1 Dear Mr. Andersen: I write pursuant to my authority as the Minister of Energy and Infrastructure, in order to exercise. the statutory powers of ministerial direction which I have in respect of the Ontario Power Authority. (the “OPA”) under section 25.35 and section 25.32 of the Electricity Act, 1998 (the “EA”). I direct you to develop a feed-in tariff (“FIT”) program that is designed to procure energy from a( wide range of renewable energy sources. The development of this program is a key element of. meeting the objectives of the Green Energy and Green Economy Act, 2009 (the “Green Energy Act”)( and is critical to Ontario’s success in becoming a leading renewable energy jurisdiction. The objectives of the FIT Program are to: • Increase capacity of renewable energy supply to ensure adequate generation and reduce. emissions • Introduce a simpler method to procure and develop generating capacity from renewable. sources of energy • Enable new green industries through new investment and job creation • Provide incentives for investment in renewable energy technologies The program will be open to technologies that produce electricity from renewable sources including. wind, solar photovoltaic [“PV”], bioenergy, and hydro up to 50 MW. It will also recognize the costs. associated with promoting First Nations, Métis and community projects. The feed-in tariff program will be announced on September 24, 2009. Proponents will have to. comply with FIT Program rules as set out by the Ontario Power Authority and are subject to all laws. and regulations of the Province of Ontario and Government of Canada. …/cont’d 3008 -2In setting and re-setting prices in accordance with program rules, the OPA should generally be. guided by the principle that the prices should seek to cover the costs that projects of a particular. type and size category are generally expected to experience, plus a reasonable return on investment. FIT Contract The FIT Program should provide for a 20-year power purchase agreement in respect of all. renewable fuels other than waterpower, and a 40-year power purchase agreement in respect of. waterpower projects. The contract should require the developer to design, build and operate a. renewable generating facility and in exchange should provide for guaranteed, long-term pricing for. the output of the renewable generating facility. Transition from RESOP In order to assist additional renewable energy projects in achieving commercial operation, the OPA. shall offer RESOP contract holders that have not achieved commercial operation the following. options for 30 days from the date that applications may be submitted to the OPA under the FIT. Program: 1. 2. Rescind their contract and apply for a FIT contract; or For wind projects that have received their Certificate of Approval from the Ministry of the. Environment and are able to achieve commercial operation in 2010, an amendment to their. contract that will require them to post security and will make other consequential changes,. and in return will provide them with the average RES III price of $121/MWh and the right to. retain any ecoEnergy for Renewable Power incentive. Domestic Content It is also important that the feed-in tariff program provide an opportunity for Ontario manufacturers. to participate in the economic benefits that will flow from the program. Therefore, I direct the OPA. to require that each wind power and solar PV project and solar microFIT project contain a defined. percentage of domestic content. In order to implement this in a simple and verifiable manner, the. FIT Contract should include a standardized method for calculating the level of domestic content in a. project. Domestic content provisions will be enforced through the FIT Contract. Developers who do not. achieve the domestic content requirements should be subject to significant commercial consequences. under the FIT contract. I direct the OPA to include in the FIT rules a requirement that the applicant submit a plan for. meeting the domestic content goals. This requirement will not apply to microFIT solar projects. Wind Power Equipment and expenditures on “balance of plant” will count towards domestic content. “Balance( of plant” includes resource assessment, design, transportation, construction materials, services and. labour. This includes services such as engineering, legal and consulting studies referable to the. renewable energy project. The value of land and operations and maintenance will not count toward. the domestic content calculation. …/cont’d 3009 -3The amount of domestic content will increase over time: 1. Developers who have a milestone date for commercial operation on or before Dec. 31, 2011. will have to meet a domestic content requirement of 25%. 2. Developers who have a milestone date for commercial operation on or after January 1, 2012. will have to meet a domestic content requirement of 50%. Solar PV Equipment and expenditures on “balance of plant” will also count towards domestic content.( “Balance of plant” includes resource assessment, design, transportation, construction materials,. services and labour referable to the renewable energy project. This includes services such as. engineering, legal and consulting studies. The value of land and operations and maintenance will. not count toward the domestic content calculation. The amount of domestic content will increase over time: 1. Developers who have a milestone date for commercial operation on or before Dec. 31, 2010. will have to meet a domestic content requirement of 50%. 2. Developers who have a milestone date for commercial operation on or after January 1, 2011. will have to meet a domestic content requirement of 60%. Solar PV MicroFIT Equipment and expenditures on “balance of plant” will also count towards domestic content.( “Balance of plant” includes resource assessment, design, transportation, construction materials,( services and labour referable to the renewable energy project. This includes services such as. engineering, legal and consulting studies. The value of land and operations and maintenance will. not count toward the domestic content calculation. The amount of domestic content will increase over time: 1. Developers who reach commercial operation on or before Dec. 31, 2010 will have to meet a. domestic content requirement of 40%. 2. Developers who reach commercial operation on or after January 1, 2011 will have to meet a. domestic content requirement of 60%. Aboriginal and Community Participation Pursuant to subsection 25.32(4.4) and 25.35 of the EA, I direct the OPA to require in the FIT Program. rules that an applicant for a project with a FIT contract must acknowledge the important role that. effective consultation with aboriginal communities may play in the successful planning,. development and operation of generating facilities and must be prepared to undertake its. appropriate role in such consultations and address the interests or concerns of First Nation and. Métis communities in good faith and in compliance with relevant laws, regulations and policies. Pursuant to subsections 25.32(4.5), (4.6) and 25.35 of the EA, I direct the OPA to encourage. aboriginal and community projects under the FIT Program by providing security deposit. requirements for such projects that are less than the standard levels. …/cont’d 3010 -4- Pursuant to section 25.35 and subsections 25.32(4.5) and (4.6) of the EA, I direct the OPA to establish. in the FIT Program’s pricing schedule one or more price adders for First Nation and Métis people( and for communities. These price adders should be designed to be proportional to the economic. interest that the aboriginal or local community applicant has in the project, such that projects in. which the applicant has a greater interest attract a larger adder. Restrictions on Prime Agricultural Land Pursuant to section 25.35, I direct the Ontario Power Authority, in its FIT Program, not to enter into. FIT contracts for energy generated by ground-mounted solar photovoltaic generation facilities. greater than 100 kW where those facilities are located on: • • land comprised of Canada Land Inventory Class 1 and 2 soils, Specialty Crop Areas within the meaning of the 2005 Provincial Policy Statement. Procurement of energy generated by ground-mounted solar photovoltaic facilities greater than 100. kW located on lands comprised of Canada Land Inventory Class 3 soils shall not exceed a total of. 500 MW (nameplate capacity). Furthermore, I direct the OPA to allocate the procurement of energy. generated by ground-mounted solar photovoltaic facilities located on lands comprised of Canada. Land Inventory Class 3 soils among the Regional Administrative Boundary Alignments (North,. West, East and Central) used by the Ontario Realty Corporation. The allocation shall be based on. the proportion of Class 3 soil land found in each region in relation to the total Class 3 soil land in. Ontario. This part of the feed-in tariff direction shall remain effective until such time as a regulation is made. under clause 114(1.3)(g.1) of the Electricity Act, 1998 as amended. Programs Supporting FIT (“Support Programs”) In order to encourage aboriginal community, community group and municipal involvement in the. development of renewable energy generation, I direct the OPA, pursuant to subsections 25.32(4.5). and (4.6) of the EA, to establish programs to facilitate the participation of aboriginal communities. and community groups and organizations in the development of renewable energy generation. facilities. I also direct the OPA, under subsection 25.32(4.7) of the EA, to develop and deliver a. program that is designed to reimburse the direct costs incurred by municipalities in order to. facilitate the development of renewable energy generation facilities. Community Energy Partnerships Program Pursuant to subsection 25.32 (4.6), I direct the OPA to develop and deliver through a third party, a. Community Energy Partnerships Program (“CEPP”) that will provide financial assistance in the( form of grants to community groups that are interested in developing renewable energy generation. projects in Ontario that are 10 MW or less in size. …/cont’d 3011 -5- The CEPP should be designed and administered to assist community groups in paying for one time. financial assistance of up to $200,000 for project planning costs, as well as feasibility, environmental. and engineering studies associated with the development of a project. Examples of eligible costs. would include costs related to: o Site investigation and control o Resource assessments o Business and Financial planning o Project management o Studies associated with applying for a Renewable Energy Approval Eligible participants for the program would include: • one or more Ontario residents developing a renewable energy project that would be greater. than 10 kW and less than or equal to 10 MW. • an Ontario-registered charity or Ontario-based not-for-profit organization. • A co-op owned by residents of Ontario Municipal Renewable Energy Program Pursuant to subsection 25.32(4.7), I direct the OPA to develop and deliver a Municipal Renewable. Energy Program (“MREP”) to reimburse municipalities for direct costs associated with facilitating. the development of renewable energy generation facilities in accordance with the following. considerations and guidelines. The purpose of the Program will be to ensure that municipalities, in hosting renewable energy. facilities within their communities, are able to be reimbursed for costs incurred directly as a result of. facilitating the development of these facilities. Examples of costs that could be considered eligible. under the Program include, but would not be limited to, costs associated with rehabilitation of. municipal infrastructure, traffic management, and training of emergency services personnel. Key principles for the Program include the following: • • • • • • • All municipalities would be eligible to apply to the Program. In seeking reimbursement of costs, municipalities would be required to provide verifiable. evidence that the costs were incurred specifically as a result of facilitating the development. of renewable energy generation facilities that have a contract under the FIT Program. Costs incurred by developers of renewable energy generation facilities would not be eligible. for reimbursement through the MREP, for example, to obtain a permit, or other approvals, or. for repairs to infrastructure damaged during construction of a facility. Municipalities are expected to work with developers to ensure that developers remain. responsible for reasonable direct costs incurred in the development of the project. This. program is intended for those costs related to the project that the municipality must incur. but that could not reasonably be recovered from the developer. Municipalities would be eligible to apply to the program at any stage following the issuance. of required municipal authorizations such as building permits. Applications would only be considered for costs already incurred by municipalities, not for. anticipated future costs. Ongoing maintenance, operating and staffing costs, would not be eligible. …/cont’d 3012 -6- It is expected that the OPA will begin development of the Program immediately, and be ready to. launch the program by the first quarter of 2010. Aboriginal Energy Partnerships Program (AEPP) Pursuant to subsection 25.32 (4.5) of the Electricity Act, 1998, I direct the OPA to develop and deliver. an Aboriginal Energy Partnerships Program (“AEPP”) that will support the participation of First. Nation and Métis communities in renewable energy development in Ontario. AEPP is to be a program designed to assist First Nation and Métis communities to participate in the. development of Ontario’s electricity system. The Program will consist of 3 parts to facilitate( increasing Aboriginal capacity to participate in developing renewable energy projects, including: • Support for Community Energy Plans - A Community Energy Plan will allow First Nation. and Métis communities to determine local interests, needs and opportunities for renewable. energy development and conservation; • Support through funding of some of the soft costs associated with the development of First. Nation and Métis renewable energy projects; and • Support to establish the Aboriginal Renewable Energy Networks (AREN), to facilitate. sharing of knowledge and best practices related to First Nation and Métis renewable energy. projects. The program will be open to Aboriginal communities as defined by the FIT rules. In order to obtain. advice and guidance on the development of program details, the OPA will establish an Aboriginal. Advisory Committee. Governance of Programs Program Delivery It is my expectation that the OPA will follow a competitive procurement process in selecting a third. party to deliver the CEPP or any of the other Support Programs. Eligibility It is my expectation that renewable energy projects with multiple partnerships should be. encouraged and rewarded, whereby projects with First Nation and Métis participation as well as. Community participation will be rewarded with the appropriate percentage of the adder dependent. on the extent of their economic interest. If the First Nation and Métis partnership and Community. partnership results in a 50% or greater combined equity, the project shall be eligible for only one of. the adders. …/cont’d 3013 -7Audit It is our expectation that the OPA will establish appropriate policies and procedures with respect to. the administration of the Programs including ensuring that program participants are subject to. being audited. Reporting Beginning in calendar year 2010, the OPA shall include in its annual report an update on the results. of the FIT Program and its Support Programs. Review The OPA shall review the FIT Program, including the pricing schedule, and its Support Programs at. least once every two years and report to the Minister with results and suggestions for improvement. Effective Date This Direction takes effect on the date issued. Sincerely, George Smitherman Deputy Premier, Minister 3014 Jim MacDougall From: Jim MacDougall Sent: April-28-10 9:01 AM To: Jason Chee-Aloy Subject: RE: FIT Program Changes Attachments: FIT_Loose Ends_Note_April28JCB.doc amended as discussed. I am sending the track changes version, but really with the 2 sections added. Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Jason Chee-Aloy Sent: Fri 23/04/2010 10:33 AM To: JoAnne Butler Cc: Jim MacDougall Subject: FIT Program Changes JoAnne,⌥ Further to our discussion a couple of days ago, can you please raise with Colin the concern we have, re: owning the FIT Program design and Government intervention with respect to potential changes in the Program?⌥ These two examples illustrate the problem.⌥ One, changes to microFIT pricing for pole- or ground- mount solar PV. OPA staff reach consensus to lower the price to 44.3 cents/kWh (same for all ground- mount projects, no matter size). REFO did not have issue weeks ago. REFO asked us to provide analysis on the development cost of these projects and we helped. REFO staff then used these numbers to come up with a new price of 58.8 cents/kWh. As a result, their recommended option to MO will be 58.8 cents/kWh and our preference is not planned to be put forward. While this back and forth is going on, we continue to receive on average 100 applications per day and have received around 10,000 application in total.⌥ Two, consideration to changing the 80% revenue from future contract related products for biogas projects. OPA has never suggested or agreed to discuss this with stakeholders. REFO/MO wishes us to do so right now.⌥ All in all, there are three problems with the above. First, who ‘ owns ’ the FIT Program? It’ s one thing to⌥ keep REFO/Government in the loop with changes and issues (and we get this point considering the importance of the Program as it relates to Government policy objectives) but it ’ s another thing to take direction from Government – especially on very detailed Program elements. Second, these are technical issues that the Government does not fully understand (e.g., the contract related products issue is not really an issue – it ’ s ignorance on behalf of biogas developers and Government – despite our repeated 3015 really an issue – it ’ s ignorance on behalf of biogas developers and Government – despite our repeated points within various discussions). It seems like they are just trying to make all stakeholders happy. Third, working this way is terribly inefficient. OPA points out an issue, Government asks a lot of questions, OPA educates Government, Government goes off and meets with stakeholders, Government comes back to the OPA asking different questions or requesting further analysis or wanting alternate solutions, etc., etc., OPA has more discussions with Government, bureaucrats make recommendations to political staff (that are not necessarily in line with OPA), on and on and on ... without getting any closer to really driving home the right answer.⌥ Like I said, I no longer know where the lines are between OPA and Government. My weekly meetings with REFO help but REFO isn’ t always kept in the loop or on the same page within MEI (e.g., tv ads).⌥ This is beginning to really drive Procurement staff crazy and it ’s resolution ASAP.⌥ eating up our time. We need higher level Thanks,⌥ Jason⌃ 3016 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration. The motivation for this memorandum really stems from the concern regarding how the OPA will facilitate changes and evolution of the FIT and microFIT Program design (i.e., Program Rules, standard contracts and price schedule) while working with Government towards achieving overarching policy objectives. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any apropriate changes to the FIT program. In turn, each ‘loose end’ Not Responsive 1 3017 Not Responsive microFIT Pole-Mount Price The microFIT Program was originally envisioned as primarily (as some other energy sources were expected to comprise of applicant projects) a rooftop solar PV program for homeowners, institutions and small businesses. Uptake to this program is significantly higher than was originally expected and is dominated by pole-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about: 1) the appropriate price for polemounted projects under 10 kW (58.8 cents/kWh vs. $43.3 cents/kWh); and, 2) “grandfathering” applications that have been submitted. If there is no “grandfathering”," this will be a heavy administrative burden as at this time there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. 2 3018 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 3023 Jim MacDougall From: Jim MacDougall Sent: April-28-10 9:17 AM To: JoAnne Butler; Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins Subject: RE: FIT/microFIT Loose Ends Attachments: FIT_Loose Ends_Note_April28JCB.doc Colin;⌥ I have added a couple of items that we have discussed in regard to roles and responsibilities as between OPA and⌥ MEI, and that I have discussed with Jason and JoAnne.⌥ The document is in track changes mode and a clean version.⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Ontario Power Authority⌥ (416) 969 - 6415⌥ From: JoAnne Butler Sent: Tue 27/04/2010 2:35 PM To: Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins; Jim MacDougall Subject: FIT/microFIT Loose Ends Colin,⌥ As promised, attached please find a document, completed in collaboration from Jason and his team, Michael and myself, in which we outline the most pressing FIT/microFIT issues at this time. Please let us know if you need anything else or want us to book some time to go through it. Thanks… JCB⌥ JoAnne C. Butler⌥ Vice President, Electricity Resources⌥ Ontario Power Authority⇣ 120 Adelaide Street West, Suite 1600⌥ Toronto, Ontario M5H 1 T1 416 - 969 - 6005 416 - 969 - 6071 Tel. Fax. joanne.butler@powerauthority.on.ca⌥ 3024 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration. The motivation for this memorandum really stems from the concern regarding how the OPA will facilitate changes and evolution of the FIT and microFIT Program design (i.e., Program Rules, standard contracts and price schedule) while working with Government towards achieving overarching policy objectives. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any apropriate changes to the FIT program. In turn, each ‘loose end’ Not Responsive 1 3025 Not Responsive microFIT Pole-Mount Price The microFIT Program was originally envisioned as primarily (as some other energy sources were expected to comprise of applicant projects) a rooftop solar PV program for homeowners, institutions and small businesses. Uptake to this program is significantly higher than was originally expected and is dominated by pole-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about: 1) the appropriate price for polemounted projects under 10 kW (58.8 cents/kWh vs. $43.3 cents/kWh); and, 2) “grandfathering” applications that have been submitted. If there is no “grandfathering”," this will be a heavy administrative burden as at this time there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. 2 3026 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 3031 Jim MacDougall From: Jim MacDougall Sent: April-28-10 9:19 AM To: Jim MacDougall; JoAnne Butler; Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins Subject: RE: FIT/microFIT Loose Ends Attachments: FIT_Loose Ends_Note_April28JCB clean.doc Darn - clean version atttached.✓ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation✓ Ontario Power Authority✓ (416) 969 - 6415✓ From: Jim MacDougall Sent: Wed 28/04/2010 9:17 AM To: JoAnne Butler; Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins Subject: RE: FIT/microFIT Loose Ends Colin;✓ I have added a couple of items that we have discussed in regard to roles and responsibilities as between OPA and✓ MEI, and that I have discussed with Jason and JoAnne.✓ The document is in track changes mode and a clean version.✓ Jim MacDougall, P.Eng.✓ Manager, Distributed Generation✓ Ontario Power Authority✓ (416) 969 - 6415✓ From: JoAnne Butler Sent: Tue 27/04/2010 2:35 PM To: Colin Andersen Cc: Jason Chee-Aloy; Michael Killeavy; Ben Chin; Kristin Jenkins; Jim MacDougall Subject: FIT/microFIT Loose Ends Colin,✓ As promised, attached please find a document, completed in collaboration from Jason and his team, Michael and myself, in which we outline the most pressing FIT/microFIT issues at this time. Please let us know if you need anything else or want us to book some time to go through it. Thanks… JCB✓ JoAnne C. Butler✓ Vice President, Electricity Resources✓ 3032 Vice President, Electricity Resources✓ Ontario Power Authority⇣ 120 Adelaide Street West, Suite 1600✓ Toronto, Ontario M5H 1 T1 416 - 969 - 6005 416 - 969 - 6071 Tel. Fax. joanne.butler@powerauthority.on.ca✓ 3033 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration. The motivation for this memorandum really stems from the concern regarding how the OPA will facilitate changes and evolution of the FIT and microFIT Program design (i.e., Program Rules, standard contracts and price schedule) while working with Government towards achieving overarching policy objectives. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any apropriate changes to the FIT program. In turn, each ‘loose end’ Not Responsive 1 3034 Not Responsive microFIT Pole-Mount Price The microFIT Program was originally envisioned as primarily (as some other energy sources were expected to comprise of applicant projects) a rooftop solar PV program for homeowners, institutions and small businesses. Uptake to this program is significantly higher than was originally expected and is dominated by pole-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. There is some debate between the OPA and MEI about: 1) the appropriate price for polemounted projects under 10 kW (58.8 cents/kWh vs. $43.3 cents/kWh); and, 2) “grandfathering” applications that have been submitted. If there is no “grandfathering”," this will be a heavy administrative burden as at this time there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. 2 3035 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 3040 JoAnne Butler From: JoAnne Butler Sent: April-29-10 10:09 AM To: Irene Mauricette Cc: Colin Andersen; Jim MacDougall; Sylvie Doucet Subject: FIT/microFIT Memo Attachments: FIT_Loose Ends_Note_April27JCBCAchanges.doc Importance: High Irene, please print off this version in colour for Colin. Jim and I just tried to incorporate Colin ’ s two mark ups and have left it as track changes. (It is a good think that Jim and I are forensic letter scribbling interpreters… ..). We can come up right now … . JCB JoAnne C. Butler Vice President, Electricity Resources Ontario Power Authority⇣ 120 Adelaide Street West, Suite 1600 Toronto, Ontario M5H 1 T1& 416 - 969 - 6005 416 - 969 - 6071 Tel.& Fax.& joanne.butler@powerauthority.on.ca 3041 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration as well as propose a systematic approach for reviewing emerging issues and evolving the FIT and microFIT program design, (i.e., Program Rules, standard contracts and price schedule) while working with MEI towards achieving overarching policy objectives. At this time, and as the work shifts towards implementation, we have not specifically assessed LDC, MOE, MNR or other government departments’ readiness. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive In turn, each ‘loose end’ will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any appropriate changes to the FIT program. Not Responsive 1 3042 Not Responsive microFIT Ground-Mount Price The microFIT Program was originally envisioned as primarily a rooftop solar PV program for homeowners, institutions and small businesses which would provide a reasonable rate of return. The acceptance of using other structures other than the roof was to accommodate certain shading or geographic issues. Uptake to this program is significantly higher than was originally expected and is dominated by ground-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. Outstanding issues include: 1) the appropriate price for ground-mounted projects under 10 kW (58.8 cents/kWh to get a rate of return of 11% vs. $44.3 cents/kWh to align with larger scale ground mount solar); and, 2) “grandfathering” applications that have been submitted. The rules do not require us to offer the price at the time of application. If there is no “grandfathering”, this will be a heavy administrative burden as at this time$ there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. 2 3043 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive Cheng, Clarence (MEI)⌘ From: Cheng, Clarence (MEI)⌘ Sent: May-10-10 1:34 PM⌘ To: Jim MacDougall⌘ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⌘ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet.⇢ I presently have:⇢ · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO:⇢ Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ 3049 Total⌥ Cheers,⇢ Clarence Cheng↵ Policy Analyst⇢ Renewables and Energy Efficiency Division⇢ Ministry of Energy and Infrastructure⇢ email: Clarence.Cheng@ontario.ca⇢ phone: 416 - 326 - 7287⇢ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⇢ From: Ing, Pearl (MEI)✏ Sent: May 10, 2010 11:43 AM✏ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we⇢ will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)✏ Sent: May 10, 2010 11:10 AM✏ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)✏ Cc: Ing, Pearl (MEI)✏ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo⇢ From: Cheng, Clarence (MEI)✏ Sent: May 10, 2010 10:59 AM✏ To: Tasca, Leo (MEI)✏ Cc: Slawner, Karen (MEI)✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Before we make the data request from Jim, is this what MO wants? (attached)⇢ NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst⇢ Renewables and Energy Efficiency Division⇢ Ministry of Energy and Infrastructure⇢ email: Clarence.Cheng@ontario.ca⇢ phone: 416 - 326 - 7287⇢ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⇢ From: Tasca, Leo (MEI)✏ Sent: May 10, 2010 8:41 AM✏ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall✏ Cc: Ing, Pearl (MEI)✏ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount⇢ 3050 Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount⇢ issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears).⇢ This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo⇢ 3051 Cheng, Clarence (MEI)⌘ From: Cheng, Clarence (MEI)⌘ Sent: May-10-10 3:09 PM⌘ To: Perry Cecchini⌘ Cc: Jim MacDougall⌘ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Hi Perry, I haven ’t heard back from Jim on this yet (below). I assume at least the CAE FIT stuff falls under your bailiwick?! Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Cheng, Clarence (MEI)⌘ Sent: May 10, 2010 1:34 PM⌘ To: 'Jim.MacDougall@powerauthority.on.ca'⌘ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⌘ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet. I presently have: · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO: Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ 3052 Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Ing, Pearl (MEI)⌘ Sent: May 10, 2010 11:43 AM⌘ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)⌘ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)⌘ Sent: May 10, 2010 11:10 AM⌘ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)⌘ Cc: Ing, Pearl (MEI)⌘ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo From: Cheng, Clarence (MEI)⌘ Sent: May 10, 2010 10:59 AM⌘ To: Tasca, Leo (MEI)⌘ Cc: Slawner, Karen (MEI)⌘ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Before we make the data request from Jim, is this what MO wants? (attached) NB:⌥ 3053 NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Tasca, Leo (MEI)⌘ Sent: May 10, 2010 8:41 AM⌘ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall⌘ Cc: Ing, Pearl (MEI)⌘ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears). This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo 3054 Jim MacDougall From: Jim MacDougall Sent: May-10-10 3:53 PM To: 'Cheng, Clarence (MEI)' Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Clarence I won ’t be able to get you any more meaningful data today.◆ If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch. The numbers are in the same ball park so assuming another 510 post launch CAEs is fine. You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half. I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications. Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]⇢ Sent: May 10, 2010 1:34 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet. I presently have: · Contracted CAR FIT⌥ 3055 ·⇤ microFIT up to April 13.⌥ ·⇤ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO: Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Ing, Pearl (MEI)⇢ Sent: May 10, 2010 11:43 AM⇢ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 11:10 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Cc: Ing, Pearl (MEI)⇢ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want 3056 Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo From: Cheng, Clarence (MEI)⇢ Sent: May 10, 2010 10:59 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Before we make the data request from Jim, is this what MO wants? (attached) NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 8:41 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall⇢ Cc: Ing, Pearl (MEI)⇢ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears). This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo 3057 Jim MacDougall From: Jim MacDougall Sent: May-11-10 9:41 AM To: Jim MacDougall; 'Cheng, Clarence (MEI)' Cc: 'Tasca, Leo (MEI)'; 'Slawner, Karen (MEI)'; Cindy Roks Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Hi guys I understand you talked to Perry last night. Can you advise on what data you want? Same as email below? Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Jim MacDougall Sent: May 10, 2010 3:53 PM To: 'Cheng, Clarence (MEI)' Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Clarence I won ’t be able to get you any more meaningful data today. If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch. The numbers are in the same ball park so assuming another 510 post launch CAEs is fine. You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half. I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications. Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 3058 From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca] Sent: May 10, 2010 1:34 PM To: Jim MacDougall Cc: Tasca, Leo (MEI); Slawner, Karen (MEI) Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet. I presently have: · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO: Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division 3059 Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Ing, Pearl (MEI) Sent: May 10, 2010 11:43 AM To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI) Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI) Sent: May 10, 2010 11:10 AM To: Cheng, Clarence (MEI); Slawner, Karen (MEI) Cc: Ing, Pearl (MEI) Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo From: Cheng, Clarence (MEI) Sent: May 10, 2010 10:59 AM To: Tasca, Leo (MEI) Cc: Slawner, Karen (MEI) Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Before we make the data request from Jim, is this what MO wants? (attached) NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Tasca, Leo (MEI) Sent: May 10, 2010 8:41 AM To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall Cc: Ing, Pearl (MEI) Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears). This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo 3060 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: May-11-10 9:49 AM✏ To: Jim MacDougall; Cheng, Clarence (MEI)✏ Cc: Slawner, Karen (MEI); Cindy Roks✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Perry and I discussed the scope of the analysis and we agreed that the emphasis would be on FIT and we would not include ratebase impacts of RESOP and the Korean Consortium solar PV. How about having a quick teleconference& at 11 am for about 15 mins to discuss the request?& From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 11, 2010 9:41 AM⇢ To: Jim MacDougall; Cheng, Clarence (MEI)⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi guys& I understand you talked to Perry last night.& Can you advise on what data you want? Same as email below? Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program& Electricity Resources& Ontario Power Authority& 120 Adelaide St W, Suite 1600& Toronto , ON M5H 1T1 , Canada& tel 416.969.6415& From: Jim MacDougall⇢ Sent: May 10, 2010 3:53 PM⇢ To: 'Cheng, Clarence (MEI)'⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence& I won ’t be able to get you any more meaningful data today. If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch.& The numbers are in the same ball park so assuming another 510 post launch CAEs is fine.& You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half.& I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications.& 3061 Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program& Electricity Resources& Ontario Power Authority& 120 Adelaide St W, Suite 1600& Toronto , ON M5H 1T1 , Canada& tel 416.969.6415& From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]⇢ Sent: May 10, 2010 1:34 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet.& I presently have:& · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO:& Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ 3062 Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers,& Clarence Cheng↵ Policy Analyst& Renewables and Energy Efficiency Division& Ministry of Energy and Infrastructure& email: Clarence.Cheng@ontario.ca& phone: 416 - 326 - 7287& 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3& From: Ing, Pearl (MEI)⇢ Sent: May 10, 2010 11:43 AM⇢ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we& will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 11:10 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Cc: Ing, Pearl (MEI)⇢ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo& From: Cheng, Clarence (MEI)⇢ Sent: May 10, 2010 10:59 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Before we make the data request from Jim, is this what MO wants? (attached)& NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst& Renewables and Energy Efficiency Division& Ministry of Energy and Infrastructure& email: Clarence.Cheng@ontario.ca& phone: 416 - 326 - 7287& 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3& From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 8:41 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall⇢ 3063 Cc: Ing, Pearl (MEI)⇢ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount& issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears).& This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo& 3064 Cheng, Clarence (MEI)⌘ From: Cheng, Clarence (MEI)⌘ Sent: May-11-10 11:01 AM⌘ To: Jim MacDougall⌘ Cc: Slawner, Karen (MEI); Cindy Roks; Tasca, Leo (MEI)⌘ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⌘ Hi Jim,⌥ We ’re cancelling this teleconference. I have all the info required based on your and Perry’s assumptions. I don ’ t⌥ think there will be time to respin the analysis. Cheers,⌥ Clarence Cheng↵ Policy Analyst⌥ Renewables and Energy Efficiency Division⌥ Ministry of Energy and Infrastructure⌥ email: Clarence.Cheng@ontario.ca⌥ phone: 416 - 326 - 7287⌥ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌥ From: Tasca, Leo (MEI)✏ Sent: May 11, 2010 9:49 AM✏ To: Jim MacDougall; Cheng, Clarence (MEI)✏ Cc: Slawner, Karen (MEI); Cindy Roks✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Perry and I discussed the scope of the analysis and we agreed that the emphasis would be on FIT and we would not include ratebase impacts of RESOP and the Korean Consortium solar PV. How about having a quick teleconference⌥ at 11 am for about 15 mins to discuss the request?⌥ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]✏ Sent: May 11, 2010 9:41 AM✏ To: Jim MacDougall; Cheng, Clarence (MEI)✏ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Hi guys⌥ I understand you talked to Perry last night.⌥ Can you advise on what data you want? Same as email below? Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto , ON M5H 1T1 , Canada⌥ tel 416.969.6415⌥ 3065 From: Jim MacDougall✏ Sent: May 10, 2010 3:53 PM✏ To: 'Cheng, Clarence (MEI)'✏ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Clarence⌥ I won ’t be able to get you any more meaningful data today. If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch.⌥ The numbers are in the same ball park so assuming another 510 post launch CAEs is fine.⌥ You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half.⌥ I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications.⌥ Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto , ON M5H 1T1 , Canada⌥ tel 416.969.6415⌥ From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]✏ Sent: May 10, 2010 1:34 PM✏ To: Jim MacDougall✏ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet.⌥ I presently have:⌥ · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO:⌥ Incremental solar PV costs to ratebase⌥ 3066 Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers,⌥ Clarence Cheng↵ Policy Analyst⌥ Renewables and Energy Efficiency Division⌥ Ministry of Energy and Infrastructure⌥ email: Clarence.Cheng@ontario.ca⌥ phone: 416 - 326 - 7287⌥ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌥ From: Ing, Pearl (MEI)✏ Sent: May 10, 2010 11:43 AM✏ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we⌥ will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)✏ Sent: May 10, 2010 11:10 AM✏ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)✏ Cc: Ing, Pearl (MEI)✏ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo⌥ From: Cheng, Clarence (MEI)✏ Sent: May 10, 2010 10:59 AM✏ To: Tasca, Leo (MEI)✏ 3067 Cc: Slawner, Karen (MEI)✏ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Before we make the data request from Jim, is this what MO wants? (attached)⌥ NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst⌥ Renewables and Energy Efficiency Division⌥ Ministry of Energy and Infrastructure⌥ email: Clarence.Cheng@ontario.ca⌥ phone: 416 - 326 - 7287⌥ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌥ From: Tasca, Leo (MEI)✏ Sent: May 10, 2010 8:41 AM✏ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall✏ Cc: Ing, Pearl (MEI)✏ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation✏ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount⌥ issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears).⌥ This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo⌥ 3068 Jim MacDougall From: Jim MacDougall Sent: May-11-10 11:04 AM To: 'Cheng, Clarence (MEI)' Cc: Slawner, Karen (MEI); Cindy Roks; Tasca, Leo (MEI) Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation cool⌅ Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]⇢ Sent: May 11, 2010 11:01 AM⇢ To: Jim MacDougall⇢ Cc: Slawner, Karen (MEI); Cindy Roks; Tasca, Leo (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi Jim,⌅ We ’re cancelling this teleconference. I have all the info required based on your and Perry’s assumptions. I don ’ t⌅ think there will be time to respin the analysis. Cheers,⌅ Clarence Cheng↵ Policy Analyst⌅ Renewables and Energy Efficiency Division⌅ Ministry of Energy and Infrastructure⌅ email: Clarence.Cheng@ontario.ca⌅ phone: 416 - 326 - 7287⌅ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌅ From: Tasca, Leo (MEI)⇢ Sent: May 11, 2010 9:49 AM⇢ To: Jim MacDougall; Cheng, Clarence (MEI)⇢ Cc: Slawner, Karen (MEI); Cindy Roks⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Perry and I discussed the scope of the analysis and we agreed that the emphasis would be on FIT and we would not include ratebase impacts of RESOP and the Korean Consortium solar PV. How about having a quick teleconference⌅ at 11 am for about 15 mins to discuss the request?⌅ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 11, 2010 9:41 AM⇢ To: Jim MacDougall; Cheng, Clarence (MEI)⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks⇢ 3069 Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi guys⌅ I understand you talked to Perry last night.⌅ Can you advise on what data you want? Same as email below? Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Jim MacDougall⇢ Sent: May 10, 2010 3:53 PM⇢ To: 'Cheng, Clarence (MEI)'⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence⌅ I won ’t be able to get you any more meaningful data today. If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch.⌅ The numbers are in the same ball park so assuming another 510 post launch CAEs is fine.⌅ You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half.⌅ I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications.⌅ Jim MacDougall , P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]⇢ Sent: May 10, 2010 1:34 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ 3070 · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet.⌅ I presently have:⌅ · · · Contracted CAR FIT⌥ microFIT up to April 13.⌥ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO:⌅ Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers,⌅ Clarence Cheng↵ Policy Analyst⌅ Renewables and Energy Efficiency Division⌅ Ministry of Energy and Infrastructure⌅ email: Clarence.Cheng@ontario.ca⌅ phone: 416 - 326 - 7287⌅ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌅ From: Ing, Pearl (MEI)⇢ Sent: May 10, 2010 11:43 AM⇢ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we⌅ 3071 Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we⌅ will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 11:10 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Cc: Ing, Pearl (MEI)⇢ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo⌅ From: Cheng, Clarence (MEI)⇢ Sent: May 10, 2010 10:59 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Before we make the data request from Jim, is this what MO wants? (attached)⌅ NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst⌅ Renewables and Energy Efficiency Division⌅ Ministry of Energy and Infrastructure⌅ email: Clarence.Cheng@ontario.ca⌅ phone: 416 - 326 - 7287⌅ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌅ From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 8:41 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall⇢ Cc: Ing, Pearl (MEI)⇢ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount⌅ issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears).⌅ This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo⌅ 3072 Cheng, Clarence (MEI)⌘ From: Cheng, Clarence (MEI)⌘ Sent: May-10-10 3:53 PM⌘ To: Jim MacDougall⌘ Cc: Tasca, Leo (MEI)⌘ Subject: RE: CAE Solar pricing Attachments: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation.msg⌘ Hi Jim,⌥ I want to clarify what you told Pearl (below).⌥ For solar PV CAE FIT, Perry tells me it ’ s roughly 40MW COD in 2010 and 40 MW COD in 2013.⌥ For post- launch, should I be assuming 80 MW / 6 months since Dec 1?⌥ Right now, per your previous email (attached), I ’ m assuming 80 MW of post - launch solar PV CAE FIT offers up to⌥ the end of 2010, of which 20MW COD in 2010 and 60 MW COD in 2013.⌥ Cheers,⌥ Clarence Cheng↵ Policy Analyst⌥ Renewables and Energy Efficiency Division⌥ Ministry of Energy and Infrastructure⌥ email: Clarence.Cheng@ontario.ca⌥ phone: 416 - 326 - 7287⌥ 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3⌥ From: Ing, Pearl (MEI)✏ Sent: May 12, 2010 10:10 AM✏ To: Tasca, Leo (MEI); Cheng, Clarence (MEI)✏ Subject: CAE Solar pricing✏ Hi. On CAE pricing and forecasting price trends over the next year, Jim indicated to me that we should use the following:⌥ Based on initial 510 CAE projects at Launch, assume a 20% drop - out rate of 20% - so you get 399 or so, and then assume 500 CAE applications every 6 months with a 20% drop- out rate. We can use this to estimate rough calculation of MWs, and price impacts. Jim indicated he is working on reviewing Navigant ’ s work on developing the initial FIT solar prices to determine⌥ whether any of the assumptions applied have changed significantly (possibly signalling the prices should be adjusted). He said he hoped to have this completed by end of Thursday. This will be interesting analysis that we will want to include in our reportback to Sue. Director, Renewables and Energy Facilitation Branch⌥ Ontario Ministry of Energy and Infrastructure⌥ 77 Grenville Street⌥ 416 - 327 - 3868⌥ 3073 Jim MacDougall From: Jim MacDougall Sent: May-10-10 3:53 PM To: Cheng, Clarence (MEI) Cc: Tasca, Leo (MEI); Slawner, Karen (MEI); Cindy Roks Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation Clarence I won ’t be able to get you any more meaningful data today.◆ If you need to make estimates, as most of our post launch CAEs are not validated yet, You can assume the same “ post launch PV interest ” as was seen in launch. The numbers are in the same ball park so assuming another 510 post launch CAEs is fine. You could even assume similar PV relative to other technologies, but perhaps cut the 2010 in service in half. I will ask Cindy to crunch some numbers tomorrow, but again, it is mostly invalidated applications. Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]⇢ Sent: May 10, 2010 1:34 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Hi Jim,⌥ could you provide this info please? MO is looking for the analysis by the end of the day, so I need the data ASAP.⌥ · · CAE FIT with COD data.⌥ Projections for post-launch solar PV.⌥ o Any solar expected from BxM?⌥ o How many MW of CAE post- launch solar are expected to be awarded this year? How much of this will be 2010 v 2013?⌥ · Also, if you want newer microFIT info in this analysis, could you please send an updated spreadsheet. I presently have: · Contracted CAR FIT⌥ 3074 ·⇤ microFIT up to April 13.⌥ ·⇤ For microFIT, I ’m going to use 2,500 groundmount solar PV applications / month. Will do a projection for rooftop.⌥ This is what I plan to send up to the MO: Incremental solar PV costs to ratebase⌥ Increases to typical 2009 residential bill (all in) [$/year]⌥ FIT price 2010 2011 2012 2013 Total⌥ [c/kWh]⌥ microFIT aggregators 80.2⌥ non -aggregators⌥ Subtotal⌥ 10 -250kW rooftop aggregators 71.3⌥ non -aggregators⌥ Subtotal⌥ 250 - 500kW rooftop aggregators 63.5⌥ non -aggregators⌥ Subtotal⌥ >500 kW rooftop aggregators 53.9⌥ non -aggregators⌥ Subtotal⌥ Groundmount aggregators 44.3⌥ non -aggregators⌥ Subtotal⌥ Totals aggregators⌥ non -aggregators⌥ Total⌥ Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Ing, Pearl (MEI)⇢ Sent: May 10, 2010 11:43 AM⇢ To: Tasca, Leo (MEI); Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Yes- COD dates gives a sense of magnitude of what we know is coming down pipe but of course for forecasting we will need to provide an estimate of what we expect uptake will be, based on current patterns. Thanks. From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 11:10 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI)⇢ Cc: Ing, Pearl (MEI)⇢ Subject: FW: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want 3075 Clarence, my understanding is that MO just wants an estimate of impacts of current prices. However, they do want it broken out by COD year. Pearl , can you confirm? Leo From: Cheng, Clarence (MEI)⇢ Sent: May 10, 2010 10:59 AM⇢ To: Tasca, Leo (MEI)⇢ Cc: Slawner, Karen (MEI)⇢ Subject: RE: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Before we make the data request from Jim, is this what MO wants? (attached) NB:⌥ 1) no attempt to quantify effect of changing prices.⌥ 2) Not broken out by COD year.⌥ Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9 th floor, Toronto , ON , M5S 1B3 From: Tasca, Leo (MEI)⇢ Sent: May 10, 2010 8:41 AM⇢ To: Cheng, Clarence (MEI); Slawner, Karen (MEI); Jim MacDougall⇢ Cc: Ing, Pearl (MEI)⇢ Subject: Urgent MO request for analysis of ratebase impacts of solar PV aggregation⇢ Clarence/Karen/Jim, MO has indicated they need more analysis before a decision can be reached on groundmount issue. Specifically, they are requesting similar cost analysis regarding ratebase impacts for CAE solar aggregation both for FIT Launch and post- FIT Launch project (broken out annually for this year, 2011 and subsequent outyears). This analysis would have to be done for each of the solar PV price tranches (71.3, 63.5, 53.9, and 44.3). We would assume an 80% uptake for the projects with a 20% drop out rate. We will also need Tom ’ s assistance to do this analysis. The rationale for the additional analysis is that we going to address the price issue for microFIT we may as well do the additional analysis so we can decide if other urgent changes need to be made to solar PV prices. Leo 3076 Jim MacDougall From: Jim MacDougall Sent: May-13-10 11:55 AM To: Jason Chee-Aloy Cc: Cindy Roks Subject: fit note Attachments: FIT_Loose Ends_Note_May 12.doc Updated with very short summary of Issue Projects.⇠ There may be more but this is the first 5 or so.⇠ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St W, Suite 1600⇠ Toronto , ON M5H 1T1 , Canada⇠ tel 416.969.6415⇠ 3077 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration as well as propose a systematic approach for reviewing emerging issues and evolving the FIT and microFIT program design, (i.e., Program Rules, standard contracts and price schedule) while working with MEI towards achieving overarching policy objectives. At this time, and as the work shifts towards implementation, we have not specifically assessed LDC, MOE, MNR or other government departments’ readiness. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive In turn, each ‘loose end’ will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any appropriate changes to the FIT program. Not Responsive 1 3078 Not Responsive microFIT Ground-Mount Price The microFIT Program was originally envisioned as primarily a rooftop solar PV program for homeowners, institutions and small businesses which would provide a reasonable rate of return. The acceptance of using other structures other than the roof was to accommodate certain shading or geographic issues. Uptake to this program is significantly higher than was originally expected and is dominated by ground-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. Outstanding issues include: 1) the appropriate price for ground-mounted projects under 10 kW (58.8 cents/kWh to get a rate of return of 11% vs. $44.3 cents/kWh to align with larger scale ground mount solar); and, 2) “grandfathering” applications that have been submitted. The rules do not require us to offer the price at the time of application. If 2 3079 there is no “grandfathering”, this will be a heavy administrative burden as at this time$ there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. Not Responsive 3 3080 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 3085 Jason Chee-Aloy From: Jason Chee-Aloy⇣ Sent: May-13-10 3:12 PM⇣ To: JoAnne Butler⇣ Cc: Jim MacDougall; Sheri Bizarro⇣ Subject: Fw: fit note⇣ Attachments: FIT_Loose Ends_Note_May 12.doc⇣ Updated Loose Ends note attached.⇣ ----- Original Message ----From: Jim MacDougall⇣ To: Jason Chee- Aloy⇣ CC: Cindy Roks⇣ Sent: Thu May 13 11:55:10 2010⇣ Subject: fit note⇣ <>⇣ Updated with very short summary of Issue Projects.⇣ There may be more but this is the first 5 or so.⇣ Jim MacDougall, P.Eng.⇣ Manager, Feed- In Tariff Program⇣ Electricity Resources⇣ Ontario Power Authority⇣ 120 Adelaide St W, Suite 1600⇣ Toronto, ON M5H 1T1, Canada⇣ tel 416.969.6415⇣ 3086 MEMORANDUM DATE: TO: FROM: RE: March 7, 2018 Colin Andersen JoAnne Butler, Jason Chee-Aloy, Michael Killeavy FIT and microFIT ‘Loose Ends’ – Summary and Recommendations The purpose of this memorandum is to identify key issues that remain outstanding for the administration and effectiveness of the FIT and microFIT Program. This note will also highlight the need for greater clarity around the OPA/MEI roles and responsibilities in ongoing FIT Program administration as well as propose a systematic approach for reviewing emerging issues and evolving the FIT and microFIT program design, (i.e., Program Rules, standard contracts and price schedule) while working with MEI towards achieving overarching policy objectives. At this time, and as the work shifts towards implementation, we have not specifically assessed LDC, MOE, MNR or other government departments’ readiness. The following ‘loose ends’ have been identified and listed below. ⇥ microFIT pole-mount price Not Responsive In turn, each ‘loose end’ will be summarized in sub-sections below, including recommendations. Finally, the OPA will propose a clear protocol for OPA/MEI communication around proposing and implementing any appropriate changes to the FIT program. Not Responsive 1 3087 Not Responsive microFIT Ground-Mount Price The microFIT Program was originally envisioned as primarily a rooftop solar PV program for homeowners, institutions and small businesses which would provide a reasonable rate of return. The acceptance of using other structures other than the roof was to accommodate certain shading or geographic issues. Uptake to this program is significantly higher than was originally expected and is dominated by ground-mounted solar PV projects. This indicates that the price offered for pole-mounted solar PV projects is too high (presently 80.2 cents/kWh.) Hydro One and other LDCs have expressed concern that, due to the volume of connection requests, there may be difficulty connecting these projects. Recommendation: Immediate action is recommended to address this issue. The OPA is working with MEI to discuss options to revise the Program Rules and price as well as logistics for implementation. The OPA’s preferred approach is to restrict the 80.2 cents/kWh price to rooftop solar PV projects only and to allow applicants who have submitted applications to the program to proceed under the original price schedule. Outstanding issues include: 1) the appropriate price for ground-mounted projects under 10 kW (58.8 cents/kWh to get a rate of return of 11% vs. $44.3 cents/kWh to align with larger scale ground mount solar); and, 2) “grandfathering” applications that have been submitted. The rules do not require us to offer the price at the time of application. If 2 3088 there is no “grandfathering”, this will be a heavy administrative burden as at this time$ there is no way to distinguish microFIT rooftop solar PV from ground mounted solar PV. Also of concern, is that the OPA has been directed to develop TV advertisements for the microFIT Program and this matter needs to be resolved before the ads are aired so as to manage expectations. Not Responsive 3 3089 Not Responsive Not Responsive Not Responsive Not Responsive Not Responsive 3094 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: May-19-10 1:48 PM↵ To: JoAnne Butler; Colin Andersen; Michael Lyle; Susan Kennedy; Jim MacDougall;↵ Michael Killeavy; Perry Cecchini; Jason Chee-Aloy; Sarah Simmons↵ Cc: Mary Bernard; Tim Butters; Glenna Ford↵ Subject: Ground-Mounted Solar Communications↵ Attachments: Ground-Mounted Solar Communications.doc↵ Attached is a draft of what is proposed for communicating the price change for ground - mounted solar microFIT◆ projects. As JoAnne said earlier, MEI is particularly interested in OPA working with CANSIA to communicate with# stakeholders and applicants on the changes. If anyone has ideas beyond holding a webinar let me know when you# send your comments. Thanks.# Kristin◆ 3095 Background↵ microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions% and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the% program. As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for a potential 1112 MW of generating capacity, and 3,266 conditional% offers have been issued for a potential of 27.0 MW of generation and 320 microFIT projects% have been connected with 1.3 MW of capacity.% Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size of the projects indicates that a very large majority of applications are for groundmounted rather than roof-top solar projects located in rural areas.% the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing generators an 11% return on investment over the 20 years of the microFIT% contract (as is all microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be% roof-top solar projects which cost more to install. It was assumed that ground-mounted% would make a small minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to% encourage small rooftop projects and is therefore not in keeping with the intent of the% microFIT program. Costs associated with ground-mounted projects are lower than roof-top and there is% agreement between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be reduced.% The decision has been made to reduce the price to 58.8¢/kWh for ground-mounted solar projects effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a% conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the% rationale for the change To continue to encourage uptake on the microFIT Program and the development of small% renewable energy projects in Ontario% Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers% Solar industry associations and other stakeholders 8c17f7e77a9c4509992f07c467f1d858 3096 2 Key messages↵ microFIT has been a runaway success. However, its tariffs were intended to stimulate↵ small rooftop solar PV generation projects and that focus needs to be restored. microFIT has enjoyed great success since being launched late last year. However, we have% received far more applications for ground mounted solar PV than was foreseen during the% program design. As of May 17th, 12,301 applications have been submitted for microFIT% projects for a potential 1112 MW of generating capacity, and 3,266 conditional offers have% been issued for a potential of 27.0 MW of generation and 320 microFIT projects have been% connected with 1.3 MW of capacity. That is why we are refocusing the tariff schedule to% reinforce the focus of microFIT to encourage rooftop projects specifically and by doing so% ensure that ratepayers get value for their investment. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has↵ been changed to 5. Any project that has not received a conditional offer or contract is subject to this rate. Prices set for the microFIT program followed extensive consultation with stakeholders about the level necessary to motivate development and compensate proponents for small projects% fairly for their investment. The rates were set to provide generators with an 11% return on% investment over the 20 years of the contract. The pricing levels for microFIT solar projects were established specifically to incent the% development of rooftop solar projects. These projects have higher costs than groundmounted projects. The Ontario Power Authority has an obligation to protect ratepayers by% paying tariffs that are fair and reasonable against the specific goals of the microFIT program and we are doing so. We believe the new rate is fair and reasonable for ground mounted% solar PV applications. .There are no price changes at this time for other types of generation% in the microFIT program. The Ministry of Energy and Infrastructure supports this decision as it ensures↵ microFIT is meeting its program goals and is providing proper value to developers↵ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential purpose% and focus of the microFIT program. We believe it is in the best long-term interests of microFIT, developers and ratepayers that we do this now so we can restore focus and% obtain the value that the program was intended to deliver. Proposed tactics: Post notice on the microFIT website to advise of price change for ground-mounted solar and% include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted rooftop or ground-mounted% – advise when accept contract if Send note to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change 8c17f7e77a9c4509992f07c467f1d858 3097 3 Send note to industry associations and other relevant industry stakeholders– similar to% notice on website Together with CanSIA (to be confirmed), hold webinar one week post change to provide% opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used% by OPA and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a↵ huge volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, its tariffs were intended to stimulate small% rooftop solar PV generation projects and that focus needs to be restored. Prices set for the% program followed extensive consultation with stakeholders about the level necessary to% motivate development and compensate proponents for small projects fairly for their investment. They were also intended to support development of rooftop solar PV, which has additional cost% considerations associated with it. Our focus was on encouraging—not discouraging—project development to secure the new generation Ontario needs. The Ontario Power Authority has an% obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific% goals of the microFIT program. That is why effective immediately, the tariff for ground-mounted% solar PV microFIT projects has been reset at 58.8 cents. Any project that has not received a% conditional offer or contract will be paid 58.8 cents. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected by the price change. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has been reset at 58.8 cents. Any% project that has not received a contract or conditional offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with stakeholders about the level% necessary to motivate development and compensate proponents for small projects fairly for their investment. The pricing levels for microFIT were established specifically to incent the% development of rooftop solar PV, which has additional cost considerations associated with it.% There are no tariff changes at this time for other types of generation in the program. The Ontario% Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and% reasonable against the specific goals of the microFIT program and we are doing so. Why aren’t you honouring the price that people applied for and make the change⇡ effective from this point forward? microFIT has been a runaway success. However, its tariffs were intended to stimulate small% rooftop solar PV generation projects and that focus needs to be restored. A contract only% becomes binding when it is executed. We welcome and encourage proponents who are seeking to develop ground mounted solar PV generation projects to continue to apply at the new rate.% The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair% 8c17f7e77a9c4509992f07c467f1d858 3098 4 and reasonable against the specific goals of the microFIT program and we are doing so. We% believe the new rate is fair and reasonable for ground mounted solar PV applications. What will this tariff reset by the Ontario Power Authority cost ratepayers in dollars and↵ lost projects when everything is calculated?↵ We cannot speculate on how many applicants will withdraw their applications because of the% price change. We welcome applicants who are seeking to develop ground mounted solar PV% generation projects to continue with their projects albeit at the new rate. The Ontario Power% Authority has an obligation to protect ratepayers by paying tariffs that are fair and reasonable% against the specific goals of the microFIT program and we are doing so. We believe the new% rate is fair and reasonable for ground mounted solar PV applications. I thought the OPA said it would only review its tariff schedule after two years – you broke↵ your own rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract% specifically permits program changes – including pricing revisions – to be made as required to% respond to Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure% supports this decision as it ensures microFIT is meeting its program goals and is providing proper value to developers and ratepayers. This decision was made in conjunction with the% Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting small renewable PV projects by homeowners, institutions and small businesses. We% believe it is in the best long-term interests of microFIT, developers and ratepayers that we do% this now so we can restore focus and obtain the value that the program was intended to deliver. ####% 8c17f7e77a9c4509992f07c467f1d858 3099 Susan Kennedy↵ From: Susan Kennedy↵ Sent: May-19-10 1:59 PM↵ To: Kristin Jenkins↵ Subject: RE: Ground-Mounted Solar Communications↵ Attachments: Ground-Mounted Solar Communications(shk).doc↵ Small suggestion. Attached in track change. From: Kristin Jenkins↵ Sent: May 19, 2010 1:48 PM↵ To: JoAnne Butler; Colin Andersen; Michael Lyle; Susan Kennedy; Jim MacDougall; Michael Killeavy; Perry Cecchini;↵ Jason Chee-Aloy; Sarah Simmons↵ Cc: Mary Bernard; Tim Butters; Glenna Ford↵ Subject: Ground-Mounted Solar Communications↵ Attached is a draft of what is proposed for communicating the price change for ground - mounted solar microFIT◆ projects. As JoAnne said earlier, MEI is particularly interested in OPA working with CANSIA to communicate with stakeholders and applicants on the changes. If anyone has ideas beyond holding a webinar let me know when you send your comments. Thanks. Kristin◆ 3100 Background↵ microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions& and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the& program. As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for a potential 1112 MW of generating capacity, and 3,266 conditional& offers have been issued for a potential of 27.0 MW of generation and 320 microFIT projects& have been connected with 1.3 MW of capacity.& Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size of the projects indicates that a very large majority of applications are for groundmounted solar projects located in rural areas, rather than roof-top projects.& the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing generators an 11% return on investment over the 20 years of the microFIT& contract (as is all microFIT and FIT pricing).& In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be& roof-top solar projects which cost more to install. It was assumed that ground-mounted& would make a small minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to& encourage small rooftop projects and is therefore not in keeping with the intent of the& microFIT program. Costs associated with ground-mounted projects are lower than roof-top and there is& agreement between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be reduced.& The decision has been made to reduce the price to 58.8¢/kWh for ground-mounted solar projects effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a& conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the& rationale for the change To continue to encourage uptake on the microFIT Program and the development of small& renewable energy projects in Ontario& Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders 3ba4e91e18d244a1b8530f9733d57311 3101 2 Key messages↵ microFIT has been a runaway success. However, its tariffs were intended to stimulate↵ small rooftop solar PV generation projects and that focus needs to be restored.↵ microFIT has enjoyed great success since being launched late last year. However, we have& received far more applications for ground mounted solar PV than was foreseen during the& program design. As of May 17th, 12,301 applications have been submitted for microFIT& projects for a potential 1112 MW of generating capacity, and 3,266 conditional offers have& been issued for a potential of 27.0 MW of generation and 320 microFIT projects have been& connected with 1.3 MW of capacity. That is why we are refocusing the tariff schedule to& reinforce the focus of microFIT to encourage rooftop projects specifically and by doing so& ensure that ratepayers get value for their investment. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has↵ been changed to 5. Any project that has not received a conditional offer or contract is subject to this rate. Prices set for the microFIT program followed extensive consultation with stakeholders about the level necessary to motivate development and compensate proponents for small projects& fairly for their investment. The rates were set to provide generators with an 11% return on& investment over the 20 years of the contract. The pricing levels for microFIT solar projects were established specifically to incent the& development of rooftop solar projects. These projects have higher costs than groundmounted projects. The Ontario Power Authority has an obligation to protect ratepayers by& paying tariffs that are fair and reasonable against the specific goals of the microFIT program and we are doing so. We believe the new rate is fair and reasonable for ground mounted& solar PV applications. .There are no price changes at this time for other types of generation& in the microFIT program. The Ministry of Energy and Infrastructure supports this decision as it ensures↵ microFIT is meeting its program goals and is providing proper value to developers↵ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential purpose& and focus of the microFIT program. We believe it is in the best long-term interests of microFIT, developers and ratepayers that we do this now so we can restore focus and& obtain the value that the program was intended to deliver. Proposed tactics: Post notice on the microFIT website to advise of price change for ground-mounted solar and& include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted rooftop or ground-mounted& – advise when accept contract if Send note to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change 3ba4e91e18d244a1b8530f9733d57311 3102 3 Send note to industry associations and other relevant industry stakeholders– similar to& notice on website Together with CanSIA (to be confirmed), hold webinar one week post change to provide& opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used& by OPA and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a↵ huge volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, its tariffs were intended to stimulate small& rooftop solar PV generation projects and that focus needs to be restored. Prices set for the& program followed extensive consultation with stakeholders about the level necessary to& motivate development and compensate proponents for small projects fairly for their investment. They were also intended to support development of rooftop solar PV, which has additional cost& considerations associated with it. Our focus was on encouraging—not discouraging—project development to secure the new generation Ontario needs. The Ontario Power Authority has an& obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific& goals of the microFIT program. That is why effective immediately, the tariff for ground-mounted& solar PV microFIT projects has been reset at 58.8 cents. Any project that has not received a& conditional offer or contract will be paid 58.8 cents. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected by the price change. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has been reset at 58.8 cents. Any& project that has not received a contract or conditional offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with stakeholders about the level& necessary to motivate development and compensate proponents for small projects fairly for their investment. The pricing levels for microFIT were established specifically to incent the& development of rooftop solar PV, which has additional cost considerations associated with it.& There are no tariff changes at this time for other types of generation in the program. The Ontario& Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and& reasonable against the specific goals of the microFIT program and we are doing so. Why aren’t you honouring the price that people applied for and make the change⇡ effective from this point forward? microFIT has been a runaway success. However, its tariffs were intended to stimulate small& rooftop solar PV generation projects and that focus needs to be restored. A contract only& becomes binding when it is executed. We welcome and encourage proponents who are seeking to develop ground mounted solar PV generation projects to continue to apply at the new rate.& The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair& 3ba4e91e18d244a1b8530f9733d57311 3103 4 and reasonable against the specific goals of the microFIT program and we are doing so. We& believe the new rate is fair and reasonable for ground mounted solar PV applications. What will this tariff reset by the Ontario Power Authority cost ratepayers in dollars and↵ lost projects when everything is calculated?↵ We cannot speculate on how many applicants will withdraw their applications because of the& price change. We welcome applicants who are seeking to develop ground mounted solar PV& generation projects to continue with their projects albeit at the new rate. The Ontario Power& Authority has an obligation to protect ratepayers by paying tariffs that are fair and reasonable& against the specific goals of the microFIT program and we are doing so. We believe the new& rate is fair and reasonable for ground mounted solar PV applications.& I thought the OPA said it would only review its tariff schedule after two years – you broke↵ your own rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract& specifically permits program changes – including pricing revisions – to be made as required to& respond to Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure& supports this decision as it ensures microFIT is meeting its program goals and is providing proper value to developers and ratepayers. This decision was made in conjunction with the& Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting small renewable PV projects by homeowners, institutions and small businesses. We& believe it is in the best long-term interests of microFIT, developers and ratepayers that we do& this now so we can restore focus and obtain the value that the program was intended to deliver. ####& 3ba4e91e18d244a1b8530f9733d57311 3104 Sarah Simmons↵ From: Sarah Simmons↵ Sent: May-19-10 2:40 PM↵ To: Kristin Jenkins; JoAnne Butler; Colin Andersen; Michael Lyle; Susan Kennedy; Jim↵ MacDougall; Michael Killeavy; Perry Cecchini; Jason Chee-Aloy↵ Cc: Mary Bernard; Tim Butters; Glenna Ford↵ Subject: RE: Ground-Mounted Solar Communications↵ Attachments: Ground-Mounted Solar Communications_SS comments.doc↵ See comments attached. 1) the total MW is off by a factor of about ten … its not 1 1 1 2 MW. Possibly 1 1 2MW?✓ 2) in a couple of places you say “ any project without a conditional offer will receive 58.8c/kWh ”… really, it ’ s only “ any ground mount solar pv project ”✓ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: May 19, 2010 1:48 PM↵ To: JoAnne Butler; Colin Andersen; Michael Lyle; Susan Kennedy; Jim MacDougall; Michael Killeavy; Perry Cecchini;↵ Jason Chee-Aloy; Sarah Simmons↵ Cc: Mary Bernard; Tim Butters; Glenna Ford↵ Subject: Ground-Mounted Solar Communications↵ Attached is a draft of what is proposed for communicating the price change for ground - mounted solar microFIT projects. As JoAnne said earlier, MEI is particularly interested in OPA working with CANSIA to communicate with✓ stakeholders and applicants on the changes. If anyone has ideas beyond holding a webinar let me know when you✓ send your comments. Thanks.✓ Kristin 3105 Background↵ microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions' and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the' program. As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for a potential 1112 MW of generating capacity, and 3,266 conditional' offers have been issued for a potential of 27.0 MW of generation and 320 microFIT projects' have been connected with 1.3 MW of capacity.' Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size of the projects indicates that a very large majority of applications are for groundmounted rather than roof-top solar projects located in rural areas.' the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing generators an 11% return on investment over the 20 years of the microFIT' contract (as is all microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be' roof-top solar projects which cost more to install. It was assumed that ground-mounted' would make a small minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to' encourage small rooftop projects and is therefore not in keeping with the intent of the' microFIT program. Costs associated with ground-mounted projects are lower than roof-top and there is' agreement between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be reduced.' The decision has been made to reduce the price to 58.8¢/kWh for ground-mounted solar projects effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a' conditional offer will receive 80.2¢/kWh. All other applicants with ground mounted solar' projects will receive 58.8¢/kWh, rooftop projects will still receive 80.2 ¢/kWh.' Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the' rationale for the change To continue to encourage uptake on the microFIT Program and the development of small' renewable energy projects in Ontario' Audiences: Solar microFIT contract holders and those with conditional offers' Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders 734b73e59cb14041a9ffc8c16fce1286 3106 2 Key messages↵ microFIT has been a runaway success. However, its tariffs were intended to stimulate↵ small rooftop solar PV generation projects and that focus needs to be restored. microFIT has enjoyed great success since being launched late last year. However, we have' received far more applications for ground mounted solar PV than was foreseen during the' program design. As of May 17th, 12,301 applications have been submitted for microFIT' projects for a potential 1112 MW of generating capacity, and 3,266 conditional offers have' been issued for a potential of 27.0 MW of generation and 320 microFIT projects have been' connected with 1.3 MW of capacity. That is why we are refocusing the tariff schedule to' reinforce the focus of microFIT to encourage rooftop projects specifically and by doing so' ensure that ratepayers get value for their investment. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has↵ been changed to 58.8 ¢/kWh Any ground mounted solar project that has not received↵ a conditional offer or contract is subject to this rate.↵ Prices set for the microFIT program followed extensive consultation with stakeholders about the level necessary to motivate development and compensate proponents for small projects' fairly for their investment. The rates were set to provide generators with an 11% return on' investment over the 20 years of the contract.' The pricing levels for microFIT solar projects were established specifically to incent the' development of rooftop solar projects. These projects have higher costs than groundmounted projects. The Ontario Power Authority has an obligation to protect ratepayers by' paying tariffs that are fair and reasonable against the specific goals of the microFIT program and we are doing so. We believe the new rate is fair and reasonable for ground mounted' solar PV applications. There are no price changes at this time for other types of generation' in the microFIT program. The Ministry of Energy and Infrastructure supports this decision as it ensures↵ microFIT is meeting its program goals and is providing proper value to developers↵ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential purpose' and focus of the microFIT program. We believe it is in the best long-term interests of microFIT, developers and ratepayers that we do this now so we can restore focus and' obtain the value that the program was intended to deliver. Proposed tactics: Post notice on the microFIT website to advise of price change for ground-mounted solar and' include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted rooftop or ground-mounted' – advise when accept contract if Send note to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change 734b73e59cb14041a9ffc8c16fce1286 3107 3 Send note to industry associations and other relevant industry stakeholders– similar to' notice on website Together with CanSIA (to be confirmed), hold webinar one week post change to provide' opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used' by OPA and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a↵ huge volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, its tariffs were intended to stimulate small' rooftop solar PV generation projects and that focus needs to be restored. Prices set for the' program followed extensive consultation with stakeholders about the level necessary to' motivate development and compensate proponents for small projects fairly for their investment. They were also intended to support development of rooftop solar PV, which has additional cost' considerations associated with it. Our focus was on encouraging—not discouraging—project development to secure the new generation Ontario needs. The Ontario Power Authority has an' obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific' goals of the microFIT program. That is why effective immediately, the tariff for ground-mounted' solar PV microFIT projects has been set at 58.8 cents/kWh. Any ground mounted solar project that has not received a conditional offer or contract will be paid 58.8 cents/kWh.' Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected by the price change. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has been set at 58.8 cents/kWh. Any' ground mounted solar project that has not received a contract or conditional offer is subject to' this rate. Prices set for the microFIT program followed extensive consultation with stakeholders' about the level necessary to motivate development and compensate proponents for small' projects fairly for their investment. The pricing levels for microFIT were established specifically' to incent the development of rooftop solar PV, which has additional cost considerations' associated with it. There are no tariff changes at this time for other types of generation in the' program. The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs' that are fair and reasonable against the specific goals of the microFIT program and we are' doing so. Why aren’t you honouring the price that people applied for and make the change⇡ effective from this point forward? microFIT has been a runaway success. However, its tariffs were intended to stimulate small' rooftop solar PV generation projects and that focus needs to be restored. A contract only' becomes binding when it is executed. We welcome and encourage proponents who are seeking to develop ground mounted solar PV generation projects to continue to apply at the new rate.' 734b73e59cb14041a9ffc8c16fce1286 3108 4 The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair' and reasonable against the specific goals of the microFIT program and we are doing so. We' believe the new rate is fair and reasonable for ground mounted solar PV applications. What will this tariff set by the Ontario Power Authority cost ratepayers in dollars and lost↵ projects when everything is calculated?↵ We cannot speculate on how many applicants will withdraw their applications because of the' price change. We welcome applicants who are seeking to develop ground mounted solar PV' generation projects to continue with their projects albeit at the new rate. The Ontario Power' Authority has an obligation to protect ratepayers by paying tariffs that are fair and reasonable' against the specific goals of the microFIT program and we are doing so. We believe the new' rate is fair and reasonable for ground mounted solar PV applications. I thought the OPA said it would only review its tariff schedule after two years your own rules didn’t you? – you broke↵ While we stated that there would be a tariff review every two years, the microFIT contract' specifically permits program changes – including pricing revisions – to be made as required to' respond to Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure' supports this decision as it ensures microFIT is meeting its program goals and is providing proper value to developers and ratepayers. This decision was made in conjunction with the' Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting small renewable PV projects by homeowners, institutions and small businesses. We' believe it is in the best long-term interests of microFIT, developers and ratepayers that we do' this now so we can restore focus and obtain the value that the program was intended to deliver. ####' 734b73e59cb14041a9ffc8c16fce1286 3109 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: May-19-10 3:27 PM↵ To: Tang, Amy (MEI); Penic, Jordan (MEI); 'paul.ungerman@ontario.ca'↵ Cc: JoAnne Butler; Colin Andersen; Jim MacDougall; Sheri Bizarro; Mary Bernard; Tim↵ Butters; Glenna Ford; Michael Lyle; Susan Kennedy↵ Subject: Ground-Mounted Solar Communications↵ Attachments: Ground-Mounted Solar Communications.doc↵ As discussed, attached is a draft issue note and comms plan. Kristin 3110 Ground-Mounted microFIT Solar PV Price Change Issue Note and Communications Plan⌧ Background⌧ microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions& and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the& program. As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for a potential 1112 MW of generating capacity, and 3,266 conditional& offers have been issued for a potential of 27.0 MW of generation and 320 microFIT projects& have been connected with 1.3 MW of capacity.& Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size of the projects indicates that a very large majority of applications are for groundmounted rather than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing generators an 11% return on investment over the 20 years of the microFIT& contract (as is all microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be& roof-top solar projects which cost more to install. It was assumed that ground-mounted& would make a small minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to& encourage small rooftop projects and is therefore not in keeping with the intent of the& microFIT program. Costs associated with ground-mounted projects are lower than roof-top and there is& agreement between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be reduced.& The decision has been made to reduce the price to 58.8¢/kWh for ground-mounted solar projects effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a& conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers& approximately $5 per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will& complete the processing of these applications by June 10, 2009. Applicants who have not received a response from OPA by June 10, and who applied to the& microFIT by March 31, will receive a response by August. Applicants submitted by May 31st will receive a response by September. 06521f9fff40483ebfa538c8c438d48b 3111 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the& rationale for the change To continue to encourage uptake on the microFIT Program and the development of small& renewable energy projects in Ontario& Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages⌧ microFIT has been very successful. However, the program was intended to attract⌧ small rooftop solar PV generation projects and that focus needs to be restored. microFIT has enjoyed great success since being launched . OPA has received more& applications for ground mounted solar PV than expected when the program was designed.& As of May 17th, 12,301 applications have been submitted for microFIT projects for a potential& 112 MW of generating capacity, and 3,266 conditional offers have been issued for a& potential of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3& MW of capacity. The size of these projects suggests that the large majority are for groundmounted solar projects. Effective immediately, the price for ground-mounted solar PV microFIT projects has⌧ been changed to 58.8 cents/kWh. microFIT rates were set to provide generators with an 11% return on investment over the 20& years of the contract. The pricing levels for microFIT solar projects were specifically& established for the development of rooftop solar projects. These projects have higher costs& than ground-mounted projects. The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and reasonable. The new rate is fair and provides& ground-mounted generators with an 11% return. 58.8 cents/kWh levels the playing field so that microFIT ground-mounted solar⌧ generators will receive the same rate of return as other microFIT generators – 11%.⌧ The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA& designed the program assuming that there would be very few ground-mounted solar& projects which have lower capital costs than roof-top solar projects. 58.8 cents levels the& playing field among microFIT generators and protects rateapayers. No other microFIT prices are being changed. And roof-top microFIT solar prices⌧ remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures⌧ microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. 06521f9fff40483ebfa538c8c438d48b 3112 3 Proposed tactics: Post notice on the microFIT website to advise of price change for ground-mounted solar and& include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted rooftop or ground-mounted& – advise when accept contract if Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on& website& Engage CANSIA and OFA just prior to the announcement of the change (to be coordinated& with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar one week post change to& provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used& by OPA and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a⌧ huge volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the& program were intended to stimulate small rooftop solar PV generation projects and that focus& needs to be restored. Prices set for the program followed extensive consultation with& stakeholders about the level necessary to motivate development and compensate proponents& for small projects fairly for their investment. The rates were set to provide generators with an& 11% return on investment over the 20 years of the contract. They were also intended to support development of rooftop solar PV, which has additional cost considerations associated with it.& The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair& and reasonable against the specific goals of the microFIT program. That is why effective& immediately, the tariff for ground-mounted solar PV microFIT projects has been reset at 58.8& cents. Any project that has not received a conditional offer or contract will be paid 58.8 cents. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an⌧ 11% rate of return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA designed the program assuming that there would be very few ground-mounted solar projects which have lower capital costs than roof-top solar projects. 58.8 cents levels the& playing field among microFIT generators and protects rateapayers. 06521f9fff40483ebfa538c8c438d48b 3113 4 Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected by the price change. Effective immediately, the tariff for ground-mounted solar PV microFIT projects has been reset at 58.8 cents. Any& project that has not received a contract or conditional offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with stakeholders about the level& necessary to motivate development and compensate proponents for small projects fairly for their investment. The rates were set to provide generators with an 11% return on investment over the 20 years of the contract. The pricing levels for microFIT were established specifically to& incent the development of rooftop solar PV, which has additional cost considerations associated& with it. There are no tariff changes at this time for other types of generation in the program. The& Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and& reasonable against the specific goals of the microFIT program and we are doing so. Why aren’t you honouring the price that people applied for and make the change⌧ effective from this point forward? microFIT has been very successful. However, prices paid for generating electricity under the& program were intended to stimulate small rooftop solar PV generation projects and that focus& needs to be restored. A contract only becomes binding when it is executed. We welcome and& encourage proponents who are seeking to develop ground mounted solar PV generation& projects to continue to apply at the new rate. The Ontario Power Authority has an obligation to& protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the& microFIT program and we are doing so. We believe the new rate is fair and reasonable for& ground mounted solar PV applications.& How many applicants do you think will withdraw because of the price change?⌧ We cannot speculate on how many applicants will withdraw their applications because of the& price change. We welcome applicants who are seeking to develop ground mounted solar PV& generation projects to continue with their projects albeit at the new rate. The Ontario Power& Authority has an obligation to protect ratepayers by paying tariffs that are fair and reasonable& against the specific goals of the microFIT program and we are doing so. We believe the new& rate is fair and reasonable for ground mounted solar PV applications. I thought the OPA said it would only review its tariff schedule after two years – you broke⌧ your own rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract& specifically permits program changes – including pricing revisions – to be made as required to& respond to Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure& supports this decision as it ensures microFIT is meeting its program goals and is providing proper value to developers and ratepayers. This decision was made in conjunction with the& Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting small renewable PV projects by homeowners, institutions and small businesses. We& believe it is in the best long-term interests of microFIT, developers and ratepayers that we do& this now so we can restore focus and obtain the value that the program was intended to deliver. ####& 06521f9fff40483ebfa538c8c438d48b 3114 Patricia Lightburn From: Patricia Lightburn Sent: May-20-10 1:44 PM To: Jim MacDougall; Susan Kennedy Cc: Jason Chee-Aloy Subject: Rooftop Solar PV Definition Attachments: Rooftop Facility Version 1.4.DOCX Attached is the most recent rooftop definition. The only changes that have been made are to remove structure⇡ from “ building or structure ” and to add the requirement that the building must exist at the time of application, unless otherwise allowed by the OPA. Patricia Lightburn⇡ Analyst, FIT Program⇡ 416.969.6267⇡ 3115 Proposed OPA Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of an existing permanent building that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building that would not reasonably have been constructed in the absence of the solar installation. Other solar PV facilities will only be permitted to qualify for this definition with the written consent of the OPA. Guidelines – Definition of Rooftop Facility The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘existing’ in the case where the building is completed and constructed at the⌫ time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘solarready’ home developments are expected to be accommodated through this process. In reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: Has plumbing Has power Has at least three walls Has a roof 3116 Has a roof over 10 feet high Has a foundation Has a building permit The OPA cannot give a final answer on the conformity of a project to the definition of rooftop until the project has been constructed and COD has been reached. However details to the questions provided above will allow the OPA to be better positioned to understand the need and rationale for such a structure. The OPA reserves the right to inspect the facility (as outlined in Section 14.4 of the FIT Contract) to further confirm the project’s compliance with the FIT Contract. Appendix A - Existing definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. 3117 Mary Bernard⌦ From: Mary Bernard⌦ Sent: May-20-10 1:50 PM⌦ To: Sarah Simmons⌦ Cc: Glenna Ford; Kristin Jenkins; Jim MacDougall; Michael Killeavy; Perry Cecchini;⌦ JoAnne Butler⌦ Subject: RE: Ground mounted communications material⌦ Thanks, Sarah, for your comments. 1) 2) Can you please supply a definition of rooftop according to the program? Would ground- mounted not be everything that doesn ’t fit the definition of rooftop? I don’ t really like non- rooftop (maybe for the revised rules, but not for the communications material), but it will depend on the definition. 3) 4) Is it better to ask them to withdraw their application if they don ’ t want the new price or is that more trouble than it is worth? Would it be better to let the application be processed and a conditional offer made just to⇡ let it expire if they don ’ t want the new price? I understand you can ’ t tell the ground- mounted from the rooftop projects from the applications. Perhaps you⇡ would process the application and have the type confirmed by the LDC or project proponent after the conditional offer is made (does it matter prior to that point)? You are right, needs to be addressed.⇡ 5) 6) Will add in your point. It was my understanding that only contracts and conditional offers would get the old price, but that discussion may still be ongoing. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416 - 969 - 6084 From: Sarah Simmons Sent: May 20, 2010 1:37 PM To: Mary Bernard Cc: Glenna Ford; Kristin Jenkins; Jim MacDougall; Michael Killeavy; Perry Cecchini; JoAnne Butler Subject: RE: Ground mounted communications material 1) One thing that I think may be missing from this material is the definition of “ rooftop ” . 2) Instead of calling it “ ground - mounted ”, does it make more sense to call it “ non - rooftop ”? Really, we don ’ t have a definition for “ ground - mounted ” . 3) “ Applicants who feel their microFIT ground- mounted solar PV project will not be economic at the new rate can choose to withdraw their application or reject the conditional offer of a contract when it is made (check). ” … there is no need to reject or cancel a conditional offer … if they have a conditional offer under the old price schedule, they get 80.2. there is no penalty if they let the conditional offer expire. If they get a conditional offer under the new⇡ price schedule, they can let it expire if they don ’ t want to proceed (we will need to determine who wants to proceed 3118 price schedule, they can let it expire if they don ’ t want to proceed (we will need to determine who wants to proceed with their application and who does not, see #4 below) 4) This material does not address one major problem.. what are we doing with existing applications? Rejecting⇡ them and asking them all to resubmit? Unlocking all the application forms and asking them to specify “ rooftop ”⇡ or “ ground ”? Or, doing some form of survey? We don ’ t have enough information to process the applications that have been submitted under the new rules (e.g., we do not know if they are rooftop or ground). Plus, we want to⇡ make sure that everyone under the new prices schedule knows that there has been a price change. All of these⇡ decisions will depend on the outcome of the grand- fathering question which is outstanding. 5) “The price is being changed because the high volume of applications for ground- mounted solar PV projects represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects, and is not in keeping with the intent of the microFIT Program. “ … here we could also say that the cost to install a ground mounted solar PV project is significantly less than the cost to install a rooftop PV project, this represents a change in market conditions and leads us to believe a price change is necessary. 6) Is there any appetite to grandfather applications that have been submitted prior to a cut off date? Is this still on the table at all? Cheers, and great work! Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins Sent: May 20, 2010 12:41 PM To: Jim MacDougall; Michael Killeavy; Perry Cecchini; JoAnne Butler; Sarah Simmons Cc: Mary Bernard; Glenna Ford Subject: FW: Ground mounted communications material Importance: High Please review the attached and send your comments to Mary Bernard . There is a chance the announcement could⇡ be made today or tomorrow but this is not confirmed. Thanks.⇡ Kristin From: Mary Bernard Sent: May 19, 2010 5:00 PM To: Kristin Jenkins Cc: Tim Butters Subject: Ground mounted communications material Kristin – attached for your review is draft: l Website copy l Notes to various groups (applicants, contract holders, ind. associations) l Backgrounders (thanks, Tim) 3119 Please note that as the Qs evolve in the issues note, so must the Qs in the internal backgrounder. Let us know if/when further work on these are required or if you want me to handle reviews and approvals. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416 - 969 - 6084 3120 Sarah Simmons↵ From: Sarah Simmons↵ Sent: May-20-10 2:19 PM↵ To: Mary Bernard↵ Cc: Glenna Ford; Kristin Jenkins; Jim MacDougall; Michael Killeavy; Perry Cecchini;↵ JoAnne Butler; Sheri Bizarro↵ RE: Ground mounted communications material↵ Subject: 1) It ’ s TBD … the definition may only be required in the letters to the folks that are not going to be grandfathered and perhaps in a revised FAQ. At this point in time, we perhaps should just leave a placeholder. I fear that as soon as we launch this change that we will be bombarded with Q ’ s.. e.g., “ does _______ qualify as a rooftop ” ? 2) Fair enough. My point here is that there are some projects that may not consider themselves to be “ ground mounted ” and not really consider themselves “ rooftop ” either. But for the purpose of communications, I ’ m ok to leave in the term “ ground - mounted ” 3) and 4) There are some pretty big decisions regarding implementation of this price change… which we really need to think thru before we post anything. For the grandfathered applicants, there is no need to provide any further detail. For the Public docs and the letters to non - grandfathered applicants, I think we need to state something along the lines of “ more information about how the OPA will implement this change will follow next week, including how applicants can indicate to the OPA if they wish to withdraw their application or proceed under the new price schedule ” … e.g., we are going to need a second letter/notice telling people what to do next … when we have time to think it thru with the application review team and IT. We cannot process applications that have been submitted under the new rules … we don ’ t know if they are ground or roof. 5) thanks 6) It is my understanding that the “ grandfathering discussion ” is still taking place. Though I could be wrong. The communication material you have prepared represents the most likely outcome of the discussion.. I was simply wondering if there was any further progress. --- one more point … are we freezing applications submission until we have the new application form uploaded. IT will need some time to implement the new application form. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Mary Bernard⌦ 3121 Sent: May 20, 2010 1:50 PM⌦ To: Sarah Simmons⌦ Cc: Glenna Ford; Kristin Jenkins; Jim MacDougall; Michael Killeavy; Perry Cecchini; JoAnne Butler⌦ Subject: RE: Ground mounted communications material⌦ Thanks, Sarah, for your comments. 1) 2) Can you please supply a definition of rooftop according to the program? Would ground- mounted not be everything that doesn ’t fit the definition of rooftop? I don’ t really like non- rooftop (maybe for the revised rules, but not for the communications material), but it will depend on the definition. 3) 4) Is it better to ask them to withdraw their application if they don ’ t want the new price or is that more trouble than it is worth? Would it be better to let the application be processed and a conditional offer made just to let it expire if they don ’ t want the new price? I understand you can ’ t tell the ground- mounted from the rooftop projects from the applications. Perhaps you would process the application and have the type confirmed by the LDC or project proponent after the conditional offer is made (does it matter prior to that point)? You are right, needs to be addressed. 5) 6) Will add in your point. It was my understanding that only contracts and conditional offers would get the old price, but that discussion may still be ongoing. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416 - 969 - 6084 From: Sarah Simmons Sent: May 20, 2010 1:37 PM⌦ To: Mary Bernard⌦ Cc: Glenna Ford; Kristin Jenkins; Jim MacDougall; Michael Killeavy; Perry Cecchini; JoAnne Butler⌦ Subject: RE: Ground mounted communications material⌦ 1) One thing that I think may be missing from this material is the definition of “ rooftop ” . 2) Instead of calling it “ ground - mounted ”, does it make more sense to call it “ non - rooftop ”? Really, we don ’ t have a definition for “ ground - mounted ” . 3) “ Applicants who feel their microFIT ground- mounted solar PV project will not be economic at the new rate can choose to withdraw their application or reject the conditional offer of a contract when it is made (check). ” … there is no need to reject or cancel a conditional offer … if they have a conditional offer under the old price schedule, they get 80.2. there is no penalty if they let the conditional offer expire. If they get a conditional offer under the new price schedule, they can let it expire if they don ’ t want to proceed (we will need to determine who wants to proceed with their application and who does not, see #4 below) 4) This material does not address one major problem.. what are we doing with existing applications? Rejecting them and asking them all to resubmit? Unlocking all the application forms and asking them to specify “ rooftop ” or “ ground ”? Or, doing some form of survey? We don ’ t have enough information to process the applications that have been submitted under the new rules (e.g., we do not know if they are rooftop or ground). Plus, we want to make sure that everyone under the new prices schedule knows that there has been a price change. All of these decisions will depend on the outcome of the grand- fathering question which is outstanding. 3122 5) “The price is being changed because the high volume of applications for ground- mounted solar PV projects represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects, and is not in keeping with the intent of the microFIT Program. “ … here we could also say that the cost to install a ground mounted solar PV project is significantly less than the cost to install a rooftop PV project, this represents a change in market conditions and leads us to believe a price change is necessary. 6) Is there any appetite to grandfather applications that have been submitted prior to a cut off date? Is this still on the table at all? Cheers, and great work! Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins⌦ Sent: May 20, 2010 12:41 PM⌦ To: Jim MacDougall; Michael Killeavy; Perry Cecchini; JoAnne Butler; Sarah Simmons⌦ Cc: Mary Bernard; Glenna Ford⌦ Subject: FW: Ground mounted communications material⌦ Importance: High⌦ Please review the attached and send your comments to Mary Bernard . There is a chance the announcement could be made today or tomorrow but this is not confirmed. Thanks. Kristin From: Mary Bernard⌦ Sent: May 19, 2010 5:00 PM⌦ To: Kristin Jenkins⌦ Cc: Tim Butters⌦ Subject: Ground mounted communications material⌦ Kristin – attached for your review is draft: l Website copy l Notes to various groups (applicants, contract holders, ind. associations) l Backgrounders (thanks, Tim) Please note that as the Qs evolve in the issues note, so must the Qs in the internal backgrounder. Let us know if/when further work on these are required or if you want me to handle reviews and approvals. Thanks. Mary Bernard Corporate Communications 3123 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: May-21-10 12:20 PM↵ To: 'Tang, Amy (MEI)'; 'Penic, Jordan (MEI)'; 'paul.ungerman@ontario.ca'; JoAnne↵ Butler; Jason Chee-Aloy; Jim MacDougall; 'Ing, Pearl (MEI)'; Lo, Sue (MEI); 'Lewyckyj, Maryanna (MEI)'; Powers, Kevin (MEI); 'Smith, Anne (MEI)';↵ Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford↵ Cc: Irene Mauricette↵ Subject: Updated Ground-Mounted Solar Materials↵ Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web↵ Posting.doc↵ We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground- mounted solar. Attached is an updated issues note◆ as well as the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will circulate shortly.◆ Kristin Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca. 3124 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3125 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3126 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3127 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3128 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3129 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3130 Jim MacDougall From: Jim MacDougall Sent: May-25-10 11:29 AM To: Cindy Roks Cc: Patricia Lightburn Subject: FW: Updated Ground-Mounted Solar Materials Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web Posting.doc Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Kristin Jenkins↵ Sent: May 21, 2010 12:20 PM↵ To: 'Tang, Amy (MEI)'; 'Penic, Jordan (MEI)'; 'paul.ungerman@ontario.ca'; JoAnne Butler; Jason Chee-Aloy; Jim↵ MacDougall; 'Ing, Pearl (MEI)'; Lo, Sue (MEI); 'Lewyckyj, Maryanna (MEI)'; Powers, Kevin (MEI); 'Smith, Anne↵ (MEI)'; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford↵ Cc: Irene Mauricette↵ Subject: Updated Ground-Mounted Solar Materials↵ We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground- mounted solar. Attached is an updated issues note◆ as well as the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new◆ positioning. Will circulate shortly.◆ Kristin◆ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca4 3131 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3132 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3133 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3134 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3135 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3136 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3137 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: May-25-10 1:14 PM✏ To: Jim MacDougall✏ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI)✏ Subject: Small Wind Pricing✏ Attachments: DMO Small Wind FIT May 25 2010Revised.ppt✏ Hi Jim, we briefed the DM on small wind this morning and we will be revising this deck for a Minister ’ s briefing at⇢ some point in the near future. One issue we foresee on pricing is the potential issue of aggregation surfacing with⇢ small wind. Can you please have a look at the deck and give some thought to proactively addressing this issue by considering a price category to address aggregation? Thanks, Leo⇢ 3138 Ministry of Energy and Infrastructure◆ Developing a Small Wind⇣ Feed-in Tariff⇣ Deputy Minister Briefing⇣ May 25, 2010 Renewables and Energy Efficiency 1⇥ 3139 Ministry of Energy and Infrastructure◆ Key Deliverables⇣ Small Wind FIT Price⇣ Domestic Content Grid⇣ Standards (Performance and Consumer Protection)⇣ Municipal and Provincial Regulatory Approvals⇣ 2⇣ 3140 Ministry of Energy and Infrastructure◆ Why We Need Small Wind FIT Price⇣ Definition of Small Wind:⇣ Definition varies depending on source; maximum 300 kW⇣ Based on capacity <300 kW or < 65 kW or swept area of <200m2 ~16 m diameter⇣ Introducing a FIT price for small wind would:⇣ Expand use of clean renewable energy⇣ Assist rural economic development (farms, communities, rural businesses)⇣ Encourage growth in Ontario’s small wind sector in both manufacturing and⇠ installation through domestic content requirements. Currently four firms in Ontario:⇣ Cleanfield Energy - 3.5kW turbines (merged with WePower of California - 12 kW turbines),⇣ ⇠ Wind Simplicity 3, 7 turbines and 23 kW turbines,⇣ ⇠ Wenvor 30 kW turbines,⇣ ⇠ Windtronics 2.2 kW turbines⇣ 3⇣ 3141 Ministry of Energy and Infrastructure◆ Proposed Small Wind FIT Price⇣ Section 13 There will be a meeting with CanWEA (late May/Early June) to discuss the differences.⇣ Prices considerably lower than price requested by Windtronics for ⇢ 1 0 kW tranche (60⇣ c/KWh). Currently working with MEDT to review Windtronics’ pricing assumptions.⇠ 4⇣ 3142 Ministry of Energy and Infrastructure◆ OPA Proposed Small Wind FIT Price⇣ Section 13 5⇣ 3143 Ministry of Energy and Infrastructure◆ CanWEA Recommended Small Wind FIT Price⇣ Proposed CanWEA prices are based on turbine capacity*:⇣ 1 - 10 kW kW)⇣ – 50 to 55 c/KWh (assuming 15% capacity factor and $4,500 per⇣ 11 – 100 kW - 35 c/KWh (assuming 20% capacity factor and $6,000 per⇣ kW)⇣ 101 – 500 kW kW)⇣ - 25 c/KWh (assuming 20% capacity factor and $7,500 per⇣ CanWEA’s small wind FIT price estimates are based on pre-REA installations⇣ and assumes REA process varies by small wind turbine size.⇣ CanWEA used same assumptions used to calculate FIT prices for solar PV (12% return on investment and a 70-30 debt-equity ratio).⇣ * CanWEA FIT price analysis are in the appendix on slides 18 and 19.⇣ 6⇣ 3144 Ministry of Energy and Infrastructure◆ Domestic Content Grid: Current Status◆ Working with CanWEA and industry to develop a domestic content⇣ grid for specific components relevant for small wind.⇣ MEI consultation with stakeholders to establish domestic content⇣ requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA⇣ website (August 15, 2010)⇣ 7⇣ 3145 Ministry of Energy and Infrastructure◆ Standards⇣ Performance Standard information is required to develop accurate FIT prices and to assure⇣ customers that the turbine meets safety standards.⇣ MEI supports CanWEA’s proposal that a Small Wind FIT use the SWCC standard:⇠ The standard applies specifically to small wind turbines.⇣ SWCC to issue easy-to-understand labels for Rated Annual Energy Output, Rated Power; and Rated Sound Level⇣ SWCC certification will also confirm the turbine meets durability and safety requirements⇣ Certification applications will be accepted in early 2010⇣ First certified turbines to be on the market by mid-2010; one year for the program to be in full⇣ swing (spring 2011)⇣ SWCC provides assurance around performance ratings, noise, safety and product durability to⇣ protect consumers. CanWEA also has public education role to address consumer protection.⇣ International Electronic Commission (IEC)/ British Wind Energy Association (BWEA) small wind⇣ standards can be used for Conditional Temporary Certification during first two years of SWCC. This level of certification would last for 18 months (reciprocity).⇣ CanWEA, in the interim, is recommending government use the New York State Energy Research⇣ and Development Authority (NYSERDA) list of certified wind turbines.⇣ Non-accredited and manufacturer testing is permitted by the SWCC, but would require SWCC on⇣ site audit and period spot checks.⇣ 8⇣ 3146 Ministry of Energy and Infrastructure◆ Standards (cont’d)⌦ Continue to work with CSA and stakeholders to establish standards and consider MEI financial⇣ support for CSA certification on SW standards (fiscal 2010/11); standards work would address:⇣ Cold weather testing, flicker, ice throw, lightning strikes⇣ Health and safety (ie. acoustic, worker safety and training, other areas of public interest)⇣ Design, durability, installation operation and maintenance⇣ Development of an Ontario test facility (currently only facility in Canada is in PEI).⇣ 9⇣ 3147 Ministry of Energy and Infrastructure◆ Municipal Approvals⇣ Building Code Act requires building permit (supporting tower) for wind turbines rated⇣ greater than 3 kW - roof mounted turbines of any size require a building permit; silent⇣ on installation requirements for turbines rated under 3 kW and municipalities no⇣ longer have ability to regulate under the Planning Act. (larger ones regulated by⇣ REA); MMAH advised that the AMO would strongly oppose including turbines under 3⇣ kW in the Building Code, as that would impose an administrative burden on⇣ municipalities.⇣ Municipal Act offers municipalities broad powers related to health, safety and wellbeing of persons; protection of persons and property, including consumer protection⇣ and structures. Municipalities may attempt to use the Act to create noise by-laws or a⇣ permit system Planning Act (e.g., zoning) does not apply to renewable energy technologies (generating electricity)⇣ 10⇣ 10 3148 Ministry of Energy and Infrastructure◆ Provincial Approvals⇣ Renewable Energy Approval for wind turbines⇣ <3 kW - No REA requirements (potential for municipal noise by-laws);⇣ MOE position is that wind turbines <3 kW are unlikely to require⇣ regulation; seeking legal opinion on whether turbines <3 kW can be⇣ regulated under GEA.⇣ 3 kW to 50 kW - REA includes public notice and Project Description⇣ Report, (noise considerations under MOE’s Noise Guidelines for Wind⇠ Farms part of REA review)⇣ >50 kW < 102dBa - REA includes the above plus public consultation,⇣ construction plan, decommissioning plan, property setback (hub height),⇣ road/rail setback (blade + 10m)⇣ >50 kW 102 to 107dBA - REA includes the above 550m noise setback⇣ 11 11⇣ 3149 Ministry of Energy and Infrastructure◆ Next Steps⇣ Interministerial Small Wind meeting: MEI, MMAH, MOE (May 31, 2010)⇣ Presentation of OPA proposed small wind FIT tariff to CanWEA (May/Early June, 2010)⇣ Technical standards survey response results compiled by CSA (May/Early June, 2010)⇣ Domestic Content Grid survey response from CanWEA Small Wind members (June, 2010)⇣ Review policy and standards used in other jurisdictions (June, 2010)⇣ Develop certification requirements: American Wind Energy Association adopted the Small Wind Certification Council⇣ (SWCC) test method in December 2009. CanWEA has proposed that a micro wind FIT⇣ use the new standard; SWCC estimated cost of certification between 10K and 40K⇣ excluding cost of testing.⇣ MEI consultation with stakeholders to establish domestic content requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA website (August 15, 2010)⇣ 12⇣ 12 3150 Ministry of Energy and Infrastructure◆ Appendix◆ Windtronics⇣ Jurisdictional Review⇣ CanWEA FIT Price Analysis⇣ Municipal/Provincial Approvals⇣ 13⇣ 13 3151 . Ontario Ministryof Energy and Infrastructure i i a? Windtronics Section 17 14 3152 Ministry of Energy and Infrastructure◆ Jurisdictional Comparison to◆ Vermont, Washington (WA), G. Britain, Israel, Italy◆ <10 kW WA Contract Term 6 Vermont Size FIT CAD$/kW > 10 ⇧ 50 Small 0.44⇥ Vermont <15 kW 0.21⇥ Ontario Contract◆ Term◆ Size FIT◆ CAD$/kW◆ > 15 kW 0.16⇥ 20 > 10 ⇧ 50 0.315⇥ ON 20 <10 kW 0.392⇥ G. Britain proposed >15 <50kW 0.36⇥ G. Britain proposed >1.5<15 kW 0.41⇥ Italy 15 < 200 kW 0.53⇥ Israel 20 <15 kW 0.52⇥ Italy 15 < 200 kW 0.53⇥ > 50 ⇧300 Contract Term Vermont Size FIT◆ CAD$/kW◆ >15 kW 0.16⇥ Ontario 20 > 10 ⇧ 50 0.237⇥ B. Britain Proposed >250 <500kW⇥ 0.28⇥ 15⇣ 3153 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis◆ This memo presents the results of a generic analysis which aimed at calculating realistic FIT prices for small⇣ wind applications, i.e. from 1 kW to approximately 300 kW. The following table presents the parameters that⇣ were used in the financial model. It should be noted that, when appropriate, parameters used by the OPA to develop the prices for other renewables such as solar PV applications were used. Table 1. Parameter Values Used in the Financial Analysis 0-10 kW 11-100 kW > 100 kW 10 kW 65 kW 250 kW – Small Wind Comment Parameter Nominal project size used in analysis Total project cost O & M costs Capacity factor Project duration (FIT⇣ contract) $7500 0r⇣ 8500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $6000 or⇣ 6500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $4500/kW Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 1.6 ¢/kWh Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 13,15 or 22% Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 20 years 20 years 20 years Base year of construction 2011 2011 2011 Inflation rate (IPC) 2.25 % 2.25 % 2.25 % Electricity price⇣ index 0.4% 0.4 % 0.4 % EcoEnergy/other⇣ incentive 0 ¢/kWh 0 ¢/kWh 0 ¢/kWh Debt/equity Interest rate 70/30 or⇣ 50/50 7% 70/30⇣ 7% Assumption from the OPA Assumes that the electricity price is indexed at 20% of⇣ CPI (20% x 2 % = 0.4%), as per proposed FIT program rules. 70/30 Assumption from the OPA 7% Assumption from the OPA 16⇣ 3154 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis (cont’d) The parameters above were input in the Helimax financial model and prices were calculated to achieve either a⇣ Return on Equity (ROE) of 12% before taxes, or an Internal Rate of Return (IRR) of 12% before taxes. The two⇣ calculations were provided as it is not clear from the OPA calculations how the ROE was calculated and what was the implicit cost of equity. Table 2. Estimated Prices for Base-Case Scenarios of Three Small Wind Categories Project Size Range 0-10 kW 11-100 kW $7500/kW,⇣ $8500/kW,⇣ $8500/kW,⇣ 30%⇣ 50%⇣ 30%⇣ $6500/kw Equity, Equity, Equity, 18% CF 18% CF 20% CF > 100 kW Scenario $8500/kW, 30%⇣ Equity, 18% CF Price to achieve 12% ROE 54.0 47.8 54.6 48.8 37.7 35.0 24.4 Price to achieve 12% IRR 58.5 52.1 62.4 53 41.0 38.0 26.5 $6000/kW Table 3. Additional Runs 1-10kW 1-10kW 10-100kW 10-100kW 100300kW Scenario $7500/kW, 30% Equity, 13% CF $7500/kW, 30% Equity, 15% CF $6000/kW, 30% Equity, 13% CF $6000/kW, 30% Equity, 15% CF $4500/kW, 30% Equity, 13% CF Price to achieve 12% ROE 64.5 56.2 52.0 45.3 39.5 34.5 Price to achieve 12% IRR 71.5 62.0 57.5 50.0 43.5 38.0 100300kW $4500/kW,⇣ 30%⇣ Equity, 15% CF 17⇣ 3155 Ministry of Energy and Infrastructure◆ CanWEA FIT Small Wind Committee Members◆ The input provided by manufacturers who were members of CanWEA’s small wind committee in ’09⇠ and ’1 0.⇠ The numbers submitted were based on installations in Ontario.⇣ Section 13 18⇣ 3156 Ministry of Energy and Infrastructure◆ Jurisdictional Review:⇣ Small Wind Certification Options⇣ American Wind Energy Association (AWEA) small wind standard includes:⇣ Standardized real world performance measurement and rating⇣ Standard noise measurements (with product label)⇣ Safety measures including operation/maintenance provisions and loss of control⇣ function at lowest claimed operating temperature⇣ Durability (25 hours of power production, includes noting repairs, tower dynamics problems)⇣ Standard to be overseen by the SWCC. Products would be evaluated by a third party⇣ tester (one in PEI)⇣ Standardized real world performance measures would help classify products FIT⇣ categories. 19⇣ 19 3157 Ministry of Energy and Infrastructure◆ Small Wind Certification Options◆ CSA⇣ CSA 61400-2 small wind standard is based on the IEC standard and covers safety, quality assurance, and engineering integrity and specifies safety requirements including design, installation, maintenance and operation under specified external conditions⇣ Canadian deviations related to electrical and structural safety considerations related to Canadian weather⇣ conditions (products to be designed for extreme weather -200C to 500C and local icing, but no testing⇣ requirements)⇣ ⇠ MMAH does not recognize CSA small wind standard due to a lack of cold weather testing provisions ULE⇣ Underwriter Laboratories Environmental is a new certification system that focuses on the electrical components of wind turbines. Note CSA standards look at the electrical components as they relate to Canadian climate⇣ conditions.⇣ California⇣ California’s Emerging Renewables Program requires eligible products be compliant with either IEC 61 400 -2 (small⇣ wind standard used by CSA and AWEA) or provide one year performance data and demonstrate product reliability⇣ by testing the turbine for one year at winds of at least 12 mph⇣ United Kingdom⇣ British Wind Energy Association uses same small wind standard as the AWEA. The BWEA standard is already in⇣ effect, but is not mandatory⇣ Proposed UK FIT may require⇣ BWEA small wind standard⇣ Microgeneration Certification Scheme for the manufacturing process (evaluated at factory); and⇣ Microgeneration Certification Scheme standard for installation⇣ The BWEA notes that UK manufacturers hold an 82% revenue share of the UK market and export 50% of their⇣ output to over 100 countries worldwide⇣ 3158 20⇣ 20 Ministry of Energy and Infrastructure◆ Small Wind Certification Options⇣ NYSERDA offers three options for manufacturers or dealers to certify products:⇣ Provide evidence of certification by a nationally recognized testing laboratory or organization⇣ as meeting the safety and performance requirements of a nationally or internationally⇣ recognized testing institution;⇣ Provide technical information and specifications of the wind generator and provide⇣ acceptable evidence to NYSERDA demonstrating one year of reliable operation of that model⇣ of equipment at a site with average annual wind speeds of at least 12 mph; or⇣ Provide evidence that the wind generator has demonstrated reliable operation when tested to⇣ the requirements of the AWEA Small Wind Turbine Performance and Safety Standard (or⇣ most recent version of the draft standard until the standard is adopted).⇣ Wind generators approved by other jurisdictions with similar eligibility criteria may be qualified.⇣ NYSERDA reserves the right to deny eligibility of any wind generator for any reason including but not limited to: poor generator performance, concerns about wind generation system design or⇣ quality of data presented, lack of manufacturer support for maintenance, warranties, etc.,⇣ insufficient experience with generator, etc. Siting requirements include: minimum lot size (1 acre), setbacks, minimum wind resources (10⇣ miles per hour)⇣ 21⇣ 21 3159 Jim MacDougall From: Jim MacDougall Sent: May-25-10 2:14 PM To: Patricia Lightburn Bcc: Travis Lusney Subject: FW: Small Wind Pricing Attachments: DMO Small Wind FIT May 25 2010Revised.ppt FYI⌅ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: May 25, 2010 1:14 PM⇢ To: Jim MacDougall⇢ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI)⇢ Subject: Small Wind Pricing⇢ Hi Jim, we briefed the DM on small wind this morning and we will be revising this deck for a Minister ’ s briefing at⌅ some point in the near future. One issue we foresee on pricing is the potential issue of aggregation surfacing with⌅ small wind. Can you please have a look at the deck and give some thought to proactively addressing this issue by considering a price category to address aggregation? Thanks, Leo⌅ 3160 Ministry of Energy and Infrastructure◆ Developing a Small Wind⇣ Feed-in Tariff⇣ Deputy Minister Briefing⇣ May 25, 2010 Renewables and Energy Efficiency 1⇥ 3161 Ministry of Energy and Infrastructure◆ Key Deliverables⇣ Small Wind FIT Price⇣ Domestic Content Grid⇣ Standards (Performance and Consumer Protection)⇣ Municipal and Provincial Regulatory Approvals⇣ 2⇣ 3162 Ministry of Energy and Infrastructure◆ Why We Need Small Wind FIT Price⇣ Definition of Small Wind:⇣ Definition varies depending on source; maximum 300 kW⇣ Based on capacity <300 kW or < 65 kW or swept area of <200m2 ~16 m diameter⇣ Introducing a FIT price for small wind would:⇣ Expand use of clean renewable energy⇣ Assist rural economic development (farms, communities, rural businesses)⇣ Encourage growth in Ontario’s small wind sector in both manufacturing and⇠ installation through domestic content requirements. Currently four firms in Ontario:⇣ Cleanfield Energy - 3.5kW turbines (merged with WePower of California - 12 kW turbines),⇣ ⇠ Wind Simplicity 3, 7 turbines and 23 kW turbines,⇣ ⇠ Wenvor 30 kW turbines,⇣ ⇠ Windtronics 2.2 kW turbines⇣ 3⇣ 3163 Ministry of Energy and Infrastructure◆ Proposed Small Wind FIT Price⇣ Section 13 There will be a meeting with CanWEA (late May/Early June) to discuss the differences.⇣ Prices considerably lower than price requested by Windtronics for ⇢ 1 0 kW tranche (60⇣ c/KWh). Currently working with MEDT to review Windtronics’ pricing assumptions.⇠ 4⇣ 3164 Ministry of Energy and Infrastructure◆ OPA Proposed Small Wind FIT Price⇣ Section 13 5⇣ 3165 Ministry of Energy and Infrastructure◆ CanWEA Recommended Small Wind FIT Price⇣ Proposed CanWEA prices are based on turbine capacity*:⇣ 1 - 10 kW kW)⇣ – 50 to 55 c/KWh (assuming 15% capacity factor and $4,500 per⇣ 11 – 100 kW - 35 c/KWh (assuming 20% capacity factor and $6,000 per⇣ kW)⇣ 101 – 500 kW kW)⇣ - 25 c/KWh (assuming 20% capacity factor and $7,500 per⇣ CanWEA’s small wind FIT price estimates are based on pre-REA installations⇣ and assumes REA process varies by small wind turbine size.⇣ CanWEA used same assumptions used to calculate FIT prices for solar PV (12% return on investment and a 70-30 debt-equity ratio).⇣ * CanWEA FIT price analysis are in the appendix on slides 18 and 19.⇣ 6⇣ 3166 Ministry of Energy and Infrastructure◆ Domestic Content Grid: Current Status◆ Working with CanWEA and industry to develop a domestic content⇣ grid for specific components relevant for small wind.⇣ MEI consultation with stakeholders to establish domestic content⇣ requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA⇣ website (August 15, 2010)⇣ 7⇣ 3167 Ministry of Energy and Infrastructure◆ Standards⇣ Performance Standard information is required to develop accurate FIT prices and to assure⇣ customers that the turbine meets safety standards.⇣ MEI supports CanWEA’s proposal that a Small Wind FIT use the SWCC standard:⇠ The standard applies specifically to small wind turbines.⇣ SWCC to issue easy-to-understand labels for Rated Annual Energy Output, Rated Power; and Rated Sound Level⇣ SWCC certification will also confirm the turbine meets durability and safety requirements⇣ Certification applications will be accepted in early 2010⇣ First certified turbines to be on the market by mid-2010; one year for the program to be in full⇣ swing (spring 2011)⇣ SWCC provides assurance around performance ratings, noise, safety and product durability to⇣ protect consumers. CanWEA also has public education role to address consumer protection.⇣ International Electronic Commission (IEC)/ British Wind Energy Association (BWEA) small wind⇣ standards can be used for Conditional Temporary Certification during first two years of SWCC. This level of certification would last for 18 months (reciprocity).⇣ CanWEA, in the interim, is recommending government use the New York State Energy Research⇣ and Development Authority (NYSERDA) list of certified wind turbines.⇣ Non-accredited and manufacturer testing is permitted by the SWCC, but would require SWCC on⇣ site audit and period spot checks.⇣ 8⇣ 3168 Ministry of Energy and Infrastructure◆ Standards (cont’d)⌦ Continue to work with CSA and stakeholders to establish standards and consider MEI financial⇣ support for CSA certification on SW standards (fiscal 2010/11); standards work would address:⇣ Cold weather testing, flicker, ice throw, lightning strikes⇣ Health and safety (ie. acoustic, worker safety and training, other areas of public interest)⇣ Design, durability, installation operation and maintenance⇣ Development of an Ontario test facility (currently only facility in Canada is in PEI).⇣ 9⇣ 3169 Ministry of Energy and Infrastructure◆ Municipal Approvals⇣ Building Code Act requires building permit (supporting tower) for wind turbines rated⇣ greater than 3 kW - roof mounted turbines of any size require a building permit; silent⇣ on installation requirements for turbines rated under 3 kW and municipalities no⇣ longer have ability to regulate under the Planning Act. (larger ones regulated by⇣ REA); MMAH advised that the AMO would strongly oppose including turbines under 3⇣ kW in the Building Code, as that would impose an administrative burden on⇣ municipalities.⇣ Municipal Act offers municipalities broad powers related to health, safety and wellbeing of persons; protection of persons and property, including consumer protection⇣ and structures. Municipalities may attempt to use the Act to create noise by-laws or a⇣ permit system Planning Act (e.g., zoning) does not apply to renewable energy technologies (generating electricity)⇣ 10⇣ 10 3170 Ministry of Energy and Infrastructure◆ Provincial Approvals⇣ Renewable Energy Approval for wind turbines⇣ <3 kW - No REA requirements (potential for municipal noise by-laws);⇣ MOE position is that wind turbines <3 kW are unlikely to require⇣ regulation; seeking legal opinion on whether turbines <3 kW can be⇣ regulated under GEA.⇣ 3 kW to 50 kW - REA includes public notice and Project Description⇣ Report, (noise considerations under MOE’s Noise Guidelines for Wind⇠ Farms part of REA review)⇣ >50 kW < 102dBa - REA includes the above plus public consultation,⇣ construction plan, decommissioning plan, property setback (hub height),⇣ road/rail setback (blade + 10m)⇣ >50 kW 102 to 107dBA - REA includes the above 550m noise setback⇣ 11 11⇣ 3171 Ministry of Energy and Infrastructure◆ Next Steps⇣ Interministerial Small Wind meeting: MEI, MMAH, MOE (May 31, 2010)⇣ Presentation of OPA proposed small wind FIT tariff to CanWEA (May/Early June, 2010)⇣ Technical standards survey response results compiled by CSA (May/Early June, 2010)⇣ Domestic Content Grid survey response from CanWEA Small Wind members (June, 2010)⇣ Review policy and standards used in other jurisdictions (June, 2010)⇣ Develop certification requirements: American Wind Energy Association adopted the Small Wind Certification Council⇣ (SWCC) test method in December 2009. CanWEA has proposed that a micro wind FIT⇣ use the new standard; SWCC estimated cost of certification between 10K and 40K⇣ excluding cost of testing.⇣ MEI consultation with stakeholders to establish domestic content requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA website (August 15, 2010)⇣ 12⇣ 12 3172 Ministry of Energy and Infrastructure◆ Appendix◆ Windtronics⇣ Jurisdictional Review⇣ CanWEA FIT Price Analysis⇣ Municipal/Provincial Approvals⇣ 13⇣ 13 3173 . Ontario Ministryof Energy and Infrastructure i i a? Windtronics Section 17 14 3174 Ministry of Energy and Infrastructure◆ Jurisdictional Comparison to◆ Vermont, Washington (WA), G. Britain, Israel, Italy◆ <10 kW WA Contract Term 6 Vermont Size FIT CAD$/kW > 10 ⇧ 50 Small 0.44⇥ Vermont <15 kW 0.21⇥ Ontario Contract◆ Term◆ Size FIT◆ CAD$/kW◆ > 15 kW 0.16⇥ 20 > 10 ⇧ 50 0.315⇥ ON 20 <10 kW 0.392⇥ G. Britain proposed >15 <50kW 0.36⇥ G. Britain proposed >1.5<15 kW 0.41⇥ Italy 15 < 200 kW 0.53⇥ Israel 20 <15 kW 0.52⇥ Italy 15 < 200 kW 0.53⇥ > 50 ⇧300 Contract Term Vermont Size FIT◆ CAD$/kW◆ >15 kW 0.16⇥ Ontario 20 > 10 ⇧ 50 0.237⇥ B. Britain Proposed >250 <500kW⇥ 0.28⇥ 15⇣ 3175 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis◆ This memo presents the results of a generic analysis which aimed at calculating realistic FIT prices for small⇣ wind applications, i.e. from 1 kW to approximately 300 kW. The following table presents the parameters that⇣ were used in the financial model. It should be noted that, when appropriate, parameters used by the OPA to develop the prices for other renewables such as solar PV applications were used. Table 1. Parameter Values Used in the Financial Analysis 0-10 kW 11-100 kW > 100 kW 10 kW 65 kW 250 kW – Small Wind Comment Parameter Nominal project size used in analysis Total project cost O & M costs Capacity factor Project duration (FIT⇣ contract) $7500 0r⇣ 8500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $6000 or⇣ 6500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $4500/kW Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 1.6 ¢/kWh Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 13,15 or 22% Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 20 years 20 years 20 years Base year of construction 2011 2011 2011 Inflation rate (IPC) 2.25 % 2.25 % 2.25 % Electricity price⇣ index 0.4% 0.4 % 0.4 % EcoEnergy/other⇣ incentive 0 ¢/kWh 0 ¢/kWh 0 ¢/kWh Debt/equity Interest rate 70/30 or⇣ 50/50 7% 70/30⇣ 7% Assumption from the OPA Assumes that the electricity price is indexed at 20% of⇣ CPI (20% x 2 % = 0.4%), as per proposed FIT program rules. 70/30 Assumption from the OPA 7% Assumption from the OPA 16⇣ 3176 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis (cont’d) The parameters above were input in the Helimax financial model and prices were calculated to achieve either a⇣ Return on Equity (ROE) of 12% before taxes, or an Internal Rate of Return (IRR) of 12% before taxes. The two⇣ calculations were provided as it is not clear from the OPA calculations how the ROE was calculated and what was the implicit cost of equity. Table 2. Estimated Prices for Base-Case Scenarios of Three Small Wind Categories Project Size Range 0-10 kW 11-100 kW $7500/kW,⇣ $8500/kW,⇣ $8500/kW,⇣ 30%⇣ 50%⇣ 30%⇣ $6500/kw Equity, Equity, Equity, 18% CF 18% CF 20% CF > 100 kW Scenario $8500/kW, 30%⇣ Equity, 18% CF Price to achieve 12% ROE 54.0 47.8 54.6 48.8 37.7 35.0 24.4 Price to achieve 12% IRR 58.5 52.1 62.4 53 41.0 38.0 26.5 $6000/kW Table 3. Additional Runs 1-10kW 1-10kW 10-100kW 10-100kW 100300kW Scenario $7500/kW, 30% Equity, 13% CF $7500/kW, 30% Equity, 15% CF $6000/kW, 30% Equity, 13% CF $6000/kW, 30% Equity, 15% CF $4500/kW, 30% Equity, 13% CF Price to achieve 12% ROE 64.5 56.2 52.0 45.3 39.5 34.5 Price to achieve 12% IRR 71.5 62.0 57.5 50.0 43.5 38.0 100300kW $4500/kW,⇣ 30%⇣ Equity, 15% CF 17⇣ 3177 Ministry of Energy and Infrastructure◆ CanWEA FIT Small Wind Committee Members◆ The input provided by manufacturers who were members of CanWEA’s small wind committee in ’09⇠ and ’1 0.⇠ The numbers submitted were based on installations in Ontario.⇣ Canadian-based:⇣ Section 13 18⇣ 3178 Ministry of Energy and Infrastructure◆ Jurisdictional Review:⇣ Small Wind Certification Options⇣ American Wind Energy Association (AWEA) small wind standard includes:⇣ Standardized real world performance measurement and rating⇣ Standard noise measurements (with product label)⇣ Safety measures including operation/maintenance provisions and loss of control⇣ function at lowest claimed operating temperature⇣ Durability (25 hours of power production, includes noting repairs, tower dynamics problems)⇣ Standard to be overseen by the SWCC. Products would be evaluated by a third party⇣ tester (one in PEI)⇣ Standardized real world performance measures would help classify products FIT⇣ categories. 19⇣ 19 3179 Ministry of Energy and Infrastructure◆ Small Wind Certification Options◆ CSA⇣ CSA 61400-2 small wind standard is based on the IEC standard and covers safety, quality assurance, and engineering integrity and specifies safety requirements including design, installation, maintenance and operation under specified external conditions⇣ Canadian deviations related to electrical and structural safety considerations related to Canadian weather⇣ conditions (products to be designed for extreme weather -200C to 500C and local icing, but no testing⇣ requirements)⇣ ⇠ MMAH does not recognize CSA small wind standard due to a lack of cold weather testing provisions ULE⇣ Underwriter Laboratories Environmental is a new certification system that focuses on the electrical components of wind turbines. Note CSA standards look at the electrical components as they relate to Canadian climate⇣ conditions.⇣ California⇣ California’s Emerging Renewables Program requires eligible products be compliant with either IEC 61 400 -2 (small⇣ wind standard used by CSA and AWEA) or provide one year performance data and demonstrate product reliability⇣ by testing the turbine for one year at winds of at least 12 mph⇣ United Kingdom⇣ British Wind Energy Association uses same small wind standard as the AWEA. The BWEA standard is already in⇣ effect, but is not mandatory⇣ Proposed UK FIT may require⇣ BWEA small wind standard⇣ Microgeneration Certification Scheme for the manufacturing process (evaluated at factory); and⇣ Microgeneration Certification Scheme standard for installation⇣ The BWEA notes that UK manufacturers hold an 82% revenue share of the UK market and export 50% of their⇣ output to over 100 countries worldwide⇣ 3180 20⇣ 20 Ministry of Energy and Infrastructure◆ Small Wind Certification Options⇣ NYSERDA offers three options for manufacturers or dealers to certify products:⇣ Provide evidence of certification by a nationally recognized testing laboratory or organization⇣ as meeting the safety and performance requirements of a nationally or internationally⇣ recognized testing institution;⇣ Provide technical information and specifications of the wind generator and provide⇣ acceptable evidence to NYSERDA demonstrating one year of reliable operation of that model⇣ of equipment at a site with average annual wind speeds of at least 12 mph; or⇣ Provide evidence that the wind generator has demonstrated reliable operation when tested to⇣ the requirements of the AWEA Small Wind Turbine Performance and Safety Standard (or⇣ most recent version of the draft standard until the standard is adopted).⇣ Wind generators approved by other jurisdictions with similar eligibility criteria may be qualified.⇣ NYSERDA reserves the right to deny eligibility of any wind generator for any reason including but not limited to: poor generator performance, concerns about wind generation system design or⇣ quality of data presented, lack of manufacturer support for maintenance, warranties, etc.,⇣ insufficient experience with generator, etc. Siting requirements include: minimum lot size (1 acre), setbacks, minimum wind resources (10⇣ miles per hour)⇣ 21⇣ 21 3181 Tasca, Leo (MEI)✏ From: Tasca, Leo (MEI)✏ Sent: May-25-10 2:42 PM✏ To: Jim MacDougall✏ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI); Patricia Lightburn✏ Subject: RE: Small Wind Pricing✏ Attachments: DMO Small Wind FIT May 25 2010Revised.ppt✏ Jim, revisions on slide 6 in red font. Leo◆ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 25, 2010 2:14 PM⇢ To: Tasca, Leo (MEI)⇢ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI); Patricia Lightburn⇢ Subject: RE: Small Wind Pricing⇢ Hi Leo◆ I think the capital costs on Slide 6 are reversed (lowest price is in the < 10 kW category and that should be the highest cost / kW) Addressing aggregation is a tough one – and I would suggest is broader than microWind but we can turn our minds to it.◆ The main problem is that an Applicant may be an individual, and that individual, (you or I) may have other contracts◆ directly with the Aggregator that assign all monies earned to them, after they get paid to us.◆ Again, we can think about ways that we would discourage aggregation.◆ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: May 25, 2010 1:14 PM⇢ To: Jim MacDougall⇢ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI)⇢ Subject: Small Wind Pricing⇢ Hi Jim, we briefed the DM on small wind this morning and we will be revising this deck for a Minister ’ s briefing at◆ some point in the near future. One issue we foresee on pricing is the potential issue of aggregation surfacing with◆ small wind. Can you please have a look at the deck and give some thought to proactively addressing this issue by considering a price category to address aggregation? Thanks, Leo◆ 3182 Ministry of Energy and Infrastructure◆ Developing a Small Wind⇣ Feed-in Tariff⇣ Deputy Minister Briefing⇣ May 25, 2010 Renewables and Energy Efficiency 1⇥ 3183 Ministry of Energy and Infrastructure◆ Key Deliverables⇣ Small Wind FIT Price⇣ Domestic Content Grid⇣ Standards (Performance and Consumer Protection)⇣ Municipal and Provincial Regulatory Approvals⇣ 2⇣ 3184 Ministry of Energy and Infrastructure◆ Why We Need Small Wind FIT Price⇣ Definition of Small Wind:⇣ Definition varies depending on source; maximum 300 kW⇣ Based on capacity <300 kW or < 65 kW or swept area of <200m2 ~16 m diameter⇣ Introducing a FIT price for small wind would:⇣ Expand use of clean renewable energy⇣ Assist rural economic development (farms, communities, rural businesses)⇣ Encourage growth in Ontario’s small wind sector in both manufacturing and⇠ installation through domestic content requirements. Currently four firms in Ontario:⇣ Cleanfield Energy - 3.5kW turbines (merged with WePower of California - 12 kW turbines),⇣ ⇠ Wind Simplicity 3, 7 turbines and 23 kW turbines,⇣ ⇠ Wenvor 30 kW turbines,⇣ ⇠ Windtronics 2.2 kW turbines⇣ 3⇣ 3185 Ministry of Energy and Infrastructure◆ Proposed Small Wind FIT Price⇣ Section 13 There will be a meeting with CanWEA (late May/Early June) to discuss the differences.⇣ Prices considerably lower than price requested by Windtronics for ⇢ 1 0 kW tranche (60⇣ c/KWh). Currently working with MEDT to review Windtronics’ pricing assumptions.⇠ 4⇣ 3186 Ministry of Energy and Infrastructure◆ OPA Proposed Small Wind FIT Price⇣ Section 13 5⇣ 3187 Ministry of Energy and Infrastructure◆ CanWEA Recommended Small Wind FIT Price⇣ Proposed CanWEA prices are based on turbine capacity*:⇣ 1 - 10 kW 11 – 100 101 – 50 to 55 c/KWh (assuming 15% capacity factor and $8,500 per kW)⇣ kW - 35 c/KWh (assuming 20% capacity factor and $6,500 per kW)⇣ – 500 kW - 25 c/KWh (assuming 20% capacity factor and $4,500 per kW)⇣ CanWEA’s small wind FIT price estimates are based on pre-REA installations and assumes REA process varies by small wind turbine size.⇣ CanWEA used same assumptions used to calculate FIT prices for solar PV (12% return on investment and a 70-30 debt-equity ratio).⇣ * CanWEA FIT price analysis are in the appendix on slides 18 and 19.⇣ 6⇣ 3188 Ministry of Energy and Infrastructure◆ Domestic Content Grid: Current Status◆ Working with CanWEA and industry to develop a domestic content⇣ grid for specific components relevant for small wind.⇣ MEI consultation with stakeholders to establish domestic content⇣ requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA⇣ website (August 15, 2010)⇣ 7⇣ 3189 Ministry of Energy and Infrastructure◆ Standards⇣ Performance Standard information is required to develop accurate FIT prices and to assure⇣ customers that the turbine meets safety standards.⇣ MEI supports CanWEA’s proposal that a Small Wind FIT use the SWCC standard:⇠ The standard applies specifically to small wind turbines.⇣ SWCC to issue easy-to-understand labels for Rated Annual Energy Output, Rated Power; and Rated Sound Level⇣ SWCC certification will also confirm the turbine meets durability and safety requirements⇣ Certification applications will be accepted in early 2010⇣ First certified turbines to be on the market by mid-2010; one year for the program to be in full⇣ swing (spring 2011)⇣ SWCC provides assurance around performance ratings, noise, safety and product durability to⇣ protect consumers. CanWEA also has public education role to address consumer protection.⇣ International Electronic Commission (IEC)/ British Wind Energy Association (BWEA) small wind⇣ standards can be used for Conditional Temporary Certification during first two years of SWCC. This level of certification would last for 18 months (reciprocity).⇣ CanWEA, in the interim, is recommending government use the New York State Energy Research⇣ and Development Authority (NYSERDA) list of certified wind turbines.⇣ Non-accredited and manufacturer testing is permitted by the SWCC, but would require SWCC on⇣ site audit and period spot checks.⇣ 8⇣ 3190 Ministry of Energy and Infrastructure◆ Standards (cont’d)⌦ Continue to work with CSA and stakeholders to establish standards and consider MEI financial⇣ support for CSA certification on SW standards (fiscal 2010/11); standards work would address:⇣ Cold weather testing, flicker, ice throw, lightning strikes⇣ Health and safety (ie. acoustic, worker safety and training, other areas of public interest)⇣ Design, durability, installation operation and maintenance⇣ Development of an Ontario test facility (currently only facility in Canada is in PEI).⇣ 9⇣ 3191 Ministry of Energy and Infrastructure◆ Municipal Approvals⇣ Building Code Act requires building permit (supporting tower) for wind turbines rated⇣ greater than 3 kW - roof mounted turbines of any size require a building permit; silent⇣ on installation requirements for turbines rated under 3 kW and municipalities no⇣ longer have ability to regulate under the Planning Act. (larger ones regulated by⇣ REA); MMAH advised that the AMO would strongly oppose including turbines under 3⇣ kW in the Building Code, as that would impose an administrative burden on⇣ municipalities.⇣ Municipal Act offers municipalities broad powers related to health, safety and wellbeing of persons; protection of persons and property, including consumer protection⇣ and structures. Municipalities may attempt to use the Act to create noise by-laws or a⇣ permit system Planning Act (e.g., zoning) does not apply to renewable energy technologies (generating electricity)⇣ 10⇣ 10 3192 Ministry of Energy and Infrastructure◆ Provincial Approvals⇣ Renewable Energy Approval for wind turbines⇣ <3 kW - No REA requirements (potential for municipal noise by-laws);⇣ MOE position is that wind turbines <3 kW are unlikely to require⇣ regulation; seeking legal opinion on whether turbines <3 kW can be⇣ regulated under GEA.⇣ 3 kW to 50 kW - REA includes public notice and Project Description⇣ Report, (noise considerations under MOE’s Noise Guidelines for Wind⇠ Farms part of REA review)⇣ >50 kW < 102dBa - REA includes the above plus public consultation,⇣ construction plan, decommissioning plan, property setback (hub height),⇣ road/rail setback (blade + 10m)⇣ >50 kW 102 to 107dBA - REA includes the above 550m noise setback⇣ 11 11⇣ 3193 Ministry of Energy and Infrastructure◆ Next Steps⇣ Interministerial Small Wind meeting: MEI, MMAH, MOE (May 31, 2010)⇣ Presentation of OPA proposed small wind FIT tariff to CanWEA (May/Early June, 2010)⇣ Technical standards survey response results compiled by CSA (May/Early June, 2010)⇣ Domestic Content Grid survey response from CanWEA Small Wind members (June, 2010)⇣ Review policy and standards used in other jurisdictions (June, 2010)⇣ Develop certification requirements: American Wind Energy Association adopted the Small Wind Certification Council⇣ (SWCC) test method in December 2009. CanWEA has proposed that a micro wind FIT⇣ use the new standard; SWCC estimated cost of certification between 10K and 40K⇣ excluding cost of testing.⇣ MEI consultation with stakeholders to establish domestic content requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA website (August 15, 2010)⇣ 12⇣ 12 3194 Ministry of Energy and Infrastructure◆ Appendix◆ Windtronics⇣ Jurisdictional Review⇣ CanWEA FIT Price Analysis⇣ Municipal/Provincial Approvals⇣ 13⇣ 13 3195 . Ontario Ministryof Energy and Infrastructure i i a? Windtronics Section 17 14 3196 Ministry of Energy and Infrastructure◆ Jurisdictional Comparison to◆ Vermont, Washington (WA), G. Britain, Israel, Italy◆ <10 kW WA Contract Term 6 Vermont Size FIT CAD$/kW > 10 ⇧ 50 Small 0.44⇥ Vermont <15 kW 0.21⇥ Ontario Contract◆ Term◆ Size FIT◆ CAD$/kW◆ > 15 kW 0.16⇥ 20 > 10 ⇧ 50 0.315⇥ ON 20 <10 kW 0.392⇥ G. Britain proposed >15 <50kW 0.36⇥ G. Britain proposed >1.5<15 kW 0.41⇥ Italy 15 < 200 kW 0.53⇥ Israel 20 <15 kW 0.52⇥ Italy 15 < 200 kW 0.53⇥ > 50 ⇧300 Contract Term Vermont Size FIT◆ CAD$/kW◆ >15 kW 0.16⇥ Ontario 20 > 10 ⇧ 50 0.237⇥ B. Britain Proposed >250 <500kW⇥ 0.28⇥ 15⇣ 3197 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis◆ This memo presents the results of a generic analysis which aimed at calculating realistic FIT prices for small⇣ wind applications, i.e. from 1 kW to approximately 300 kW. The following table presents the parameters that⇣ were used in the financial model. It should be noted that, when appropriate, parameters used by the OPA to develop the prices for other renewables such as solar PV applications were used. Table 1. Parameter Values Used in the Financial Analysis 0-10 kW 11-100 kW > 100 kW 10 kW 65 kW 250 kW – Small Wind Comment Parameter Nominal project size used in analysis Total project cost O & M costs Capacity factor Project duration (FIT⇣ contract) $7500 0r⇣ 8500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $6000 or⇣ 6500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $4500/kW Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 1.6 ¢/kWh Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 13,15 or 22% Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 20 years 20 years 20 years Base year of construction 2011 2011 2011 Inflation rate (IPC) 2.25 % 2.25 % 2.25 % Electricity price⇣ index 0.4% 0.4 % 0.4 % EcoEnergy/other⇣ incentive 0 ¢/kWh 0 ¢/kWh 0 ¢/kWh Debt/equity Interest rate 70/30 or⇣ 50/50 7% 70/30⇣ 7% Assumption from the OPA Assumes that the electricity price is indexed at 20% of⇣ CPI (20% x 2 % = 0.4%), as per proposed FIT program rules. 70/30 Assumption from the OPA 7% Assumption from the OPA 16⇣ 3198 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis (cont’d) The parameters above were input in the Helimax financial model and prices were calculated to achieve either a⇣ Return on Equity (ROE) of 12% before taxes, or an Internal Rate of Return (IRR) of 12% before taxes. The two⇣ calculations were provided as it is not clear from the OPA calculations how the ROE was calculated and what was the implicit cost of equity. Table 2. Estimated Prices for Base-Case Scenarios of Three Small Wind Categories Project Size Range 0-10 kW 11-100 kW $7500/kW,⇣ $8500/kW,⇣ $8500/kW,⇣ 30%⇣ 50%⇣ 30%⇣ $6500/kw Equity, Equity, Equity, 18% CF 18% CF 20% CF > 100 kW Scenario $8500/kW, 30%⇣ Equity, 18% CF Price to achieve 12% ROE 54.0 47.8 54.6 48.8 37.7 35.0 24.4 Price to achieve 12% IRR 58.5 52.1 62.4 53 41.0 38.0 26.5 $6000/kW Table 3. Additional Runs 1-10kW 1-10kW 10-100kW 10-100kW 100300kW Scenario $7500/kW, 30% Equity, 13% CF $7500/kW, 30% Equity, 15% CF $6000/kW, 30% Equity, 13% CF $6000/kW, 30% Equity, 15% CF $4500/kW, 30% Equity, 13% CF Price to achieve 12% ROE 64.5 56.2 52.0 45.3 39.5 34.5 Price to achieve 12% IRR 71.5 62.0 57.5 50.0 43.5 38.0 100300kW $4500/kW,⇣ 30%⇣ Equity, 15% CF 17⇣ 3199 Ministry of Energy and Infrastructure◆ CanWEA FIT Small Wind Committee Members◆ The input provided by manufacturers who were members of CanWEA’s small wind committee in ’09⇠ and ’1 0.⇠ The numbers submitted were based on installations in Ontario.⇣ Section 13 18⇣ 3200 Ministry of Energy and Infrastructure◆ Jurisdictional Review:⇣ Small Wind Certification Options⇣ American Wind Energy Association (AWEA) small wind standard includes:⇣ Standardized real world performance measurement and rating⇣ Standard noise measurements (with product label)⇣ Safety measures including operation/maintenance provisions and loss of control⇣ function at lowest claimed operating temperature⇣ Durability (25 hours of power production, includes noting repairs, tower dynamics problems)⇣ Standard to be overseen by the SWCC. Products would be evaluated by a third party⇣ tester (one in PEI)⇣ Standardized real world performance measures would help classify products FIT⇣ categories. 19⇣ 19 3201 Ministry of Energy and Infrastructure◆ Small Wind Certification Options◆ CSA⇣ CSA 61400-2 small wind standard is based on the IEC standard and covers safety, quality assurance, and engineering integrity and specifies safety requirements including design, installation, maintenance and operation under specified external conditions⇣ Canadian deviations related to electrical and structural safety considerations related to Canadian weather⇣ conditions (products to be designed for extreme weather -200C to 500C and local icing, but no testing⇣ requirements)⇣ ⇠ MMAH does not recognize CSA small wind standard due to a lack of cold weather testing provisions ULE⇣ Underwriter Laboratories Environmental is a new certification system that focuses on the electrical components of wind turbines. Note CSA standards look at the electrical components as they relate to Canadian climate⇣ conditions.⇣ California⇣ California’s Emerging Renewables Program requires eligible products be compliant with either IEC 61 400 -2 (small⇣ wind standard used by CSA and AWEA) or provide one year performance data and demonstrate product reliability⇣ by testing the turbine for one year at winds of at least 12 mph⇣ United Kingdom⇣ British Wind Energy Association uses same small wind standard as the AWEA. The BWEA standard is already in⇣ effect, but is not mandatory⇣ Proposed UK FIT may require⇣ BWEA small wind standard⇣ Microgeneration Certification Scheme for the manufacturing process (evaluated at factory); and⇣ Microgeneration Certification Scheme standard for installation⇣ The BWEA notes that UK manufacturers hold an 82% revenue share of the UK market and export 50% of their⇣ output to over 100 countries worldwide⇣ 3202 20⇣ 20 Ministry of Energy and Infrastructure◆ Small Wind Certification Options⇣ NYSERDA offers three options for manufacturers or dealers to certify products:⇣ Provide evidence of certification by a nationally recognized testing laboratory or organization⇣ as meeting the safety and performance requirements of a nationally or internationally⇣ recognized testing institution;⇣ Provide technical information and specifications of the wind generator and provide⇣ acceptable evidence to NYSERDA demonstrating one year of reliable operation of that model⇣ of equipment at a site with average annual wind speeds of at least 12 mph; or⇣ Provide evidence that the wind generator has demonstrated reliable operation when tested to⇣ the requirements of the AWEA Small Wind Turbine Performance and Safety Standard (or⇣ most recent version of the draft standard until the standard is adopted).⇣ Wind generators approved by other jurisdictions with similar eligibility criteria may be qualified.⇣ NYSERDA reserves the right to deny eligibility of any wind generator for any reason including but not limited to: poor generator performance, concerns about wind generation system design or⇣ quality of data presented, lack of manufacturer support for maintenance, warranties, etc.,⇣ insufficient experience with generator, etc. Siting requirements include: minimum lot size (1 acre), setbacks, minimum wind resources (10⇣ miles per hour)⇣ 21⇣ 21 3203 Jim MacDougall From: Jim MacDougall⌘ Sent: May-26-10 1:19 PM⌘ To: Sheri Bizarro; Sarah Simmons; Patricia Lightburn; Cindy Roks⌘ Cc: Jason Chee-Aloy⌘ Subject: Fw: Updated Ground-Mounted Solar Materials⌘ Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web⌘ Posting.doc⌘ Here is positioning on gndmt sdolar.⌘ Just got out of a a DC session w 400 participants and took a a beating on microfit timelines...⌘ Jim MacDougall, P.Eng.⌘ Manager, FIT Program⌘ Ontario Power Authority⌘ 416 969 6415⌘ Sent from my BB⌘ ----- Original Message ----From: Kristin Jenkins⌘ To: 'Tang, Amy (MEI)' ; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy;⌘ Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI) ; 'Smith, Anne (MEI)'# ; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford⌘ CC: Irene Mauricette⌘ Sent: Fri May 21 12:20:03 2010⌘ Subject: Updated Ground - Mounted Solar Materials⌘ <> <> We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as# the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will# circulate shortly.# Kristin⌘ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca⌘ 3204 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3205 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3206 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3207 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3208 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3209 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3210 Jim MacDougall From: Jim MacDougall⌘ Sent: May-26-10 1:19 PM⌘ To: Sheri Bizarro; Sarah Simmons; Patricia Lightburn; Cindy Roks⌘ Cc: Jason Chee-Aloy⌘ Bcc: Travis Lusney⌘ Subject: Fw: Updated Ground-Mounted Solar Materials⌘ Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web⌘ Posting.doc⌘ Here is positioning on gndmt sdolar.⌘ Just got out of a a DC session w 400 participants and took a a beating on microfit timelines...⌘ Jim MacDougall, P.Eng.⌘ Manager, FIT Program⌘ Ontario Power Authority⌘ 416 969 6415⌘ Sent from my BB⌘ ----- Original Message ----From: Kristin Jenkins⌘ To: 'Tang, Amy (MEI)' ; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy;⌘ Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI) ; 'Smith, Anne (MEI)'# ; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford⌘ CC: Irene Mauricette⌘ Sent: Fri May 21 12:20:03 2010⌘ Subject: Updated Ground - Mounted Solar Materials⌘ <> <> We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as# the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will# circulate shortly.# Kristin⌘ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca⌘ 3211 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3212 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3213 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3214 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3215 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3216 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3217 Jim MacDougall From: Jim MacDougall✏ Sent: May-31-10 1:51 PM✏ To: Sheri Bizarro; Cindy Roks✏ Subject: FW: Updated Ground-Mounted Solar Materials✏ Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web✏ Posting.doc✏ This is the latest and greatest.✏ Do you want to book a meeting with the whole team on Wed am to discuss how to manage angry customers?✏ Jim MacDougall, P.Eng.✏ Manager, Feed- In Tariff Program✏ Electricity Resources✏ Ontario Power Authority✏ 120 Adelaide St W, Suite 1600✏ Toronto, ON M5H 1T1, Canada✏ tel 416.969.6415✏ ----- Original Message ----From: Jim MacDougall✏ Sent: May 26, 2010 1:19 PM✏ To: Sheri Bizarro; Sarah Simmons; Patricia Lightburn; Cindy Roks✏ Cc: Jason Chee- Aloy✏ Subject: Fw: Updated Ground- Mounted Solar Materials✏ Here is positioning on gndmt sdolar.✏ Just got out of a a DC session w 400 participants and took a a beating on microfit timelines...✏ Jim MacDougall, P.Eng.✏ Manager, FIT Program✏ Ontario Power Authority✏ 416 969 6415✏ Sent from my BB✏ ----- Original Message ----From: Kristin Jenkins✏ To: 'Tang, Amy (MEI)' > <> o.ca>; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy; Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI)! ; 'Smith, Anne (MEI)' ; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford✏ CC: Irene Mauricette✏ Sent: Fri May 21 12:20:03 2010✏ Subject: Updated Ground - Mounted Solar Materials✏ We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as! the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will! 3218 circulate shortly.! Kristin✏ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca✏ 3219 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3220 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3221 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3222 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3223 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3224 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3225 Jim MacDougall From: Jim MacDougall✏ Sent: May-31-10 1:51 PM✏ To: Sheri Bizarro; Cindy Roks✏ Bcc: Linda Filippi✏ Subject: FW: Updated Ground-Mounted Solar Materials✏ Attachments: Ground-Mounted Solar Communications (2).doc; Ground-Mounted Solar Web✏ Posting.doc✏ This is the latest and greatest.✏ Do you want to book a meeting with the whole team on Wed am to discuss how to manage angry customers?✏ Jim MacDougall, P.Eng.✏ Manager, Feed- In Tariff Program✏ Electricity Resources✏ Ontario Power Authority✏ 120 Adelaide St W, Suite 1600✏ Toronto, ON M5H 1T1, Canada✏ tel 416.969.6415✏ ----- Original Message ----From: Jim MacDougall✏ Sent: May 26, 2010 1:19 PM✏ To: Sheri Bizarro; Sarah Simmons; Patricia Lightburn; Cindy Roks✏ Cc: Jason Chee- Aloy✏ Subject: Fw: Updated Ground- Mounted Solar Materials✏ Here is positioning on gndmt sdolar.✏ Just got out of a a DC session w 400 participants and took a a beating on microfit timelines...✏ Jim MacDougall, P.Eng.✏ Manager, FIT Program✏ Ontario Power Authority✏ 416 969 6415✏ Sent from my BB✏ ----- Original Message ----From: Kristin Jenkins✏ To: 'Tang, Amy (MEI)' > <> o.ca>; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy; Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI)! ; 'Smith, Anne (MEI)' ; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford✏ CC: Irene Mauricette✏ Sent: Fri May 21 12:20:03 2010✏ Subject: Updated Ground - Mounted Solar Materials✏ We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as! the posting that will go up on the OPA website. The email notification to applicants – essentially same as website 3226 posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will! circulate shortly.! Kristin✏ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca✏ 3227 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. fde50438db934ad986a304914da51a84 3228 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted fde50438db934ad986a304914da51a84 3229 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ fde50438db934ad986a304914da51a84 3230 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. #### fde50438db934ad986a304914da51a84 3231 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3232 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3233 Linda Filippi⌦ From: Linda Filippi✏ Sent: May-31-10 10:22 PM✏ To: Jim MacDougall✏ Cc: Cindy Roks; Sheri Bizarro✏ Subject: RE: Updated Ground-Mounted Solar Materials✏ Attachments: Ground_Mounted_Solar_Communications(LF053110).doc; Ground-Mounted Solar✏ Web Posting(LF053110).doc✏ Jim,⇧ I have added a few questions that I anticipate will be asked by individuals who have submitted applications.⇧ Do you know when the announcement will be made on Wednesday? If it is not until the afternoon, then it would be⇢ great to meet with the whole team on Wed a.m. to discuss, however, if it is anticipated that the announcement will come out on Wed a.m. then i would need to meet with you tomorrow afternoon to obtain responses to the questions outlined on the attached and put in place a process that enables us to manage extreme escalated situations.⇧ Thanks in particular to yourself and Cindy for keeping me in the loop. The more information I can acquire upfront,⇢ the better able the call centre will be to provide effective responses. In return, I anticipate that this will lessen the⇢ impact on the FIT team here at OPA.⇧ Thank you. Linda⇢ From: Jim MacDougall Sent: Mon 5/31/2010 1:51 PM To: Sheri Bizarro; Cindy Roks Subject: FW: Updated Ground-Mounted Solar Materials This is the latest and greatest.✏ Do you want to book a meeting with the whole team on Wed am to discuss how to manage angry customers?✏ Jim MacDougall, P.Eng.✏ Manager, Feed- In Tariff Program✏ Electricity Resources✏ Ontario Power Authority✏ 120 Adelaide St W, Suite 1600✏ Toronto, ON M5H 1T1, Canada✏ tel 416.969.6415✏ ----- Original Message ----From: Jim MacDougall✏ Sent: May 26, 2010 1:19 PM✏ To: Sheri Bizarro; Sarah Simmons; Patricia Lightburn; Cindy Roks✏ Cc: Jason Chee- Aloy✏ Subject: Fw: Updated Ground- Mounted Solar Materials✏ Here is positioning on gndmt sdolar.✏ Just got out of a a DC session w 400 participants and took a a beating on microfit timelines...✏ 3234 Jim MacDougall, P.Eng.✏ Manager, FIT Program✏ Ontario Power Authority✏ 416 969 6415✏ Sent from my BB✏ ----- Original Message ----From: Kristin Jenkins✏ To: 'Tang, Amy (MEI)' > <> o.ca>; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy; Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI)! ; 'Smith, Anne (MEI)' ; Mary Bernard; Tim Butters; Luisa Da Rocha; Glenna Ford✏ CC: Irene Mauricette✏ Sent: Fri May 21 12:20:03 2010✏ Subject: Updated Ground - Mounted Solar Materials✏ We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as! the posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will! circulate shortly.! Kristin✏ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca✏ 3235 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3236 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3237 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. 5a49a38a90e5458f9d5a672f7f5fd7f8 3238 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted 5a49a38a90e5458f9d5a672f7f5fd7f8 3239 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ 5a49a38a90e5458f9d5a672f7f5fd7f8 3240 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. 1. I noticed that you have information pertaining to in-series connections now being available once& again for microFIT contracts. How can I be certain that my ground-mount solar application which is& currently slated to be connected in-series will actually receive any payment at all since you continue& to recommend an ‘in-parallel’ connection? (the concern will be that ground-mount customers with an& ‘in-series’ connection may have a hard time down the road if MC comes out to say that their⇢ installation must be ‘in-parallel’. 2. My application was submitted back in February and you have not responded within your 30 day timeframe so why am I being penalized? 3. How do I log a complaint? 5a49a38a90e5458f9d5a672f7f5fd7f8 3241 5 4. I have signed a microFIT agreement with a company who is installing my ground-mount system – can I still opt out if I do not wish to receive 58.8 cents vs 80.2 cents per kWh? 5. Under section 3.1(d) and 3.2(a) of the microFIT rules it states: 3.1(d)↵ The OPA will review the Application to confirm that the project meets the microFIT Program eligibility requirements as set out in Section 2 of this document. The OPA may ask for additional clarification with respect to the Application, if required. The OPA’s target for processing Applications is 30 days following the submission of a complete Application. 3.2 Conditional Offer of microFIT Contract If the OPA determines that the Application meets the microFIT Program eligibility requirements,↵ then the OPA will issue the Applicant a Conditional Offer of microFIT Contract. Considering the fact that I met with all the eligibility requirements as set out in section 2 of the Rules& for microFIT and the OPA did not respond within 30 days with a conditional offer or with any other& communications alerting me to any issues, why is my application request not being ‘grand fathered’ as⇢ other applicants who have received conditional offers with ground mounts> 6. Please ensure that the call centre is provided with information contained within the rules that& supports the changes being made e.g. Section 6.1 ‘Additional Rules’ The OPA reserves the right to cancel all or any part of the microFIT Program at any time and for any↵ reason, or to suspend the microFIT Program in whole or in part for any reason for such period of↵ time as the OPA shall determine in its sole discretion, in each case without any obligation or any↵ reimbursement to the Applicants. For Applicants that receive a Conditional Offer of microFIT Contract prior to the date of such cancellation or suspension, the OPA will offer microFIT Contracts↵ to these Applicants if the conditions are satisfied. Cancellation or suspension of the microFIT Program will not affect executed microFIT Contracts. #### 5a49a38a90e5458f9d5a672f7f5fd7f8 3242 Jim MacDougall From: Jim MacDougall Sent: June-01-10 4:06 PM To: Sarah Simmons Cc: Susan Kennedy; Sheri Bizarro Subject: FW: Rooftop Solar PV Definition Attachments: Rooftop Facility Version 1.4.DOCX Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Patricia Lightburn Sent: May 20, 2010 1:44 PM To: Jim MacDougall; Susan Kennedy Cc: Jason Chee-Aloy Subject: Rooftop Solar PV Definition Attached is the most recent rooftop definition. The only changes that have been made are to remove structure◆ from “ building or structure ” and to add the requirement that the building must exist at the time of application, unless otherwise allowed by the OPA. Patricia Lightburn◆ Analyst, FIT Program◆ 416.969.6267◆ 3243 Proposed OPA Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of an existing permanent building that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building that would not reasonably have been constructed in the absence of the solar installation. Other solar PV facilities will only be permitted to qualify for this definition with the written consent of the OPA. Guidelines – Definition of Rooftop Facility The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘existing’ in the case where the building is completed and constructed at the⌫ time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘solarready’ home developments are expected to be accommodated through this process. In reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: Has plumbing Has power Has at least three walls Has a roof 3244 Has a roof over 10 feet high Has a foundation Has a building permit The OPA cannot give a final answer on the conformity of a project to the definition of rooftop until the project has been constructed and COD has been reached. However details to the questions provided above will allow the OPA to be better positioned to understand the need and rationale for such a structure. The OPA reserves the right to inspect the facility (as outlined in Section 14.4 of the FIT Contract) to further confirm the project’s compliance with the FIT Contract. Appendix A - Existing definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. 3245 Jim MacDougall From: Jim MacDougall Sent: June-01-10 4:27 PM To: Sarah Simmons Cc: Sheri Bizarro; Patricia Lightburn; Cindy Roks Subject: price schedule Attachments: FIT Pricing Schedule - Final_June 2 2010_PV_ rooftop gnd mt.doc Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ 3246 June 2, 2010⌦ Feed⌅ -In⌅ Tariff Prices⌅ for Renewable⌅ Energy Projects⌅ in⌅ Ontario⌅ Base Date: September 30, 2009 Renewable Fuel Contract Price ¢/kWh Escalation⌅ Percentage4 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% 53.9 0% 58.8 0% 44.3 0% Size tranches Biomass1,2 Biogas 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Rooftop 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted Ground Mounted2 250 kW 500 kW > 500 kW 1 0 kW > 1 0 kW 1 0 MW Wind2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1⌦ - Peak⌦ Performance Factor applies. 2⌦ - Aboriginal⌦ Price⌦ Adder⌦ and Community⌦ Price⌦ Adder⌦ eligible⌦ as⌦ outlined⌦ in Appendix A⌦ below. 3⌦ - In⌦ the⌦ case⌦ of an⌦ incremental⌦ Waterpower⌦ project,⌦ the⌦ Incremental⌦ Project⌦ together with the⌦ Existing⌦ Generating⌦ Facility to⌦ which⌦ it is⌦ incremental⌦ cannot⌦ exceed 50⌦ MW.⌦ 4⌦ - Escalation⌦ Percentage will be⌦ applied⌦ to⌦ eligible⌦ Renewable⌦ Fuels as⌦ calculated⌦ in⌦ Exhibit⌦ B of⌦ FIT⌦ Contract.⌦ 3247 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV⌅ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌅ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules.⌦ 3248 Sarah Simmons↵ From: Sarah Simmons↵ Sent: June-01-10 4:28 PM↵ To: Jim MacDougall↵ Cc: Sheri Bizarro; Patricia Lightburn; Cindy Roks↵ Subject: RE: price schedule↵ Thanks! Make sure we revise the date before we post J⇥ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Jim MacDougall Sent: June 1, 2010 4:27 PM To: Sarah Simmons Cc: Sheri Bizarro; Patricia Lightburn; Cindy Roks Subject: price schedule Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 3249 Jim MacDougall From: Jim MacDougall Sent: June-01-10 4:28 PM To: Jim MacDougall Subject: RE: price schedule Come on – were going tomorrow J⇥ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Jim MacDougall Sent: June 1, 2010 4:27 PM To: Sarah Simmons Cc: Sheri Bizarro; Patricia Lightburn; Cindy Roks Subject: price schedule Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 3250 Patricia Lightburn From: Patricia Lightburn Sent: June-02-10 11:47 AM To: Jim MacDougall; Sarah Simmons Subject: rooftop Guidlines Attachments: Rooftop Facility Version 1.4.DOCX This is what I had drafted for posting on the website along with the new rules – comments suggestions? (see attached⇡ Guidelines – Definition of Rooftop Facility The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘ existing ’ in the case where the building is completed and constructed at the time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘ solar-ready ’ home developments are expected to be accommodated through this process. To evaluate what constitutes a building and in reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: · Has plumbing · Has power · Has at least three walls · Has a roof · Has a roof over 10 feet high · Has a foundation · Has a building permit Patricia Lightburn⇡ Analyst, FIT Program⇡ 3251 Proposed OPA Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of an existing permanent building that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building that would not reasonably have been constructed in the absence of the solar installation. Other solar PV facilities will only be permitted to qualify for this definition with the written consent of the OPA. Guidelines – Definition of Rooftop Facility The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘existing’ in the case where the building is completed and constructed at the⌫ time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘solarready’ home developments are expected to be accommodated through this process. In reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: Has plumbing Has power Has at least three walls Has a roof 3252 Has a roof over 10 feet high Has a foundation Has a building permit The OPA cannot give a final answer on the conformity of a project to the definition of rooftop until the project has been constructed and COD has been reached. However details to the questions provided above will allow the OPA to be better positioned to understand the need and rationale for such a structure. The OPA reserves the right to inspect the facility (as outlined in Section 14.4 of the FIT Contract) to further confirm the project’s compliance with the FIT Contract. Appendix A - Existing definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. 3253 Patricia Lightburn From: Patricia Lightburn Sent: June-02-10 12:03 PM To: Glenna Ford Subject: Rooftop Definition Attachments: Rooftop Facility Version 1.4.DOCX Could you review this in preparation for the microFIT changes? (at the same time, we are posting a revised definition of rooftop into the FIT Definitions) We would be posting this in the rules section Patricia Lightburn Analyst, FIT Program 416.969.6267 3254 Guidelines – Definition of Rooftop Facility June 2, 2010 Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent existing building that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building that would not reasonably have been constructed in the absence of the solar installation. Guidelines The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘existing’ in the case where the building is completed and constructed at the⌫ time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘solar- ready’ home developments are expected to be accommodated through this process. To evaluate what constitutes a building and in reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: Has plumbing Is supplied with electricity Has at least three walls Has a roof Has a roof over 10 feet high Has a foundation 3255 Has a building permit Appendix A - Existing definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. 3256 Glenna Ford↵ From: Glenna Ford Sent: June-02-10 1:12 PM To: Patricia Lightburn Subject: Emailing: Rooftop Facility Version 1.4 gf.DOCX Attachments: Rooftop Facility Version 1.4 gf.DOCX <> Here are my comments. 3257 Guidelines – Definition of Rooftop Facility June 2, 2010 Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent existing building that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building that would not reasonably have been constructed in the absence of the solar installation. Guidelines The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders about what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be existing where it has been completed and constructed at the time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. Where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as “solar-ready” home developments are expected to be accommodated through this process. The OPA will consider the following factors when evaluating what constitutes a building and when reviewing requests to allow proposed buildings to qualify: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Whether the building has: plumbing an electricity supply at least three walls a roof a roof over 10 feet high a foundation 3258 a building permit. Appendix A: Existing Definition Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof, cover, or other architectural element that forms part of a permanent building or structure that has been designed to be used for the purpose of providing enclosure, shelter or protection to people or property, provided that it is not principally for the purpose of supporting a solar power installation or providing shelter from the sun. A building or structure will be considered to have a principal purpose of supporting a solar power installation or providing shelter from the sun where the Facility is located on a part of the building or structure that would not reasonably have been constructed in the absence of the solar installation. 3259 Jim MacDougall From: Jim MacDougall Sent: June-02-10 2:30 PM To: Patricia Lightburn Subject: RE: rooftop Guidlines What happened to “ foundation below grade ”⇤ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Patricia Lightburn Sent: June 2, 2010 11:47 AM To: Jim MacDougall; Sarah Simmons Subject: rooftop Guidlines This is what I had drafted for posting on the website along with the new rules – comments suggestions? (see attached Guidelines – Definition of Rooftop Facility The changes to the definition of rooftop facility are intended to provide greater clarity to stakeholders regarding what projects qualify for rooftop solar PV prices under the FIT price schedule. Under the new definition, the building must be an existing permanent building. A building is considered to be ‘ existing ’ in the case where the building is completed and constructed at the time of the application. This change provides greater clarity on the requirement that the building is not principally for the purpose of supporting a solar power installation. In the case where the building does not exist at the time of application, the applicant may request written consent from the OPA to allow the proposed project to qualify. Buildings such as ‘ solar-ready ’ home developments are expected to be accommodated through this process. To evaluate what constitutes a building and in reviewing requests to allow proposed buildings to qualify, the OPA will consider the following factors: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Check all that apply - The building: · Has plumbing · Has power 3260 · Has at least three walls · Has a roof · Has a roof over 10 feet high · Has a foundation · Has a building permit Patricia Lightburn Analyst, FIT Program 416.969.6267 3261 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: June-10-10 3:26 PM✏ To: Jim MacDougall✏ Cc: Tasca, Leo (MEI)✏ Subject: FW: Updated Analysis for Small Wind✏ Hello Jim,⌦ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could⇢ bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⌦ Thanks,⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,⌦ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌦ Project Number 12 Technology Type Capacity ACF Project Life 14 CanWea CanWea⌦ Presentation - Presentation - Low Low⌦ 17⌦ CanWea⌦ Presentation Mid⌦ MW 0.0025 0.05 0.2⌦ % 20.00% 20.00% 20.00%⌦ years 20 20 20⌦ 3262 Project Life years 20 20 20⌦ Capital Cost $/kw 6,000 5,000 3,750⌦ Construction Lead Time years 1 1 1⌦ $/MWh $/kW/year 15 10 10⌦ 24 6 1.5⌦ 314.71 236.91⌦ Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment $/MWh Feed - in Tarrif 391.68 c/kW Section 13 The justification for these prices is as follows:⌦ · · · · In line with CanWEA presentation (May 2009)⌦ In line with presentation by Paul Gipe to CanWEA conference⌦ In line with other int ’ l FITs for small wind⌦ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⌦ experience⌦ Please let me know if you have any questions.⌦ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind 6 small 0.13⌦ <15 kW 20 Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology ⌧1 0 0.21⌦ Section 13 >1.5 < 15 kW 0.41⌦ small 0.44⌦ 20 < 15 kW 0.52⌦ 15 < 200 kW 0.53⌦ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 ⌧ 50 0.16⌦ Section 13 >15 < 50 kW Contract Term 0.36⌦ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 ⌧ 50 >250 < 500 kW 0.16⌦ Section 13 0.28⌦ Jonathan Cheszes⌦ Business Analyst⌦ 3263 Business Analyst⌦ Electricity Resources⌦ 120 Adelaide St. West, Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 41 6.969.6251⇢ Fax 416.967.1947⌦ www.powerauthority.on.ca⌦ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3264 Jim MacDougall From: Jim MacDougall Sent: June-10-10 3:28 PM To: 'Palmer, Mary (MEI)' Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney Subject: RE: Updated Analysis for Small Wind I am OK with the assumptions and analysis. Leo – you will want to make sure that your management is OK with more high priced power contracts. Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 10, 2010 3:26 PM⇡ To: Jim MacDougall⇡ Cc: Tasca, Leo (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Hello Jim, Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing. Thanks, Mary From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: May 6, 2010 4:49 PM⇡ To: Palmer, Mary (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 3265 From: Jonathan Cheszes⇡ Sent: December 2, 2009 5:19 PM⇡ To: 'Beale, Barry (MEI)'⇡ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇡ Subject: Updated Analysis for Small Wind⇡ Barry, Below is an updated analysis on micro and small wind turbines with recommended FIT prices. Project Number 12 17 CanWea CanWea CanWea Presentation - Presentation - Presentation - Low Low Mid Technology Type Capacity 14 MW 0.0025 0.05 0.2 % 20.00% 20.00% 20.00% years 20 20 20 Capital Cost $/kw 6,000 5,000 3,750 Construction Lead Time years 1 1 1 $/MWh $/kW/year 15 10 10 24 6 1.5 314.71 236.91 ACF Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment $/MWh Feed - in Tarrif 391.68 c/kW Section 13 The justification for these prices is as follows: · · · · In line with CanWEA presentation (May 2009) In line with presentation by Paul Gipe to CanWEA conference In line with other int ’ l FITs for small wind Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and experience Please let me know if you have any questions. Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind 6 small 0.13 <15 kW 20 Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology Contract Term 10 0.21 Section 13 >1.5 < 15 kW 0.41 small 0.44 20 < 15 kW 0.52 15 < 200 kW 0.53 Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 3266 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 50 0.16 Section 13 >15 < 50 kW Contract Term 0.36 Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 50 >250 < 500 kW 0.16 Section 13 0.28 Jonathan Cheszes Business Analyst Electricity Resources 120 Adelaide St. West, Suite 1600 Toronto , ON , M5H 1T1 Tel 41 6.969.6251 Fax 416.967.1947 www.powerauthority.on.ca This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3267 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: June-14-10 10:12 AM✏ To: Jim MacDougall✏ Cc: Tasca, Leo (MEI)✏ Subject: RE: Updated Analysis for Small Wind✏ Jim,⇧ in anticipation of potential aggregation of small wind projects with these proposed small wind FIT calculations, do⇡ you have any ideas as to how to prevent it? Thanks, Jim.⇡ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.⇧ Leo – you will want to make sure that your management is OK with more high priced power contracts.⇧ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St W, Suite 1600⇧ Toronto , ON M5H 1T1 , Canada⇧ tel 416.969.6415⇧ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,⇧ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could⇡ bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⇧ Thanks,⇧ Mary⇧ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ 3268 Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St W, Suite 1600⇧ Toronto , ON M5H 1T1 , Canada⇧ tel 416.969.6415⇧ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,⇧ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⇧ Project Number 12 14 CanWea CanWea⇧ Presentation - Presentation - Technology Type Low Capacity Low⇧ 17⇧ CanWea⇧ Presentation Mid⇧ MW 0.0025 0.05 0.2⇧ % 20.00% 20.00% 20.00%⇧ years 20 20 20⇧ Capital Cost $/kw 6,000 5,000 3,750⇧ Construction Lead Time years 1 1 1⇧ $/MWh $/kW/year 15 10 10⇧ 24 6 1.5⇧ 314.71 236.91⇧ ACF Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment $/MWh Feed - in Tarrif 391.68 c/kW Section 13 The justification for these prices is as follows:⇧ · · · · In line with CanWEA presentation (May 2009)⇧ In line with presentation by Paul Gipe to CanWEA conference⇧ In line with other int ’ l FITs for small wind⇧ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⇧ experience⇧ Please let me know if you have any questions.⇧ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind 6 small 0.13⇧ <15 kW 0.21⇧ 3269 Ontario (recommended) Wind Great Britain (proposed) Wind 20 Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology *1 0 Section 13 >1.5 < 15 kW 0.41⇧ small 0.44⇧ 20 < 15 kW 0.52⇧ 15 < 200 kW 0.53⇧ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 * 50 0.16⇧ Section 13 >15 < 50 kW Contract Term 0.36⇧ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 * 50 >250 < 500 kW 0.16⇧ Section 13 0.28⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251⇡ Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3270 Jim MacDougall From: Jim MacDougall⌦ Sent: June-14-10 1:55 PM⌦ To: Patricia Lightburn⌦ Cc: Travis Lusney⌦ Subject: Re: Updated Analysis for Small Wind⌦ Unbelievable.⌦ Jim MacDougall, P.Eng.⌦ Manager, FIT Program⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ -----Original Message----From: Palmer, Mary (MEI) ⌦ To: Jim MacDougall⌦ CC: Tasca, Leo (MEI) ⌦ Sent: Mon Jun 14 10:12:08 2010⌦ Subject: RE: Updated Analysis for Small Wind⌦ Jim,⌦ in anticipation of potential aggregation of small wind projects with these proposed small wind FIT⌫ calculations, do you have any ideas as to how to prevent it? Thanks, Jim.⌫ ________________________________⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⌦ Sent: June 10, 2010 3:28 PM⌦ To: Palmer, Mary (MEI)⌦ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⌦ Subject: RE: Updated Analysis for Small Wind⌦ I am OK with the assumptions and analysis.⌦ Leo - you will want to make sure that your management is OK with more high priced power contracts.⌦ 3271 Jim MacDougall, P.Eng.⌦ Manager, Feed-In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto, ON M5H 1T1, Canada⌦ tel 416.969.6415⌦ ________________________________⌦ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⌦ Sent: June 10, 2010 3:26 PM⌦ To: Jim MacDougall⌦ Cc: Tasca, Leo (MEI)⌦ Subject: FW: Updated Analysis for Small Wind⌦ Hello Jim,⌦ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation⌦ about proposed small wind FIT pricing.⌦ Thanks,⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⌦ Sent: May 6, 2010 4:49 PM⌦ To: Palmer, Mary (MEI)⌦ Subject: FW: Updated Analysis for Small Wind⌦ 3272 Jim MacDougall, P.Eng.⌦ Manager, Feed-In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto, ON M5H 1T1, Canada⌦ tel 416.969.6415⌦ ________________________________⌦ ________________________________⌦ From: Jonathan Cheszes⌦ Sent: December 2, 2009 5:19 PM⌦ To: 'Beale, Barry (MEI)'⌦ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⌦ Subject: Updated Analysis for Small Wind⌦ Barry,⌦ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌦ Project Number⌦ 12⌫ 14⌫ 3273 17⌫ Technology Type⌦ CanWea Presentation - Low⌦ CanWea Presentation - Low⌦ CanWea Presentation - Mid⌦ Capacity⌦ MW⌫ 3274 0.0025⌫ 0.05⌫ 0.2⌫ ACF⌦ %⌫ 20.00%⌫ 20.00%⌫ 20.00%⌫ Project Life⌦ years⌫ 20⌫ 20⌫ 20⌫ Capital Cost⌦ $/kw⌫ 6,000⌫ 5,000⌫ 3,750⌫ 3275 Construction Lead Time⌦ years⌫ 1⌫ 1⌫ 1⌫ Variable O & M $/MWh⌫ 15⌫ 10⌫ 10⌫ Fixed O & M⌦ $/kW/year⌫ 24⌫ 6⌫ 1.5⌫ 3276 IRR⌦ %⌫ NPV⌦ First Year Payment⌦ $/MWh⌫ 391.68⌫ 314.71⌫ 236.91⌫ Feed-in Tarrif⌦ c/kW⌫ 39.2⌫ 31.5⌫ 23.7⌫ 3277 The justification for these prices is as follows:⌦ · In line with CanWEA presentation (May 2009)⌫ · In line with presentation by Paul Gipe to CanWEA conference⌫ · In line with other int'l FITs for small wind⌫ · Installed costs varied from different sources but capital & labour costs are anticipated to fall with⌫ volume and experience⌦ Please let me know if you have any questions.⌦ Jurisdiction⌦ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ Micro Wind @ 10 kW⌫ Washington Out state⌦ Wind⌫ 6⌫ small⌫ 3278 0.13⌫ Vermont⌦ Wind⌫ <15 kW⌫ 0.21⌫ Ontario (recommended)⌦ Wind⌫ 20⌫ @10⌫ 0.392⌫ Great Britain (proposed)⌦ Wind⌫ >1.5 < 15 kW⌫ 0.41⌫ Washington In state⌦ Wind⌫ 6⌫ small⌫ 0.44⌫ Israel⌦ Wind⌫ 3279 20⌫ < 15 kW⌫ 0.52⌫ Italy⌦ Wind⌫ 15⌫ < 200 kW⌫ 0.53⌫ Jurisdiction⌦ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ 3280 Small Wind > 10 @ 50 kW⌫ Vermont⌦ Wind⌫ > 15 kW⌫ 0.16⌫ Ontario (recommended)⌦ Wind⌫ 20⌫ >10 @ 50⌫ 0.315⌫ Great Britain (proposed)⌦ Wind⌫ >15 < 50 kW⌫ 0.36⌫ 3281 Jurisdiction⌦ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ Small Wind > 50 @300 kW⌫ Vermont⌦ Wind⌫ > 15 kW⌫ 0.16⌫ 3282 Ontario (recommended)⌦ Wind⌫ 20⌫ >10 @ 50⌫ 0.237⌫ Great Britain (proposed)⌦ Wind⌫ >250 < 500 kW⌫ 0.28⌫ Jonathan Cheszes⌦ Business Analyst⌦ Electricity Resources⌦ 120 Adelaide St. West, Suite 1600⌦ Toronto, ON, M5H 1T1⌦ Tel 416.969.6251⌦ Fax 416.967.1947⌦ www.powerauthority.on.ca ⌦ 3283 Patricia Lightburn From: Patricia Lightburn⇢ Sent: June-14-10 2:40 PM⇢ To: Jim MacDougall⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Why is MEI taking the lead on stakeholdering this? Who does this program belong to exactly???⇢ And for the last time - What the hell is wrong with aggregators?!!!!! (scuse my language) Patricia Lightburn⇢ Analyst, FIT Program⇢ -----Original Message----From: Jim MacDougall⇢ Sent: Monday, June 14, 2010 1:55 PM⇢ To: Patricia Lightburn⇢ Cc: Travis Lusney⇢ Subject: Re: Updated Analysis for Small Wind⇢ Unbelievable.⇢ Jim MacDougall, P.Eng.⇢ Manager, FIT Program⇢ Ontario Power Authority⇢ 416 969 6415⇢ Sent from my BB⇢ -----Original Message----From: Palmer, Mary (MEI) ⇢ To: Jim MacDougall⇢ CC: Tasca, Leo (MEI) ⇢ Sent: Mon Jun 14 10:12:08 2010⇢ Subject: RE: Updated Analysis for Small Wind⇢ Jim,⇢ in anticipation of potential aggregation of small wind projects with these proposed small wind FIT⌫ calculations, do you have any ideas as to how to prevent it? Thanks, Jim.⌫ ________________________________⇢ 3284 From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.⇢ Leo - you will want to make sure that your management is OK with more high priced power contracts.⇢ Jim MacDougall, P.Eng.⇢ Manager, Feed-In Tariff Program⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St W, Suite 1600⇢ Toronto, ON M5H 1T1, Canada⇢ tel 416.969.6415⇢ ________________________________⇢ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,⇢ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation⇢ about proposed small wind FIT pricing.⇢ 3285 Thanks,⇢ Mary⇢ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall, P.Eng.⇢ Manager, Feed-In Tariff Program⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St W, Suite 1600⇢ Toronto, ON M5H 1T1, Canada⇢ tel 416.969.6415⇢ ________________________________⇢ ________________________________⇢ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,⇢ 3286 Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⇢ Project Number⇢ 12⌫ 14⌫ 17⌫ Technology Type⇢ CanWea Presentation - Low⇢ CanWea Presentation - Low⇢ CanWea Presentation - Mid⇢ 3287 Capacity⇢ MW⌫ 0.0025⌫ 0.05⌫ 0.2⌫ ACF⇢ %⌫ 20.00%⌫ 20.00%⌫ 20.00%⌫ Project Life⇢ years⌫ 20⌫ 20⌫ 20⌫ 3288 Capital Cost⇢ $/kw⌫ 6,000⌫ 5,000⌫ 3,750⌫ Construction Lead Time⇢ years⌫ 1⌫ 1⌫ 1⌫ Variable O & M $/MWh⌫ 15⌫ 10⌫ 10⌫ Fixed O & M⇢ 3289 S/kW/year 24 1.5 IRR NPV First Year Payment 391.68 314.71 3290 236.91⌫ Feed-in Tarrif⇢ c/kW⌫ 39.2⌫ 31.5⌫ 23.7⌫ The justification for these prices is as follows:⇢ · In line with CanWEA presentation (May 2009)⌫ · In line with presentation by Paul Gipe to CanWEA conference⌫ · In line with other int'l FITs for small wind⌫ · Installed costs varied from different sources but capital & labour costs are anticipated to fall with⌫ volume and experience⇢ Please let me know if you have any questions.⇢ Jurisdiction⇢ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ Micro Wind @ 10 kW⌫ 3291 Washington Out state⇢ Wind⌫ 6⌫ small⌫ 0.13⌫ Vermont⇢ Wind⌫ <15 kW⌫ 0.21⌫ Ontario (recommended)⇢ Wind⌫ 20⌫ @10⌫ 0.392⌫ Great Britain (proposed)⇢ Wind⌫ >1.5 < 15 kW⌫ 0.41⌫ 3292 Washington In state⇢ Wind⌫ 6⌫ small⌫ 0.44⌫ Israel⇢ Wind⌫ 20⌫ < 15 kW⌫ 0.52⌫ Italy⇢ Wind⌫ 15⌫ < 200 kW⌫ 0.53⌫ 3293 Jurisdiction⇢ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ Small Wind > 10 @ 50 kW⌫ Vermont⇢ Wind⌫ > 15 kW⌫ 0.16⌫ Ontario (recommended)⇢ Wind⌫ 20⌫ >10 @ 50⌫ 0.315⌫ Great Britain (proposed)⇢ 3294 Wind⌫ >15 < 50 kW⌫ 0.36⌫ Jurisdiction⇢ Technology⌫ Contract Term⌫ Project Size Limit⌫ FIT ( CAD $/kW)⌫ Small Wind > 50 @300 kW⌫ 3295 Vermont⇢ Wind⌫ > 15 kW⌫ 0.16⌫ Ontario (recommended)⇢ Wind⌫ 20⌫ >10 @ 50⌫ 0.237⌫ Great Britain (proposed)⇢ Wind⌫ >250 < 500 kW⌫ 0.28⌫ Jonathan Cheszes⇢ Business Analyst⇢ 3296 Electricity Resources⇢ 120 Adelaide St. West, Suite 1600⇢ Toronto, ON, M5H 1T1⇢ Tel 416.969.6251⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca ⇢ This e-mail message and any files transmitted with it are intended only for the named recipient(s)⇢ above and may contain information that is privileged, confidential and/or exempt from disclosure⇢ under applicable law. If you are not the intended recipient(s), any dissemination, distribution or⇢ copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately⇢ and delete this e-mail message. 3297 Cindy Roks↵ From: Cindy Roks Sent: June-14-10 4:35 PM To: Sheri Bizarro Subject: FW: Updated Ground-Mounted Solar Materials Attachments: Ground_Mounted_Solar_Communications(LF053110).doc; Ground-Mounted Solar Web Posting(LF053110).doc I found some communications … you were originally cc ’ d anyway! Cindy Roks↵ Senior Stakeholder Relations Advisor✓ 416 - 969 - 6099✓ P please consider the environment before printing this email _________________________ _________⇤ From: Linda Filippi⌦ Sent: May 31, 2010 10:22 PM⌦ To: Jim MacDougall⌦ Cc: Cindy Roks; Sheri Bizarro⌦ Subject: RE: Updated Ground-Mounted Solar Materials⌦ Jim,✓ I have added a few questions that I anticipate will be asked by individuals who have submitted applications.✓ Do you know when the announcement will be made on Wednesday? If it is not until the afternoon, then it would be⇢ great to meet with the whole team on Wed a.m. to discuss, however, if it is anticipated that the announcement will come out on Wed a.m. then i would need to meet with you tomorrow afternoon to obtain responses to the questions outlined on the attached and put in place a process that enables us to manage extreme escalated situations.✓ Thanks in particular to yourself and Cindy for keeping me in the loop. The more information I can acquire upfront,⇢ the better able the call centre will be to provide effective responses. In return, I anticipate that this will lessen the⇢ impact on the FIT team here at OPA.✓ Thank you. Linda⇢ From: Jim MacDougall⌦ Sent: Mon 5/31/2010 1:51 PM⌦ To: Sheri Bizarro; Cindy Roks⌦ Subject: FW: Updated Ground-Mounted Solar Materials⌦ This is the latest and greatest. Do you want to book a meeting with the whole team on Wed am to discuss how to manage angry customers? Jim MacDougall, P.Eng. Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 3298 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 ----- Original Message ----From: Jim MacDougall Sent: May 26, 2010 1:19 PM To: Sheri Bizarro ; Sarah Simmons; Patricia Lightburn ; Cindy Roks Cc: Jason Chee - Aloy Subject: Fw: Updated Ground - Mounted Solar Materials Here is positioning on gndmt sdolar. Just got out of a a DC session w 400 participants and took a a beating on microfit timelines... Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Kristin Jenkins To: 'Tang, Amy (MEI)' > <> o.ca>; 'Penic, Jordan (MEI)' ; 'paul.ungerman@ontario.ca' ; JoAnne Butler; Jason Chee - Aloy ; Jim MacDougall; 'Ing, Pearl (MEI)' ; Lo, Sue (MEI) ; 'Lewyckyj, Maryanna (MEI)' ; Powers, Kevin (MEI)! ; 'Smith, Anne (MEI)' ; Mary Bernard; Tim Butters; Luisa Da Rocha ; Glenna Ford CC: Irene Mauricette Sent: Fri May 21 12:20:03 2010 Subject: Updated Ground - Mounted Solar Materials We have made some adjustments to how this issue is positioned. Instead of saying we are dropping the price, we are saying that we are creating a new price category for ground - mounted solar. Attached is an updated issues note as well as the! posting that will go up on the OPA website. The email notification to applicants – essentially same as website posting – and the backgrounder are now being revised as is the backgrounder to reflect the new positioning. Will circulate shortly.! Kristin Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600  Toronto , ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca 3299 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3300 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3301 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. 5a49a38a90e5458f9d5a672f7f5fd7f8 3302 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted 5a49a38a90e5458f9d5a672f7f5fd7f8 3303 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ 5a49a38a90e5458f9d5a672f7f5fd7f8 3304 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. 1. I noticed that you have information pertaining to in-series connections now being available once& again for microFIT contracts. How can I be certain that my ground-mount solar application which is& currently slated to be connected in-series will actually receive any payment at all since you continue& to recommend an ‘in-parallel’ connection? (the concern will be that ground-mount customers with an& ‘in-series’ connection may have a hard time down the road if MC comes out to say that their⇢ installation must be ‘in-parallel’. 2. My application was submitted back in February and you have not responded within your 30 day timeframe so why am I being penalized? 3. How do I log a complaint? 5a49a38a90e5458f9d5a672f7f5fd7f8 3305 5 4. I have signed a microFIT agreement with a company who is installing my ground-mount system – can I still opt out if I do not wish to receive 58.8 cents vs 80.2 cents per kWh? 5. Under section 3.1(d) and 3.2(a) of the microFIT rules it states: 3.1(d)↵ The OPA will review the Application to confirm that the project meets the microFIT Program eligibility requirements as set out in Section 2 of this document. The OPA may ask for additional clarification with respect to the Application, if required. The OPA’s target for processing Applications is 30 days following the submission of a complete Application. 3.2 Conditional Offer of microFIT Contract If the OPA determines that the Application meets the microFIT Program eligibility requirements,↵ then the OPA will issue the Applicant a Conditional Offer of microFIT Contract. Considering the fact that I met with all the eligibility requirements as set out in section 2 of the Rules& for microFIT and the OPA did not respond within 30 days with a conditional offer or with any other& communications alerting me to any issues, why is my application request not being ‘grand fathered’ as⇢ other applicants who have received conditional offers with ground mounts> 6. Please ensure that the call centre is provided with information contained within the rules that& supports the changes being made e.g. Section 6.1 ‘Additional Rules’ The OPA reserves the right to cancel all or any part of the microFIT Program at any time and for any↵ reason, or to suspend the microFIT Program in whole or in part for any reason for such period of↵ time as the OPA shall determine in its sole discretion, in each case without any obligation or any↵ reimbursement to the Applicants. For Applicants that receive a Conditional Offer of microFIT Contract prior to the date of such cancellation or suspension, the OPA will offer microFIT Contracts↵ to these Applicants if the conditions are satisfied. Cancellation or suspension of the microFIT Program will not affect executed microFIT Contracts. #### 5a49a38a90e5458f9d5a672f7f5fd7f8 3306 Sarah Simmons↵ From: Sarah Simmons↵ Sent: June-16-10 8:55 AM↵ To: Sheri Bizarro; Patricia Lightburn↵ Cc: Jim MacDougall↵ Subject: RE: Notes on g-m↵ Attachments: Draft notes to applicants contractholders on g-m solar issue - June 16 - SS.doc↵ My suggestions. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email↵ From: Sheri Bizarro↵ Sent: June 15, 2010 5:35 PM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Jim MacDougall↵ Subject: FW: Notes on g-m↵ Will need everyone's comments on this letter first thing tomorrow morning. I still need to connect with Damian about sending it out mass mail tho .... Thanks!!! Sheri -----Original Message----From: Mary Bernard Sent: Tuesday, June 15, 2010 5:31 PM To: Sheri Bizarro Subject: Fw: Notes on g-m Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: 'sheri.bizaro@powerauthority.on.ca' 3307 Sent: Tue Jun 15 17:29:06 2010 Subject: Fw: Notes on g-m Sheri- I need to get this to Ben for the ETM in the morning. through a revised version ASAP? Thanks for yourf help.⇢ Can you please send⇢ Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: Sheri Bizarro CC: Jason Chee-Aloy; Ben Chin; Kristin Jenkins Sent: Mon Jun 14 16:46:28 2010 Subject: Notes on g-m Sheri – here are the notes to applicants and contract-holders. Please revise where necessary to add the process you ’ ve decided on and we ’ ll get Ben the whole package tomorrow for the ETM on Wed. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416-969-6084 3308 Draft May 25-10 Notes on ground-mounted solar PV projects price change To: Solar PV microFIT applicants waiting for conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. You are being advised of this change because you have applied for a microFIT solar PV contract but have not yet received a conditional offer. Consistent with the microFIT Rules version 1.4, if your solar PV project is a rooftop project, your contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the✓ microFIT rules, version 1.4. If your solar PV project does not comply with the definition of Rooftop Facility, it is considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term, sustainable 3309 interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] More information about how the OPA will implement the new price category will be sent to all applicants next week. More information is also available on the microFIT website. The OPA will be holding a webinar on June X to discuss the new price category and answer questions. Details on how to participate can be found on the microFIT website. 3310 To: Solar microFIT contract holders and those with conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Because you already have a microFIT contract or a conditional offer of microFIT contract for your solar PV project, this change does not affect your contract. Regardless of whether your project is ground-mounted or rooftop, your contract price will remain at the original price of 80.2 cents/kWh. The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators with a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is substantially lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3311 To: Solar industry associations and other stakeholders New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Consistent with the microFIT Rules version 1.4, if a solar PV project is a rooftop project, the contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the microFIT rules, version 1.4. If a solar PV project does not comply with the definition of Rooftop Facility, it will be considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. 3312 All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver and remain sustainable for years to come. More information is available on the microFIT website. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3313 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: June-16-10 10:49 AM↵ To: Patricia Lightburn; Jim MacDougall↵ Cc: Sarah Simmons↵ Subject: RE: Notes on g-m↵ Attachments: Draft notes to applicants contractholders on g-m solar issue - June 16 - SS.DOC↵ Sarah ’ s comments pretty much captured what I had and I have nothing more to add here – last call – do you guys have anything to add?⇠ From: Sarah Simmons↵ Sent: Wednesday, June 16, 2010 8:55 AM↵ To: Sheri Bizarro; Patricia Lightburn↵ Cc: Jim MacDougall↵ Subject: RE: Notes on g-m↵ My suggestions.⇠ Sarah Simmons↵ Analyst⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St. W. Suite 1600⇠ Toronto , ON , M5H 1T1⇠ Tel 416.969.6213⇠ Fax 416.967.1947⇠ www.powerauthority.on.ca⇠ P please consider the environment before printing this email↵ From: Sheri Bizarro↵ Sent: June 15, 2010 5:35 PM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Jim MacDougall↵ Subject: FW: Notes on g-m↵ Will need everyone's comments on this letter first thing tomorrow morning. I still need to connect with Damian about sending it out mass mail tho .... Thanks!!! Sheri -----Original Message----From: Mary Bernard Sent: Tuesday, June 15, 2010 5:31 PM To: Sheri Bizarro Subject: Fw: Notes on g-m 3314 Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: 'sheri.bizaro@powerauthority.on.ca' Sent: Tue Jun 15 17:29:06 2010 Subject: Fw: Notes on g-m Sheri- I⇤ need⇤ to⇤ get⇤ this⇤ to⇤ Ben⇤ for⇤ the⇤ ETM⇤ in⇤ the⇤ morning. ⇤ ⇤ Can⇤ you⇤ please⇤ send through⇤ a⇤ revised⇤ version⇤ ASAP?⇤ ⇤ Thanks⇤ for⇤ yourf⇤ help. Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: Sheri Bizarro CC: Jason Chee-Aloy; Ben Chin; Kristin Jenkins Sent: Mon Jun 14 16:46:28 2010 Subject: Notes on g-m Sheri – here are the notes to applicants and contract-holders. Please revise where necessary to add the process you ’ ve decided on and we ’ ll get Ben the whole package tomorrow for the ETM on Wed. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416-969-6084 3315 Draft May 25-10 Notes on ground-mounted solar PV projects price change To: Solar PV microFIT applicants waiting for conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. You are being advised of this change because you have applied for a microFIT solar PV contract but have not yet received a conditional offer. Consistent with the microFIT Rules version 1.4, if your solar PV project is a rooftop project, your contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the✓ microFIT rules, version 1.4. If your solar PV project does not comply with the definition of Rooftop Facility, it is considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term, sustainable 3316 interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] More information about how the OPA will implement the new price category will be sent to all applicants next week. More information is also available on the microFIT website. The OPA will be holding a webinar on June X to discuss the new price category and answer questions. Details on how to participate can be found on the microFIT website. 3317 To: Solar microFIT contract holders and those with conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Because you already have a microFIT contract or a conditional offer of microFIT contract for your solar PV project, this change does not affect your contract. Regardless of whether your project is ground-mounted or rooftop, your contract price will remain at the original price of 80.2 cents/kWh. The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators with a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is substantially lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3318 To: Solar industry associations and other stakeholders New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Consistent with the microFIT Rules version 1.4, if a solar PV project is a rooftop project, the contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the microFIT rules, version 1.4. If a solar PV project does not comply with the definition of Rooftop Facility, it will be considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. 3319 All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver and remain sustainable for years to come. More information is available on the microFIT website. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3320 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: June-16-10 10:51 AM↵ To: Mary Bernard↵ Subject: FW: Notes on g-m↵ Attachments: Draft notes to applicants contractholders on g-m solar issue - June 16 - SS.doc↵ Here are our initial comments to get you started.◆ I asked Jim if he also wanted to add anything so a few more may come but this is the bulk of our◆ comments.◆ Sheri◆ -----Original Message----From: Mary Bernard Sent: Tuesday, June 15, 2010 5:31 PM To: Sheri Bizarro Subject: Fw: Notes on g-m Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: 'sheri.bizaro@powerauthority.on.ca' Sent: Tue Jun 15 17:29:06 2010 Subject: Fw: Notes on g-m Sheri- I⇤ need⇤ to⇤ get⇤ this⇤ to⇤ Ben⇤ for⇤ the⇤ ETM⇤ in⇤ the⇤ morning. ⇤ ⇤ Can⇤ you⇤ please⇤ send through⇤ a⇤ revised⇤ version⇤ ASAP?⇤ ⇤ Thanks⇤ for⇤ yourf⇤ help. Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: Sheri Bizarro CC: Jason Chee-Aloy; Ben Chin; Kristin Jenkins Sent: Mon Jun 14 16:46:28 2010 Subject: Notes on g-m 3321 Sheri – here are the notes to applicants and contract-holders. Please revise where necessary to add the process you ’ ve decided on and we ’ ll get Ben the whole package tomorrow for the ETM on Wed. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416-969-6084 3322 Draft May 25-10 Notes on ground-mounted solar PV projects price change To: Solar PV microFIT applicants waiting for conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. You are being advised of this change because you have applied for a microFIT solar PV contract but have not yet received a conditional offer. Consistent with the microFIT Rules version 1.4, if your solar PV project is a rooftop project, your contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the✓ microFIT rules, version 1.4. If your solar PV project does not comply with the definition of Rooftop Facility, it is considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term, sustainable 3323 interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] More information about how the OPA will implement the new price category will be sent to all applicants next week. More information is also available on the microFIT website. The OPA will be holding a webinar on June X to discuss the new price category and answer questions. Details on how to participate can be found on the microFIT website. 3324 To: Solar microFIT contract holders and those with conditional offers New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Because you already have a microFIT contract or a conditional offer of microFIT contract for your solar PV project, this change does not affect your contract. Regardless of whether your project is ground-mounted or rooftop, your contract price will remain at the original price of 80.2 cents/kWh. The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators with a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is substantially lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects and maintains the long-term stability of the program. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3325 To: Solar industry associations and other stakeholders New Price Category for Ground-Mounted Solar PV Projects 10 kW or less The Ontario Power Authority has created a new price category for ground-mounted solar PV projects 10 kW or less. Ground-mounted, or non-rooftop, solar PV projects 10 kW or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective June 18, 2010. Rooftop solar PV projects will continue to be eligible for 80.2 cents/kWh. Consistent with the microFIT Rules version 1.4, if a solar PV project is a rooftop project, the contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is one that is that is being installed on the roof of an existing permanent building, such as a home, small business or other institution. Please make sure to review the definition of “Rooftop Facility” in the microFIT rules, version 1.4. If a solar PV project does not comply with the definition of Rooftop Facility, it will be considered a ground-mounted project (or non-rooftop project). The microFIT program was designed on a principle of a reasonable of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground-mounted solar projects will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. [NTD: In transitioning to the new price schedule, the Ministry of Energy and Infrastructure and the OPA want to ensure that individual participants in the microFIT program are not adversely affected by this change. Therefore, applications submitted by individuals prior to June 18, 2010 will be offered a conditional offer based on the September 30, 2009 price schedule and version 1.3 of the microFIT rules and contract. The applicant will be considered an individual if the legal applicant is the owner of the microFIT project and the owner of the property on which the microFIT project is to be located on. All other applicants will be processed under version 1.4 of the microFIT rules and contract and the new price schedule effective today, June 18, 2010. 3326 All applicants submitting applications on or after June 18, 2010 will also be processed under version 1.4 of the microFIT rules and contract and the new price schedule.] The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that a new price category be created now so the program can realize the value it was intended to deliver and remain sustainable for years to come. More information is available on the microFIT website. The OPA will be holding a webinar on June XX to discuss the new price category and answer questions. Details on how to participate can also be found on the microFIT website. 3327 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Attachments: 10862_FIT_Pricing_Schedule_-_June 18 10_for_website.doc;↵ microFIT_price_schedule_for_website June 18.doc↵ Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT. Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you. Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3328 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: June 18, 2010 Renewable Fuel Contract Price (¢/kWh) Percentage Escalated4 1 0 MW 13.8 20 > 10 MW 13.0 20 1 00 kW 19.5 20 18.5 20 16.0 20 14.7 20 > 10 MW 10.4 20 1 0 MW 13.1 20 12.2 20 1 0MW 11.1 20 > 10 MW 10.3 20 Size Tranche Biomass1,2 Biogas1,2 On-Farm On-Farm > 1 00 kW Biogas 250 kW 500 kW Biogas >500 kW Biogas 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Rooftop 1 0 kW 80.2 0 Ground-mounted 1 0 kW 58.8 0 71.3 0 63.5 0 > 500 kW 53.9 0 10 MW 44.3 0 Any size 13.5 20 Any size 19.0 20 Rooftop > 10 Rooftop > 250 Rooftop Ground-mounted2 250 kW 500 kW Wind2 Onshore Offshore 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in Appendix A below. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW.% 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. 3329 Note: In the case of an incremental solar project, the incremental project together with the existing% generating facility to which it is incremental cannot exceed 10 MW. Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder* The following table sets out the price adders for Aboriginal and community-based projects. Renewable Fuel Wind Solar PV (groundmounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal price adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum community price adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the maximum Aboriginal price adder or maximum community price adder added to the FIT contract price is based on the Aboriginal or community participation level as defined in the FIT Rules. 3330 microFIT Price Schedule – revised June 18, 2010 Once you have entered into a microFIT contract, you will be guaranteed a fixed price⌧ for the electricity you produce. The prices are designed to cover typical capital and⌧ operating costs and to provide a reasonable return on the investment over the term of⌧ the contract. Prices for Renewable Energy Projects that are 10 kW or less Contract Term Percentage Price (¢/kWh) (years) Escalated (%) Rooftop 80.2 20 0 Ground-mounted 58.8 20 0 Wind 13.5 20 20 Waterpower 13.1 40 20 Biomass 13.8 20 20 Biogas 16.0 20 20 Landfill gas 11.1 20 20 Renewable Technology Solar PV The prices presented above are extracted from the FIT price schedule. Note that the⌧ OPA will review the FIT price schedule on a regular basis (approximately every two⌧ years). For technologies other than solar PV, 20 percent of the price will escalate annually⌧ based on increases in the Consumer Price Index. Please note that if you intend to apply for the on-farm biogas price, the community⌧ price adder or the aboriginal price adder, you must apply to the FIT Program,⌧ 3331 regardless of the size of your project. Also, projects under the microFIT program will⌧ not receive peak and off-peak pricing. 3332 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 12:08 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Patricia: Thank you very much. I will change the microFIT website and the price to reflect the new name for the new price category. I am looking forward to a smooth process! J⇥ From: Patricia Lightburn Sent: June 16, 2010 11:40 AM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Hi Glenna, Attached are the two overviews ready for posting. Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices as “ non - rooftop ” prices. In FIT it will continue as ground- mount I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted. patricia From: Glenna Ford Sent: Wednesday, June 16, 2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: Mary Bernard Subject: Friday's announcement Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. 3333 Thank you. Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3334 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT. I⌧ believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?⌧ Thank you.⌧ From: Patricia Lightburn Sent: June 16, 2010 11:40 AM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Hi Glenna,⌧ Attached are the two overviews ready for posting.⌧ Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices⌧ as “ non - rooftop ” prices. In FIT it will continue as ground- mount⌧ I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.⌧ patricia⌧ From: Glenna Ford Sent: Wednesday, June 16, 2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: Mary Bernard Subject: Friday's announcement Patricia and Sarah:⌧ I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages⌧ which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?⌧ I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the⌧ microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.⌧ 3335 Glenna Ford↵ Senior Regulatory Communications Advisor⌧ Direct: 416- 969 - 6305⌧ Cell: 416- 392 - 9905⌧ Email: glenna.ford@powerauthority.on.ca⌧ Ontario Power Authority⌧ 120 Adelaide Street West, Suite 1600⌧ Toronto , ON M5H 1T1⌧ www.powerauthority.on.ca⌧ P Please consider the environment before printing this email. 3336 Patricia Lightburn From: Patricia Lightburn Sent: June-16-10 2:04 PM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole⇡ mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop?⇡ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I⇡ believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?⇡ Thank you.⇡ From: Patricia Lightburn↵ Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna,⇡ Attached are the two overviews ready for posting.⇡ Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices⇡ as “ non - rooftop ” prices. In FIT it will continue as ground- mount⇡ I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.⇡ patricia⇡ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah:⇡ 3337 I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages⇡ which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?⇡ I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the⇡ microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.⇡ Glenna Ford↵ Senior Regulatory Communications Advisor⇡ Direct: 416- 969 - 6305⇡ Cell: 416- 392 - 9905⇡ Email: glenna.ford@powerauthority.on.ca⇡ Ontario Power Authority⇡ 120 Adelaide Street West, Suite 1600⇡ Toronto , ON M5H 1T1⇡ www.powerauthority.on.ca⇡ P Please consider the environment before printing this email. 3338 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 2:21 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non- roof top. FIT already has a category for ground- mounted – does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop?! From: Patricia Lightburn Sent: June 16, 2010 2:04 PM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole! mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop?! From: Glenna Ford Sent: Wednesday, June 16, 2010 2:02 PM To: Patricia Lightburn Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I! believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?! Thank you.! From: Patricia Lightburn Sent: June 16, 2010 11:40 AM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Hi Glenna,! Attached are the two overviews ready for posting.! Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices! as “ non - rooftop ” prices. In FIT it will continue as ground- mount! I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.! 3339 patricia! From: Glenna Ford Sent: Wednesday, June 16, 2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: Mary Bernard Subject: Friday's announcement Patricia and Sarah:! I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages! which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?! I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the! microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.! Glenna Ford↵ Senior Regulatory Communications Advisor! Direct: 416- 969 - 6305! Cell: 416- 392 - 9905! Email: glenna.ford@powerauthority.on.ca! Ontario Power Authority! 120 Adelaide Street West, Suite 1600! Toronto , ON M5H 1T1! www.powerauthority.on.ca! P Please consider the environment before printing this email. 3340 Patricia Lightburn From: Patricia Lightburn Sent: June-16-10 2:26 PM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Ok how about this – in the price schedules and messaging (both FIT and microFIT ) we can use ground- mount⌧ In the overview, website and application form we can use ground- mount, and indicate that this means anything “ non⌧ rooftop ”⇧ Does that help?⌧ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:21 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non - roof top. FIT already has a category for ground- mounted – does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop?⌧ From: Patricia Lightburn↵ Sent: June 16, 2010 2:04 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole⌧ mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop?⌧ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I⌧ believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?⌧ Thank you.⌧ From: Patricia Lightburn↵ 3341 Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna,⌧ Attached are the two overviews ready for posting.⌧ Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices⌧ as “ non - rooftop ” prices. In FIT it will continue as ground- mount⌧ I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.⌧ patricia⌧ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah:⌧ I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages⌧ which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?⌧ I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the⌧ microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.⌧ Glenna Ford↵ Senior Regulatory Communications Advisor⌧ Direct: 416- 969 - 6305⌧ Cell: 416- 392 - 9905⌧ Email: glenna.ford@powerauthority.on.ca⌧ Ontario Power Authority⌧ 120 Adelaide Street West, Suite 1600⌧ Toronto , ON M5H 1T1⌧ www.powerauthority.on.ca⌧ P Please consider the environment before printing this email. 3342 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 2:29 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I am fine with this, but others can/should weigh in. From: Patricia Lightburn Sent: June 16, 2010 2:26 PM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Ok how about this – in the price schedules and messaging (both FIT and microFIT ) we can use ground- mount In the overview, website and application form we can use ground- mount, and indicate that this means anything “ non rooftop ”⇧ Does that help? From: Glenna Ford Sent: Wednesday, June 16, 2010 2:21 PM To: Patricia Lightburn Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non - roof top. FIT already has a category for ground- mounted – does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop? From: Patricia Lightburn Sent: June 16, 2010 2:04 PM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop? From: Glenna Ford Sent: Wednesday, June 16, 2010 2:02 PM To: Patricia Lightburn Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement 3343 Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know? Thank you. From: Patricia Lightburn Sent: June 16, 2010 11:40 AM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Hi Glenna, Attached are the two overviews ready for posting. Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices as “ non - rooftop ” prices. In FIT it will continue as ground- mount I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted. patricia From: Glenna Ford Sent: Wednesday, June 16, 2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: Mary Bernard Subject: Friday's announcement Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you. Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca 3344 Jim MacDougall From: Jim MacDougall Sent: June-16-10 2:29 PM To: Glenna Ford; Patricia Lightburn Cc: Mary Bernard; Sarah Simmons; Sheri Bizarro Subject: RE: Friday's announcement Good for me.⌦ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Glenna Ford↵ Sent: June 16, 2010 2:29 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I am fine with this, but others can/should weigh in. From: Patricia Lightburn↵ Sent: June 16, 2010 2:26 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Ok how about this – in the price schedules and messaging (both FIT and microFIT ) we can use ground- mount⌦ In the overview, website and application form we can use ground- mount, and indicate that this means anything “ non⌦ rooftop ”⇧ Does that help?⌦ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:21 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non - roof top. FIT already has a category for ground- mounted – does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop?⌦ From: Patricia Lightburn↵ 3345 Sent: June 16, 2010 2:04 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole⌦ mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop?⌦ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I⌦ believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?⌦ Thank you.⌦ From: Patricia Lightburn↵ Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna,⌦ Attached are the two overviews ready for posting.⌦ Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices⌦ as “ non - rooftop ” prices. In FIT it will continue as ground- mount⌦ I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.⌦ patricia⌦ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah:⌦ I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages⌦ which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?⌦ I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the⌦ 3346 on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ve made the⌦ microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.⌦ Glenna Ford✓ Senior Regulatory Communications Advisor⌦ Direct: 416- 969 - 6305⌦ Cell: 416- 392 - 9905⌦ Email: glenna.ford@powerauthority.on.ca⌦ Ontario Power Authority⌦ 120 Adelaide Street West, Suite 1600⌦ Toronto , ON M5H 1T1⌦ www.powerauthority.on.ca⌦ P Please consider the environment before printing this email. 3347 Sarah Simmons↵ From: Sarah Simmons↵ Sent: June-16-10 2:36 PM↵ To: Glenna Ford; Patricia Lightburn↵ Cc: Mary Bernard; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I agree this approach.✏ Sarah Simmons↵ Analyst✏ Electricity Resources✏ Ontario Power Authority✏ 120 Adelaide St. W. Suite 1600✏ Toronto , ON , M5H 1T1✏ Tel 416.969.6213✏ Fax 416.967.1947✏ www.powerauthority.on.ca✏ P please consider the environment before printing this email From: Glenna Ford↵ Sent: June 16, 2010 2:29 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I am fine with this, but others can/should weigh in. From: Patricia Lightburn↵ Sent: June 16, 2010 2:26 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Ok how about this – in the price schedules and messaging (both FIT and microFIT ) we can use ground- mount✏ In the overview, website and application form we can use ground- mount, and indicate that this means anything “ non✏ rooftop ”⇧ Does that help?✏ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:21 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non - roof top. FIT already has a category for ground- mounted – does that include other non-✏ 3348 microFIT list will say non - roof top. FIT already has a category for ground- mounted does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop?✏ From: Patricia Lightburn↵ Sent: June 16, 2010 2:04 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole✏ mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop?✏ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I✏ believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know?✏ Thank you.✏ From: Patricia Lightburn↵ Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna,✏ Attached are the two overviews ready for posting.✏ Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices✏ as “ non - rooftop ” prices. In FIT it will continue as ground- mount✏ I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted.✏ patricia✏ From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah:✏ I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages✏ which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when 3349 which I d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday?✏ I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the✏ microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you.✏ Glenna Ford Senior Regulatory Communications Advisor✏ Direct: 416- 969 - 6305✏ Cell: 416- 392 - 9905✏ Email: glenna.ford@powerauthority.on.ca✏ Ontario Power Authority✏ 120 Adelaide Street West, Suite 1600✏ Toronto , ON M5H 1T1✏ www.powerauthority.on.ca✏ P Please consider the environment before printing this email. 3350 Glenna Ford↵ From: Glenna Ford↵ Sent: June-16-10 2:38 PM↵ To: Patricia Lightburn↵ Subject: RE: Friday's announcement↵ Patricia: Do you have time to meet tomorrow to go over website changes? I ’ d like to make sure the microFIT site is completely done before Friday. From: Patricia Lightburn Sent: June 16, 2010 11:40 AM To: Glenna Ford Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro Subject: RE: Friday's announcement Hi Glenna, Attached are the two overviews ready for posting. Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices as “ non - rooftop ” prices. In FIT it will continue as ground- mount I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted. patricia From: Glenna Ford Sent: Wednesday, June 16, 2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: Mary Bernard Subject: Friday's announcement Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you. Glenna Ford↵ 3351 Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3352 Patricia Lightburn From: Patricia Lightburn Sent: June-16-10 2:40 PM To: Glenna Ford Subject: RE: Friday's announcement How about 1130? From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:38 PM↵ To: Patricia Lightburn↵ Subject: RE: Friday's announcement↵ Patricia: Do you have time to meet tomorrow to go over website changes? I ’ d like to make sure the microFIT site is completely done before Friday. From: Patricia Lightburn↵ Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna, Attached are the two overviews ready for posting. Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices as “ non - rooftop ” prices. In FIT it will continue as ground- mount I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted. patricia From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go 3353 I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you. Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3354 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: June-16-10 3:02 PM↵ To: Sarah Simmons; Glenna Ford; Patricia Lightburn↵ Cc: Mary Bernard; Jim MacDougall↵ Subject: RE: Friday's announcement↵ I ’ m cool with that. From: Sarah Simmons↵ Sent: Wednesday, June 16, 2010 2:36 PM↵ To: Glenna Ford; Patricia Lightburn↵ Cc: Mary Bernard; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I agree this approach. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Glenna Ford↵ Sent: June 16, 2010 2:29 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ I am fine with this, but others can/should weigh in. From: Patricia Lightburn↵ Sent: June 16, 2010 2:26 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Ok how about this – in the price schedules and messaging (both FIT and microFIT ) we can use ground- mount In the overview, website and application form we can use ground- mount, and indicate that this means anything “ non rooftop ”⌃ Does that help? 3355 From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:21 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ One problem is that the two price lists will be different – the FIT price list will say ground mount 10 k or less and the microFIT list will say non - roof top. FIT already has a category for ground- mounted – does that include other non- rooftop solar? What about calling it ground - mounted and other non- rooftop? From: Patricia Lightburn↵ Sent: June 16, 2010 2:04 PM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ The concern is that we will be seeing a lot of stuff that people will not want to classify as ground- mount (ie pole mount or a parking shelter). But I agree that the messaging may be confusing. Could we have the messaging as ground mount but in the actual documents use non- rooftop? From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 2:02 PM↵ To: Patricia Lightburn↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Mary and I would like to suggest that we use ground- mounted as the category name for both FIT and microFIT . I believe it ’ s confusing to refer to the same category using two different terms in our communications and price lists. Could you please consider this and let us know? Thank you. From: Patricia Lightburn↵ Sent: June 16, 2010 11:40 AM↵ To: Glenna Ford↵ Cc: Mary Bernard; Sarah Simmons; Jim MacDougall; Sheri Bizarro↵ Subject: RE: Friday's announcement↵ Hi Glenna, Attached are the two overviews ready for posting. Only one change to the microFIT price schedule – in the microFIT program we are referring to ground- mount prices as “ non - rooftop ” prices. In FIT it will continue as ground- mount I will work with you today and tomorrow to get the full list of documents and on Friday I will work with you to get them posted. patricia From: Glenna Ford↵ Sent: Wednesday, June 16, 2010 11:20 AM↵ 3356 To: Patricia Lightburn; Sarah Simmons↵ Cc: Mary Bernard↵ Subject: Friday's announcement↵ Patricia and Sarah: I would like to get a list of all the documents that will have to be re- posted on Friday for both FIT and microFIT . Apart from the two program overviews, which I have updated and Patricia is now checking, and apart from web pages which I ’ d like to review with you, can you please send me the list? I.e., rules, contracts and definitions? Also when will I receive the documents? And with whom should I work from ER on Friday? I would like to upload all the documents on both sites as soon as possible so that we are more or less ready to go on Friday afternoon. I will have to make the web copy changes to the FIT website at that time (I ’ ve made the microFIT changes on the test site already). I ’ ve attached what I believe are the latest price lists (revised) – please check them. Thank you. Glenna Ford Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3357 Mary Bernard⌦ From: Mary Bernard⌦ Sent: June-17-10 9:19 AM⌦ To: Sheri Bizarro; Jim MacDougall; Kristin Jenkins; Ben Chin⌦ Cc: Glenna Ford; Linda Filippi; Patricia Lightburn; Sarah Simmons; Luisa Da Rocha⌦ Subject: Updated G-M comm. material⌦ Attachments: Draft notes to applicants contractholders on g-m solar issue June 17.doc; GroundMounted Solar Communications June 17.doc; Ground-Mounted Solar Web Posting⌦ June 17.doc; Public BG - Price Change for Ground-Mounted Solar June 17.doc⌦ All – attached are updated versions of the communications material that now reflect the revisions made by Sheri and⇠ Jim to the notes to applicants.⇠ I ’ ve carried through those revisions to the other two notes in that document (to contract holders and other⇠ stakeholders) so that ’ s why there is a new version attached.⇠ Please review and advise if any further revisions are required.⇠ Kristin – please forward on to MEI as appropriate.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Jim MacDougall Sent: June 16, 2010 2:53 PM To: Mary Bernard; Sheri Bizarro; Kristin Jenkins; Ben Chin Cc: Glenna Ford; Patricia Lightburn; Sarah Simmons Subject: RE: Notes on g-m Sarah and I have agreed to take out a few “ non - rooftop ” references, and to point to the Rules rather than the Contract.⇠ I am good with it too.⇠ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St W, Suite 1600⇠ Toronto , ON M5H 1T1 , Canada⇠ tel 416.969.6415⇠ From: Mary Bernard Sent: June 16, 2010 2:38 PM To: Sheri Bizarro; Kristin Jenkins; Jim MacDougall; Ben Chin Cc: Glenna Ford; Patricia Lightburn; Sarah Simmons Subject: RE: Notes on g-m 3358 Sheri et al – I ’ ve edited Sheri ’ s version and added in a few more edits to try to make these notes as up to date as possible.⇠ They still assume no grandfathering of any kind.⇠ Please review and send comments.⇠ Ben and Kristin – assuming once we are happy, we can send to MEI FYI rather than for review?⇠ Will look at other pieces to make consistent with these.⇠ Thanks, all.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Sheri Bizarro Sent: June 16, 2010 10:51 AM To: Mary Bernard Subject: FW: Notes on g-m Here are our initial comments to get you started.⇠ I asked Jim if he also wanted to add anything so a few more may come but this is the bulk of our⇠ comments.⇠ Sheri⇠ -----Original Message----From: Mary Bernard Sent: Tuesday, June 15, 2010 5:31 PM To: Sheri Bizarro Subject: Fw: Notes on g-m Mary Bernard Communications Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: 'sheri.bizaro@powerauthority.on.ca'  Sent: Tue Jun 15 17:29:06 2010 Subject: Fw: Notes on g-m Sheri- I⇤ need⇤ to⇤ get⇤ this⇤ to⇤ Ben⇤ for⇤ the⇤ ETM⇤ in⇤ the⇤ morning. ⇤ ⇤ Can⇤ you⇤ please⇤ send through⇤ a⇤ revised⇤ version⇤ ASAP?⇤ ⇤ Thanks⇤ for⇤ yourf⇤ help. Mary Bernard Communications 3359 Ontario Power Authority 416-969-6084 -----Original Message----From: Mary Bernard To: Sheri Bizarro CC: Jason Chee-Aloy; Ben Chin; Kristin Jenkins Sent: Mon Jun 14 16:46:28 2010 Subject: Notes on g-m Sheri – here are the notes to applicants and contract-holders. Please revise where necessary to add the process you ’ ve decided on and we ’ ll get Ben the whole package tomorrow for the ETM on Wed. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416-969-6084 3360 Draft June 17-10 – includes Sheri’s and Jim’s edits Notes on ground-mounted solar PV projects price change To: Solar PV microFIT applicants waiting for conditional offers (to be sent out by ER) New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT groundmounted solar PV projects. Ground-mounted solar PV projects of 10 kilowatts or lesswill be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effectiveimmediately. Rooftop solar PV projects, as defined in the microFIT Rules, version 1.4,will continue to be eligible for 80.2 cents/kWh. You are being advised of this change because you have applied for a microFIT solar PVcontract but have not yet received a conditional offer. Consistent with the microFITRules version 1.4, if your solar PV project is a rooftop project, your contract offer will beat the original price of 80.2 cents/kWh. A rooftop project is one that is being installed onthe roof of an existing permanent building, such as a home, small business or otherinstitution. Please review the definition of “Rooftop Facility” in the microFIT Rules, version 1.4. If your solar PV project does not comply with the definition of a rooftopfacility, it is considered a ground-mounted project, and you will be offered a contractunder the new price category. The microFIT program was designed on the principle of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched theprogram. More than 15,000 applications have been submitted. Virtually all of theprojects are for solar PV, and the size of the projects indicates that the majority ofapplications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricingwas set to encourage small rooftop projects. The 80.2 cents/kWh was set to providerooftop solar generators a reasonable rate of return of approximately 11 percent over the20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install arooftop project. This new price category will provide ground-mounted solar generatorswith the same reasonable rate of return of approximately 11 percent that other generatorswill receive over the 20-year term of their contracts. The OPA believes the new pricecategory is fair, reasonable, more accurately reflects the costs associated with these typesof projects and maintains the long-term stability of the program. The Ministry of Energy and Infrastructure supports this decision because it ensures thatthe microFIT Program is meeting its program goals and is providing proper value togenerators and ratepayers. The OPA believes it is in the best long-term, sustainable- 3361 interests of the program, generators and ratepayers that a new price category be creatednow so the program can realize the value it was intended to deliver. A separate communication will provide instructions on how you are to indicate in yourmicroFIT application whether your project is a rooftop or a ground-mounted project. You will then need to resubmit your application. Once it is resubmitted, the OPA will process it as quickly as possible. More information is also available on the microFIT website. The OPA will be holding a webinar on June 20 (confirm) to discuss the new pricecategory and answer questions. Details on how to participate can be found on themicroFIT website.- 3362 To: Solar microFIT contract holders and those with conditional offers (to be sent out byER) New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT groundmounted solar PV projects. Ground-mounted solar PV projects of 10 kilowatts or lesswill be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effectiveimmediately. Rooftop solar PV projects, as defined in the microFIT Rules, version 1.4,will continue to be eligible for 80.2 cents/kWh. Because you already have a microFIT contract or a conditional offer of a microFITcontract for your solar PV project, this change does not affect your contract. Regardlessof whether your project is ground-mounted or rooftop, your contract price will remain atthe original price of 80.2 cents/kWh. The microFIT program was designed on the principle of a reasonable of a reasonable rateof return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority ofapplications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricingwas set to encourage small rooftop projects. The 80.2 cents/kWh was set to providerooftop solar generators with a reasonable rate of return of approximately 11 percent overthe 20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is substantially lower than the costto install a rooftop project. This new price category will provide ground-mounted solargenerators with the same reasonable rate of return of approximately 11 percent that othergenerators will receive over the 20-year term of their contracts. The OPA believes thenew price category is fair, reasonable and more accurately reflects the costs associatedwith these types of projects and maintains the long-term stability of the program. The OPA will be holding a webinar on June 20 (confirm) to discuss the new pricecategory and answer questions. Details on how to participate can also be found on themicroFIT website.- 3363 To: Solar industry associations and other stakeholders (to be sent by Comm) New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT groundmounted solar PV projects. Ground-mounted solar PV projects of 10 kilowatts or lesswill be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effectiveimmediately. Rooftop solar PV projects, as defined in the microFIT Rules, version 1.4,will continue to be eligible to receive 80.2 cents/kWh. Consistent with the microFIT Rules, version 1.4, if a solar PV project is a rooftop project,the contract offer will be at the original price of 80.2 cents/kWh. A rooftop project is onethat is being installed on the roof of an existing permanent building, such as a home,small business or other institution. Please review the definition of “Rooftop Facility” in the microFIT Rules, version 1.4. If a solar PV project does not comply with thedefinition of a rooftop facility, it will be considered a ground-mounted project, andcontracts will be offered under the new price category. The microFIT program was designed on the principle of a reasonable of a reasonable rateof return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority ofapplications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricingwas set to encourage small rooftop projects. The 80.2 cents/kWh was set to providerooftop solar generators a reasonable rate of return of approximately 11 percent over the20-year term of their contract, while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install arooftop project. This new price category will provide ground-mounted solar generatorswith the same reasonable rate of return of approximately 11 percent that other generatorswill receive over the 20-year term of their contracts. The OPA believes the new pricecategory is fair, reasonable and more accurately reflects the costs associated with thesetypes of projects. Ground-mounted microFIT applicants who already have an executed a contract orreceived a conditional contract offer from the OPA will continue to be eligible for theoriginal price of 80.2 cents/kWh. All other ground-mounted microFIT projects, includingthose for which an application has been submitted but have not yet received a contract orconditional contract offer, will be eligible for 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures thatthe microFIT Program is meeting its program goals and is providing proper value togenerators and ratepayers. The OPA believes it is in the best long-term interests of theprogram, generators and ratepayers that a new price category be created now so the- 3364 program can realize the value it was intended to deliver and remain sustainable for yearsto come.More information is available on the microFIT website.The OPA will be holding a webinar on June 20 (confirm) to discuss the new pricecategory and answer questions. Details on how to participate can also be found on themicroFIT website.- 3365 Updated June 17, 2010 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as small-scale renewable energy program for homeowners, farmers,⇢ institutions and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⇢ As of June 14, 15,323 applications had been submitted for microFIT projects for a potential 140.8⇢ MW of generating capacity, 3,518 conditional offers have been issued for a potential of 29.1 MW of⇢ generation and 340 microFIT projects have been connected with 1.5 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⇢ of the projects indicates that the majority of applications are for ground-mounted projects located⇢ in rural areas rather than rooftop solar projects. The microFIT program has always been premised on enabling homeowners, farmers, businesses and⇢ others to participate in small-scale projects and earn a reasonable rate of return for the valuable⇢ role they play in generating electricity. The price of 80.2¢/kWh was based on the assumption that⇢ most projects would be rooftop solar projects, which cost more to install. The rate would provide⇢ generators approximately an 11-percent return on investment over the 20 years of the microFIT⇢ contract (as is all microFIT and FIT pricing). In setting the price at 80.2¢/kWh, it was assumed that almost all the projects would be rooftop solar⇢ projects, which cost more to install than ground-mounted projects. It was assumed that groundmounted would be a small minority of microFIT projects. For example, in situations only when a⇢ rooftop was not viable due to structural problems with the roof or the fact that the roof was shaded⇢ or not south-facing. This volume of ground-mounted solar projects revealed a disproportional economy of scale and⇢ constitutes an unanticipated cost burden to ratepayers. This is therefore not in keeping with the⇢ intent of the microFIT program. Costs associated with ground-mounted projects are substantially lower than those for rooftop⇢ projects, and OPA and MEI agree that ground-mounted solar microFIT projects require a new price⇢ category. The decision has been made to create a new price category for ground-mounted microFIT solar PV⇢ projects at 58.8¢/kWh effective immediately. The new price is fair and still provides ground-mounted microFIT generators with a reasonable rate⇢ of return of approximately 11 percent. Consistent with the microFIT Rules, version 1.4, microFIT applicants with a ground-mounted solar⇢ project who have a contract or a conditional offer will continue to be eligible for 80.2¢/kWh. All⇢ other applicants will be eligible for 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⇢ per year over the twenty years of the microFIT contract. The OPA completed the processing of about 1,000 rooftop applications by early June 2010. 1ed7caf6ffaa496aa69d2ca0fc94b515 3366 2 Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⇢ program by March 31st, will receive a response by August. People with applications submitted by⇢ May 31st will receive a response by September. Communication objectives: To advise all affected parties of the new price category for ground-mounted solar and the rationale⇢ for it. To continue to encourage uptake on the microFIT program and the development of small renewable⇢ energy projects in Ontario. Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generatorsa reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . The OPA has received more than 15,000⇢ applications, a lot more than expected. Most of these projects are for ground-mounted solar⇢ projects and are an unanticipated cost burden to ratepayers. That’s because the price was set to✓ encourage small rooftop projects, which cost substantially more to develop. The new price category levels the playing field with other microFIT projects and will deliver asimilar rate of return of approximately 11 percent over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with a reasonable⇢ rate of return. Ground-mounted solar projects are less expensive to install than rooftop solar⇢ projects. The Ontario Power Authority also has an obligation to protect ratepayers by paying tariffs⇢ that are fair and reasonable. Rooftop microFIT solar prices remain at 80.2 cents/kWh. Please note there are no tariff changes⇢ for other types of generation in the program. The two-year review will be the preferred method to⇢ assess FIT rates. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meetingits program goals and is providing proper value to developers and ratepayers. 1ed7caf6ffaa496aa69d2ca0fc94b515 3367 3 Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⇢ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains at 80.2 cents/kWh and will not change. Send notification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⇢ with MEI) to gauge reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⇢ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⇢ and others. Be prepared to respond to media inquiries. Provide detailed information to the OPA call centre prior to the announcement to ensure they are⇢ prepared for calls regarding the new price category. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge⇠ volume of applications that ratepayers could be adversely affected? microFIT has always been premised on enabling homeowners, farmers, businesses and others to⇢ participate in small-scale projects and earn a reasonable rate of return for the valuable role they play in⇢ generating electricity. The price of 80.2¢/kWh was based on the assumption that most projects would⇢ be rooftop solar projects. Prices set for the program followed extensive consultation with stakeholders⇢ about the level necessary to motivate development and provide fair compensation to proponents who⇢ invested in small projects. The rates were set to provide generators with approximately an 11-percent⇢ return on investment over the 20 years of the contract. They were also intended to support the⇢ development of rooftop solar PV, which is more expensive to install. The Ontario Power Authority has⇢ an obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific⇢ goals of the microFIT program. That is why effective immediately, there is a new price category for⇢ ground-mounted solar PV microFIT projects. Any project that has not received a conditional offer or⇢ contract will be paid 58.8 cents/kWh to level the playing field and bring it in line with the rate of return⇢ other generation categories are receiving. 1ed7caf6ffaa496aa69d2ca0fc94b515 3368 4 Why aren’t you honouring the price that people applied for and make the change effective from this⇠ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⇢ were intended to provide a reasonable rate of return. The large number of ground-mounted solar⇢ projects is an unanticipated and unnecessary burden on ratepayers. The Ontario Power Authority has⇢ an obligation to protect ratepayers and promote the long-term sustainability of the program by paying⇢ rates that are fair and reasonable in keeping with goals of the microFIT program. Generators will still⇢ make a reasonable rate of return for their investment, while levelling the playing field with other types⇢ of renewable energy generation. Are all microFIT projects affected by this change? No, only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents/kWh. Any project that has not received a contract or⇢ conditional offer is now subject to this rate. Prices set for the microFIT program followed extensive⇢ consultation with stakeholders about the level necessary to motivate development and provide fair⇢ compensation to proponents investing in small projects. The rates were set to provide generators with⇢ approximately an 11-percent return on investment over the 20 years of the contract. The pricing levels⇢ for microFIT were established specifically to encourage the development of rooftop solar PV, which is⇢ more expensive to install. There are no tariff changes envisioned for other types of generation in the⇢ program until the regular two-year review. The Ontario Power Authority has an obligation to protect⇢ ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⇢ program, and we are doing this by introducing a new price category. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with approximatelyan 11-percent rate of return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for rooftop solar projects, which are more expensive to⇢ install. The OPA designed the program assuming that there would be very few ground-mounted solar⇢ projects, which have lower capital costs than rooftop solar projects. It was assumed that groundmounted solar PV projects would be chosen by homeowners, institutions and small businesses only⇢ when a rooftop was not viable due to structural problems with the roof or the fact that the roof was⇢ shaded or not south-facing. The new price category levels the playing field among microFIT generators⇢ and protects Ontario’s ratepayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the new price⇢ category. The new price is fair and still provides ground-mounted microFIT generators with a⇢ reasonable rate of return of approximately 11 percent. We welcome applicants who are seeking to⇢ develop ground-mounted solar PV generation projects to continue with their projects albeit at the new⇢ rate. They will receive the same rate of return as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your ownrules didn’t you? microFIT and FIT has always been premised on enabling homeowners, farmers, businesses and others to⇢ participate in renewable energy projects and earn a reasonable rate of return for the valuable role they⇢ 1ed7caf6ffaa496aa69d2ca0fc94b515 3369 5 play in generating electricity. This new price category brings microFIT ground-mounted PV back in line⇢ with that principle. The microFIT Rules specifically permit program changes – including pricing revisions – to be made as⇢ required (For example in response to Ministerial direction and market changes). The Ministry of Energy⇢ and Infrastructure supports this decision as it ensures microFIT is meeting its program goals and is⇢ providing proper value to developers and ratepayers. This decision was made in conjunction with the⇢ Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting⇢ small renewable PV projects by homeowners, institutions and small businesses. We believe that what⇢ we are doing now is in the best long-term interests of microFIT, developers and ratepayers. We want to⇢ restore focus of the microFIT program and obtain the value that it was intended to deliver. #### 1ed7caf6ffaa496aa69d2ca0fc94b515 3370 Draft June 17-10 – includes comments from MEI/updates from Sheri & Jim June 16 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects of 10 kilowatts or less will be eligible to receive 58.8 cents per kilowatt-hour (kWh). This price is effective as of June 18, 2010. Rooftop solar PV projects, as defined in the microFIT Rules, version 1.4, will continue to be eligible for 80.2 cents per kWh. The microFIT program was designed on the principle of a reasonable rate of return. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 15,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that the majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. The 80.2 cents/kWh price was set to provide rooftop solar generators a reasonable rate of return of approximately 11 percent over the 20-year term of their contract (as in all FIT and microFIT pricing), while at the same time protecting the ratepayer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. This new price category will provide ground-mounted solar generators with the same reasonable rate of return of approximately 11 percent that other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable, more accurately reflects the costs associated with ground-mounted projects and maintains the long-term stability of the program. Consistent with the microFIT Rules, version 1.4, ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will continue to be eligible for the original price of 80.2 cents/kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will be eligible to receive 58.8 cents/kWh. Rooftop solar PV projects, as defined in the microFIT Rules, version 1.4, will continue to be eligible for 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting the original program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term sustainable interests of the program, generators, manufacturers, lenders and ratepayers that this new price category be introduced now so the program can realize the value it was intended to deliver. For more information, click here for a backgrounder. 3371 The OPA will be holding a webinar on June 20 (confirm) to discuss the introduction of this new price category and answer questions. Details on how to participate can be found on the microFIT website. 3372 MicroFIT Program Backgrounder: New Price Category for microFIT Ground-Mounted Solar PV Projects June 18, 2010 microFIT Program Overview: The microFIT program, a stream of the Feed-in Tariff program, is designed to encourage⌫ homeowners, farmers, businesses and others to generate renewable energy through small⌫ projects of 10 kilowatts (kW) or less. Launched in October 2009, microFIT has always been⌫ premised on enabling homeowners, farmers, businesses and others to participate in small-scale⌫ projects and earn a reasonable rate of return for the valuable role they play in generating⌫ electricity. Prices set for the microFIT program were set after extensive consultation with stakeholders⌫ about the amount necessary to motivate the development and provide a reasonable rate of⌫ return to proponents investing in small projects. Program information as of June 14, 2010: 15,323 applications have been submitted for microFIT projects for a potential 140.8 MW of⌫ generating capacity. 3,518 conditional offers have been issued for a potential of 29.1 MW of generation. 340 microFIT projects have been connected with 1.5 MW of capacity. Roughly 99 percent of the project applications are for solar PV with an average capacity of⌫ 8.9 kW. Situation: The microFIT program was designed to provide generators approximately an 11-percent return⌫ on investment over the 20 years of the microFIT contract (as in all microFIT and FIT pricing). The⌫ price of 80.2¢/kWh was set under the assumption that the majority of projects would be⌫ rooftop solar projects, which cost more to install. It was assumed that ground-mounted⌫ projects would constitute only a small minority of microFIT projects. This presents the following challenges: The massive volume of ground-mounted solar applications revealed a disproportional⌫ economy of scale and constitutes an unanticipated cost burden to ratepayers. This is⌫ 1 3373 therefore not in keeping with the intent of the microFIT program. Consequently a new price⌫ category has been created for these projects. The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that⌫ are fair and reasonable against the specific goals of the microFIT program. We believe a⌫ revised and reasonable tariff schedule for ground-mounted solar PV applications is required⌫ to ensure that microFIT meets its program goals and continues to provide proper value to⌫ developers and ratepayers. Next Steps: The Ontario Power Authority is creating a new price category for ground-mounted solar PV⌫ projects of 10 kW or less to reinforce the focus of microFIT to encourage rooftop projects⌫ specifically and, by doing so, to ensure that ratepayers get value for their investment. With that⌫ in mind, the following adjustments have been made: microFIT applicants with a ground-mounted solar project who have a contract or a⌫ conditional offer will continue to be eligible for 80.2¢/kWh. Effectively immediately, all⌫ other ground-mounted solar PV applicants will be eligible for 58.8¢/kWh. Rooftop solar PV⌫ projects, as defined in the microFIT Rules, version 1.4, will continue to be eligible for⌫ 80.2¢/kWh. Please note there are no tariff changes for other types of generation in the program. The⌫ two-year review will be the preferred method to assess FIT rates. While we stated that there would be a tariff review every two years, the microFIT Rules specifically permits program changes to be made as required (for example, to respond to⌫ Ministerial direction and market changes). The Ministry of Energy and Infrastructure⌫ supports this decision as it ensures microFIT is meeting its program goals of providing⌫ proper value to developers and ratepayers and delivering a sustainable, long-term program. We welcome applicants who are seeking to develop ground-mounted solar PV generation⌫ projects to continue with their projects under the new, reasonable price category. A separate communication will provide instructions to microFIT applicants to indicate in⌫ their application whether their solar PV project is rooftop or ground-mounted. Once the⌫ application is resubmitted, the OPA will process it as quickly as possible. The OPA will be holding a webinar on June 20 (confirm) to discuss the new price category⌫ and answer questions. Details on how to participate can be found on the microFIT website. 2 3374 Emilie Moorhouse From: Emilie Moorhouse↵ Sent: June-17-10 10:07 AM↵ To: Jason Chee-Aloy↵ Cc: Jim MacDougall↵ Subject: CanWEA letter on domestic content for small wind↵ Attachments: CanWEA letter domestic content small wind June 2010.pdf↵ Dear Jason,↵ Please find attached CanWEA ’s recommendations on domestic content for small wind. Please do not◆ hesitate to contact me if you have any questions. Sincerely,↵ Emilie↵ Emilie Moorhouse Small Wind Policy Manager Gestionnaire, Élaboration des politiques pour le petit éolien Canadian Wind Energy Association Association canadienne de l'énergie éolienne 410 St- Nicolas, Suite 236 Montréal (Québec) H2Y 2P5 Tél: 61 3 - 234 - 871 6, x240 ou/or 800 - 922 - 6932, x240 Cell: 514 - 290 - 8390 Fax: 613- 234 - 5642 Skype: emoorhouse Join us at CanWEA’s next Wind Matters Seminar on Building Canada ’s Wind Energy Supply Chain to be held⌧ June 9- 10, 2010 in Toronto, Ontario.⇣ Visit our website for more details http://www.canwea.ca/events/windmatters10_e.php⌧ 3375 June 14, 2010↵ Ms. Sue Lo↵ Renewable Energy Facilitator↵ Ontario Ministry of Energy and Infrastructure↵ Toronto Ontario↵ Re: CanWEA domestic content recommendations for small wind in Ontario↵ Dear Ms. Lo,↵ CanWEA is pleased to have this opportunity to provide recommendations on the domestic↵ content requirements that may be applied to small wind (systems under 300 kW) should a↵ specific Feed-In Tariff be introduced for these systems. As you are aware, small wind is currently↵ not given a specific FIT price that reflects the technology’s current costs and benefits. In↵ previous submissions to the Ontario government, CanWEA has advocated for the following price↵ levels for small wind:↵ • • • 25 cents/kWh for turbines sized 101-300 kW↵ 35 cents/kWh for turbines sized 11-100 kW↵ 50-55 cents/kWh for turbines sized 1-10 kW↵ Our previous submissions on small wind have also outlined our view that incentives for small↵ wind energy systems should go towards Small Wind Certification Council (SWCC) certified↵ turbines only. The SWCC is an independent certification body mandated to certify↵ that small wind turbines meet or exceed the performance, durability, and safety requirements↵ of the Small Wind Turbine Performance and Safety Standard. This certification will provide a↵ common North American standard for reporting turbine energy and sound performance, and↵ will help small wind technology gain mainstream acceptance.↵ The present letter outlines CanWEA’s recommendations on potential small wind domestic↵ content requirements. They are based on consultations with our small wind committee↵ members, which includes five of the world’s top 10 small wind manufacturers in terms of global↵ sales volume. We believe that the recommended levels are achievable and will ultimately serve↵ to satisfy the government’s job creation objectives. Specific recommendations relate to: a) the↵ domestic content levels and timelines, b) inclusion of flexibility mechanisms and c)↵ prequalification requirements.↵ 3376 Ms. Susan Lo June 14, 2010 Pg. 2↵ Recommended Domestic Content Levels and Timelines◆ In the short term, CanWEA members have indicated that 25% of the overall cost of small wind↵ installations could be currently sourced in Ontario as long as “soft costs” (e.g. site development,↵ construction, installation) are included. In the medium term, members indicated that a greater↵ proportion of the assembly and manufacturing of components (e.g. towers, control panels,↵ inverters) could be sourced in Ontario, although it would take companies approximately three↵ years from the time of adoption of a FIT program to successfully build their Ontario supply↵ chain.↵ CanWEA therefore recommends that the domestic content requirement for small wind be↵ initially set to 25%, rising to 50% three years after the adoption of a small wind FIT. CanWEA↵ recommends that the cost be based on total installation costs, rather than on a matrix currently↵ used for large wind domestic content requirements.↵ Flexibility and Proportionality◆ In line with the above targets and timelines, CanWEA recommends that the Ontario government↵ allow certain flexibility mechanisms to be used in meeting domestic content requirements. This↵ would allow the alignment of Ontario’s core competitive competencies with global↵ manufacturing processes that will ultimately strengthen the business cases for justifying↵ investment in Ontario, leading to long term job creation. Ultimately, the goal of these↵ mechanisms is to drive Ontario job creation. The flexibility should consist of three key elements:↵ • • • Export credits: CanWEA recommends that proponents and their manufacturing partners↵ be provided with a mechanism whereby they can apply a certain percentage of exports↵ from their Ontario-based facilities/suppliers towards their Ontario-based projects’↵ domestic content requirements. For example, if a manufacturer makes ten towers and↵ exports three of these, then the costs associated with the three exported towers (or a↵ percentage thereof) should be counted as part of the content requirements for the↵ seven Ontario installations by their partner developer.↵ Proportionality: In cases where an installation includes more than one turbine, CanWEA↵ recommends that the Ontario government allow for proportionality, permitting the↵ proportional amount of designated activity to count towards the total. For example, if↵ an installation uses 5 turbines and three of the towers are sourced in Ontario, then the↵ domestic content for the towers should be counted as 60% (in the current grid for large↵ wind, such an installation would be deemed to have 0% Ontario content in terms of the↵ towers as it is an “all or nothing” evaluation).↵ Equivalency credits: There are instances where manufacturers and their partner↵ developers will not be able to use certain locally sourced components for FIT projects.↵ However such unused components may then be used elsewhere in another out-ofprovince installation. Allowing for equivalency credits would allow the proponents to↵ count an Ontario-sourced component towards their content requirements even if it is↵ ultimately used in a project outside the province.↵ 3377 Ms. Susan Lo June 14, 2010 Pg. 3↵ Prequalification of equipment suppliers◆ To increase certainty for investors, CanWEA recommends that the Ontario government consider↵ a prequalification process for equipment suppliers. In this case, manufacturers will be able to↵ pre-qualify their turbines (or a certain production line thereof) for a certain domestic content↵ percentage, thereby ensuring compliance before the installation proceeds. Such a prequalification would need to reflect the proprietary processes, unique technology, or different↵ applications of the various small wind technologies.↵ We would be pleased to meet with you to discuss the above recommendations and any other↵ aspect of a potential small wind FIT program in Ontario.↵ Sincerely,↵ Robert Hornung↵ President↵ Cc: Jordan Penic, Office of the Minister of Energy and Infrastructure↵ Jason Chee-Aloy, Ontario Power Authority↵ Marsha Seca, Ministry of Economic Development and Trade↵ 3378 Glenna Ford↵ From: Glenna Ford↵ Sent: June-17-10 10:55 AM↵ To: Patricia Lightburn↵ Subject: 10862_FIT_Pricing_Schedule_-_June 18 10_for_website.doc↵ Attachments: 10862_FIT_Pricing_Schedule_-_June 18 10_for_website.doc↵ Can you please take a look at this updated document? I am not sure whether the ground- mount note should be⇢ there and if so whether it should be numbered. Also, there is a solar note - should it be number 5 or part of 3?⇢ I would have liked it to fit on one page as well..⇢ 3379 Feed⌅ -In⌅ Tariff⌅ Prices for⌅ Renewable Energy⌅ Projects in⌅ Ontario⌅ Base Date: June 18, 2010 Renewable Fuel Size Tranche Contract Price (¢/kWh) 4 Percentage⌅ Escalated⌅ Biomass1,2 1 0 MW 13.8 20 > 10 MW 13.0 20 1 00 kW 19.5 20 18.5 20 16.0 20 14.7 20 > 10 MW 10.4 20 1 0 MW 13.1 20 12.2 20 1 0MW 11.1 20 > 10 MW 10.3 20 Biogas1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 1 0 MW 50 MW Landfill gas1,2 Solar PV Rooftop 10 kW 80.2 0 Ground-mounted* 1 0 kW 58.8 0 71.3 0 63.5 0 > 500 kW 53.9 0 1 0 MW 44.3 0 Onshore Any size 13.5 20 Offshore Any size 19.0 20 Rooftop > 10 250 kW Rooftop > 250 500 kW Rooftop Ground-mounted2 Wind2 * Includes all non-rooftop solar PV technologies. 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in Appendix A below. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 1 3380 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder* The following table sets out the price adders for Aboriginal and community-based projects. Renewable Fuel Wind Solar PV (groundmounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal price⌅ adder(¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum community price adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the maximum Aboriginal price adder or maximum community price adder added to the FIT contract price is based on the Aboriginal or community participation level as defined in the FIT Rules. 2 3381 Sheri Bizarro↵ From: Sheri Bizarro Sent: June-18-10 1:20 PM To: Sarah Simmons; Patricia Lightburn Subject: FW: Updated Ground-Mounted Solar Materials Attachments: Ground_Mounted_Solar_Communications(LF053110).doc; Ground-Mounted Solar Web Posting(LF053110).doc These are older versions now …. But just in case any of it is still needed from Cindy.⇡ Sheri⇡ From: Cindy Roks↵ Sent: Monday, June 14, 2010 4:35 PM↵ To: Sheri Bizarro↵ Subject: FW: Updated Ground-Mounted Solar Materials↵ I found some communications … you were originally cc ’ d anyway! Cindy Roks↵ Senior Stakeholder Relations Advisor⇡ 416 - 969 - 6099⇡ P please consider the environment before printing this email _________________________ _________⇤ 3382 Draft May 20-10 Web site copy New Price Category for microFIT Ground-Mounted Solar PV Projects The Ontario Power Authority has created a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV projects will be paid 58.8 cents per kilowatt-hour (kWh). This price is effective May X, 2010. Roof-top solar PV projects will continue to be paid 80.2 cents kWh. The microFIT program was designed primarily to be a roof-top solar project. Program uptake to date has surpassed what the OPA had anticipated when it launched the program. More than 12,000 applications have been submitted. Virtually all of the projects are for solar PV, and the size of the projects indicates that a large majority of applications are for ground-mounted, rather than rooftop, projects. This high volume represents an unanticipated cost burden to ratepayers, as the pricing was set to encourage small rooftop projects. It was assumed that ground mounted projects would be the exception. The 80.2 cents/kWh was set to provide roof-top solar generators a reasonable rate of return of 11% over the 20-year term of their contract, while at the same time protecting the rate payer. The cost to install a ground-mounted solar PV project is lower than the cost to install a rooftop project. The new price category for ground mount solar projects levels the playing field with respect to other microFIT projects and will provide ground mounted solar generators with the same 11% rate of return other generators will receive over the 20-year term of their contracts. The OPA believes the new price category is fair, reasonable and more accurately reflects the costs associated with these types of projects. Ground-mounted microFIT applicants who already have an executed a contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents per kWh. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, will receive 58.8 cents/kWh. The Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term interests of the program, generators and ratepayers that this price be adjusted now so the program can realize the value it was intended to deliver. More information about how the OPA will implement this change will be sent to applicants next week. For more information, click here for a backgrounder. 3383 The OPA will be holding a webinar on May XX to discuss this change and answer questions. Details on how to participate can be found on the microFIT website. 3384 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as a rooftop solar PV program for homeowners, institutions and⌧ small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⌧ As of the May 17th update report, 12,301 applications have been submitted for microFIT projects for⌧ a potential 112 MW of generating capacity, 3,266 conditional offers have been issued for a potential⌧ of 27.0 MW of generation and 320 microFIT projects have been connected with 1.3 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⌧ of the projects indicates that a very large majority of applications are for ground-mounted rather⌧ than roof-top solar projects located in rural areas. the microFIT program was designed to pay 80.2¢/kWh for all solar projects and was based providing⌧ generators an 11% return on investment over the 20 years of the microFIT contract (as is all⌧ microFIT and FIT pricing). In setting the price at pay 80.2¢/kWh it was assumed that almost all the projects would be roof-top⌧ solar projects which cost more to install. It was assumed that ground-mounted would be a small⌧ minority of microFIT projects. This volume constitutes an unanticipated cost burden to ratepayers as the pricing was set to⌧ encourage small rooftop projects and is therefore not in keeping with the intent of the microFIT⌧ program. Costs associated with ground-mounted projects are lower than roof-top and there is agreement⌧ between OPA and MEI that the price paid for ground-mounted solar microFIT projects should be⌧ reduced. The decision has been made to create a new price category for ground-mounted microFIT solar PV⌧ projects at 58.8¢/kWh effective immediately. microFIT applicants with a ground-mounted solar project who have a contract or a conditional offer will receive 80.2¢/kWh. All other applicants will receive 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⌧ per year over the twenty years of the microFIT contract. Currently, there are approximately 1000 roof-top solar microFIT applications. OPA will complete the⌧ processing of these applications by June 10, 2010. Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⌧ by March 31, will receive a response by August. People with applications submitted by May 31st will⌧ receive a response by September. 5a49a38a90e5458f9d5a672f7f5fd7f8 3385 2 Communication objectives: To advise all affected parties of the change in price for ground-mounted solar and the rationale for⌧ the change To continue to encourage uptake on the microFIT program and the development of small renewable⌧ energy projects in Ontario Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generators& a reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . OPA has received 12,000 applications, a⌧ lot more than expected. Most of these projects are for ground-mounted solar projects and are an⌧ unanticipated cost burden to ratepayers. That’s because the pricing was set to encourage small⇠ rooftop projects which cost more to develop. The new price category levels the playing field with other microFIT projects and will deliver the& same 11% rate of return over the 20-year term of the microFIT contract. In designing the microFIT program, a key principle was to provide all generators with the same rate⌧ of return regardless of project type. Ground –mounted solar projects are less expensive to install⌧ than roof-top solar projects. The Ontario Power Authority also has an obligation to protect⌧ ratepayers by paying tariffs that are fair and reasonable. Roof-top microFIT solar prices remain at 80.2 cents/kWh. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meeting& its program goals and is providing proper value to developers and ratepayers. Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⌧ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted – advise when accept contract if rooftop⌧ or ground-mounted 5a49a38a90e5458f9d5a672f7f5fd7f8 3386 3 Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains as is and will not change Send notitification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⌧ with MEI) to gage reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days following announcement⌧ to provide opportunity to clarify, ask questions. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⌧ and others. Be prepared to respond to media inquiries. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge& volume of applications that ratepayers could be adversely affected? microFIT has been a runaway success. However, prices paid for generating electricity under the program were intended to stimulate small rooftop solar PV generation projects and that focus needs to be⌧ restored. Prices set for the program followed extensive consultation with stakeholders about the level⌧ necessary to motivate development and compensate proponents for small projects fairly for their⌧ investment. The rates were set to provide generators with an 11% return on investment over the 20⌧ years of the contract. They were also intended to support development of rooftop solar PV, which has⌧ additional cost considerations associated with it. The Ontario Power Authority has an obligation to⌧ protect ratepayers by paying tariffs that are fair and reasonable against the specific goals of the microFIT⌧ program. That is why effective immediately, there is a new price category for ground-mounted solar PV⌧ microFIT projects. Any project that has not received a conditional offer or contract will be paid 58.8⌧ cents. Why aren’t you honouring the price that people applied for and make the change effective from this⇢ point forward? microFIT has been very successful. However, prices paid for generating electricity under the program⌧ were intended to stimulate small rooftop solar PV generation. The large number of ground-mounted⌧ solar projects is an unanticipated burden on ratepayers. The Ontario Power Authority has an obligation⌧ to protect ratepayers by paying rates that are fair and reasonable in keeping with goals of the microFIT⌧ program. We believe the new rate is fair and reasonable for ground mounted solar PV applications. Are all microFIT projects affected by this change? No only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is 58.8 cents. Any project that has not received a contract or conditional⌧ offer is subject to this rate. Prices set for the microFIT program followed extensive consultation with⌧ stakeholders about the level necessary to motivate development and compensate proponents for small⌧ 5a49a38a90e5458f9d5a672f7f5fd7f8 3387 4 projects fairly for their investment. The rates were set to provide generators with an 11% return on⌧ investment over the 20 years of the contract. The pricing levels for microFIT were established⌧ specifically to incent the development of rooftop solar PV, which has additional cost considerations⌧ associated with it. There are no tariff changes at this time for other types of generation in the program.⌧ The Ontario Power Authority has an obligation to protect ratepayers by paying tariffs that are fair and⌧ reasonable against the specific goals of the microFIT program and we are doing so. Does the 58.8 cents/kWh for ground-mounted solar projects provide generators with an 11% rate of& return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for roof-top solar projects which cost more to install. OPA⌧ designed the program assuming that there would be very few ground-mounted solar projects which⌧ have lower capital costs than roof-top solar projects. The new price category levels the playing field⌧ among microFIT generators and protects rateapayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the price⌧ change. We welcome applicants who are seeking to develop ground mounted solar PV generation⌧ projects to continue with their projects albeit at the new rate. They will receive the same rate of return⌧ as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your own& rules didn’t you? While we stated that there would be a tariff review every two years, the microFIT contract specifically⌧ permits program changes – including pricing revisions – to be made as required to respond to⌧ Ministerial direction, market changes, etc. The Ministry of Energy and Infrastructure supports this⌧ decision as it ensures microFIT is meeting its program goals and is providing proper value to developers⌧ and ratepayers. This decision was made in conjunction with the Ministry to reinforce the essential⌧ purpose and focus of the microFIT program as a means of supporting small renewable PV projects by⌧ homeowners, institutions and small businesses. We believe it is in the best long-term interests of⌧ microFIT, developers and ratepayers that we do this now so we can restore focus and obtain the value⌧ that the program was intended to deliver. 1. I noticed that you have information pertaining to in-series connections now being available once& again for microFIT contracts. How can I be certain that my ground-mount solar application which is& currently slated to be connected in-series will actually receive any payment at all since you continue& to recommend an ‘in-parallel’ connection? (the concern will be that ground-mount customers with an& ‘in-series’ connection may have a hard time down the road if MC comes out to say that their⇢ installation must be ‘in-parallel’. 2. My application was submitted back in February and you have not responded within your 30 day timeframe so why am I being penalized? 3. How do I log a complaint? 5a49a38a90e5458f9d5a672f7f5fd7f8 3388 5 4. I have signed a microFIT agreement with a company who is installing my ground-mount system – can I still opt out if I do not wish to receive 58.8 cents vs 80.2 cents per kWh? 5. Under section 3.1(d) and 3.2(a) of the microFIT rules it states: 3.1(d)↵ The OPA will review the Application to confirm that the project meets the microFIT Program eligibility requirements as set out in Section 2 of this document. The OPA may ask for additional clarification with respect to the Application, if required. The OPA’s target for processing Applications is 30 days following the submission of a complete Application. 3.2 Conditional Offer of microFIT Contract If the OPA determines that the Application meets the microFIT Program eligibility requirements,↵ then the OPA will issue the Applicant a Conditional Offer of microFIT Contract. Considering the fact that I met with all the eligibility requirements as set out in section 2 of the Rules& for microFIT and the OPA did not respond within 30 days with a conditional offer or with any other& communications alerting me to any issues, why is my application request not being ‘grand fathered’ as⇢ other applicants who have received conditional offers with ground mounts> 6. Please ensure that the call centre is provided with information contained within the rules that& supports the changes being made e.g. Section 6.1 ‘Additional Rules’ The OPA reserves the right to cancel all or any part of the microFIT Program at any time and for any↵ reason, or to suspend the microFIT Program in whole or in part for any reason for such period of↵ time as the OPA shall determine in its sole discretion, in each case without any obligation or any↵ reimbursement to the Applicants. For Applicants that receive a Conditional Offer of microFIT Contract prior to the date of such cancellation or suspension, the OPA will offer microFIT Contracts↵ to these Applicants if the conditions are satisfied. Cancellation or suspension of the microFIT Program will not affect executed microFIT Contracts. #### 5a49a38a90e5458f9d5a672f7f5fd7f8 3389 Jim MacDougall From: Jim MacDougall↵ Sent: June-22-10 10:01 AM↵ To: Travis Lusney↵ Subject: FW: CanWEA letter on domestic content for small wind↵ Attachments: CanWEA letter domestic content small wind June 2010.pdf↵ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Emilie Moorhouse [mailto:emiliemoorhouse@canwea.ca] Sent: June 17, 2010 10:07 AM To: Jason Chee-Aloy Cc: Jim MacDougall Subject: CanWEA letter on domestic content for small wind Dear Jason,↵ Please find attached CanWEA ’s recommendations on domestic content for small wind. Please do not◆ hesitate to contact me if you have any questions. Sincerely,↵ Emilie↵ Emilie Moorhouse✓ Small Wind Policy Manager Gestionnaire, Élaboration des politiques pour le petit éolien Canadian Wind Energy Association Association canadienne de l'énergie éolienne 410 St- Nicolas, Suite 236 Montréal (Québec) H2Y 2P5 Tél: 61 3 - 234 - 871 6, x240 ou/or 800 - 922 - 6932, x240◆ Cell: 514 - 290 - 8390◆ Fax: 613- 234 - 5642◆ Skype: emoorhouse◆ Join us at CanWEA’s next Wind Matters Seminar on Building Canada ’s Wind Energy Supply Chain to be held⌧ June 9- 10, 2010 in Toronto, Ontario.⇣ Visit our website for more details http://www.canwea.ca/events/windmatters10_e.php⌧ 3390 June 14, 2010↵ Ms. Sue Lo↵ Renewable Energy Facilitator↵ Ontario Ministry of Energy and Infrastructure↵ Toronto Ontario↵ Re: CanWEA domestic content recommendations for small wind in Ontario↵ Dear Ms. Lo,↵ CanWEA is pleased to have this opportunity to provide recommendations on the domestic↵ content requirements that may be applied to small wind (systems under 300 kW) should a↵ specific Feed-In Tariff be introduced for these systems. As you are aware, small wind is currently↵ not given a specific FIT price that reflects the technology’s current costs and benefits. In↵ previous submissions to the Ontario government, CanWEA has advocated for the following price↵ levels for small wind:↵ • • • 25 cents/kWh for turbines sized 101-300 kW↵ 35 cents/kWh for turbines sized 11-100 kW↵ 50-55 cents/kWh for turbines sized 1-10 kW↵ Our previous submissions on small wind have also outlined our view that incentives for small↵ wind energy systems should go towards Small Wind Certification Council (SWCC) certified↵ turbines only. The SWCC is an independent certification body mandated to certify↵ that small wind turbines meet or exceed the performance, durability, and safety requirements↵ of the Small Wind Turbine Performance and Safety Standard. This certification will provide a↵ common North American standard for reporting turbine energy and sound performance, and↵ will help small wind technology gain mainstream acceptance.↵ The present letter outlines CanWEA’s recommendations on potential small wind domestic↵ content requirements. They are based on consultations with our small wind committee↵ members, which includes five of the world’s top 10 small wind manufacturers in terms of global↵ sales volume. We believe that the recommended levels are achievable and will ultimately serve↵ to satisfy the government’s job creation objectives. Specific recommendations relate to: a) the↵ domestic content levels and timelines, b) inclusion of flexibility mechanisms and c)↵ prequalification requirements.↵ 3391 Ms. Susan Lo June 14, 2010 Pg. 2↵ Recommended Domestic Content Levels and Timelines◆ In the short term, CanWEA members have indicated that 25% of the overall cost of small wind↵ installations could be currently sourced in Ontario as long as “soft costs” (e.g. site development,↵ construction, installation) are included. In the medium term, members indicated that a greater↵ proportion of the assembly and manufacturing of components (e.g. towers, control panels,↵ inverters) could be sourced in Ontario, although it would take companies approximately three↵ years from the time of adoption of a FIT program to successfully build their Ontario supply↵ chain.↵ CanWEA therefore recommends that the domestic content requirement for small wind be↵ initially set to 25%, rising to 50% three years after the adoption of a small wind FIT. CanWEA↵ recommends that the cost be based on total installation costs, rather than on a matrix currently↵ used for large wind domestic content requirements.↵ Flexibility and Proportionality◆ In line with the above targets and timelines, CanWEA recommends that the Ontario government↵ allow certain flexibility mechanisms to be used in meeting domestic content requirements. This↵ would allow the alignment of Ontario’s core competitive competencies with global↵ manufacturing processes that will ultimately strengthen the business cases for justifying↵ investment in Ontario, leading to long term job creation. Ultimately, the goal of these↵ mechanisms is to drive Ontario job creation. The flexibility should consist of three key elements:↵ • • • Export credits: CanWEA recommends that proponents and their manufacturing partners↵ be provided with a mechanism whereby they can apply a certain percentage of exports↵ from their Ontario-based facilities/suppliers towards their Ontario-based projects’↵ domestic content requirements. For example, if a manufacturer makes ten towers and↵ exports three of these, then the costs associated with the three exported towers (or a↵ percentage thereof) should be counted as part of the content requirements for the↵ seven Ontario installations by their partner developer.↵ Proportionality: In cases where an installation includes more than one turbine, CanWEA↵ recommends that the Ontario government allow for proportionality, permitting the↵ proportional amount of designated activity to count towards the total. For example, if↵ an installation uses 5 turbines and three of the towers are sourced in Ontario, then the↵ domestic content for the towers should be counted as 60% (in the current grid for large↵ wind, such an installation would be deemed to have 0% Ontario content in terms of the↵ towers as it is an “all or nothing” evaluation).↵ Equivalency credits: There are instances where manufacturers and their partner↵ developers will not be able to use certain locally sourced components for FIT projects.↵ However such unused components may then be used elsewhere in another out-ofprovince installation. Allowing for equivalency credits would allow the proponents to↵ count an Ontario-sourced component towards their content requirements even if it is↵ ultimately used in a project outside the province.↵ 3392 Ms. Susan Lo June 14, 2010 Pg. 3↵ Prequalification of equipment suppliers◆ To increase certainty for investors, CanWEA recommends that the Ontario government consider↵ a prequalification process for equipment suppliers. In this case, manufacturers will be able to↵ pre-qualify their turbines (or a certain production line thereof) for a certain domestic content↵ percentage, thereby ensuring compliance before the installation proceeds. Such a prequalification would need to reflect the proprietary processes, unique technology, or different↵ applications of the various small wind technologies.↵ We would be pleased to meet with you to discuss the above recommendations and any other↵ aspect of a potential small wind FIT program in Ontario.↵ Sincerely,↵ Robert Hornung↵ President↵ Cc: Jordan Penic, Office of the Minister of Energy and Infrastructure↵ Jason Chee-Aloy, Ontario Power Authority↵ Marsha Seca, Ministry of Economic Development and Trade↵ 3393 Jim MacDougall From: Jim MacDougall Sent: June-22-10 1:39 PM To: Travis Lusney Subject: FW: Small Wind Pricing Attachments: DMO Small Wind FIT May 25 2010Revised.ppt Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Tasca, Leo (MEI) [mailto:Leo.Tasca@ontario.ca]⇢ Sent: May 25, 2010 1:14 PM⇢ To: Jim MacDougall⇢ Cc: Palmer, Mary (MEI); Ing, Pearl (MEI)⇢ Subject: Small Wind Pricing⇢ Hi Jim, we briefed the DM on small wind this morning and we will be revising this deck for a Minister ’ s briefing at◆ some point in the near future. One issue we foresee on pricing is the potential issue of aggregation surfacing with◆ small wind. Can you please have a look at the deck and give some thought to proactively addressing this issue by considering a price category to address aggregation? Thanks, Leo◆ 3394 Ministry of Energy and Infrastructure◆ Developing a Small Wind⇣ Feed-in Tariff⇣ Deputy Minister Briefing⇣ May 25, 2010 Renewables and Energy Efficiency 1⇥ 3395 Ministry of Energy and Infrastructure◆ Key Deliverables⇣ Small Wind FIT Price⇣ Domestic Content Grid⇣ Standards (Performance and Consumer Protection)⇣ Municipal and Provincial Regulatory Approvals⇣ 2⇣ 3396 Ministry of Energy and Infrastructure◆ Why We Need Small Wind FIT Price⇣ Definition of Small Wind:⇣ Definition varies depending on source; maximum 300 kW⇣ Based on capacity <300 kW or < 65 kW or swept area of <200m2 ~16 m diameter⇣ Introducing a FIT price for small wind would:⇣ Expand use of clean renewable energy⇣ Assist rural economic development (farms, communities, rural businesses)⇣ Encourage growth in Ontario’s small wind sector in both manufacturing and⇠ installation through domestic content requirements. Currently four firms in Ontario:⇣ Cleanfield Energy - 3.5kW turbines (merged with WePower of California - 12 kW turbines),⇣ ⇠ Wind Simplicity 3, 7 turbines and 23 kW turbines,⇣ ⇠ Wenvor 30 kW turbines,⇣ ⇠ Windtronics 2.2 kW turbines⇣ 3⇣ 3397 Ministry of Energy and Infrastructure◆ Proposed Small Wind FIT Price⇣ Section 13 There will be a meeting with CanWEA (late May/Early June) to discuss the differences.⇣ Prices considerably lower than price requested by Windtronics for ⇢ 1 0 kW tranche (60⇣ c/KWh). Currently working with MEDT to review Windtronics’ pricing assumptions.⇠ 4⇣ 3398 Ministry of Energy and Infrastructure◆ OPA Proposed Small Wind FIT Price⇣ Section 13 5⇣ 3399 Ministry of Energy and Infrastructure◆ CanWEA Recommended Small Wind FIT Price⇣ Proposed CanWEA prices are based on turbine capacity*:⇣ 1 - 10 kW kW)⇣ – 50 to 55 c/KWh (assuming 15% capacity factor and $4,500 per⇣ 11 – 100 kW - 35 c/KWh (assuming 20% capacity factor and $6,000 per⇣ kW)⇣ 101 – 500 kW kW)⇣ - 25 c/KWh (assuming 20% capacity factor and $7,500 per⇣ CanWEA’s small wind FIT price estimates are based on pre-REA installations⇣ and assumes REA process varies by small wind turbine size.⇣ CanWEA used same assumptions used to calculate FIT prices for solar PV (12% return on investment and a 70-30 debt-equity ratio).⇣ * CanWEA FIT price analysis are in the appendix on slides 18 and 19.⇣ 6⇣ 3400 Ministry of Energy and Infrastructure◆ Domestic Content Grid: Current Status◆ Working with CanWEA and industry to develop a domestic content⇣ grid for specific components relevant for small wind.⇣ MEI consultation with stakeholders to establish domestic content⇣ requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA⇣ website (August 15, 2010)⇣ 7⇣ 3401 Ministry of Energy and Infrastructure◆ Standards⇣ Performance Standard information is required to develop accurate FIT prices and to assure⇣ customers that the turbine meets safety standards.⇣ MEI supports CanWEA’s proposal that a Small Wind FIT use the SWCC standard:⇠ The standard applies specifically to small wind turbines.⇣ SWCC to issue easy-to-understand labels for Rated Annual Energy Output, Rated Power; and Rated Sound Level⇣ SWCC certification will also confirm the turbine meets durability and safety requirements⇣ Certification applications will be accepted in early 2010⇣ First certified turbines to be on the market by mid-2010; one year for the program to be in full⇣ swing (spring 2011)⇣ SWCC provides assurance around performance ratings, noise, safety and product durability to⇣ protect consumers. CanWEA also has public education role to address consumer protection.⇣ International Electronic Commission (IEC)/ British Wind Energy Association (BWEA) small wind⇣ standards can be used for Conditional Temporary Certification during first two years of SWCC. This level of certification would last for 18 months (reciprocity).⇣ CanWEA, in the interim, is recommending government use the New York State Energy Research⇣ and Development Authority (NYSERDA) list of certified wind turbines.⇣ Non-accredited and manufacturer testing is permitted by the SWCC, but would require SWCC on⇣ site audit and period spot checks.⇣ 8⇣ 3402 Ministry of Energy and Infrastructure◆ Standards (cont’d)⌦ Continue to work with CSA and stakeholders to establish standards and consider MEI financial⇣ support for CSA certification on SW standards (fiscal 2010/11); standards work would address:⇣ Cold weather testing, flicker, ice throw, lightning strikes⇣ Health and safety (ie. acoustic, worker safety and training, other areas of public interest)⇣ Design, durability, installation operation and maintenance⇣ Development of an Ontario test facility (currently only facility in Canada is in PEI).⇣ 9⇣ 3403 Ministry of Energy and Infrastructure◆ Municipal Approvals⇣ Building Code Act requires building permit (supporting tower) for wind turbines rated⇣ greater than 3 kW - roof mounted turbines of any size require a building permit; silent⇣ on installation requirements for turbines rated under 3 kW and municipalities no⇣ longer have ability to regulate under the Planning Act. (larger ones regulated by⇣ REA); MMAH advised that the AMO would strongly oppose including turbines under 3⇣ kW in the Building Code, as that would impose an administrative burden on⇣ municipalities.⇣ Municipal Act offers municipalities broad powers related to health, safety and wellbeing of persons; protection of persons and property, including consumer protection⇣ and structures. Municipalities may attempt to use the Act to create noise by-laws or a⇣ permit system Planning Act (e.g., zoning) does not apply to renewable energy technologies (generating electricity)⇣ 10⇣ 10 3404 Ministry of Energy and Infrastructure◆ Provincial Approvals⇣ Renewable Energy Approval for wind turbines⇣ <3 kW - No REA requirements (potential for municipal noise by-laws);⇣ MOE position is that wind turbines <3 kW are unlikely to require⇣ regulation; seeking legal opinion on whether turbines <3 kW can be⇣ regulated under GEA.⇣ 3 kW to 50 kW - REA includes public notice and Project Description⇣ Report, (noise considerations under MOE’s Noise Guidelines for Wind⇠ Farms part of REA review)⇣ >50 kW < 102dBa - REA includes the above plus public consultation,⇣ construction plan, decommissioning plan, property setback (hub height),⇣ road/rail setback (blade + 10m)⇣ >50 kW 102 to 107dBA - REA includes the above 550m noise setback⇣ 11 11⇣ 3405 Ministry of Energy and Infrastructure◆ Next Steps⇣ Interministerial Small Wind meeting: MEI, MMAH, MOE (May 31, 2010)⇣ Presentation of OPA proposed small wind FIT tariff to CanWEA (May/Early June, 2010)⇣ Technical standards survey response results compiled by CSA (May/Early June, 2010)⇣ Domestic Content Grid survey response from CanWEA Small Wind members (June, 2010)⇣ Review policy and standards used in other jurisdictions (June, 2010)⇣ Develop certification requirements: American Wind Energy Association adopted the Small Wind Certification Council⇣ (SWCC) test method in December 2009. CanWEA has proposed that a micro wind FIT⇣ use the new standard; SWCC estimated cost of certification between 10K and 40K⇣ excluding cost of testing.⇣ MEI consultation with stakeholders to establish domestic content requirements (July 30, 2010)⇣ Develop draft domestic content grid and post for comment on OPA website (August 15, 2010)⇣ 12⇣ 12 3406 Ministry of Energy and Infrastructure◆ Appendix◆ Windtronics⇣ Jurisdictional Review⇣ CanWEA FIT Price Analysis⇣ Municipal/Provincial Approvals⇣ 13⇣ 13 3407 . Ontario Ministryof Energy and Infrastructure i i a? Windtronics Section 17 14 3408 Ministry of Energy and Infrastructure◆ Jurisdictional Comparison to◆ Vermont, Washington (WA), G. Britain, Israel, Italy◆ <10 kW WA Contract Term 6 Vermont Size FIT CAD$/kW > 10 ⇧ 50 Small 0.44⇥ Vermont <15 kW 0.21⇥ Ontario Contract◆ Term◆ Size FIT◆ CAD$/kW◆ > 15 kW 0.16⇥ 20 > 10 ⇧ 50 0.315⇥ ON 20 <10 kW 0.392⇥ G. Britain proposed >15 <50kW 0.36⇥ G. Britain proposed >1.5<15 kW 0.41⇥ Italy 15 < 200 kW 0.53⇥ Israel 20 <15 kW 0.52⇥ Italy 15 < 200 kW 0.53⇥ > 50 ⇧300 Contract Term Vermont Size FIT◆ CAD$/kW◆ >15 kW 0.16⇥ Ontario 20 > 10 ⇧ 50 0.237⇥ B. Britain Proposed >250 <500kW⇥ 0.28⇥ 15⇣ 3409 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis◆ This memo presents the results of a generic analysis which aimed at calculating realistic FIT prices for small⇣ wind applications, i.e. from 1 kW to approximately 300 kW. The following table presents the parameters that⇣ were used in the financial model. It should be noted that, when appropriate, parameters used by the OPA to develop the prices for other renewables such as solar PV applications were used. Table 1. Parameter Values Used in the Financial Analysis 0-10 kW 11-100 kW > 100 kW 10 kW 65 kW 250 kW – Small Wind Comment Parameter Nominal project size used in analysis Total project cost O & M costs Capacity factor Project duration (FIT⇣ contract) $7500 0r⇣ 8500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $6000 or⇣ 6500/kW 1.6 ¢/kWh 13,15,18 or⇣ 20% $4500/kW Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 1.6 ¢/kWh Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 13,15 or 22% Values based on input from small wind players in⇣ Ontario and CanWEA (April 09, February 2010) 20 years 20 years 20 years Base year of construction 2011 2011 2011 Inflation rate (IPC) 2.25 % 2.25 % 2.25 % Electricity price⇣ index 0.4% 0.4 % 0.4 % EcoEnergy/other⇣ incentive 0 ¢/kWh 0 ¢/kWh 0 ¢/kWh Debt/equity Interest rate 70/30 or⇣ 50/50 7% 70/30⇣ 7% Assumption from the OPA Assumes that the electricity price is indexed at 20% of⇣ CPI (20% x 2 % = 0.4%), as per proposed FIT program rules. 70/30 Assumption from the OPA 7% Assumption from the OPA 16⇣ 3410 Ministry of Energy and Infrastructure◆ CanWEA FIT Price Analysis (cont’d) The parameters above were input in the Helimax financial model and prices were calculated to achieve either a⇣ Return on Equity (ROE) of 12% before taxes, or an Internal Rate of Return (IRR) of 12% before taxes. The two⇣ calculations were provided as it is not clear from the OPA calculations how the ROE was calculated and what was the implicit cost of equity. Table 2. Estimated Prices for Base-Case Scenarios of Three Small Wind Categories Project Size Range 0-10 kW 11-100 kW $7500/kW,⇣ $8500/kW,⇣ $8500/kW,⇣ 30%⇣ 50%⇣ 30%⇣ $6500/kw Equity, Equity, Equity, 18% CF 18% CF 20% CF > 100 kW Scenario $8500/kW, 30%⇣ Equity, 18% CF Price to achieve 12% ROE 54.0 47.8 54.6 48.8 37.7 35.0 24.4 Price to achieve 12% IRR 58.5 52.1 62.4 53 41.0 38.0 26.5 $6000/kW Table 3. Additional Runs 1-10kW 1-10kW 10-100kW 10-100kW 100300kW Scenario $7500/kW, 30% Equity, 13% CF $7500/kW, 30% Equity, 15% CF $6000/kW, 30% Equity, 13% CF $6000/kW, 30% Equity, 15% CF $4500/kW, 30% Equity, 13% CF Price to achieve 12% ROE 64.5 56.2 52.0 45.3 39.5 34.5 Price to achieve 12% IRR 71.5 62.0 57.5 50.0 43.5 38.0 100300kW $4500/kW,⇣ 30%⇣ Equity, 15% CF 17⇣ 3411 Ministry of Energy and Infrastructure◆ CanWEA FIT Small Wind Committee Members◆ The input provided by manufacturers who were members of CanWEA’s small wind committee in ’09⇠ and ’1 0.⇠ The numbers submitted were based on installations in Ontario.⇣ Section 13 18⇣ 3412 Ministry of Energy and Infrastructure◆ Jurisdictional Review:⇣ Small Wind Certification Options⇣ American Wind Energy Association (AWEA) small wind standard includes:⇣ Standardized real world performance measurement and rating⇣ Standard noise measurements (with product label)⇣ Safety measures including operation/maintenance provisions and loss of control⇣ function at lowest claimed operating temperature⇣ Durability (25 hours of power production, includes noting repairs, tower dynamics problems)⇣ Standard to be overseen by the SWCC. Products would be evaluated by a third party⇣ tester (one in PEI)⇣ Standardized real world performance measures would help classify products FIT⇣ categories. 19⇣ 19 3413 Ministry of Energy and Infrastructure◆ Small Wind Certification Options◆ CSA⇣ CSA 61400-2 small wind standard is based on the IEC standard and covers safety, quality assurance, and engineering integrity and specifies safety requirements including design, installation, maintenance and operation under specified external conditions⇣ Canadian deviations related to electrical and structural safety considerations related to Canadian weather⇣ conditions (products to be designed for extreme weather -200C to 500C and local icing, but no testing⇣ requirements)⇣ ⇠ MMAH does not recognize CSA small wind standard due to a lack of cold weather testing provisions ULE⇣ Underwriter Laboratories Environmental is a new certification system that focuses on the electrical components of wind turbines. Note CSA standards look at the electrical components as they relate to Canadian climate⇣ conditions.⇣ California⇣ California’s Emerging Renewables Program requires eligible products be compliant with either IEC 61 400 -2 (small⇣ wind standard used by CSA and AWEA) or provide one year performance data and demonstrate product reliability⇣ by testing the turbine for one year at winds of at least 12 mph⇣ United Kingdom⇣ British Wind Energy Association uses same small wind standard as the AWEA. The BWEA standard is already in⇣ effect, but is not mandatory⇣ Proposed UK FIT may require⇣ BWEA small wind standard⇣ Microgeneration Certification Scheme for the manufacturing process (evaluated at factory); and⇣ Microgeneration Certification Scheme standard for installation⇣ The BWEA notes that UK manufacturers hold an 82% revenue share of the UK market and export 50% of their⇣ output to over 100 countries worldwide⇣ 3414 20⇣ 20 Ministry of Energy and Infrastructure◆ Small Wind Certification Options⇣ NYSERDA offers three options for manufacturers or dealers to certify products:⇣ Provide evidence of certification by a nationally recognized testing laboratory or organization⇣ as meeting the safety and performance requirements of a nationally or internationally⇣ recognized testing institution;⇣ Provide technical information and specifications of the wind generator and provide⇣ acceptable evidence to NYSERDA demonstrating one year of reliable operation of that model⇣ of equipment at a site with average annual wind speeds of at least 12 mph; or⇣ Provide evidence that the wind generator has demonstrated reliable operation when tested to⇣ the requirements of the AWEA Small Wind Turbine Performance and Safety Standard (or⇣ most recent version of the draft standard until the standard is adopted).⇣ Wind generators approved by other jurisdictions with similar eligibility criteria may be qualified.⇣ NYSERDA reserves the right to deny eligibility of any wind generator for any reason including but not limited to: poor generator performance, concerns about wind generation system design or⇣ quality of data presented, lack of manufacturer support for maintenance, warranties, etc.,⇣ insufficient experience with generator, etc. Siting requirements include: minimum lot size (1 acre), setbacks, minimum wind resources (10⇣ miles per hour)⇣ 21⇣ 21 3415 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: June-29-10 9:01 AM✏ To: Jim MacDougall✏ Subject: RE: Updated Analysis for Small Wind✏ Hi Jim,⌥ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind⌥ tranches of 51 kW ⇣ 1 00 kW and 1 01 ⇣ 300 kW. In their view, turbines in the former tranche are similar in their technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.⌥ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as⌥ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss. Kind regards,⌥ Mary⌥ 416 212 7706⌥ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.⌥ Leo – you will want to make sure that your management is OK with more high priced power contracts.⌥ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto , ON M5H 1T1 , Canada⌥ tel 416.969.6415⌥ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,⌥ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⌥ Thanks,⌥ Mary⌥ 3416 From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌥ Electricity Resources⌥ Ontario Power Authority⌥ 120 Adelaide St W, Suite 1600⌥ Toronto , ON M5H 1T1 , Canada⌥ tel 416.969.6415⌥ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,⌥ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌥ Project Number 12 CanWea CanWea⌥ Presentation - Presentation - Technology Type Capacity ACF 14 Low 17⌥ CanWea⌥ Presentation - Low⌥ Mid⌥ MW 0.0025 0.05 0.2⌥ % 20.00% 20.00% 20.00%⌥ years 20 20 20⌥ Capital Cost $/kw 6,000 5,000 3,750⌥ Construction Lead Time years 1 1 1⌥ $/MWh $/kW/year 15 10 10⌥ 24 6 1.5⌥ Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Feed - in Tarrif $/MWh Section 13 c/kW The justification for these prices is as follows:⌥ · · · · In line with CanWEA presentation (May 2009)⌥ In line with presentation by Paul Gipe to CanWEA conference⌥ In line with other int ’ l FITs for small wind⌥ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⌥ experience⌥ Please let me know if you have any questions.⌥ 3417 Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind 6 Ontario (recommended) Wind Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology small <15 kW 20 ⇣1 0 0.13⌥ Section 13 0.21⌥ >1.5 < 15 kW 0.41⌥ small 0.44⌥ 20 < 15 kW 0.52⌥ 15 < 200 kW 0.53⌥ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 ⇣ 50 Section 13 >15 < 50 kW Contract Term 0.16⌥ 0.36⌥ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 ⇣ 50 >250 < 500 kW Section 13 0.16⌥ 0.28⌥ Jonathan Cheszes⌥ Business Analyst⌥ Electricity Resources⌥ 120 Adelaide St. West, Suite 1600⌥ Toronto , ON , M5H 1T1⌥ Tel 41 6.969.6251 Fax 416.967.1947⌥ www.powerauthority.on.ca⌥ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3418 Jim MacDougall From: Jim MacDougall✓ Sent: June-29-10 9:27 AM✓ To: Travis Lusney✓ Subject: Fw: Updated Analysis for Small Wind✓ Jim MacDougall, P.Eng.✓ Manager, FIT Program✓ Ontario Power Authority✓ 416 969 6415✓ Sent from my BB✓ -----Original Message----From: Palmer, Mary (MEI) ✓ To: Jim MacDougall✓ Sent: Tue Jun 29 09:01:10 2010✓ Subject: RE: Updated Analysis for Small Wind✓ Hi Jim,✓ As per my v-mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind tranches of 51 kW 100 kW and 101 300 kW. In their view, turbines in the former tranche are similar in their technical characteristics as are turbines in the latter tranche of 101 - 300✓ kW capacity.✓ It would be most appreciated if you could calculate the OPA's proposed FIT for small wind for these✓ two tranches as well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss.✓ Kind regards,✓ Mary✓ 416 212 7706✓ ________________________________✓ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]✓ 3419 Sent: June 10, 2010 3:28 PM✓ To: Palmer, Mary (MEI)✓ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney✓ Subject: RE: Updated Analysis for Small Wind✓ I am OK with the assumptions and analysis.✓ Leo - you will want to make sure that your management is OK with more high priced power contracts.✓ Jim MacDougall, P.Eng.✓ Manager, Feed-In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ________________________________✓ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]✓ Sent: June 10, 2010 3:26 PM✓ To: Jim MacDougall✓ Cc: Tasca, Leo (MEI)✓ Subject: FW: Updated Analysis for Small Wind✓ Hello Jim,✓ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation✓ about proposed small wind FIT pricing.✓ 3420 Thanks,✓ Mary✓ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]✓ Sent: May 6, 2010 4:49 PM✓ To: Palmer, Mary (MEI)✓ Subject: FW: Updated Analysis for Small Wind✓ Jim MacDougall, P.Eng.✓ Manager, Feed-In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ________________________________✓ ________________________________✓ From: Jonathan Cheszes✓ Sent: December 2, 2009 5:19 PM✓ To: 'Beale, Barry (MEI)'✓ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'✓ Subject: Updated Analysis for Small Wind✓ Barry,✓ 3421 Below is an updated analysis on micro and small wind turbines with recommended FIT prices.✓ Project Number✓ 12 14 17 Technology Type✓ CanWea Presentation - Low✓ CanWea Presentation - Low✓ CanWea Presentation - Mid✓ 3422 Capachy MW 0.0025 0.05 0.2 ACF 20.00% 20.00% 20.00% Project Life yea rs 20 20 20 3423 Capital Cost✓ $/kw 6,000 5,000 3,750 Construction Lead Time✓ years 1 1 1 Variable O & M $/MWh 15 10 10 Fixed O & M✓ $/kW/year 3424 24 1.5 IRR NPV First Year Payment 391.68 314.71 236.91 3425 Feed-in Tarrif✓ c/kW 39.2 31.5 23.7 The justification for these prices is as follows:✓ · In line with CanWEA presentation (May 2009) · In line with presentation by Paul Gipe to CanWEA conference · In line with other int'l FITs for small wind · Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and experience✓ Please let me know if you have any questions.✓ Jurisdiction✓ Technology Contract Term Project Size Limit FIT ( CAD $/kW) Micro Wind 10 kW 3426 Washington Out state✓ Wind 6 small 0.13 Vermont✓ Wind <15 kW 0.21 Ontario (recommended)✓ Wind 20 10 0.392 Great Britain (proposed)✓ Wind >1.5 < 15 kW 0.41 Washington In state✓ 3427 Wind small 0.44 Israel Wind 20 15 kW 0.52 Italy Wind 15 200 kW 0.53 3428 Jurisdiction✓ Technology Contract Term Project Size Limit FIT ( CAD $/kW) Small Wind > 10 50 kW Vermont✓ Wind > 15 kW 0.16 Ontario (recommended)✓ Wind 20 >10 50 0.315 Great Britain (proposed)✓ Wind 3429 >15 < 50 kW 0.36 Jurisdiction✓ Technology Contract Term Project Size Limit FIT ( CAD $/kW) Small Wind > 50 300 kW 3430 Vermont✓ Wind > 15 kW 0.16 Ontario (recommended)✓ Wind 20 >10 50 0.237 Great Britain (proposed)✓ Wind >250 < 500 kW 0.28 Jonathan Cheszes✓ Business Analyst✓ Electricity Resources✓ 3431 120 Adelaide St. West, Suite 1600✓ Toronto, ON, M5H 1T1✓ Tel 416.969.6251✓ Fax 416.967.1947✓ www.powerauthority.on.ca ✓ This e-mail message and any files transmitted with it are intended only for the named recipient(s)✓ above and may contain information that is privileged, confidential and/or exempt from disclosure✓ under applicable law. If you are not the intended recipient(s), any dissemination, distribution or✓ copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately✓ and delete this e-mail message. 3432 Jim MacDougall From: Jim MacDougall Sent: June-29-10 4:00 PM To: 'Palmer, Mary (MEI)' Cc: Travis Lusney Subject: RE: Updated Analysis for Small Wind Mary⇧ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.⇧ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St W, Suite 1600⇧ Toronto , ON M5H 1T1 , Canada⇧ tel 416.969.6415⇧ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 29, 2010 9:01 AM⇡ To: Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hi Jim,⇧ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind⇧ tranches of 51 kW ⇣ 1 00 kW and 1 01 ⇣ 300 kW. In their view, turbines in the former tranche are similar in their technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.⇧ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as⇧ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss. Kind regards,⇧ Mary⇧ 416 212 7706⇧ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 10, 2010 3:28 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ I am OK with the assumptions and analysis.⇧ Leo – you will want to make sure that your management is OK with more high priced power contracts.⇧ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇧ Electricity Resources⇧ 3433 Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St W, Suite 1600⇧ Toronto , ON M5H 1T1 , Canada⇧ tel 416.969.6415⇧ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 10, 2010 3:26 PM⇡ To: Jim MacDougall⇡ Cc: Tasca, Leo (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Hello Jim,⇧ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⇧ Thanks,⇧ Mary⇧ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: May 6, 2010 4:49 PM⇡ To: Palmer, Mary (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇧ Electricity Resources⇧ Ontario Power Authority⇧ 120 Adelaide St W, Suite 1600⇧ Toronto , ON M5H 1T1 , Canada⇧ tel 416.969.6415⇧ From: Jonathan Cheszes⇡ Sent: December 2, 2009 5:19 PM⇡ To: 'Beale, Barry (MEI)'⇡ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇡ Subject: Updated Analysis for Small Wind⇡ Barry,⇧ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⇧ Project Number 12 Technology Type Capacity ACF Project Life 14 CanWea CanWea⇧ Presentation - Presentation - Low Low⇧ 17⇧ CanWea⇧ Presentation Mid⇧ MW 0.0025 0.05 0.2⇧ % 20.00% 20.00% 20.00%⇧ years 20 20 20⇧ 3434 Capital Cost $/kw 6,000 5,000 3,750⇧ Construction Lead Time years 1 1 1⇧ $/MWh $/kW/year 15 10 10⇧ 24 6 1.5⇧ Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:⇧ · · · · In line with CanWEA presentation (May 2009)⇧ In line with presentation by Paul Gipe to CanWEA conference⇧ In line with other int ’ l FITs for small wind⇧ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⇧ experience⇧ Please let me know if you have any questions.⇧ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind 6 Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology small <15 kW 20 ⇣1 0 0.13⇧ Section 13 0.21⇧ >1.5 < 15 kW 0.41⇧ small 0.44⇧ 20 < 15 kW 0.52⇧ 15 < 200 kW 0.53⇧ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 ⇣ 50 Section 13 >15 < 50 kW Contract Term 0.16⇧ 0.36⇧ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 ⇣ 50 >250 < 500 kW Section 13 0.16⇧ 0.28⇧ Jonathan Cheszes⇧ Business Analyst⇧ Electricity Resources⇧ 3435 Electricity Resources⇧ 120 Adelaide St. West, Suite 1600⇧ Toronto , ON , M5H 1T1⇧ Tel 41 6.969.6251 Fax 416.967.1947⇧ www.powerauthority.on.ca⇧ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3436 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: June-29-10 4:10 PM✏ To: Jim MacDougall✏ Cc: Travis Lusney✏ Subject: RE: Updated Analysis for Small Wind✏ Thanks, Jim, appreciated.◆ Travis, pls feel free to call me should you like to discuss anything.◆ Mary◆ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 29, 2010 4:00 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Mary◆ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.◆ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 29, 2010 9:01 AM⇢ To: Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hi Jim,◆ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind◆ tranches of 51 kW ⇣ 1 00 kW and 1 01 ⇣ 300 kW. In their view, turbines in the former tranche are similar in their technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.◆ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as◆ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss. Kind regards,◆ Mary◆ 416 212 7706◆ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ 3437 Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.◆ Leo – you will want to make sure that your management is OK with more high priced power contracts.◆ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,◆ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.◆ Thanks,◆ Mary◆ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,◆ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.◆ 3438 Project Number 12 14 CanWea◆ CanWea◆ Presentation - Technology Type✓ Presentation - Low◆ Capacity Low◆ 17◆ CanWea◆ Presentation Mid◆ MW 0.0025 0.05 0.2◆ % 20.00% 20.00% 20.00%◆ years 20 20 20◆ Capital Cost $/kw 6,000 5,000 3,750◆ Construction Lead Time years 1 1 1◆ $/MWh $/kW/year 15 10 10◆ 24 6 1.5◆ ACF Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:◆ · · · · In line with CanWEA presentation (May 2009)◆ In line with presentation by Paul Gipe to CanWEA conference◆ In line with other int ’ l FITs for small wind◆ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and◆ experience◆ Please let me know if you have any questions.◆ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind 6 small 0.13◆ <15 kW Ontario (recommended) Wind Great Britain (proposed) Wind 20 Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology ⇣1 0 0.21◆ Section 13 >1.5 < 15 kW 0.41◆ small 0.44◆ 20 < 15 kW 0.52◆ 15 < 200 kW 0.53◆ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 ⇣ 50 0.16◆ Section 13 >15 < 50 kW Contract Term 0.36◆ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ 3439 Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 ⇣ 50 >250 < 500 kW 0.16◆ Section 13 0.28◆ Jonathan Cheszes◆ Business Analyst◆ Electricity Resources◆ 120 Adelaide St. West, Suite 1600◆ Toronto , ON , M5H 1T1◆ Tel 41 6.969.6251 Fax 416.967.1947◆ www.powerauthority.on.ca◆ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3440 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: June-29-10 4:52 PM↵ To: Sheri Bizarro↵ Subject: Info Required↵ Attachments: Ground-Mounted Solar Communications June 29.doc↵ See below. From: Ben Chin Sent: June 29, 2010 2:54 PM To: Mark Dodick; Kristin Jenkins Cc: Tim Butters Subject: RE: Ground-Mounted Solar Communications June 17 Some small changes from me in green … we still need info from ER, either to incorporate into Q ’ s and A ’ s or as a stand alone chart to answer the questions from MO I mentioned this morning: How many microFIT applications affected? What percentage of MW of microFIT apps are groundmounted? What percentage of MW of overall FIT do microFIT apps constitute/ do ground- mounted microFIT apps constitute? What percentage of overall microFIT apps to date? Ratepayer impact to grandfather all existing apps Ratepayer savings by moving ahead with immediate change Ben Chin Vice- President, Communications Ontario Power Authority⇣ T 416-969 -6007⇣ F 416-967 -1947⇣ ben.chin@powerauthority.on.ca⇣ 120 Adelaide Street West. Ste. 1600 Toronto , Ontario M5H 1T1 www.powerauthority.on.ca P⇥ Please consider your environmental responsibility before printing this email. This e -mail message and any files transmitted with it are intended only for the named recipient(s) above⇢ and may contain information that is privileged, confidential and/or exempt from disclosure under⇢ applicable law. Ifyou are not the intended recipient(s), any dissemination, distribution or copying of this e- mail message or any files transmitted with it is strictly prohibited. Ifyou have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this⇢ e-mail message.⇢ From: Mark Dodick 3441 Sent: June 29, 2010 2:12 PM To: Kristin Jenkins Cc: Ben Chin; Tim Butters Subject: RE: Ground-Mounted Solar Communications June 17 Importance: High Kristin, Revised per your request below. Some minor edits throughout and three questions added in relating to pending webinars, comment period, etc. to bring this up to date. Please let me know if anything else is needed on this document or any others now in preparation. Thanks, Mark From: Kristin Jenkins Sent: June 29, 2010 12:32 PM To: Mark Dodick Cc: Ben Chin; Tim Butters Subject: Ground-Mounted Solar Communications June 17 Mark - Qs and As are in the attached document along with messaging. Can you please revise to reflect today's discussion. Thank.s 3442 Updated June 29, 2010 New Price Category for microFIT Ground-mounted Solar PV Projects Issue Note and Communications Plan Background microFIT was envisioned mainly as small-scale renewable energy program for homeowners, farmers,⇢ institutions and small businesses. Program uptake to date has surpassed what the OPA had anticipated when it launched the program.⇢ As of June 28, 16,378 applications had been submitted for microFIT projects for a potential 151.1 MW of generating capacity, 4,229 conditional offers have been issued for a potential of 29.1 MW of⇢ generation and 340 microFIT projects have been connected with 1.5 MW of capacity. Virtually all of the projects (99 percent) are for solar PV with an average capacity of 8.9 kW. The size⇢ of the projects indicates that the majority of applications are for ground-mounted projects located⇢ in rural areas rather than rooftop solar projects. The microFIT program has always been premised on enabling homeowners, farmers, businesses and⇢ others to participate in small-scale projects and earn a reasonable rate of return for the valuable⇢ role they play in generating electricity. The price of 80.2¢/kWh was based on the assumption that⇢ most projects would be rooftop solar projects, which cost more to install. The rate would provide⇢ generators approximately an 11-percent return on investment over the 20 years of the microFIT⇢ contract (as is all microFIT and FIT pricing). In setting the price at 80.2¢/kWh, it was assumed that almost all the projects would be rooftop solar⇢ projects, which cost more to install than ground-mounted projects. It was assumed that groundmounted would be a small minority of microFIT projects. For example, in situations only when a⇢ rooftop was not viable due to structural problems with the roof or the fact that the roof was shaded⇢ or not south-facing. This volume of ground-mounted solar projects revealed a disproportional economy of scale and⇢ constitutes an unanticipated cost burden to ratepayers. This is therefore not in keeping with the⇢ intent of the microFIT program. Costs associated with ground-mounted projects are substantially lower than those for rooftop⇢ projects, and OPA and MEI agree that ground-mounted solar microFIT projects require a new price⇢ category. The decision has been made to create a new price category for ground-mounted microFIT solar PV⇢ projects at a proposed price of 58.8¢/kWh effective immediately. The new price is fair and still provides ground-mounted microFIT generators with a reasonable rate⇢ of return of approximately 11 percent. Consistent with the microFIT Rules, version 1.4, microFIT applicants with a ground-mounted solar⇢ project who have a contract or a conditional offer will continue to be eligible for 80.2¢/kWh. All⇢ other applicants will be eligible for the proposed tariff of 58.8¢/kWh. Not grandfathering existing microFIT applications will save individual ratepayers approximately $5⇢ billion per year over the 20 years of the microFIT contract. The OPA completed the processing of about 1,000 rooftop applications by early June 2010. 1059264cbb414e7fadbe1c10114cfaef 3443 2 Applicants who have not received a response from OPA by June 10, and who applied to the microFIT⇢ program by March 31st, will receive a response by August. People with applications submitted by⇢ May 31st will receive a response by September. The OPA will organize two webinars during the week of July 4th (most likely on July 5th and 7th) to⇢ answer questions about the proposed new ground mount category and pricing. It will also hold a⇢ comment period for 30 days following the first webinar to receive input from interested parties. Communication objectives: To advise all affected parties of the new price category for ground-mounted solar and the rationale⇢ for it. To continue to encourage uptake on the microFIT program and the development of small renewable⇢ energy projects in Ontario. Audiences: Solar microFIT contract holders and those with conditional offers Solar microFIT applicants waiting for conditional offers Solar industry associations and other stakeholders Key messages A new price category for microFIT ground-mounted solar projects is needed to provide generatorsa reasonable rate of return while at the same time protecting ratepayers. microFIT has enjoyed great success since being launched . The OPA has received more than 15,000⇢ applications, a lot more than expected. Most of these projects are for ground-mounted solar⇢ projects and are an unanticipated cost burden to ratepayers. That’s because the price was set to encourage small rooftop projects, which cost substantially more to develop. The new price category levels the playing field with other microFIT projects and will deliver asimilar rate of return of approximately 11 percent annually over the 20-year term of the microFITcontract. In designing the microFIT program, a key principle was to provide all generators with a reasonable⇢ rate of return. Ground-mounted solar projects are less expensive to install than rooftop solar⇢ projects. The Ontario Power Authority also has an obligation to protect ratepayers by paying tariffs⇢ that are fair and reasonable. Rooftop microFIT solar prices remain at 80.2 cents/kWh. Please note there are no tariff changes⇢ for other types of generation in the program. The two-year review will be the preferred method to⇢ assess FIT rates. The Ministry of Energy and Infrastructure supports this decision as it ensures microFIT is meetingits program goals and is providing proper value to developers and ratepayers. 1059264cbb414e7fadbe1c10114cfaef 3444 3 Proposed tactics: Post notice on the microFIT website to advise of new price category for ground-mounted solar and⇢ include rationale Send email notification to microFIT solar applicants: o Contract will be different price if ground-mounted Send email notification to microFIT contract holders and those with conditional offers: o Your contract price remains at 80.2 cents/kWh and will not change. Send notification to industry associations and other stakeholders– similar to notice on website Engage CANSIA and OFA just prior to the announcement of new price category (to be coordinated⇢ with MEI) to gauge reaction and opportunities for joint outreach with their members. Together with CanSIA and OFA (to be confirmed), hold webinar two days (most likely on July 5th and⇢ 7th) following announcement to provide opportunity to clarify, ask questions. Allow for a 30-day comment period following the first webinar to enable interested parties to share⇢ their views on the price category change with the OPA. Prepare backgrounder that succinctly explains changes and the rationale that can be used by OPA⇢ and others. Be prepared to respond to media inquiries. Provide detailed information to the OPA call centre prior to the announcement to ensure they are⇢ prepared for calls regarding the new price category. Questions and Answers Why wasn’t this situation anticipated? Why didn’t you foresee that there could be such a huge⇠ volume of applications that ratepayers could be adversely affected? microFIT has always been premised on enabling homeowners, farmers, businesses and others to⇢ participate in small-scale projects and earn a reasonable rate of return for the valuable role they play in⇢ generating electricity. The price of 80.2¢/kWh was based on the assumption that most projects would⇢ be rooftop solar projects. Prices set for the program followed extensive consultation with stakeholders⇢ about the level necessary to motivate development and provide fair compensation to proponents who⇢ invested in small projects. The rates were set to provide generators with approximately an 11 percent⇢ return on investment over the 20 years of the contract. They were also intended to support the⇢ development of rooftop solar PV, which is more expensive to install. The Ontario Power Authority has⇢ an obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific⇢ goals of the microFIT program. That is why effective immediately, there is a new price category for⇢ ground-mounted solar PV microFIT projects. Any project that has not received a conditional offer or⇢ 1059264cbb414e7fadbe1c10114cfaef 3445 4 contract will be paid at the new proposed tariff of 58.8 cents/kWh to level the playing field and bring it⇢ in line with the rate of return other generation categories are receiving. Why aren’t you honouring the price that people applied for and make the change effective from thispoint forward? microFIT has been very successful. However, prices paid for generating electricity under the program⇢ were intended to provide a reasonable rate of return. The large number of ground-mounted solar⇢ projects is an unanticipated and unnecessary burden on ratepayers. The Ontario Power Authority has⇢ an obligation to protect ratepayers and promote the long-term sustainability of the program by paying⇢ rates that are fair and reasonable in keeping with goals of the microFIT program. Generators will still⇢ make a reasonable rate of return for their investment, while levelling the playing field with other types⇢ of renewable energy generation. Are all microFIT projects affected by this change? No, only ground-mounted solar projects are affected. Effective immediately, the price for groundmounted solar PV microFIT is at the new proposed tariff of 58.8 cents/kWh. Any project that has not⇢ received a contract or conditional offer is now subject to this rate. Prices set for the microFIT program⇢ followed extensive consultation with stakeholders about the level necessary to motivate development⇢ and provide fair compensation to proponents investing in small projects. The rates were set to provide⇢ generators with approximately an 11 percent return on investment over the 20 years of the contract.⇢ The pricing levels for microFIT were established specifically to encourage the development of rooftop⇢ solar PV, which is more expensive to install. There are no tariff changes envisioned for other types of⇢ generation in the program until the regular two-year review. The Ontario Power Authority has an⇢ obligation to protect ratepayers by paying tariffs that are fair and reasonable against the specific goals⇢ of the microFIT program, and we are doing this by introducing a new price category. Does the proposed 58.8 cents/kWh for ground-mounted solar projects provide generators withapproximately an 11 percent rate of return like other generators receive under the microFIT program? Yes it does. The 80.2 cents was calculated for rooftop solar projects, which are more expensive to⇢ install. The OPA designed the program assuming that there would be very few ground-mounted solar⇢ projects, which have lower capital costs than rooftop solar projects. It was assumed that groundmounted solar PV projects would be chosen by homeowners, institutions and small businesses only⇢ when a rooftop was not viable due to structural problems with the roof or the fact that the roof was⇢ shaded or not south-facing. The new price category levels the playing field among microFIT generators⇢ and protects Ontario’s ratepayers. How many applicants do you think will withdraw because of the price change? We cannot speculate on how many applicants will withdraw their applications because of the new price⇢ category. The new price is fair and still provides ground-mounted microFIT generators with a⇢ reasonable rate of return of approximately 11 percent. We welcome applicants who are seeking to⇢ develop ground-mounted solar PV generation projects to continue with their projects albeit at the new⇢ rate. They will receive the same rate of return as other microFIT generators. I thought the OPA said it would only review its tariff schedule after two years – you broke your ownrules didn’t you? 1059264cbb414e7fadbe1c10114cfaef 3446 5 microFIT and FIT has always been premised on enabling homeowners, farmers, businesses and others to⇢ participate in renewable energy projects and earn a reasonable rate of return for the valuable role they⇢ play in generating electricity. This new price category brings microFIT ground-mounted PV back in line⇢ with that principle. The microFIT Rules specifically permit program changes – including pricing revisions – to be made as⇢ required (For example in response to Ministerial direction and market changes). The Ministry of Energy⇢ and Infrastructure supports this decision as it ensures microFIT is meeting its program goals and is⇢ providing proper value to developers and ratepayers. This decision was made in conjunction with the⇢ Ministry to reinforce the essential purpose and focus of the microFIT program as a means of supporting⇢ small renewable PV projects by homeowners, institutions and small businesses. We believe that what⇢ we are doing now is in the best long-term interests of microFIT, developers and ratepayers. We want to⇢ restore focus of the microFIT program and obtain the value that it was intended to deliver. What is the purpose of the two webinars given that you’ve already made a decision on a new price⇠ category? The Ontario Power Authority has made a commitment to transparency and open communication. We⇢ therefore believe it is important to host a two-way forum that allows us to explain the rationale for this⇢ new price category and to allow interested parties to participate. Holding these two webinars is the⇢ most efficient means of engaging in an honest dialogue about this development and reasons for the new⇢ price category.. Neither the webinars nor the 30-day comment period will result in a price increase or any othermodifications to compensate for the revenue loss, right? Why are you even bothering to hold them? There is value in engaging in an honest dialogue about the new price category. The discussion will enable us to set aside misconceptions about the program that might occur because of this one change.⇢ We also know from past stakeholder interaction that we might insightful feedback that could be useful⇢ to our program management in the future. We welcome that input and we plan to learn from it. No⇢ other changes to the microFIT program are being introduced concurrently with the new price category;⇢ all other program obligations remains. Did you try to counsel the Minister and Ministry against making this change? Or did you just cave in tothe demand to bring the price down and left project applicants hanging out to dry? We do have a responsibility to provide our best advice. In this case, we’re moving forward with a new price category and with consultations to ensure we achieve the original objects and principles of the⇢ microFIT program. The Ontario Power Authority has an obligation to protect ratepayers and promote⇢ the long-term sustainability of the program by paying rates that are fair and reasonable in keeping with⇢ goals of the microFIT program. Generators will still make a reasonable rate of return for their investment – about 11 percent a year over the 20-year contract – while levelling the playing field with⇢ other types of renewable energy generation. #### 1059264cbb414e7fadbe1c10114cfaef 3447 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: June-30-10 11:04 AM↵ To: Jim MacDougall; Sheri Bizarro; Sarah Simmons↵ Subject: Price Scenarios Analysis-microFIT Ground Mount Solar PV↵ Attachments: Scenario Analysis-Ground Mount Solar PV-NAD-June 30, 2010.ppt↵ Hi⇤ As per discussion please find attached price scenarios analysis - microFIT Ground Mount Solar PV.⇤ Regards⇤ Nadeem⇤ 3448 ONTARIO POWER AUTHORITY ,w .. 4. your? here? . 3449 Scenario Analysis-Ground Mount Solar PV Scenarios evaluated FIT price sensitivity to changes to the following key⇥ assumptions:⇥ – – – – – – – Capital Cost⇥ Capacity Factor⇥ Debt Equity ratio⇥ Cost of Debt⇥ Return on Equity⇥ Fuel Cost⇥ Tax Treatment⇥ The following slides review the results of the scenario Analysis for⇥ Ground Mount Solar PV, and the proposed changes to the FIT price⇥ schedule.⇥ 2⇥ 3450 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9 and 48.7⇥ cents per kWH⇥ Scenario-I A B C⇥ 7000 7000 7000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWH) 45.9 47.4 48.7⇥ Capital Cost Capacity Factor 3⇥ 3451 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1 and 52.1⇥ cents per kWH⇥ Scenario-II A B C⇥ 7500 7500 7500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWH) 49.1 50.7 52.1⇥ Capital Cost Capacity Factor 4⇥ 3452 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3 and 55.5⇥ cents per kWH⇥ Scenario-III A B C⇥ 8000 8000 8000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWH) 52.3 54.0 55.5⇥ Capital Cost Capacity Factor 5⇥ 3453 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8⇥ cents per kWH⇥ Scenario-IV A B C⇥ 8500 8500 8500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWH) 55.6 57.3 58.8⇥ Capital Cost Capacity Factor 6⇥ 3454 Section Title .A . . . adem?rr g. greener fut?h re. . Qi?. your .- n? ?u I I) Lora I . 4 5mm h-r your a?ra clea?r?r,? ah? greener fotuTe awm? 8 3456 3457 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: June-30-10 1:36 PM↵ To: Jim MacDougall; Sarah Simmons↵ Subject: microFIT Ground Mount Solar PV↵ Attachments: OPA_presentation gnd mt July 6 10.ppt↵ Please see attached updated slides microFIT Ground Mount Solar PV.⇢ Regards⇢ Nadeem⇢ From: Jim MacDougall Sent: Wednesday, June 30, 2010 11:45 AM To: Nadeem Anwar; Sarah Simmons Subject: RE: Price Scenarios Analysis-microFIT Ground Mount Solar PV Nadeem – can you add some of this and clean up?⇢ I have to look at this over the weekend /..⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St W, Suite 1600⇢ Toronto , ON M5H 1T1 , Canada⇢ tel 416.969.6415⇢ From: Nadeem Anwar Sent: June 30, 2010 11:04 AM To: Jim MacDougall; Sheri Bizarro; Sarah Simmons Subject: Price Scenarios Analysis-microFIT Ground Mount Solar PV Hi⇢ As per discussion please find attached price scenarios analysis - microFIT Ground Mount Solar PV.⇢ Regards⇢ Nadeem⇢ 3458 ONTARIO POWER AUTHORITY ,w .. 4. your? here? "7ll . a? 3459 FIT Pricing – Solar PV ⌦ 1 0 kW✏ Solar PV⇣ Typical Size (MW) Construction Lead Time 0.005⇥ 1⇥ Capacity Factor (%) 13⇥ Capital Cost ($/kW) 8,230⇥ Fixed O&M ($/kW/yr) Variable O&M ($/MWh) 10⇥ 0⇥ 2⇥ 3460 Updated FIT Pricing – Ground Mounted Solar PV⇣ Solar PV⇣ Typical Size (MW) Construction Lead Time 0.005⇥ 1⇥ Capacity Factor (%) 13⇥ Capital Cost ($/kW) 6,000⇥ Fixed O&M ($/kW/yr) Variable O&M ($/MWh) 10⇥ 0⇥ 3⇥ 3461 Assumed Financial Structure⇣ • Non-recourse project finance structure assumed, based on⇥ experience with RESOP⇥ • Experience indicates that this is the most efficient financing structure⇥ Variable Assumption⇣ Percent Equity 30%⇥ After Tax Return on Equity 11%⇥ Percent Debt 70%⇥ Cost of Debt 7%⇥ Income Tax Rate 30.5%⇥ 4⇥ 3462 Scenario Analysis-Ground Mount Solar PV 1" . your oraclea'r?f ?3 732? ti? HF greener futhre. . yams Scenario Analysis-Ground Mount Solar PV⇣ • Scenarios evaluated FIT price sensitivity to changes to the following key⇥ assumptions:⇥ – – – – – – – • Capital Cost⇥ Capacity Factor⇥ Debt Equity ratio⇥ Cost of Debt⇥ Return on Equity⇥ Fuel Cost⇥ Tax Treatment⇥ The following slides review the results of the scenario Analysis for⇥ Ground Mount Solar PV, and the proposed changes to the FIT price⇥ schedule.⇥ 6⇥ 3464 Micro-Scale Ground Mount Solar PV-Scenario⇣ Analysis⇣ Range of Possible FIT Prices from Analysis is between 61.5 and 80.2⇥ cents per kWh⇥ Scenario-I A B C⇥ Capital Cost 8230 8230 8230⇥ Capacity Factor 17 % 16 % 13 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 61.5 65.3 80.2⇥ 7⇥ 3465 Micro-Scale Ground Mount Solar PV-Scenario⇣ Analysis⇣ Range of Possible FIT Prices from Analysis is between 59.7 and 68.4⇥ cents per kWh⇥ Scenario-II A B C⇥ Capital Cost 8000 8000 8000⇥ Capacity Factor 17 % 16 % 13 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 59.7 55.6 68.4⇥ 8⇥ 3466 Micro-Scale Ground Mount Solar PV-Scenario⇣ Analysis⇣ Range of Possible FIT Prices from Analysis is between 52.3 and 68.4⇥ cents per kWh⇥ Scenario-III A B C⇥ Capital Cost 7500 7500 7500⇥ Capacity Factor 17 % 16 % 13 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 52.3 55.6 68.4⇥ 9⇥ 3467 Micro-Scale Ground Mount Solar PV-Scenario⇣ Analysis⇣ Range of Possible FIT Prices from Analysis is between 44.9 and 58.8⇥ cents per kWh⇥ Scenario-IV A B C⇥ Capital Cost 6000 6000 6000⇥ Capacity Factor 17 % 16 % 13 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 44.9 47.7 58.8⇥ 10⇥ 3468 Rationale for 58.8 cents/kWh Price for Ground⇣ Mount Solar PV⇣ Cost and Economics⇥ - Technology⇥ CELL AND MODULE⇥ - INVERTER⇥ - BALANCE OF SYSTEM (BOS)⇥ - PROJECT DEVELOPMENT⇥ - FINANCIAL ENGINEERING⇥ - INSURANCE COST⇥ - SUPPORT/STRUCTURAL COST⇥ - RENEVOATION COST⇥ - HIGHER YIELD⇥ - SIZE OF PROJECT⇥ - TECHNOLOGY AND SIZE⇥ - AVAILABLE BOS SOLUTIONS⇥ 11⇥ 3469 Patricia Lightburn From: Patricia Lightburn$ Sent: July-02-10 12:01 PM$ To: Cindy Roks$ Cc: Sarah Simmons$ Subject: FIT_Pricing_Schedule_-_July 2 10_for_website (3)$ Attachments: FIT_Pricing_Schedule_-_July 2 10_for_website (3).doc$ <>$ 3470 Feed⌅ -In⌅ Tariff⌅ Prices for⌅ Renewable Energy⌅ Projects in⌅ Ontario⌅ Base Date: July 2, 2010 Renewable Fuel Size Tranche Contract Price (¢/kWh) 4 Percentage⌅ Escalated⌅ Biomass1,2 1 0 MW 13.8 20 > 10 MW 13.0 20 1 00 kW 19.5 20 18.5 20 16.0 20 14.7 20 > 10 MW 10.4 20 1 0 MW 13.1 20 12.2 20 1 0MW 11.1 20 > 10 MW 10.3 20 Biogas1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 1 0 MW 50 MW Landfill gas1,2 Solar PV Rooftop 1 0 kW 80.2 0 Ground-mounted* 1 0 kW 58.8 0 71.3 0 63.5 0 > 500 kW 53.9 0 1 0 MW 44.3 0 Onshore Any size 13.5 20 Offshore Any size 19.0 20 Rooftop > 10 250 kW Rooftop > 250 500 kW Rooftop Ground-mounted2 Wind2 * Includes all non-rooftop solar PV technologies. 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in Appendix A below. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 1 3471 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder* The following table sets out the price adders for Aboriginal and community-based projects. Renewable Fuel Wind Solar PV (groundmounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal price⌅ adder(¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum community price adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the maximum Aboriginal price adder or maximum community price adder added to the FIT contract price is based on the Aboriginal or community participation level as defined in the FIT Rules. 2 3472 Nadeem Anwar↵ From: Nadeem Anwar↵ Sent: July-05-10 3:16 PM↵ To: Jim MacDougall↵ Subject: FW: analysis-microFIT Solar PV↵ FYI⌅ From: Nadeem Anwar↵ Sent: Monday, June 07, 2010 3:50 PM↵ To: Jim MacDougall↵ Subject: FW: analysis-microFIT Solar PV↵ FYI - Email dated April 23, 2010.⌅ From: Nadeem Anwar↵ Sent: Friday, April 23, 2010 12:03 PM↵ To: Jim MacDougall↵ Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca↵ Subject: RE: analysis-microFIT Solar PV↵ Hi Everyone⌅ Please see below the FIT Price Model assuming for microFIT Solar- PV based on the assumptions provide in the email.⌅ FIT Price Model for microFIT Solar PV◆ Annual Capacity Factor (ACF in %) Capital Cost 18.3% Notes/Remarks◆ 18.8% 19.4%◆ (per KW)◆ 7000 48.7 7500 52.1 8000 55.5 8500 58.9 ¢ kWh ¢ kWh ¢ kWh ¢ kWh 47.4 50.7 54.0 57.3 ¢ kWh ¢ kWh ¢ kWh ¢ kWh 45.9 49.1 52.3 55.6 ¢ kWh⌅ ¢ kWh ¢ kWh⌅ ¢ kWh⌅ Base Case Scenario⌅ Regards⌅ Nadeem Anwar⌅ From: Jim MacDougall↵ Sent: Friday, April 23, 2010 11:33 AM↵ To: Nadeem Anwar↵ Cc: leo.tasca@ontario.ca; Sheri Bizarro; Clarence.Cheng@ontario.ca↵ Subject: analysis↵ Can you run a quick analysis?⌅ can you run the FIT price model assuming for microFIT solar PV:⌅ 3473 can you run the FIT price model assuming for microFIT solar PV:⌅ capital cost = $ 7000 / kW, 7500 / kW, $8000 / kW and $8500 / kW⌅ and assuming 18.3, 18.8 and 19.4% acf (annual capacity factor) representing 1 6,000, 1 6,500 and 1 7,000 kWh per 1 0 kW PV system per year ? This is kind of urgent so please acknowledge you received this and that you can do it in the next 2 hours.⌅ Leo / Clarence⌅ I think the $7500 / kW and 16,500 kWh / year should be the base case and all others are sensitivity crunches.⌅ I hope it keeps us in the 60 cent range ...⌅ Nadeem, pls copy all here wiht results.⌅ Jim MacDougall, P.Eng.⌅ Manager, Distributed Generation⌅ Ontario Power Authority⌅ (416) 969 - 6415⌅ 3474 Patricia Lightburn From: Patricia Lightburn Sent: July-05-10 4:59 PM To: Jim MacDougall Subject: Guidelines - Rooftop Facility Attachments: Guidelines - Rooftop Facility.doc any comments on this? we could post along with the new FIT rules tomorrow⇠ 3475 Guidelines – Definition of Rooftop Facility July 6, 2010⇢ Definition Rooftop Facility means a solar (PV) Renewable Generating Facility that is integrated into or⇢ forms part of the wall facing, roof, cover, or other architectural element that forms part of a⇢ permanent Existing Building that has been designed to be used for the purpose of providing⇢ enclosure, shelter or protection to people or property, provided that one of its main purposes is not to support a solar power installation or to provide shelter from the sun. An Existing Building⇢ will be considered to have a main purpose of supporting a solar power installation or providing⇢ shelter from the sun where the building or part of that building would not reasonably have been⇢ constructed in the absence of the solar (PV) Renewable Generating Facility. Existing Building means a building (a) that was in existence and completely constructed on the⇢ date that the Applicant first submitted its Application, or (b) in respect of which the OPA has⇢ issued a written confirmation that the building will be deemed an Existing Building for the⇢ purposes of the definition of Rooftop Facility. Guidelines The changes to the definition of rooftop facility are intended to provide greater clarity to⇢ stakeholders about what projects qualify for rooftop solar PV prices under the FIT price⇢ schedule. In order to qualify for the definition of Rooftop Facility, the OPA must be satisfied that: the building on which the solar PV project is located on is an appropriate building, the primary intent of the building is not to support a solar installation the building would have been built in the absence of the solar PV project Under the new definition, the building must be an existing permanent building. A building is⇢ considered to be existing where it has been completed and constructed at the time of the⇢ application. This change provides the OPA greater certainty that the building would have been⇢ built otherwise. When the building does not exist at the time of application, the applicant may request written⇢ consent from the OPA to allow the proposed project to qualify. Buildings such as “solar-ready” home developments are expected to be accommodated through this process. The OPA will consider the following factors when evaluating what constitutes a building and⇢ when reviewing requests to allow proposed buildings to qualify: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3) Whether the building has: 3476 plumbing⇢ an electricity supply⇢ at least three walls a roof a roof over 10 feet high a foundation below grade a building permit. Appendix A: Prior Definition⇢ Rooftop Facility means a Facility that is integrated into or forms part of the wall facing, roof,⇢ cover, or other architectural element that forms part of a permanent building or structure that has⇢ been designed to be used for the purpose of providing enclosure, shelter or protection to people⇢ or property, provided that it is not principally for the purpose of supporting a solar power⇢ installation or providing shelter from the sun. A building or structure will be considered to have a⇢ principal purpose of supporting a solar power installation or providing shelter from the sun⇢ where the Facility is located on a part of the building or structure that would not reasonably have⇢ been constructed in the absence of the solar installation. 3477 Sheri Bizarro↵ From: Sheri Bizarro↵ Sent: July-05-10 5:02 PM↵ To: Nadeem Anwar; Jim MacDougall↵ Subject: RE: rate of return is for groundmount microFIT under the old rate↵ Thanks Nadeem Again, per our conversation today, if the MEI asks you for information, please let Jim and I know before you respond back. We have to remain tight during this time to ensure we are not duplicating efforts. Thanks!! Sheri From: Nadeem Anwar↵ Sent: Monday, July 05, 2010 2:44 PM↵ To: Sheri Bizarro; Jim MacDougall↵ Subject: FW: rate of return is for groundmount microFIT under the old rate↵ Hi Sheri As per discussion, please see the attached request from Clarence on rate of return for groundmount microFIT under the old FIT price. Regards Nadeem From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]↵ Sent: Monday, July 05, 2010 12:54 PM↵ To: Nadeem Anwar↵ Subject: RE: rate of return is for groundmount microFIT under the old rate↵ Thanks! Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9th floor, Toronto , ON , M5S 1B3 From: Nadeem Anwar [mailto:Nadeem.Anwar@powerauthority.on.ca]↵ Sent: July 5, 2010 12:53 PM↵ To: Cheng, Clarence (MEI)↵ Subject: RE: rate of return is for groundmount microFIT under the old rate↵ Hi Clarence Capital Cost ACF $ 6/Watt 12.50% Debit/Equity Ratio 70% Interest Rate 7% 3478 Term 20 IRR 23.4 Rate 80.2 cents/kWh Regards Nadeem From: Cheng, Clarence (MEI) [mailto:Clarence.Cheng@ontario.ca]↵ Sent: Monday, July 05, 2010 12:40 PM↵ To: Nadeem Anwar↵ Subject: rate of return is for groundmount microFIT under the old rate↵ Hi Nadeem, Could you tell me what the rate of return is for groundmount microFIT under the old rate? Assume $6/W capital costs and capacity factor of 12.5% please. Minister was quoted as saying 30- 40%. Cheers, Clarence Cheng↵ Policy Analyst Renewables and Energy Efficiency Division Ministry of Energy and Infrastructure email: Clarence.Cheng@ontario.ca phone: 416 - 326 - 7287 77 Grenville Street , 9th floor, Toronto , ON , M5S 1B3 3479 Sarah Simmons↵ From: Sarah Simmons Sent: July-06-10 11:22 AM To: Jim MacDougall Cc: Kristin Jenkins Subject: webinar prep - possible q's. Some questions we should be ready to answer: Why didn ’ t the OPA process the microFIT applications based on the order they were submitted? E.g.,⇢ why did you give a conditional offer to an application submitted in May, but not mine which was submitted in Feb? OPA gave an extension on domestic content requirements to FIT projects? Will the OPA now grant an⇢ extension on the domestic content requirements for microFIT projects, given this new rule change, and the delay due to in-series connections? Why hasn ’ t the OPA resolved the issue with Measurement Canada and in- series connections? I would⇢ like to install my rooftop project, but the costs to connect in-parallel are too high. Why didn ’ t the OPA choose to process applications submitted before July 2, 2010 under the old rules and price schedule? Didn ’ t the OPA agree not to review the prices until the two year review? The price of ground- mount tracking systems are not less then rooftop projects. Why did you reduce the⇢ price? A: I believe the key here is that these systems have a higher efficiency and produce more electricity per kWh …⇥ Why did you wait so long to announce this program change? Are you planning on reviewing other FIT prices? How did the OPA determine which projects were rooftop and which projects were ground-mounted? (e.g., projects submitted under 1.3)⇢ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 3480 5% please consider the environment before printing this email 3481 Cheng, Clarence (MEI)⌘ From: Cheng, Clarence (MEI)⌘ Sent: July-06-10 7:32 PM⌘ To: Jim MacDougall⌘ Subject: FIT pricing and rate impacts.⌘ Hi Jim,⌥ If you have updated capital cost numbers for solar PV (rooftop, CAE, CAR) and the prices that would go with them at 11% RoI, I ’d be happy⌥ to pass them upwards.⌥ Also, the folks today who were saying $14.5k/year using a dual axis tracker – that ’ s a capacity factor of 20.6%!⌥ Here are the FIT rate impacts that I ’ve got:⌥ COD year Procurement type increase to typical 2010 residential bill [%] Grand⌥ 2010 2011 2012 2013 2014 2015 2016 Total⌥ 0.22% 0.00% 0.37% 0.68% 0.64% 0.64% 0.64% 3.19%⌥ $2.97 $0.00 $4.88 $9.12 $8.48 $8.48 $8.48 $42.40⌥ 63 0 103 193 180 180 180 898⌥ $44 $0 $72 $135 $125 $125 $125 $627⌥ 0.08% 0.21% 0.25% 0.57% 0.02% 1.14%⌥ increase to typical 2010 residential bill CAE FIT [$/year] Capacity [MW] increase to ratebase [$M/year] increase to typical 2010 residential bill [%] CAR FIT launch⌥ increase to typical 2010 residential bill $1.11 $2.85 $3.29 $7.62 $0.31 $15.18⌥ Capacity [MW] [$/year] 632 748 604 427 11 2,422⌥ increase to ratebase [$M/year] $16 $42 $49 $113 $5 0.36% 0.12% 0.51% 0.51% 0.51% 0.51% 0.51% 3.02%⌥ $40.19⌥ increase to typical 2010 residential bill [%] $224⌥ increase to typical 2010 residential bill microFIT $4.73 $1.58 $6.78 $6.78 $6.78 $6.78 $6.78 Capacity [MW] [$/year] 101 34 154 154 154 154 154 904⌥ increase to ratebase [$M/year] $70 $23 $100 $100 $100 $100 $100 $594⌥ 0.58% 0.20% 1.09% 1.44% 1.72% 1.17% 1.15% 7.35%⌥ $7.70 $2.69 $14.50 $19.18 $22.87 $15.57 $15.26 $97.76⌥ 163 666 1,005 951 760 344 333 4,223⌥ $114 $40 $214 $284 $338 $230 $226 $1,446⌥ Total increase to typical 2010 residential bill [%] Total increase to typical 2010 residential bill [$/year] Total Capacity [MW] Total increase to ratebase [$M/year] Does not include KC or CAR post -FIT -launch⌥ Cheers,⌥ Clarence Cheng↵ Policy Analyst⌥ Renewables and Energy Efficiency Division⌥ Ministry of Energy and Infrastructure⌥ email: Clarence.Cheng@ontario.ca⌥ phone: 416 -326 -7287⌥ 77 Grenville Street , 9th floor, Toronto, ON, M5S 1B3⌥ 3482 Patricia Lightburn From: Patricia Lightburn Sent: July-07-10 2:51 PM To: Glenna Ford Cc: webmaster; Claire Willison Subject: RE: FIT price schedule Attachments: FIT Price Schedule_July 2 2010.pdf Sorry about that↵ Patricia Lightburn Analyst, FIT Program From: Glenna Ford↵ Sent: Wednesday, July 07, 2010 2:40 PM↵ To: Patricia Lightburn↵ Cc: webmaster; Claire Willison↵ Subject: FIT price schedule↵ Patricia:↵ Did you send me the final version of the price schedule or did Connie make it? It ’ s locked and can ’ t be printed – it↵ needs to be unlocked and the printing option activated. It will then need to be reposted in the resources section. Thank you.↵ Glenna Ford Senior Regulatory Communications Advisor↵ Direct: 416- 969 - 6305↵ Cell: 416- 392 - 9905↵ Email: glenna.ford@powerauthority.on.ca↵ Ontario Power Authority↵ 120 Adelaide Street West, Suite 1600↵ Toronto , ON M5H 1T1↵ www.powerauthority.on.ca↵ P Please consider the environment before printing this email. 3483 July 2, 2010⌦ Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 2, 2010 Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 58.8 0% 44.3 0% Rooftop > 500 kW Ground Mounted (proposed) Ground Mounted Wind 2, 4 10 kW > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3484 Important note – Proposed Ground Mounted Price: There will be a 30-day comment period on the proposed new price category that will end on Tuesday, August 3. Please send all comments and submissions to microFIT@powerauthority.on.ca. W hile all emails will be read, not all emails will receive individual responses. Comments also can be mailed to the following address and must be postmarked no later than Tuesday,◆ August 3, 2010. Ontario Power Authority◆ 120 Adelaide Street W est, Suite 1600◆ Toronto, Ontario M5H 1T1 Attention: Ground-Mounted Solar PV◆ Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel6 Wind PV (Ground Mounted)6 Water Biogas Biomass Landfill6 Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder6 (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules.⌦ 3485 Glenna Ford↵ From: Glenna Ford↵ Sent: July-07-10 2:53 PM↵ To: webmaster↵ Cc: Patricia Lightburn; Claire Willison↵ Subject: FW: FIT price schedule↵ Attachments: FIT Price Schedule_July 2 2010.pdf↵ Thank you. Connie, could you please repost this price schedule?⌫ Much appreciated.⌫ From: Patricia Lightburn Sent: July 7, 2010 2:51 PM To: Glenna Ford Cc: webmaster; Claire Willison Subject: RE: FIT price schedule Sorry about that⌫ Patricia Lightburn Analyst, FIT Program From: Glenna Ford Sent: Wednesday, July 07, 2010 2:40 PM To: Patricia Lightburn Cc: webmaster; Claire Willison Subject: FIT price schedule Patricia:⌫ Did you send me the final version of the price schedule or did Connie make it? It ’ s locked and can ’ t be printed – it⌫ needs to be unlocked and the printing option activated. It will then need to be reposted in the resources section. Thank you.⌫ Glenna Ford Senior Regulatory Communications Advisor⌫ Direct: 416- 969 - 6305⌫ Cell: 416- 392 - 9905⌫ Email: glenna.ford@powerauthority.on.ca⌫ Ontario Power Authority⌫ 120 Adelaide Street West, Suite 1600⌫ Toronto , ON M5H 1T1⌫ www.powerauthority.on.ca⌫ P Please consider the environment before printing this email. 3486 July 2, 2010⌦ Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 2, 2010 Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 58.8 0% 44.3 0% Rooftop > 500 kW Ground Mounted (proposed) Ground Mounted Wind 2, 4 10 kW > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3487 Important note – Proposed Ground Mounted Price: There will be a 30-day comment period on the proposed new price category that will end on Tuesday, August 3. Please send all comments and submissions to microFIT@powerauthority.on.ca. W hile all emails will be read, not all emails will receive individual responses. Comments also can be mailed to the following address and must be postmarked no later than Tuesday,◆ August 3, 2010. Ontario Power Authority◆ 120 Adelaide Street W est, Suite 1600◆ Toronto, Ontario M5H 1T1 Attention: Ground-Mounted Solar PV◆ Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel6 Wind PV (Ground Mounted)6 Water Biogas Biomass Landfill6 Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder6 (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules.⌦ 3488 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-08-10 11:55 AM↵ To: Ben Chin; Jason Chee-Aloy; Jim MacDougall↵ Subject: Groundmount Price Assumptions↵ Attachments: GM Price Assumptions - July 8.ppt↵ Importance: High↵ Please review this introductory email before I send to MO with attached slides⇡ Alicia,⇡ Based on the webinar as well as the emails and calls we are receiving, we think it would be helpful to post the attached slides on the OPA website next week. The slides would be accompanied with introductory text setting the context. We are working on that now, in the meantime, we thought it would be helpful to get you the slides now. The slides set out assumptions and scenarios that were used to reach the 58.8 cents. The information in the slides is the same kind of information we communicated and consulted with stakeholders when we designed the program and set the original price schedule. A bit of background to guide you in reading the slides. A tracker is a piece of technology that allows the panels to turn to capture the sun. The first four scenarios include tracker technology. Because we did not expect very many groundmount projects, we did not include trackers in the original costing that was done for microFIT. The 5 scenario, no tracker, estimates capital costs of $6,000 - $2,000 less than the capital costs used in the original analysis - because component costs have decreased since then. In addition to the slides, we are also working on responses to the other key issues that have been identified in the feedback to date. We should have this material to you to review on Monday. Please call me if you would like to discuss. Thanks. Kristin⇡ 3489 Scenario Analysis-Ground Mount Solar PV Scenarios evaluated FIT price sensitivity to changes to the following⇥ input assumptions:⇥ – – – – – – – Equipment Capital Cost⇥ Operations and Maintenance Cost⇥ Capacity Factor - % of time project produces electricity⇥ Debt/Equity ratio – 70%/30%⇥ Cost of Debt - 7%⇥ Return on Equity – 11%⇥ Tax Treatment⇥ The following slides review the results of scenario Analysis for Ground⇥ Mount Solar PV, and the proposed changes to the FIT price schedule.⇥ 1⇥ 3490 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9 and 48.7⇥ cents per kWh for microFIT projects with trackers⇥ Scenario-I A B C⇥ 7000 7000 7000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 45.9 47.4 48.7⇥ Capital Cost Capacity Factor 2⇥ 3491 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1 and 52.1⇥ cents per kWh for microFIT projects with trackers⇥ Scenario-II A B C⇥ 7500 7500 7500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 49.1 50.7 52.1⇥ Capital Cost Capacity Factor 3⇥ 3492 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3 and 55.5⇥ cents per kWh for microFIT projects with trackers⇥ Scenario-III A B C⇥ 8000 8000 8000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 52.3 54.0 55.5⇥ Capital Cost Capacity Factor 4⇥ 3493 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8⇥ cents per kWh for microFIT projects with trackers⇥ Scenario-IV A B C⇥ 8500 8500 8500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 55.6 57.3 58.8⇥ Capital Cost Capacity Factor 5⇥ 3494 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 54.0 and 63.6⇥ cents per kWh for fixed axis projects (without trackers)⇥ Scenario-V A B C⇥ 5500 6000 6500⇥ 13.0 % 13.0 % 13.0 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 54.0 58.8 63.6⇥ Capital Cost Capacity Factor 6⇥ 3495 Jim MacDougall From: Jim MacDougall⌦ Sent: July-08-10 12:00 PM⌦ To: Kristin Jenkins; Ben Chin; Jason Chee-Aloy⌦ Subject: Re: Groundmount Price Assumptions⌦ Well said!⌦ Jim MacDougall, P.Eng.⌦ Manager, FIT Program⌦ Ontario Power Authority⌦ 416 969 6415⌦ Sent from my BB⌦ ----- Original Message ----From: Kristin Jenkins⌦ To: Ben Chin; Jason Chee- Aloy; Jim MacDougall⌦ Sent: Thu Jul 08 11:55:21 2010⌦ Subject: Groundmount Price Assumptions⌦ Please review this introductory email before I send to MO with attached slides⌦ Alicia,⌦ Based on the webinar as well as the emails and calls we are receiving, we think it would be helpful to post the attached slides on the OPA website next week. The slides would be accompanied with introductory text setting the context. We are working on that now, in the meantime, we thought it would be helpful to get you the slides now.⌦ The slides set out assumptions and scenarios that were used to reach the 58.8 cents. The information in the slides is the same kind of information we communicated and consulted with stakeholders when we designed the program and set the original price schedule. A bit of background to guide you in reading the slides. A tracker is a piece of technology that allows the panels to turn to capture the sun. The first four scenarios include tracker technology. Because we did not expect very many groundmount projects, we did not include trackers in the original costing that was done for microFIT. The 5 scenario, no tracker, estimates capital costs of $6,000 - $2,000 less than the capital costs used in the original analysis - because component costs have decreased since then.⌦ In addition to the slides, we are also working on responses to the other key issues that have been identified in the feedback to date. We should have this material to you to review on Monday. Please call me if you would like to discuss. Thanks.⌦ Kristin⌦ 3496 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-08-10 12:12 PM↵ To: 'Johnston, Alicia (MEI)'↵ Cc: Ben Chin; Jason Chee-Aloy; Jim MacDougall; JoAnne Butler; Colin Andersen; 'Ing,↵ Pearl (MEI)'↵ Subject: Groundmount Price Assumptions↵ Attachments: GM Price Assumptions - July 8.ppt↵ Hi Alicia, Based on the webinar as well as the emails and calls we are receiving, we think it would be helpful to post the attached slides on the OPA website next week. The slides would be accompanied with introductory text setting the⌧ context. We are working on that now, in the meantime, we thought it would be helpful to get you the slides to⌧ review. The slides set out the assumptions and scenarios that were used to reach the 58.8 cents. The information in the⌧ slides is the same kind of information we communicated and consulted with stakeholders when we designed the program and set the original price schedule. A bit of background to guide you in reading the slides, a tracker is a⌧ piece of technology that allows the panels to turn to capture the sun. The first four scenarios include tracker⌧ technology. Because we did not expect very many groundmount projects, we did not include trackers in the original⌧ costing that was done for microFIT. The 5 th scenario - no tracker - estimates capital costs of $6,000 which is $2,000 less than the capital costs used in the original analysis, the reason being that component costs have decreased since then. In addition to posting the slides, we are also working on responses to the other key issues that have been identified in the feedback to date. The idea is to post them next week too. We should have this material to you to review on Monday. Please call me if you would like to discuss. Thanks.⌧ Kristin Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca. 3497 Scenario Analysis-Ground Mount Solar PV Scenarios evaluated FIT price sensitivity to changes to⇥ the following input assumptions:⇥ – – – – – – – Equipment Capital Cost⇥ Operations and Maintenance Cost⇥ Capacity Factor – % of time project generates electricity⇥ Debt/Equity ratio – 70/30⇥ Cost of Debt – 7%⇥ Return on Equity – 11%⇥ Tax Treatment⇥ The following slides review the results of scenario⇥ Analysis for Ground Mount Solar PV, and the proposed⇥ changes to the FIT price schedule.⇥ 1⇥ 3498 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9⇥ and 48.7 cents per kWh for microFIT projects with trackers⇥ Scenario-I A B C⇥ 7000 7000 7000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 45.9 47.4 48.7⇥ Capital Cost Capacity Factor 2⇥ 3499 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1⇥ and 52.1 cents per kWh for microFIT projects with trackers⇥ Scenario-I A B C⇥ 7500 7500 7500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 49.1 50.7 52.1⇥ Capital Cost Capacity Factor 3⇥ 3500 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3⇥ and 55.5 cents per kWh for microFIT projects with trackers⇥ Scenario-I A B C⇥ 8000 8000 8000⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 52.3 54.0 55.5⇥ Capital Cost Capacity Factor 4⇥ 3501 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6⇥ and 58.8 cents per kWh for microFIT projects with trackers⇥ Scenario-I A B C⇥ 8500 8500 8500⇥ 19.4 % 18.8 % 18.3 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 55.6 57.3 58.8⇥ Capital Cost Capacity Factor 5⇥ 3502 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between⇥ 54.0 and 63.6 cents per kWh for fixed axis projects⇥ (without trackers)⇥ Scenario-I A B C⇥ 5500 6000 6500⇥ 13.0 % 13.0 % 13.0 %⇥ Percent Debt 70 70 70⇥ Interest Rate 7% 7% 7 %⇥ Accelerated Depreciation YES YES YES⇥ Derived FIT Price (Cents/kWh) 54.0 58.8 63.6⇥ Capital Cost Capacity Factor 6⇥ 3503 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-08-10 1:37 PM↵ To: Jim MacDougall↵ Cc: Patricia Lightburn; Travis Lusney↵ Subject: RE: Overview of finanical model.ppt↵ Attachments: Overview of finanical model.ppt↵ Pls look at this one … and delete the old one.✏ Sarah Simmons↵ Analyst✏ Electricity Resources✏ Ontario Power Authority✏ 120 Adelaide St. W. Suite 1600✏ Toronto , ON , M5H 1T1✏ Tel 416.969.6213✏ Fax 416.967.1947✏ www.powerauthority.on.ca✏ P please consider the environment before printing this email From: Sarah Simmons Sent: July 8, 2010 1:33 PM⇠ To: Jim MacDougall⇠ Cc: Patricia Lightburn; Travis Lusney⇠ Subject: Overview of finanical model.ppt⇠ So, I don't know if this is a crazy idea or not... but pls review. I've tried to include a "simplifed example" to demonstrate how the factors influence the FIT model. Comments welcomed!✏ Cheers,✏ Sarah✏ PS. Thanks to Travis for teaching me some new excel tricks :) 3504 ONTARIO POWER AUTHORITY ONTARIO POWER AUTHORITY [insert date] 3505 Presentation Overview • Overview of Financial Model • Financial Assumptions • Simplified Example • Factors that impact FIT rate • Scenario Analysis 2 3506 Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – • DCF models are commonly used in project finance The DCF model calculates the prices required to – – – Cover the cost of investment Cover ongoing operating expenses Earn a reasonable rate of return over a 20-year contact term 3 3507 Financial Assumptions Variable Assumption⌘ Percent Investment 30% After Tax Return on 11% Investment • Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% Inflation Rate 2.25% These financial assumptions are held constant for all technologies. 4 3508 Simplified Example • This is a highly simplified example, for the purpose of illustrating how the financial model works. • Let’s assume that a renewable energy project has⇠ capital cost of $50,000 – 70% of the cost of the project is borrowed from the bank $50,000 x 70% = $35,000 (from bank) $50,000 x 30% = $15,000 (Investment from savings) 5 3509 Simplified Example (continued) • Payback Payments on borrowed amount are to the bank at 7% $35,000 @ 7% = approx. $270 per month (20 years) Return on Investment is paid to the Supplier at 11% $15,000 @ 11% = approx. $155 per month (20 years) Therefore, the annual revenue requirement is: ($270 + $155) x 12 = $5100 6 3510 Simplified Example (continued) • Electricity Output – Let’s assume that this renewable energy project⇠ produces 10000 kWh in one year • The FIT rate is derived to ensure that the revenue requirements are met, given the expected output from the renewable energy project $5100 ⇢ FIT x 10000 kWh * * Note: the actual calculation is much more complicated, because it includes factors such as O&M, taxes, inflation, etc. 7 3511 Factors that affect the FIT rate • Efficiency of the system (Capacity Factor) – A more efficient renewable technology will produce more electricity per year – Projects that use technologies with higher efficiencies require a lower the FIT rate – E.g., $5100 ⇢ FIT x 10000 kWh (higher FIT) ⇢ FIT x 20000 kWh (lower FIT) versus $5100 8 3512 Factors that affect the FIT rate (continued) • Revenue Requirement – A project with a lower revenue requirement will have a lower FIT rate – E.g., $5100 ⇢ FIT x 10000 kWh (higher FIT) ⇢ FIT x 10000 kWh (lower FIT) versus $3000 – Factors that impact the revenue requirement, include: • • • • Capital costs (Lower costs O&M costs (lower costs lower FIT) lower FIT) Debt/Equity share (More debt Cost of debt (Lower cost lower FIT) lower FIT) 9 3513 Scenario Analysis-Ground Mount Solar PV • Scenarios evaluated FIT price sensitivity to changes to the following key assumptions: – – – – – – – • Capital Cost Capacity Factor Debt Equity ratio Cost of Debt Return on Equity Fuel Cost Tax Treatment The following slides review the results of the scenario Analysis for Ground Mount Solar PV, and the proposed changes to the FIT price schedule. 10 3514 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9 and 48.7 cents per kWh Scenario-I A B C 7000 7000 7000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 45.9 47.4 48.7 Capital Cost Capacity Factor 11 3515 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1 and 52.1 cents per kWh Scenario-II A B C 7500 7500 7500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 49.1 50.7 52.1 Capital Cost Capacity Factor 12 3516 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3 and 55.5 cents per kWh Scenario-III A B C 8000 8000 8000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 52.3 54.0 55.5 Capital Cost Capacity Factor 13 3517 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8 cents per kWh A B C 8500 8500 8500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 55.6 57.3 58.8 Scenario-IV Capital Cost Capacity Factor 14 3518 Travis Lusney From: Travis Lusney Sent: July-08-10 2:24 PM To: Sarah Simmons; Jim MacDougall Cc: Patricia Lightburn Subject: RE: Overview of finanical model.ppt Hi Sarah I have some comments and suggestions for the slides. So far so good, but I think the examples can better answer⌧ the questions/comments we have had raised so far. In general I think we should explain the following analysis: 1) How we determine the FIT price (you have done that well) 2) How a higher capacity factor would decrease the FIT price (done) 3) How a higher capital cost would increase the FIT price 4) How the combination would do both to the FIT price (i.e. tracking system, higher investment, better capacity factor) I think we want to say we are keeping our assumptions on D/E ratio, debt rate, return on equity rate, but are monitoring closely capital cost. This leads logically to a lower FIT price for groundmounted regardless of stationary⌧ or tracking. Thanks Travis Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Sarah Simmons Sent: Thursday, July 08, 2010 1:37 PM To: Jim MacDougall Cc: Patricia Lightburn; Travis Lusney Subject: RE: Overview of finanical model.ppt Pls look at this one … and delete the old one. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 3519 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Sarah Simmons Sent: July 8, 2010 1:33 PM To: Jim MacDougall Cc: Patricia Lightburn; Travis Lusney Subject: Overview of finanical model.ppt So, I don't know if this is a crazy idea or not... but pls review. I've tried to include a "simplifed example" to⌧ demonstrate how the factors influence the FIT model.⌧ Comments welcomed! Cheers, Sarah PS. Thanks to Travis for teaching me some new excel tricks :)⌧ 3520 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-09-10 10:17 AM↵ To: Travis Lusney; Jim MacDougall↵ Cc: Patricia Lightburn↵ Subject: RE: Overview of finanical model.ppt↵ Attachments: Overview of finanical model.ppt↵ Thanks for your comments T!✓ I ’ ve inserted a few extra slides.✓ We can discuss next week if you like.✓ Sarah Simmons↵ Analyst✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St. W. Suite 1600✓ Toronto , ON , M5H 1T1✓ Tel 416.969.6213✓ Fax 416.967.1947✓ www.powerauthority.on.ca✓ P please consider the environment before printing this email From: Travis Lusney Sent: July 8, 2010 2:24 PM To: Sarah Simmons; Jim MacDougall Cc: Patricia Lightburn Subject: RE: Overview of finanical model.ppt Hi Sarah✓ I have some comments and suggestions for the slides. So far so good, but I think the examples can better answer the questions/comments we have had raised so far.✓ In general I think we should explain the following analysis:✓ 1) How we determine the FIT price (you have done that well)✓ 2) How a higher capacity factor would decrease the FIT price (done)✓ 3) How a higher capital cost would increase the FIT price✓ 4) How the combination would do both to the FIT price (i.e. tracking system, higher investment, better capacity factor)✓ I think we want to say we are keeping our assumptions on D/E ratio, debt rate, return on equity rate, but are monitoring closely capital cost. This leads logically to a lower FIT price for groundmounted regardless of stationary or tracking.✓ Thanks✓ Travis✓ 3521 Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Sarah Simmons Sent: Thursday, July 08, 2010 1:37 PM To: Jim MacDougall Cc: Patricia Lightburn; Travis Lusney Subject: RE: Overview of finanical model.ppt Pls look at this one … and delete the old one.✓ Sarah Simmons↵ Analyst✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St. W. Suite 1600✓ Toronto , ON , M5H 1T1✓ Tel 416.969.6213✓ Fax 416.967.1947✓ www.powerauthority.on.ca✓ P please consider the environment before printing this email From: Sarah Simmons Sent: July 8, 2010 1:33 PM To: Jim MacDougall Cc: Patricia Lightburn; Travis Lusney Subject: Overview of finanical model.ppt So, I don't know if this is a crazy idea or not... but pls review. I've tried to include a "simplifed example" to demonstrate how the factors influence the FIT model. Comments welcomed!✓ Cheers,✓ Sarah✓ PS. Thanks to Travis for teaching me some new excel tricks :) 3522 ONTARIO POWER AUTHORITY ONTARIO POWER AUTHORITY [insert date] 3523 Presentation Overview • Overview of Financial Model • Financial Assumptions • Simplified Example • Factors that impact FIT rate • Scenario Analysis 2 3524 Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – • DCF models are commonly used in project finance The DCF model calculates the prices required to – – – Cover the cost of investment Cover ongoing operating expenses Earn a reasonable rate of return over a 20-year contact term 3 3525 Financial Assumptions Variable Assumption⌘ Percent Investment 30% After Tax Return on 11% Investment • Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% Inflation Rate 2.25% These financial assumptions are held constant for all technologies. 4 3526 Simplified Example • This is a highly simplified example, for the purpose of illustrating how the financial model works. • Let’s assume that a renewable energy project has⇠ capital cost of $50,000 – 70% of the cost of the project is borrowed from the bank $50,000 x 70% = $35,000 (from bank) $50,000 x 30% = $15,000 (Investment from savings) 5 3527 Simplified Example (continued) • Payback Payments on borrowed amount are to the bank at 7% $35,000 @ 7% = approx. $270 per month (20 years) (Assumes annuity payment, i.e., constant) Return on Investment is paid to the Supplier at 11% $15,000 @ 11% = approx. $155 per month (20 years) Therefore, the annual revenue requirement is: ($270 + $155) x 12 = $5100 6 3528 Simplified Example (continued) • Electricity Output – The electricity output from the facility depends on the facility’s capacity factor. In this case, let’s assume that this⇠ renewable energy project produces 10000 kWh in one year. • The FIT rate is derived to ensure that the revenue requirements are met given the expected output from the renewable energy project. $5100 FIT x 10000 kWh * * Note: the actual calculation is much more complicated, because it includes factors such as O&M, taxes, inflation, etc. 7 3529 Factors that affect the FIT rate • Efficiency of the system (Capacity Factor) – A more efficient renewable technology will produce more electricity per year – Projects that produce more electricity per kW installed will require a lower the FIT rate – E.g., $5100 FIT x 10000 kWh (higher FIT) FIT x 20000 kWh (lower FIT) versus $5100 More electricity produced per kW installed 8 3530 Factors that affect the FIT rate (continued) • Revenue Requirement – A project with a lower revenue requirement will have a lower FIT rate – E.g., $5100 FIT x 10000 kWh (higher FIT) FIT x 10000 kWh (lower FIT) versus $3000 Lower revenue requirement per kW installed – Factors that impact the revenue requirement, include: • • • • Capital costs (Lower costs O&M costs (lower costs lower FIT) lower FIT) Debt/Equity share (More debt Cost of debt (Lower cost lower FIT) lower FIT) 9 3531 Cost per unit energy (example) • Solar PV rooftop fixed mounted – – – – – 3 kW Capacity NTD: make sure Capital costs is $9600 per kW assumptions are Total installed cost = $28,800 appropriate Capacity Factor = 13% Electricity produced per year 3400 kWh (e.g., 13% x 3kW x 8760h/year) – • Cost per unit energy = $8.4 / kWh Solar PV ground-mounted with tracking system – – – – – 10 kW Capacity Capital costs is $9600 per kW Total installed costs = $96,000 Capacity Factor = 19% Electricity produced per year 16600 kWh (e.g., 19% x 10kW x 8760h/year) – Cost per unit energy = $ 5.8 / kWh 10 3532 Data Sources • Project cost information was developed from a range of sources using best available information – Consistent with literature and industry experience – Sources clearly documented NTD: Slide from stakeholder session (April 7, 2009) • Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary The OPA used a wide rate of sources as inputs into the applicable models. The OPA necessarily applied professional judgment were applicable. 11 3533 Cost and Performance Assumptions • Project costs can vary significantly depending on site conditions, proponent experience, and the cost and performance characteristics of the various technologies • Project cost estimates are part of an integrated package – Care needs to be taken when changing just one element of the cost estimates NTD: Slide from stakeholder session (April 7, 2009) 12 3534 Scenario Analysis-Ground Mount Solar PV • Scenarios evaluated FIT price sensitivity to changes to the following key assumptions: – – – – – – – • Capital Cost Capacity Factor Debt Equity ratio Cost of Debt Return on Equity Fuel Cost Tax Treatment The following slides review the results of the scenario Analysis for Ground Mount Solar PV, and the proposed changes to the FIT price schedule. 13 3535 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9 and 48.7 cents per kWh Scenario-I A B C 7000 7000 7000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 45.9 47.4 48.7 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 14 3536 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1 and 52.1 cents per kWh Scenario-II A B C 7500 7500 7500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 49.1 50.7 52.1 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 15 3537 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3 and 55.5 cents per kWh Scenario-III A B C 8000 8000 8000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 52.3 54.0 55.5 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 16 3538 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8 cents per kWh A B C 8500 8500 8500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 55.6 57.3 58.8 Scenario-IV Capital Cost Capacity Factor 17 3539 18 Micro-Scale Ground Mount Solar PV-Scenario Analysis ONTARIO POWER AUTHORITY 3540 Jim MacDougall From: Jim MacDougall✏ Sent: July-09-10 2:40 PM✏ To: Sarah Simmons; Travis Lusney✏ Subject: Fw: Groundmount Price Assumptions✏ Lets talk monday.✏ Jim MacDougall, P.Eng.✏ Manager, FIT Program✏ Ontario Power Authority✏ 416 969 6415✏ Sent from my BB✏ ----- Original Message ----From: Kristin Jenkins✏ To: 'Alicia.Johnston@ontario.ca' ; 'Paul.Ungerman@ontario.ca' ✏ CC: Ben Chin; Jason Chee- Aloy; Jim MacDougall; JoAnne Butler; Colin Andersen; 'Pearl.Ing@ontario.ca' ✏ Sent: Fri Jul 09 14:23:10 2010✏ Subject: Re: Groundmount Price Assumptions✏ Agreed. We are working on this. Hope to have draft for you to look at on Monday.✏ ----- Original Message ----From: Johnston, Alicia (MEI) ✏ To: Kristin Jenkins; Ungerman, Paul (MEI) ✏ CC: Ben Chin; Jason Chee- Aloy; Jim MacDougall; JoAnne Butler; Colin Andersen; Ing, Pearl (MEI) ✏ Sent: Fri Jul 09 12:54:30 2010✏ Subject: RE: Groundmount Price Assumptions✏ Thanks for this.✏ Paul will follow - up directly re: this particular deck.✏ I think we also need to have a more simplified version (or a few slides) that is more direct and less technical - to explain↵ why the new proposed price is the fair one that will still turn generators a profit. An example that is real and talks about actual dollars and costs would also be helpful.↵ This would be more of a communications tool for people who are not acquainted with the details of the program.✏ Thoughts?✏ Alicia✏ 3541 _________________________ _____ __✏ From: Kristin Jenkins [ mailto:Kristin.Jenkins@powerauthority.on.ca ]✏ Sent: July 8, 2010 12:12 PM✏ To: Johnston, Alicia (MEI)✏ Cc: Ben Chin; Jason Chee- Aloy; Jim MacDougall; JoAnne Butler; Colin Andersen; Ing, Pearl (MEI)✏ Subject: Groundmount Price Assumptions✏ Hi Alicia,✏ Based on the webinar as well as the emails and calls we are receiving, we think it would be helpful to post the attached slides on the OPA website next week. The slides would be accompanied with introductory text setting the context. We are↵ working on that now, in the meantime, we thought it would be helpful to get you the slides to review.✏ The slides set out the assumptions and scenarios that were used to reach the 58.8 cents. The information in the slides is↵ the same kind of information we communicated and consulted with stakeholders when we designed the program and set the original price schedule. A bit of background to guide you in reading the slides, a tracker is a piece of technology that↵ allows the panels to turn to capture the sun. The first four scenarios include tracker technology. Because we did not↵ expect very many groundmount projects, we did not include trackers in the original costing that was done for microFIT.↵ The 5th scenario - no tracker - estimates capital costs of $6,000 which is $2,000 less than the capital costs used in the original analysis, the reason being that component costs have decreased since then.✏ In addition to posting the slides, we are also working on responses to the other key issues that have been identified in the feedback to date. The idea is to post them next week too. We should have this material to you to review on Monday. Please↵ call me if you would like to discuss. Thanks.↵ Kristin✏ Kristin Jenkins Director Media & Stakeholder Relations Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 tel. 416.969.6326 fax. 416.967.1947 www.powerauthority.on.ca✏ < http://www.powerpledge.ca>✏ Take The Power Pledge at www.powerpledge.ca↵ This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain 3542 Travis Lusney From: Travis Lusney Sent: July-12-10 9:05 AM To: 'Palmer, Mary (MEI)'; Jim MacDougall Subject: RE: Updated Analysis for Small Wind Hello Mary⌦ Would you be available for a phone call around 11 this morning?⌦ Thanks⌦ Travis⌦ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Tuesday, June 29, 2010 4:10 PM⇡ To: Jim MacDougall⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ Thanks, Jim, appreciated.⌦ Travis, pls feel free to call me should you like to discuss anything.⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 29, 2010 4:00 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ Mary⌦ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.⌦ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 29, 2010 9:01 AM⇡ To: Jim MacDougall⇡ 3543 To: Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hi Jim,⌦ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind⌦ tranches of 51 kW ⇣ 1 00 kW and 1 01 ⇣ 300 kW. In their view, turbines in the former tranche are similar in their technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.⌦ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as⌦ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss. Kind regards,⌦ Mary⌦ 416 212 7706⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 10, 2010 3:28 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ I am OK with the assumptions and analysis.⌦ Leo – you will want to make sure that your management is OK with more high priced power contracts.⌦ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 10, 2010 3:26 PM⇡ To: Jim MacDougall⇡ Cc: Tasca, Leo (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Hello Jim,⌦ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⌦ Thanks,⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: May 6, 2010 4:49 PM⇡ To: Palmer, Mary (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌦ 3544 Manager, Feed - In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Jonathan Cheszes⇡ Sent: December 2, 2009 5:19 PM⇡ To: 'Beale, Barry (MEI)'⇡ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇡ Subject: Updated Analysis for Small Wind⇡ Barry,⌦ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌦ Project Number 12 14 CanWea CanWea⌦ Presentation - Presentation - Technology Type Low Capacity Low⌦ 17⌦ CanWea⌦ Presentation Mid⌦ MW 0.0025 0.05 0.2⌦ % 20.00% 20.00% 20.00%⌦ Project Life years 20 20 20⌦ Capital Cost $/kw 6,000 5,000 3,750⌦ Construction Lead Time years 1 1 1⌦ $/MWh $/kW/year 15 10 10⌦ 24 6 1.5⌦ ACF Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:⌦ · · · · In line with CanWEA presentation (May 2009)⌦ In line with presentation by Paul Gipe to CanWEA conference⌦ In line with other int ’ l FITs for small wind⌦ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⌦ experience⌦ Please let me know if you have any questions.⌦ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Washington In state Wind 6 small <15 kW 20 6 ⇣1 0 0.13⌦ 0.21⌦ Section 13 >1.5 < 15 kW 0.41⌦ small 0.44⌦ 3545 Israel Wind 20 < 15 kW 0.52⌦ Italy Wind 15 < 200 kW 0.53⌦ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 ⇣ 50 0.16⌦ Section 13 >15 < 50 kW Contract Term 0.36⌦ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 ⇣ 50 >250 < 500 kW 0.16⌦ Section 13 0.28⌦ Jonathan Cheszes⌦ Business Analyst⌦ Electricity Resources⌦ 120 Adelaide St. West, Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 41 6.969.6251 Fax 416.967.1947⌦ www.powerauthority.on.ca⌦ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3546 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: July-12-10 9:11 AM✏ To: Travis Lusney; Jim MacDougall✏ Subject: RE: Updated Analysis for Small Wind✏ Perfect at time of writing! I will await your call … Confidential From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇢ Sent: July 12, 2010 9:05 AM⇢ To: Palmer, Mary (MEI); Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hello Mary↵ Would you be available for a phone call around 11 this morning?↵ Thanks↵ Travis↵ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: Tuesday, June 29, 2010 4:10 PM⇢ To: Jim MacDougall⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Thanks, Jim, appreciated.↵ Travis, pls feel free to call me should you like to discuss anything.↵ Mary↵ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 29, 2010 4:00 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Mary↵ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.↵ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program↵ Electricity Resources↵ 3547 Electricity Resources↵ Ontario Power Authority↵ 120 Adelaide St W, Suite 1600↵ Toronto , ON M5H 1T1 , Canada↵ tel 416.969.6415↵ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 29, 2010 9:01 AM⇢ To: Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hi Jim,↵ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind↵ tranches of 51 kW 1 00 kW and 1 01 300 kW. In their view, turbines in the former tranche are similar in their# – 300 kW capacity.↵ technical characteristics as are turbines in the latter tranche of 101 It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as↵ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss.# Kind regards,↵ Mary↵ 416 212 7706↵ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.↵ Leo – you will want to make sure that your management is OK with more high priced power contracts.↵ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program↵ Electricity Resources↵ Ontario Power Authority↵ 120 Adelaide St W, Suite 1600↵ Toronto , ON M5H 1T1 , Canada↵ tel 416.969.6415↵ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,↵ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could# bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.↵ Thanks,↵ Mary↵ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ 3548 Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program↵ Electricity Resources↵ Ontario Power Authority↵ 120 Adelaide St W, Suite 1600↵ Toronto , ON M5H 1T1 , Canada↵ tel 416.969.6415↵ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ Barry,↵ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.↵ Project Number 12 CanWea CanWea↵ Presentation - Presentation - Technology Type Capacity 14 Low Low↵ 17↵ CanWea↵ Presentation Mid↵ MW 0.0025 0.05 0.2↵ % 20.00% 20.00% 20.00%↵ years 20 20 20↵ Capital Cost $/kw 6,000 5,000 3,750↵ Construction Lead Time years 1 1 1↵ $/MWh $/kW/year 15 10 10↵ 24 6 1.5↵ ACF Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Feed - in Tarrif $/MWh Section 13 c/kW The justification for these prices is as follows:↵ · · · · In line with CanWEA presentation (May 2009)↵ In line with presentation by Paul Gipe to CanWEA conference↵ In line with other int ’ l FITs for small wind↵ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and↵ experience↵ Please let me know if you have any questions.↵ 3549 Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind 6 small 0.13↵ <15 kW 20 Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology 10 0.21↵ Section 13 >1.5 < 15 kW 0.41↵ small 0.44↵ 20 < 15 kW 0.52↵ 15 < 200 kW 0.53↵ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 50 0.16↵ Section 13 >15 < 50 kW Contract Term 0.36↵ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 50 >250 < 500 kW 0.16↵ Section 13 0.28↵ Jonathan Cheszes↵ Business Analyst↵ Electricity Resources↵ 120 Adelaide St. West, Suite 1600↵ Toronto , ON , M5H 1T1↵ Tel 41 6.969.6251# Fax 416.967.1947↵ www.powerauthority.on.ca↵ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3550 Travis Lusney From: Travis Lusney Sent: July-12-10 9:12 AM To: 'Palmer, Mary (MEI)'; Jim MacDougall Subject: RE: Updated Analysis for Small Wind Hello Mary⌦ Is there any particular questions/comments you have for the call?⌦ Thanks⌦ Travis⌦ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Monday, July 12, 2010 9:11 AM⇡ To: Travis Lusney; Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Perfect at time of writing! I will await your call … . Confidential From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇡ Sent: July 12, 2010 9:05 AM⇡ To: Palmer, Mary (MEI); Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hello Mary⌦ Would you be available for a phone call around 11 this morning?⌦ Thanks⌦ Travis⌦ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Tuesday, June 29, 2010 4:10 PM⇡ To: Jim MacDougall⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ 3551 Thanks, Jim, appreciated.⌦ Travis, pls feel free to call me should you like to discuss anything.⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 29, 2010 4:00 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ Mary⌦ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.⌦ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 29, 2010 9:01 AM⇡ To: Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hi Jim,⌦ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind⌦ tranches of 51 kW 1 00 kW and 1 01 300 kW. In their view, turbines in the former tranche are similar in their# – 300 kW capacity.⌦ technical characteristics as are turbines in the latter tranche of 101 It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as⌦ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss.# Kind regards,⌦ Mary⌦ 416 212 7706⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 10, 2010 3:28 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ I am OK with the assumptions and analysis.⌦ Leo – you will want to make sure that your management is OK with more high priced power contracts.⌦ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 3552 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 10, 2010 3:26 PM⇡ To: Jim MacDougall⇡ Cc: Tasca, Leo (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Hello Jim,⌦ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could# bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⌦ Thanks,⌦ Mary⌦ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: May 6, 2010 4:49 PM⇡ To: Palmer, Mary (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St W, Suite 1600⌦ Toronto , ON M5H 1T1 , Canada⌦ tel 416.969.6415⌦ From: Jonathan Cheszes⇡ Sent: December 2, 2009 5:19 PM⇡ To: 'Beale, Barry (MEI)'⇡ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇡ Subject: Updated Analysis for Small Wind⇡ Barry,⌦ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌦ Project Number 12 Technology Type Capacity 14 CanWea CanWea⌦ Presentation - Presentation - Low Low⌦ 17⌦ CanWea⌦ Presentation Mid⌦ MW 0.0025 0.05 0.2⌦ % 20.00% 20.00% 20.00%⌦ Project Life years 20 20 20⌦ Capital Cost $/kw 6,000 5,000 3,750⌦ Construction Lead Time years 1 1 1⌦ ACF 3553 Variable O & M $/MWh $/kW/year Fixed O & M IRR 15 10 10⌦ 24 6 1.5⌦ %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:⌦ · · · · In line with CanWEA presentation (May 2009)⌦ In line with presentation by Paul Gipe to CanWEA conference⌦ In line with other int ’ l FITs for small wind⌦ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⌦ experience⌦ Please let me know if you have any questions.⌦ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind 6 small 0.13⌦ <15 kW 20 10 0.21⌦ Section 13 >1.5 < 15 kW 0.41⌦ Washington In state Wind 6 small 0.44⌦ Israel Wind 20 < 15 kW 0.52⌦ Italy Wind 15 < 200 kW 0.53⌦ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 50 0.16⌦ Section 13 >15 < 50 kW Contract Term 0.36⌦ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 50 >250 < 500 kW 0.16⌦ Section 13 0.28⌦ Jonathan Cheszes⌦ Business Analyst⌦ Electricity Resources⌦ 120 Adelaide St. West, Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 41 6.969.6251# 3554 Palmer, Mary (MEI)✏ From: Palmer, Mary (MEI)✏ Sent: July-12-10 9:22 AM✏ To: Travis Lusney; Jim MacDougall✏ Subject: RE: Updated Analysis for Small Wind✏ I would like to discuss the domestic content grid that CanWEA provided us and the next steps for proceeding on evaluating, commenting, adjusting, etc. as one of the considerations for our “ business case ” up to the MO. It is also✓ very important to have a discussion around the FIT tranches, assumptions, turbine sizes that CanWEA deems to be “ small wind ” albeit 1 00 kW ⇠ 300 kW falls under what industry refers to as “ medium wind ” , impact on ratebase.✓ We would like to have a sense of where you may be at with this.$ I am putting together the entire policy options/recommendations for sw with the view of moving this to MO within the next couple of weeks. Pending the MO’s direction, stakeholder consultations would likely be high on the radar.✓ Thanks,$ Mary$ From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇢ Sent: July 12, 2010 9:12 AM⇢ To: Palmer, Mary (MEI); Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hello Mary$ Is there any particular questions/comments you have for the call?$ Thanks$ Travis$ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: Monday, July 12, 2010 9:11 AM⇢ To: Travis Lusney; Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Perfect at time of writing! I will await your call … . Confidential $ From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇢ Sent: July 12, 2010 9:05 AM⇢ To: Palmer, Mary (MEI); Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hello Mary$ 3555 Would you be available for a phone call around 11 this morning?$ Thanks$ Travis$ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: Tuesday, June 29, 2010 4:10 PM⇢ To: Jim MacDougall⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Thanks, Jim, appreciated.$ Travis, pls feel free to call me should you like to discuss anything.$ Mary$ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 29, 2010 4:00 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ Mary$ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.$ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program$ Electricity Resources$ Ontario Power Authority$ 120 Adelaide St W, Suite 1600$ Toronto , ON M5H 1T1 , Canada$ tel 416.969.6415$ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 29, 2010 9:01 AM⇢ To: Jim MacDougall⇢ Subject: RE: Updated Analysis for Small Wind⇢ Hi Jim,$ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind$ tranches of 51 kW * 1 00 kW and 1 01 * 300 kW. In their view, turbines in the former tranche are similar in their✓ technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.$ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as$ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss.✓ Kind regards,$ Mary$ 416 212 7706$ 3556 From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: June 10, 2010 3:28 PM⇢ To: Palmer, Mary (MEI)⇢ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇢ Subject: RE: Updated Analysis for Small Wind⇢ I am OK with the assumptions and analysis.$ Leo – you will want to make sure that your management is OK with more high priced power contracts.$ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program$ Electricity Resources$ Ontario Power Authority$ 120 Adelaide St W, Suite 1600$ Toronto , ON M5H 1T1 , Canada$ tel 416.969.6415$ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇢ Sent: June 10, 2010 3:26 PM⇢ To: Jim MacDougall⇢ Cc: Tasca, Leo (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Hello Jim,$ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could✓ bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.$ Thanks,$ Mary$ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇢ Sent: May 6, 2010 4:49 PM⇢ To: Palmer, Mary (MEI)⇢ Subject: FW: Updated Analysis for Small Wind⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program$ Electricity Resources$ Ontario Power Authority$ 120 Adelaide St W, Suite 1600$ Toronto , ON M5H 1T1 , Canada$ tel 416.969.6415$ From: Jonathan Cheszes⇢ Sent: December 2, 2009 5:19 PM⇢ To: 'Beale, Barry (MEI)'⇢ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇢ Subject: Updated Analysis for Small Wind⇢ 3557 Barry,$ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.$ Project Number 12 14 CanWea CanWea$ Presentation - Presentation - Technology Type Low Capacity Low$ 17$ CanWea$ Presentation Mid$ MW 0.0025 0.05 0.2$ % 20.00% 20.00% 20.00%$ years 20 20 20$ Capital Cost $/kw 6,000 5,000 3,750$ Construction Lead Time years 1 1 1$ $/MWh $/kW/year 15 10 10$ 24 6 1.5$ ACF Project Life Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:$ · · · · In line with CanWEA presentation (May 2009)$ In line with presentation by Paul Gipe to CanWEA conference$ In line with other int ’ l FITs for small wind$ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and$ experience$ Please let me know if you have any questions.$ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind 6 Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Washington In state Wind 6 Israel Wind Italy Wind Jurisdiction Technology small 0.13$ <15 kW 20 *1 0 0.21$ Section 13 >1.5 < 15 kW 0.41$ small 0.44$ 20 < 15 kW 0.52$ 15 < 200 kW 0.53$ Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 * 50 >15 < 50 kW 0.16$ Section 13 0.36$ 3558 Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 * 50 >250 < 500 kW 0.16$ Section 13 0.28$ Jonathan Cheszes$ Business Analyst$ Electricity Resources$ 120 Adelaide St. West, Suite 1600$ Toronto , ON , M5H 1T1$ Tel 41 6.969.6251✓ Fax 416.967.1947$ www.powerauthority.on.ca$ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3559 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-12-10 10:37 AM↵ To: Jim MacDougall; Jason Chee-Aloy; Sarah Simmons↵ Subject: Rationale for GM Price - 07-12-10↵ Attachments: Rationale for GM Price - 07-12-10.doc↵ Please review and send me comments asap. Thanks. Kristin⌥ 3560 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account the costs of capital, financing, operating and maintenance over the life of the project. A 70/30 debt/equity split is assumed and borrowing costs were set at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the amount of energy a project produces, are BOTH key elements in determining a project’s rate of return. Ground-mounted projects generally have lower upfront capital costs and generate more electricity, and therefore more revenue, relative to rooftop installations. Lower project costs and higher revenues mean the lower rate of 58.8 cents/kWh provides groundmount developers with the same rate of return that roof-top generators receive at 80.2 cents/kWh. Ground-mounted projects with tracking (panels that turn to follow the sun) have higher upfront capital costs but produce more energy (higher capacity factor) and therefore generate more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a rate of return that is comparable to roof-top solar projects as well as other FIT projects. Ground-mounted projects without tracking have lower capital costs but also generate less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the costs of these projects in particular which have come down relative to rooftop installations since the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30 day consultation period on the new pricing category and invite proponents to submit feedback. 3561 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-12-10 10:53 AM↵ To: Jim MacDougall; Sarah Simmons↵ Subject: Updated Price Rationale↵ Attachments: Rationale for GM Price - 07-12-10.doc↵ Importance: High↵ Text the same but I added a table at the end⇣ 3562 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account the costs of capital, financing, operating and⌫ maintenance over the life of the project. A 70/30 debt/equity split was assumed and borrowing⌫ costs were set at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects generally have lower upfront capital costs and generate more⌫ electricity, and therefore more revenue, relative to rooftop installations. Lower project costs⌫ and higher revenues mean the lower rate of 58.8 cents/kWh provides ground-mount developers⌫ with the same rate of return that roof-top generators receive at 80.2 cents/kWh. Ground-mounted projects with tracking (panels that turn to follow the sun) have higher upfront⌫ capital costs but produce more energy (higher capacity factor) and therefore generate more⌫ revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a⌫ rate of return that is comparable to roof-top solar projects as well as other FIT projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Typical Ground-Mount Project Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Rate of Return Tracking $80,000 18% 15.8 kW $9,272 9 years 11% No Tracking $60,000 13% 11.3 kW $6,696 9 years 11% 3563 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-12-10 10:59 AM↵ To: Kristin Jenkins; Jim MacDougall↵ Cc: Travis Lusney↵ Subject: RE: Updated Price Rationale↵ Attachments: Rationale for GM Price - 07-12-10 (2).doc↵ Changes to table. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 12, 2010 10:53 AM↵ To: Jim MacDougall; Sarah Simmons↵ Subject: Updated Price Rationale↵ Importance: High↵ Text the same but I added a table at the end 3564 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account the costs of capital, financing, operating and⌫ maintenance over the life of the project. A 70/30 debt/equity split was assumed and borrowing⌫ costs were set at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects generally have lower upfront capital costs and generate more⌫ electricity, and therefore more revenue, relative to rooftop installations. Lower project costs⌫ and higher revenues mean the lower rate of 58.8 cents/kWh provides ground-mount developers⌫ with the same rate of return that roof-top generators receive at 80.2 cents/kWh. Ground-mounted projects with tracking (panels that turn to follow the sun) have higher upfront⌫ capital costs but produce more energy (higher capacity factor) and therefore generate more⌫ revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a⌫ rate of return that is comparable to roof-top solar projects as well as other FIT projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Typical Ground-Mount Project Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $80,000 18% 15,800 kWh $9,300 9 years No Tracking (10 kW) $60,000 13% 11,300 kWh $6,700 9 years 3565 Jim MacDougall From: Jim MacDougall Sent: July-12-10 11:35 AM To: Sarah Simmons Subject: RE: Updated Price Rationale Attachments: Rationale for GM Price - 07-12-10 v3.doc Before we send to Kristin, lets get on same page …⇥ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St W, Suite 1600⇢ Toronto , ON M5H 1T1 , Canada⇢ tel 416.969.6415⇢ From: Sarah Simmons Sent: July 12, 2010 11:01 AM To: Kristin Jenkins; Jim MacDougall Cc: Travis Lusney Subject: RE: Updated Price Rationale Because it ’ s an “ input ” rather than and “ output ” in determining the cost.⇢ Sarah Simmons↵ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email✓ From: Kristin Jenkins Sent: July 12, 2010 10:59 AM To: Sarah Simmons; Jim MacDougall Cc: Travis Lusney Subject: RE: Updated Price Rationale Why did you take out the 11%⇢ From: Sarah Simmons Sent: July 12, 2010 10:59 AM To: Kristin Jenkins; Jim MacDougall Cc: Travis Lusney Subject: RE: Updated Price Rationale 3566 Changes to table.⇢ Sarah Simmons↵ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email✓ From: Kristin Jenkins Sent: July 12, 2010 10:53 AM To: Jim MacDougall; Sarah Simmons Subject: Updated Price Rationale Importance: High Text the same but I added a table at the end⇢ 3567 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to roof-top solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $80,000 18% 15,800 kWh $9,300 9 years Fixed - No Tracking (10 kW) $60,000 13% 11,300 kWh $6,700 9 years 3568 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-12-10 11:54 AM↵ To: Jim MacDougall↵ Cc: Kristin Jenkins↵ Subject: Rationale for GM Price - 07-12-10 v3.doc↵ Attachments: Rationale for GM Price - 07-12-10 v3.doc↵ updated. 3569 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to roof-top solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $90,000 19% 16,600 kWh $9,800 9 years Fixed - No Tracking (10 kW) $60,000 13% 11,300 kWh $6,700 9 years 3570 Jim MacDougall From: Jim MacDougall Sent: July-12-10 12:49 PM To: Jason Chee-Aloy Subject: FW: Updated Analysis for Small Wind FYI⌅ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: July 12, 2010 9:22 AM⇡ To: Travis Lusney; Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ I would like to discuss the domestic content grid that CanWEA provided us and the next steps for proceeding on evaluating, commenting, adjusting, etc. as one of the considerations for our “ business case ” up to the MO. It is also✓ very important to have a discussion around the FIT tranches, assumptions, turbine sizes that CanWEA deems to be “ small wind ” albeit 1 00 kW ⇠ 300 kW falls under what industry refers to as “ medium wind ” , impact on ratebase.✓ We would like to have a sense of where you may be at with this.⌅ I am putting together the entire policy options/recommendations for sw with the view of moving this to MO within the next couple of weeks. Pending the MO’s direction, stakeholder consultations would likely be high on the radar.✓ Thanks,⌅ Mary⌅ From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇡ Sent: July 12, 2010 9:12 AM⇡ To: Palmer, Mary (MEI); Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hello Mary⌅ Is there any particular questions/comments you have for the call?⌅ Thanks⌅ Travis⌅ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement 3571 From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Monday, July 12, 2010 9:11 AM⇡ To: Travis Lusney; Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Perfect at time of writing! I will await your call … . 416 212 7706⌅ From: Travis Lusney [mailto:Travis.Lusney@powerauthority.on.ca]⇡ Sent: July 12, 2010 9:05 AM⇡ To: Palmer, Mary (MEI); Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hello Mary⌅ Would you be available for a phone call around 11 this morning?⌅ Thanks⌅ Travis⌅ Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Tuesday, June 29, 2010 4:10 PM⇡ To: Jim MacDougall⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ Thanks, Jim, appreciated.⌅ Travis, pls feel free to call me should you like to discuss anything.⌅ Mary⌅ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 29, 2010 4:00 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ Mary⌅ I have no capacity to lead this right now, so I will put you in touch with my colleague Travis who will take the lead on this one.⌅ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ 3572 Sent: June 29, 2010 9:01 AM⇡ To: Jim MacDougall⇡ Subject: RE: Updated Analysis for Small Wind⇡ Hi Jim,⌅ As per my v- mail, CanWEA small wind will be providing us with their calculations of a proposed FIT for small wind⌅ tranches of 51 kW * 1 00 kW and 1 01 * 300 kW. In their view, turbines in the former tranche are similar in their✓ technical characteristics as are turbines in the latter tranche of 101 – 300 kW capacity.⌅ It would be most appreciated if you could calculate the OPA ’ s proposed FIT for small wind for these two tranches as⌅ well. Please provide your assumptions along with the calculated FIT pricing. Happy to discuss.✓ Kind regards,⌅ Mary⌅ 416 212 7706⌅ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: June 10, 2010 3:28 PM⇡ To: Palmer, Mary (MEI)⇡ Cc: Tasca, Leo (MEI); Jason Chee-Aloy; Travis Lusney⇡ Subject: RE: Updated Analysis for Small Wind⇡ I am OK with the assumptions and analysis.⌅ Leo – you will want to make sure that your management is OK with more high priced power contracts.⌅ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: June 10, 2010 3:26 PM⇡ To: Jim MacDougall⇡ Cc: Tasca, Leo (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ Hello Jim,⌅ Could you please confirm that you are “ ok ” with these proposed small wind FIT calculations. If so, then we could✓ bring them forward to CanWEA and other stakeholders when we embark on our conversation about proposed small wind FIT pricing.⌅ Thanks,⌅ Mary⌅ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇡ Sent: May 6, 2010 4:49 PM⇡ To: Palmer, Mary (MEI)⇡ Subject: FW: Updated Analysis for Small Wind⇡ 3573 Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto , ON M5H 1T1 , Canada⌅ tel 416.969.6415⌅ From: Jonathan Cheszes⇡ Sent: December 2, 2009 5:19 PM⇡ To: 'Beale, Barry (MEI)'⇡ Cc: Jim MacDougall; 'Slawner, Karen (MEI)'⇡ Subject: Updated Analysis for Small Wind⇡ Barry,⌅ Below is an updated analysis on micro and small wind turbines with recommended FIT prices.⌅ Project Number 12 14 CanWea CanWea⌅ Presentation - Presentation - Technology Type Low Capacity Low⌅ 17⌅ CanWea⌅ Presentation Mid⌅ MW 0.0025 0.05 0.2⌅ % 20.00% 20.00% 20.00%⌅ Project Life years 20 20 20⌅ Capital Cost $/kw 6,000 5,000 3,750⌅ Construction Lead Time years 1 1 1⌅ $/MWh $/kW/year 15 10 10⌅ 24 6 1.5⌅ ACF Variable O & M Fixed O & M IRR %✓ NPV✓ First Year Payment Section 13 $/MWh Feed - in Tarrif c/kW The justification for these prices is as follows:⌅ · · · · In line with CanWEA presentation (May 2009)⌅ In line with presentation by Paul Gipe to CanWEA conference⌅ In line with other int ’ l FITs for small wind⌅ Installed costs varied from different sources but capital & labour costs are anticipated to fall with volume and⌅ experience⌅ Please let me know if you have any questions.⌅ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit $/kW)✓ Micro Wind ⌘ 1 0 kW Washington Out state Wind Vermont Wind Ontario (recommended) Wind 6 small <15 kW 20 *1 0 0.13⌅ Section 13 0.21⌅ 3574 Great Britain (proposed) Wind Washington In state Wind 6 >1.5 < 15 kW 0.41⌅ small Israel Wind 0.44⌅ 20 < 15 kW 0.52⌅ Italy Wind 15 < 200 kW 0.53⌅ Jurisdiction Technology Contract Term Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 1 0 ⌘ 50 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind Jurisdiction Technology > 15 kW 20 >1 0 * 50 Section 13 >15 < 50 kW Contract Term 0.16⌅ 0.36⌅ Project Size FIT ( CAD✓ Limit✓ $/kW)✓ Small Wind > 50 ⌘300 kW✓ Vermont Wind Ontario (recommended) Wind Great Britain (proposed) Wind > 15 kW 20 >1 0 * 50 >250 < 500 kW 0.16⌅ Section 13 0.28⌅ Jonathan Cheszes⌅ Business Analyst⌅ Electricity Resources⌅ 120 Adelaide St. West, Suite 1600⌅ Toronto , ON , M5H 1T1⌅ Tel 41 6.969.6251✓ Fax 416.967.1947⌅ www.powerauthority.on.ca⌅ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3575 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-12-10 4:14 PM↵ To: Kristin Jenkins↵ Cc: Jim MacDougall↵ Subject: Rationale for GM Price - 07-12-10 v3 (2).doc↵ Attachments: Rationale for GM Price - 07-12-10 v3 (2).doc↵ See table - with rooftop.⌘ 3576 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to roof-top solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Rooftop (10kW) Cost to Install Capacity Factor Annual Production FIT price Annual Revenue Simple Payback $92,000 13% 11,300 kWh $0.802/kWh $9,000 10 years Ground mounted with tracking (10 kW) $90,000 19% 16,600 kWh $0.588/kWh $9,800 9 years Fixed Ground! Mounted (10 kW) $60,000 13% 11,300 kWh $0.588/kWh $6,700 9 years 3577 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-12-10 4:14 PM↵ To: Kristin Jenkins↵ Cc: Jim MacDougall↵ Subject: Rationale for GM Price - 07-12-10 v3 (2).doc↵ Attachments: Rationale for GM Price - 07-12-10 v3 (2).doc↵ my mistake... please use this one.⌘ 3578 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to roof-top solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Rooftop (10kW) Cost to Install Capacity Factor Annual Production FIT price Annual Revenue Simple Payback $92,000 13% 11,300 kWh $0.802/kWh $9,100 10 years Ground mounted with tracking (10 kW) $90,000 19% 16,600 kWh $0.588/kWh $9,800 9 years Fixed Ground! Mounted (10 kW) $60,000 13% 11,300 kWh $0.588/kWh $6,700 9 years 3579 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-12-10 4:24 PM↵ To: 'MacLennan, Craig (MEI)'; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ Fixed Ground Mounted↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.! I think if we compare the two that we would be able to further justify why the change was so important.! CM! From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin! Take The Power Pledge at www.powerpledge.ca✓ 3580 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-12-10 4:27 PM↵ To: Patricia Lightburn↵ Subject: FW: Rationale for GM Price - Web Posting↵ Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 12, 2010 4:24 PM↵ To: 'MacLennan, Craig (MEI)'; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM 3581 From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3582 MacLennan, Craig (MEI)⌘ From: MacLennan, Craig (MEI)⌘ Sent: July-12-10 4:48 PM⌘ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⌘ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee-Aloy⌘ Subject: RE: Rationale for GM Price - Web Posting⌘ Importance: High⌘ Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇡ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇡ Sorry if there was confusion.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 4:24 PM⇢ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Rooftop (10kW) Ground mounted with Fixed Ground Mounted⌘ tracking (10 kW) (10 kW)⌘ Cost to Install $92,000 $90,000 $60,000⌘ Capacity Factor 13% 19% 13%⌘ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh⌘ FIT price $0.802/kWh $0.588/kWh $0.588/kWh⌘ Annual Revenue $9,100 $9,800 $6,700⌘ Simple Payback 10 years 9 years 9 years⌘ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3583 From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇡ I think if we compare the two that we would be able to further justify why the change was so important.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⇡ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3584 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-12-10 5:00 PM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: FW: Rationale for GM Price - Web Posting↵ Importance: High↵ Do we have this info? Will call on Tues morning to discuss.⇡ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 4:48 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Importance: High⇢ Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇡ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇡ Sorry if there was confusion.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 4:24 PM⇢ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ Fixed Ground Mounted↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. 3585 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇡ I think if we compare the two that we would be able to further justify why the change was so important.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⇡ Kristin⇡ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3586 Jim MacDougall From: Jim MacDougall Sent: July-12-10 5:12 PM To: Brian Shields Subject: Fw: Rationale for GM Price - 07-12-10 v3 (2).doc Attachments: Rationale for GM Price - 07-12-10 v3 (2).doc Per ur questuion.... Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Sarah Simmons To: Kristin Jenkins CC: Jim MacDougall Sent: Mon Jul 12 16:14:10 2010 Subject: Rationale for GM Price - 07- 12- 10 v3 (2).doc <> my mistake... please use this one. 3587 Rationale for new Ground-mount FIT price category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to roof-top solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking have lower capital costs but also generate less⌫ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new pricing category and invite proponents to⌫ submit feedback. Rooftop (10kW) Cost to Install Capacity Factor Annual Production FIT price Annual Revenue Simple Payback $92,000 13% 11,300 kWh $0.802/kWh $9,100 10 years Ground mounted with tracking (10 kW) $90,000 19% 16,600 kWh $0.588/kWh $9,800 9 years Fixed Ground! Mounted (10 kW) $60,000 13% 11,300 kWh $0.588/kWh $6,700 9 years 3588 Ben Chin From: Ben Chin Sent: July-12-10 5:46 PM To: 'MacLennan, Craig (MEI)'; Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee-Aloy Subject: RE: Rationale for GM Price - Web Posting No problem, we ’ ll get you that✓ Ben Chin✓ Vice- President, Communications✓ Ontario Power Authority⇣ T 416-969 -6007⇣ F 416-967 -1947⇣ ben.chin@powerauthority.on.ca⇣ 120 Adelaide Street West. Ste. 1600✓ Toronto , Ontario M5H 1T1✓ www.powerauthority.on.ca✓ P⇥ Please consider your environmental responsibility before printing this email.✓ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended⌧ recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender⌧ immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 4:48 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Importance: High⇢ Thanks but this isnt what I was looking for – completely my fault for lacking clarity.✓ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.✓ Sorry if there was confusion.✓ CM✓ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 4:24 PM⇢ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ 3589 Subject: RE: Rationale for GM Price - Web Posting⇢ Rooftop (10kW) Ground mounted with Fixed Ground Mounted tracking (10 kW) (10 kW) Cost to Install $92,000 $90,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.588/kWh $0.588/kWh Annual Revenue $9,100 $9,800 $6,700 Simple Payback 10 years 9 years 9 years As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.✓ I think if we compare the two that we would be able to further justify why the change was so important.✓ CM✓ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin✓ 3590 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3591 Jim MacDougall From: Jim MacDougall Sent: July-12-10 10:50 PM To: Kristin Jenkins Cc: Sarah Simmons; Jason Chee-Aloy Subject: RE: Rationale for GM Price - Web Posting Kristin⌥ We can easily get that data first thing tomorrow morning.⌥ I am confused as to what we are posting in response to our commitment to post something for furthering stakeholder understanding of the source of the 58.8 ...⌥ Can you give us instruction on what should go to whom and when\?⌥ Jim MacDougall, P.Eng.⌥ Manager, Distributed Generation⌥ Ontario Power Authority⌥ (416) 969 - 6415⌥ From: Ben Chin Sent: Mon 12/07/2010 5:45 PM To: 'MacLennan, Craig (MEI)'; Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting No problem, we ’ ll get you that⌥ Ben Chin⌥ Vice- President, Communications⌥ Ontario Power Authority⇣ T 416-969 -6007⇣ F 416-967 -1947⇣ ben.chin@powerauthority.on.ca⇣ 120 Adelaide Street West. Ste. 1600⌥ Toronto , Ontario M5H 1T1⌥ www.powerauthority.on.ca⌥ P⇥ Please consider your environmental responsibility before printing this email.⌥ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended⌧ recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender⌧ immediately and delete this e - mail message. 3592 From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 4:48 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Importance: High Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⌥ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⌥ Sorry if there was confusion.⌥ CM⌥ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 4:24 PM To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW) Cost to Install $92,000 $90,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.588/kWh $0.588/kWh Annual Revenue $9,100 $9,800 $6,700 Simple Payback 10 years 9 years 9 years Fixed Ground Mounted As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting 3593 Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⌥ I think if we compare the two that we would be able to further justify why the change was so important.⌥ CM⌥ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⌥ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3594 Jim MacDougall From: Jim MacDougall Sent: July-12-10 11:03 PM To: Kristin Jenkins; Sarah Simmons Subject: RE: Rationale for GM Price - Web Posting Attachments: image001.gif We simply need to run the price model and create a row with Return on Investment, which will be around 26% for ground mount fixed and with trackers. We can uipdate the table in the morning. Sarah, can you run the model to confirm the 26%?⌧ Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Kristin Jenkins↵ Sent: Mon 12/07/2010 5:00 PM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: FW: Rationale for GM Price - Web Posting↵ Do we have this info? Will call on Tues morning to discuss.⌧ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 4:48 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ Thanks but this isnt what I was looking for – completely my fault for lacking clarity. What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted. Sorry if there was confusion. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 4:24 PM↵ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with Fixed Ground Mounted tracking (10 kW) (10 kW) 3595 Cost to Install $92,000 $90,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.588/kWh $0.588/kWh Annual Revenue $9,100 $9,800 $6,700 Simple Payback 10 years 9 years 9 years As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⌧ Kristin Take The Power Pledge at www.powerpledge.ca" 3596 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 7:55 AM↵ To: 'MacLennan, Craig (MEI)'; Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin; Colin Andersen; Jim MacDougall; Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ That ’ s easy enough to calculate.⇣ @80.2c/kWh Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $90,000 $60,000↵ Capacity Factor 19% 13%↵ Annual Production 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.802/kWh↵ Annual Revenue $13,300 $9,100↵ Simple Payback 7 years 7 years↵ Sarah Simmons↵ Analyst⇣ Electricity Resources⇣ Ontario Power Authority⇣ 120 Adelaide St. W. Suite 1600⇣ Toronto , ON , M5H 1T1⇣ Tel 416.969.6213⇣ Fax 416.967.1947⇣ www.powerauthority.on.ca⇣ P please consider the environment before printing this email From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 4:48 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Importance: High⇢ Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇣ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇣ Sorry if there was confusion.⇣ CM⇣ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 4:24 PM⇢ 3597 To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇣ I think if we compare the two that we would be able to further justify why the change was so important.⇣ CM⇣ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⇣ 3598 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3599 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 9:05 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ So, with the following inputs, for a ground mounted system with tracking:⇡ $9000 / kW 19% CF 23% ROI The FIT Rate is calculated at 80.2c/kWh. J⇥ Therefore, we can say that the current rate is indicative of a 23% return on investment, for a gm with tracking. Likewise, for a non- tracking gm system: $6000 / kW 13% CF 24% ROI The FIT rate is calculated at 80.2 c/kWh.. So, a non - tracking GM at 80.2c/kWh would have a 24% ROI. …⇡ On a side note, I think people are struggling with the concept of return on investment. We assume 70/30 debt/equity share. So, on a $90,000 project, $27,000 is invested from personal savings.⇡ Therefore, the 11% return is paid the supplier on $27,000 … not the full $90,000. We assume that the remaining⇡ $63,000 is borrowed to the bank at a cost of 7%. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Jim MacDougall Sent: July 12, 2010 11:03 PM To: Kristin Jenkins; Sarah Simmons Subject: RE: Rationale for GM Price - Web Posting We simply need to run the price model and create a row with Return on Investment, which will be around 26% for ground mount fixed and with trackers. We can uipdate the table in the morning. Sarah, can you run the model to confirm the 26%?⇡ 3600 Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Kristin Jenkins Sent: Mon 12/07/2010 5:00 PM To: Sarah Simmons; Jim MacDougall Subject: FW: Rationale for GM Price - Web Posting Do we have this info? Will call on Tues morning to discuss.⇡ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 4:48 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Importance: High Thanks but this isnt what I was looking for – completely my fault for lacking clarity. What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted. Sorry if there was confusion. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 4:24 PM To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ Fixed Ground Mounted↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. 3601 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⇡ Kristin Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3602 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-13-10 9:14 AM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: RE: Rationale for GM Price - Web Posting↵ Previously we told MEI 25- 30% ROI for GM at 80.2? From: Sarah Simmons↵ Sent: July 13, 2010 9:05 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ So, with the following inputs, for a ground mounted system with tracking:⇡ $9000 / kW 19% CF 23% ROI The FIT Rate is calculated at 80.2c/kWh. J⇥ Therefore, we can say that the current rate is indicative of a 23% return on investment, for a gm with tracking. Likewise, for a non- tracking gm system: $6000 / kW 13% CF 24% ROI The FIT rate is calculated at 80.2 c/kWh.. So, a non - tracking GM at 80.2c/kWh would have a 24% ROI. …⇡ On a side note, I think people are struggling with the concept of return on investment. We assume 70/30 debt/equity share. So, on a $90,000 project, $27,000 is invested from personal savings.⇡ Therefore, the 11% return is paid the supplier on $27,000 … not the full $90,000. We assume that the remaining⇡ $63,000 is borrowed to the bank at a cost of 7%. Cheers, Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Jim MacDougall↵ 3603 Sent: July 12, 2010 11:03 PM↵ To: Kristin Jenkins; Sarah Simmons↵ Subject: RE: Rationale for GM Price - Web Posting↵ We simply need to run the price model and create a row with Return on Investment, which will be around 26% for ground mount fixed and with trackers. We can uipdate the table in the morning. Sarah, can you run the model to confirm the 26%?⇡ Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Kristin Jenkins↵ Sent: Mon 12/07/2010 5:00 PM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: FW: Rationale for GM Price - Web Posting↵ Do we have this info? Will call on Tues morning to discuss.⇡ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 4:48 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ Thanks but this isnt what I was looking for – completely my fault for lacking clarity. What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted. Sorry if there was confusion. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 4:24 PM↵ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ Fixed Ground Mounted↵ 3604 As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⇡ Kristin Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3605 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 9:16 AM↵ To: Jim MacDougall↵ Cc: Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do you know what the inputs were? When did we tell them that???... we may have moved on our assumptions a bit.⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 13, 2010 9:14 AM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: RE: Rationale for GM Price - Web Posting↵ Previously we told MEI 25- 30% ROI for GM at 80.2?⇡ From: Sarah Simmons↵ Sent: July 13, 2010 9:05 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ So, with the following inputs, for a ground mounted system with tracking:⇡ $9000 / kW⇡ 19% CF⇡ 23% ROI⇡ The FIT Rate is calculated at 80.2c/kWh.⇡ J⇥ Therefore, we can say that the current rate is indicative of a 23% return on investment, for a gm with tracking.⇡ Likewise, for a non- tracking gm system:⇡ $6000 / kW⇡ 13% CF⇡ 24% ROI⇡ The FIT rate is calculated at 80.2 c/kWh.. So, a non - tracking GM at 80.2c/kWh would have a 24% ROI.⇡ …⇡ 3606 On a side note, I think people are struggling with the concept of return on investment.⇡ We assume 70/30 debt/equity share. So, on a $90,000 project, $27,000 is invested from personal savings.⇡ Therefore, the 11% return is paid the supplier on $27,000 … not the full $90,000. We assume that the remaining⇡ $63,000 is borrowed to the bank at a cost of 7%.⇡ Cheers,⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email From: Jim MacDougall↵ Sent: July 12, 2010 11:03 PM↵ To: Kristin Jenkins; Sarah Simmons↵ Subject: RE: Rationale for GM Price - Web Posting↵ We simply need to run the price model and create a row with Return on Investment, which will be around 26% for⇡ ground mount fixed and with trackers.⇡ We can uipdate the table in the morning. Sarah, can you run the model to confirm the 26%?⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Kristin Jenkins↵ Sent: Mon 12/07/2010 5:00 PM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: FW: Rationale for GM Price - Web Posting↵ Do we have this info? Will call on Tues morning to discuss.⇡ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 4:48 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇡ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇡ Sorry if there was confusion.⇡ 3607 CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 4:24 PM↵ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇡ I think if we compare the two that we would be able to further justify why the change was so important.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ 3608 Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⇡ Kristin⇡ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3609 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-13-10 9:16 AM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: RE: Rationale for GM Price - Web Posting↵ Day of the announcement apparently and then I reconfirmed with Jim last week.⇡ From: Sarah Simmons↵ Sent: July 13, 2010 9:16 AM↵ To: Jim MacDougall↵ Cc: Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do you know what the inputs were? When did we tell them that???... we may have moved on our assumptions a bit.⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 13, 2010 9:14 AM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: RE: Rationale for GM Price - Web Posting↵ Previously we told MEI 25- 30% ROI for GM at 80.2?⇡ From: Sarah Simmons↵ Sent: July 13, 2010 9:05 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ So, with the following inputs, for a ground mounted system with tracking:⇡ $9000 / kW⇡ 19% CF⇡ 23% ROI⇡ The FIT Rate is calculated at 80.2c/kWh.⇡ J⇥ Therefore, we can say that the current rate is indicative of a 23% return on investment, for a gm with tracking.⇡ 3610 Likewise, for a non- tracking gm system:⇡ $6000 / kW⇡ 13% CF⇡ 24% ROI⇡ The FIT rate is calculated at 80.2 c/kWh.. So, a non - tracking GM at 80.2c/kWh would have a 24% ROI.⇡ …⇡ On a side note, I think people are struggling with the concept of return on investment.⇡ We assume 70/30 debt/equity share. So, on a $90,000 project, $27,000 is invested from personal savings.⇡ Therefore, the 11% return is paid the supplier on $27,000 … not the full $90,000. We assume that the remaining⇡ $63,000 is borrowed to the bank at a cost of 7%.⇡ Cheers,⇡ Sarah Simmons↵ Analyst⇡ Electricity Resources⇡ Ontario Power Authority⇡ 120 Adelaide St. W. Suite 1600⇡ Toronto , ON , M5H 1T1⇡ Tel 416.969.6213⇡ Fax 416.967.1947⇡ www.powerauthority.on.ca⇡ P please consider the environment before printing this email From: Jim MacDougall↵ Sent: July 12, 2010 11:03 PM↵ To: Kristin Jenkins; Sarah Simmons↵ Subject: RE: Rationale for GM Price - Web Posting↵ We simply need to run the price model and create a row with Return on Investment, which will be around 26% for⇡ ground mount fixed and with trackers.⇡ We can uipdate the table in the morning. Sarah, can you run the model to confirm the 26%?⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Kristin Jenkins↵ Sent: Mon 12/07/2010 5:00 PM↵ To: Sarah Simmons; Jim MacDougall↵ Subject: FW: Rationale for GM Price - Web Posting↵ Do we have this info? Will call on Tues morning to discuss.⇡ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 4:48 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ 3611 Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇡ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇡ Sorry if there was confusion.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 4:24 PM↵ To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇡ I think if we compare the two that we would be able to further justify why the change was so important.⇡ 3612 CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⇡ Kristin⇡ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3613 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-13-10 9:19 AM↵ To: Jim MacDougall↵ Cc: Sarah Simmons; Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Hi Jim. The text for the price rationale is not finalized. It should be this morning. Communications will coordinate with IT for the web posting. Ben would also like it to be emailed to microFIT applicants too. We will coordinate this with Sheri. I also circulated a longer document yesterday that covers a number of issues as well as the price rationale. Please provide comments on that. We would like to have that posted on the website tomorrow. Communications will also coordinate with IT on that posting.⇡ Kristin⇡ From: Jim MacDougall Sent: July 12, 2010 10:50 PM To: Kristin Jenkins Cc: Sarah Simmons; Jason Chee-Aloy Subject: RE: Rationale for GM Price - Web Posting Kristin⇡ We can easily get that data first thing tomorrow morning.⇡ I am confused as to what we are posting in response to our commitment to post something for furthering stakeholder understanding of the source of the 58.8 ...⇡ Can you give us instruction on what should go to whom and when\?⇡ Jim MacDougall, P.Eng.⇡ Manager, Distributed Generation⇡ Ontario Power Authority⇡ (416) 969 - 6415⇡ From: Ben Chin Sent: Mon 12/07/2010 5:45 PM To: 'MacLennan, Craig (MEI)'; Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting No problem, we ’ ll get you that⇡ Ben Chin⇡ Vice- President, Communications⇡ Ontario Power Authority⇣ T 416-969 -6007⇣ F 416-967 -1947⇣ ben.chin@powerauthority.on.ca⇣ 3614 120 Adelaide Street West. Ste. 1600⇡ Toronto , Ontario M5H 1T1⇡ www.powerauthority.on.ca⇡ P⇥ Please consider your environmental responsibility before printing this email.⇡ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended⌧ recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender⌧ immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 4:48 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Importance: High Thanks but this isnt what I was looking for – completely my fault for lacking clarity.⇡ What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted.⇡ Sorry if there was confusion.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 4:24 PM To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy Subject: RE: Rationale for GM Price - Web Posting Rooftop (10kW) Ground mounted with tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ Fixed Ground Mounted↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. 3615 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇡ I think if we compare the two that we would be able to further justify why the change was so important.⇡ CM⇡ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⇡ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3616 Jim MacDougall From: Jim MacDougall Sent: July-13-10 9:37 AM To: Sarah Simmons; Kristin Jenkins Subject: RE: Rationale for GM Price - Web Posting Let ’ s drop the reference to “ Simple Payback ” .⇠ We assume 70/30 debt/equity project investment. Assumptions for ground mount tracking as an example: $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we⇠ target at 11% return on investment or return on equity⇠ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⇠ Electricity Resources⇠ Ontario Power Authority⇠ 120 Adelaide St W, Suite 1600⇠ Toronto , ON M5H 1T1 , Canada⇠ tel 416.969.6415⇠ Rooftop (10kW) Ground mounted with Fixed Ground Mounted tracking (10 kW) (10 kW) Cost to Install $92,000 $85,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.802/kWh $0.802/kWh Annual Revenue $9,100 $9,800 $6,700 Return on Investment 11% 26% 25.5% As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca✓ 3617 This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]⇢ Sent: July 12, 2010 1:02 PM⇢ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: RE: Rationale for GM Price - Web Posting⇢ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⇠ I think if we compare the two that we would be able to further justify why the change was so important.⇠ CM⇠ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 12, 2010 12:41 PM⇢ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin ; Colin Andersen⇢ Subject: Rationale for GM Price - Web Posting⇢ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⇠ Take The Power Pledge at www.powerpledge.ca✓ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3618 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 9:51 AM↵ To: Kristin Jenkins; Jim MacDougall↵ Cc: Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Attachments: Ground-Mounted Web Posting_ss.doc↵ Kristin, Here are my comments to the doc. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 13, 2010 9:19 AM↵ To: Jim MacDougall↵ Cc: Sarah Simmons; Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Hi Jim. The text for the price rationale is not finalized. It should be this morning. Communications will coordinate with IT for the web posting. Ben would also like it to be emailed to microFIT applicants too. We will coordinate this with Sheri. I also circulated a longer document yesterday that covers a number of issues as well as the price rationale. Please provide comments on that. We would like to have that posted on the website tomorrow. Communications will also coordinate with IT on that posting. Kristin From: Jim MacDougall↵ Sent: July 12, 2010 10:50 PM↵ To: Kristin Jenkins↵ Cc: Sarah Simmons; Jason Chee-Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Kristin We can easily get that data first thing tomorrow morning. I am confused as to what we are posting in response to our commitment to post something for furthering stakeholder understanding of the source of the 58.8 ... 3619 Can you give us instruction on what should go to whom and when\? Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Ben Chin↵ Sent: Mon 12/07/2010 5:45 PM↵ To: 'MacLennan, Craig (MEI)'; Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ No problem, we ’ ll get you that Ben Chin Vice- President, Communications Ontario Power Authority↵ T 416-969 -6007↵ F 416-967 -1947↵ ben.chin@powerauthority.on.ca↵ 120 Adelaide Street West. Ste. 1600 Toronto , Ontario M5H 1T1 www.powerauthority.on.ca P⇥ Please consider your environmental responsibility before printing this email. This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended⌧ recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender⌧ immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 4:48 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ Thanks but this isnt what I was looking for – completely my fault for lacking clarity. What I am looking for is what the numbers (payback etc) would be if we left the price at 80.2 for ground mounted with tracking and fixed ground mounted. Sorry if there was confusion. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 4:24 PM↵ 3620 To: MacLennan, Craig (MEI); Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen; Sarah Simmons; Jim MacDougall; Jason Chee- Aloy↵ Subject: RE: Rationale for GM Price - Web Posting↵ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $90,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.588/kWh $0.588/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Simple Payback 10 years 9 years 9 years↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin 3621 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3622 1) How did OPA come up with the 58.8 cents/kWh for ground-mounted solar PV projects? FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to the⇠ developer which is roughly 11% return on investment over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and maintenance costs, financing costs, and expected electricity production over the life of the project. A 70/30⇠ debt/equity split was assumed and debt borrowing costs were assumed at 7%. As an example, if a⇠ project costs $90,000 we assume that $63,000 is borrowed from the bank at a cost of 7%. Therefore, we⇠ assume that suppliers will receive an 11% return on $27,000 that was invested from private equity. Projects can come in many different configurations. Project costs and capacity factor, that is the⇠ amount of energy a project produces, are BOTH key elements in determining a project’s rate of return. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher upfront⇠ capital costs but produce more energy (higher capacity factor) and therefore generate more revenue.⇠ At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a rate of return⇠ that is comparable to roof-top solar projects as well as other FIT projects. Ground-mounted projects without tracking systems have lower capital costs but also generate less⇠ energy and therefore less revenue. In this case, the lower upfront cost offsets the lower revenue, still⇠ enabling a reasonable rate of return from the same 58.8 cents/kWh FIT rate. It is the costs of these⇠ projects in particular which have come down relative to rooftop installations since the program was⇠ introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA is⇠ conducting a 30 day consultation period on the new pricing category and invite proponents to submit⇠ feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $90,000 19% 16,600 kWh $9,800 9 years Fixed - No Tracking (10 kW) $60,000 13% 11,300 kWh $6,700 9 years 2) Why can’t there be a different rate of return for different solar technologies within the microFIT⇢ program? The rate of return on investment must be consistent across the entire program to be fair to ratepayers⇠ and to developers. At the new proposed price, ground-mounted developers can expect a return on⇠ investment of about 11% which is consistent with what rooftop solar developers and other FIT⇠ developers will receive. 3505be54afdb4ca7b15d58bcbad577d8 3623 2 3) Why didn’t you lower the tariff for both rooftop and ground-mounted solar PV projects rather than5 severely reducing one category? This is a standard offer program and the rate of return on investment must be consistent across the⇠ entire program to be fair to ratepayers and to developers. Multiple differentiators and/or categories⇠ based on specific individual circumstances challenge both the concept of a standard offer and the⇠ viability of the program to efficiently and effectively procure electricity on behalf of ratepayers at a⇠ reasonable price. 4) How does the OPA differentiate between a rooftop and a ground-mounted solar PV project? The definition of a rooftop project is included in the microFIT Program Rules, number 53. The definition⇠ has been updated to make it clear that a structure must not exist primarily for the purpose of supporting⇠ a solar PV project. It must be an existing, permanent structure with a primary use that is independent of⇠ the microFIT project. 5) Why didn’t the OPA set the price for ground-mounted solar PV installations lower than rooftop5 projects when the microFIT program was launched? Based on consultations and stakeholder feedback when designing the FIT program, OPA assumed that⇠ the majority of solar microFIT projects would be rooftop installations and that a very small minority⇠ would be ground-mounted. This is a new program, a first in North America; as with any new program,⇠ sometimes adjustments are needed. As it has turned out, most of the 16,000 microFIT applications were submitted prior to July 2, 2010, and the large majority of those projects are for ground-mounted⇠ projects. The new price category has been created to ensure that ground-mount developers receive the⇠ same reasonable rate of return as other FIT developers. 6) If I re-submit my ground-mount microFIT application now and the proposed price of 58.85 cents/kWh increases after the 30-day comment period ends will I be stuck with the 58.8 cents? No, the price that you will receive will be the price that is finalized after the 30-day comment period⇠ ends. Re-submitting your application now means that you are willing to build your project on under the⇠ new rules and the proposed new price. 7) Why won’t the Ontario Power Authority “grandfather” all existing applications up to the⇢ announcement of the new proposed price category at the original price of 80.2¢/kWh? The response to the microFIT program far exceeded our expectations and planning. More than 16,000⇠ applications were submitted, with a large majority for ground-mounted solar projects. The original⇠ prices were set following extensive consultation with stakeholders about what was needed to motivate⇠ development and provide fair compensation for investments in small projects. We have an obligation to⇠ ensure good value for ratepayers and promote the long-term sustainability of the program by paying⇠ rates that are fair and reasonable. Developers determine when they will proceed to make commitments with suppliers and investments in⇠ equipment, just as they determine which type of project they will pursue. As is clear from the formal⇠ program documents, applicants must receive a conditional offer and subsequently execute a contract⇠ before the enrolment process is complete. All microFIT conditional contract offers and signed contracts⇠ are being honoured. All microFIT conditional contract offers and signed contracts at the new proposed⇠ price will be honoured after the comment period has ended on August 3rd and a decision is finalized. 3505be54afdb4ca7b15d58bcbad577d8 3624 3 8) Will you extend the domestic content requirements for 2010 into 2011 for ground-mounted solar5 PV applicants? No, there are no plans at this time to extend the 2010 domestic content deadline into 2011. 9) Will the tariff for rooftop solar PV microFIT projects remain at 80.2¢/kWh? There is no plan at this time to change the price for rooftop solar projects. As set out in the microFIT⇠ Program Rules, we anticipate undertaking a two-year review of the program and prices in 2011. 10) How long will it take to process the ground-mount applications following the 30-day comment5 period? We will process all outstanding applications as soon as possible following the 30-day comment period⇠ (ending August 3rd). During this consultation process, we will be working with all applicants to confirm⇠ their interest in pursuing their projects. At the very least, we will uphold what has been stated on the⇠ microFIT website: If your original application was submitted before March 31, 2010, you can expect to⇠ hear back from us by August. If you submitted your original application by May 31, it will be processed⇠ by September. 11) What is the purpose of the 30-day comment period? We believe there is value in engaging in an honest dialogue directly with applicants and interested⇠ parties about the new price category. We also know from past stakeholder interaction that we will gain⇠ insightful feedback that could be useful to our program management in the future. We welcome that⇠ input and we plan to learn from it. Applicants to the microFIT program are encouraged to share⇠ information during the comment period (ending August 3, 2010) and to advise the OPA of material facts⇠ related to the cost of ground-mounted solar PV projects. Details on how to do so are provided in the⇠ introduction to this FAQ. 12) Will you host another webinar after you receive information from developers about groundmounted solar PV? We are receptive to hosting another webinar but have not yet set a date or time to do so. If this occurs,⇠ further details will be shared through this website when available. 3505be54afdb4ca7b15d58bcbad577d8 3625 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-13-10 10:26 AM↵ To: Jim MacDougall; Sarah Simmons↵ Cc: Ben Chin↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ I just notice that the cost to install in this table was revised to 85K but in table Sarah sent today for GM at 80.2 cents its back to 90K. Can you please confirm correct number and recalculate which ever table needs to be⌧ changed and resend to me? Thanks.⌧ From: Jim MacDougall Sent: July 13, 2010 9:37 AM To: Sarah Simmons; Kristin Jenkins Subject: RE: Rationale for GM Price - Web Posting Let ’ s drop the reference to “ Simple Payback ” .$ We assume 70/30 debt/equity project investment.⌧ Assumptions for ground mount tracking as an example:⌧ $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we$ target at 11% return on investment or return on equity$ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program$ Electricity Resources$ Ontario Power Authority$ 120 Adelaide St W, Suite 1600$ Toronto , ON M5H 1T1 , Canada$ tel 416.969.6415$ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $85,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.802/kWh $0.802/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Return on Investment 11% 26% 25.5%↵ 3626 As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.$ I think if we compare the two that we would be able to further justify why the change was so important.$ CM$ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants).⌧ Kristin$ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3627 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 10:29 AM↵ To: Kristin Jenkins; Jim MacDougall↵ Cc: Ben Chin↵ Subject: RE: Rationale for GM Price - Web Posting↵ Jim and I are just working on which scenario should be presented in this table. Really, there is a range of values and scenarios, both cost and capacity factors.◆ We ’ ll put our heads together and come up with the best approach.◆ Sarah Simmons↵ Analyst◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St. W. Suite 1600◆ Toronto , ON , M5H 1T1◆ Tel 416.969.6213◆ Fax 416.967.1947◆ www.powerauthority.on.ca◆ P please consider the environment before printing this email From: Kristin Jenkins↵ Sent: July 13, 2010 10:26 AM↵ To: Jim MacDougall; Sarah Simmons↵ Cc: Ben Chin↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ I just notice that the cost to install in this table was revised to 85K but in table Sarah sent today for GM at 80.2 cents its back to 90K. Can you please confirm correct number and recalculate which ever table needs to be changed and resend to me? Thanks. From: Jim MacDougall↵ Sent: July 13, 2010 9:37 AM↵ To: Sarah Simmons; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ Let ’ s drop the reference to “ Simple Payback ” .◆ We assume 70/30 debt/equity project investment. Assumptions for ground mount tracking as an example: $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we◆ 3628 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we◆ target at 11% return on investment or return on equity◆ Jim MacDougall , P.Eng. Manager, Feed - In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $85,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.802/kWh $0.802/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Return on Investment 11% 26% 25.5%↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.◆ I think if we compare the two that we would be able to further justify why the change was so important.◆ CM◆ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ 3629 Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin◆ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3630 Jim MacDougall From: Jim MacDougall Sent: July-13-10 10:55 AM To: Sarah Simmons Subject: RE: Rationale for GM Price - Web Posting Can you modify things back to $90k?⌫ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St W, Suite 1600⌫ Toronto , ON M5H 1T1 , Canada⌫ tel 416.969.6415⌫ From: Sarah Simmons↵ Sent: July 13, 2010 10:29 AM↵ To: Kristin Jenkins; Jim MacDougall↵ Cc: Ben Chin↵ Subject: RE: Rationale for GM Price - Web Posting↵ Jim and I are just working on which scenario should be presented in this table. Really, there is a range of values and scenarios, both cost and capacity factors.⌫ We ’ ll put our heads together and come up with the best approach.⌫ Sarah Simmons↵ Analyst⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St. W. Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 416.969.6213⌫ Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ P please consider the environment before printing this email✓ From: Kristin Jenkins↵ Sent: July 13, 2010 10:26 AM↵ To: Jim MacDougall; Sarah Simmons↵ Cc: Ben Chin↵ Subject: RE: Rationale for GM Price - Web Posting↵ Importance: High↵ I just notice that the cost to install in this table was revised to 85K but in table Sarah sent today for GM at 80.2 cents its back to 90K. Can you please confirm correct number and recalculate which ever table needs to be changed and resend to me? Thanks. From: Jim MacDougall↵ 3631 Sent: July 13, 2010 9:37 AM↵ To: Sarah Simmons; Kristin Jenkins↵ Subject: RE: Rationale for GM Price - Web Posting↵ Let ’ s drop the reference to “ Simple Payback ” .⌫ We assume 70/30 debt/equity project investment. Assumptions for ground mount tracking as an example: $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we⌫ target at 11% return on investment or return on equity⌫ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St W, Suite 1600⌫ Toronto , ON M5H 1T1 , Canada⌫ tel 416.969.6415⌫ Rooftop (10kW) Ground mounted with Fixed Ground Mounted tracking (10 kW) (10 kW) Cost to Install $92,000 $85,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.802/kWh $0.802/kWh Annual Revenue $9,100 $9,800 $6,700 Return on Investment 11% 26% 25.5% As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3632 From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca]↵ Sent: July 12, 2010 1:02 PM↵ To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: RE: Rationale for GM Price - Web Posting↵ Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8.⌫ I think if we compare the two that we would be able to further justify why the change was so important.⌫ CM⌫ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]↵ Sent: July 12, 2010 12:41 PM↵ To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI)↵ Cc: Ben Chin ; Colin Andersen↵ Subject: Rationale for GM Price - Web Posting↵ Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin⌫ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3633 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-13-10 11:09 AM↵ To: Kristin Jenkins↵ Cc: Jim MacDougall↵ Subject: RE: Rationale for GM Price - Web Posting↵ @$0.802/kWh Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $90,000 $60,000↵ Capacity Factor 19% 13%↵ Annual Production 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.802/kWh↵ Annual Revenue $13,300 $9,100↵ Return on Investment 23% 24%↵ Here ’ s were we landed. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Jim MacDougall Sent: July 13, 2010 10:55 AM To: Sarah Simmons Subject: RE: Rationale for GM Price - Web Posting Can you modify things back to $90k? Jim MacDougall , P.Eng. Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 From: Sarah Simmons Sent: July 13, 2010 10:29 AM To: Kristin Jenkins; Jim MacDougall Cc: Ben Chin Subject: RE: Rationale for GM Price - Web Posting 3634 Jim and I are just working on which scenario should be presented in this table. Really, there is a range of values and scenarios, both cost and capacity factors. We ’ ll put our heads together and come up with the best approach. Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email From: Kristin Jenkins Sent: July 13, 2010 10:26 AM To: Jim MacDougall; Sarah Simmons Cc: Ben Chin Subject: RE: Rationale for GM Price - Web Posting Importance: High I just notice that the cost to install in this table was revised to 85K but in table Sarah sent today for GM at 80.2 cents its back to 90K. Can you please confirm correct number and recalculate which ever table needs to be changed and resend to me? Thanks. From: Jim MacDougall Sent: July 13, 2010 9:37 AM To: Sarah Simmons; Kristin Jenkins Subject: RE: Rationale for GM Price - Web Posting Let ’ s drop the reference to “ Simple Payback ” . We assume 70/30 debt/equity project investment. Assumptions for ground mount tracking as an example: $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we target at 11% return on investment or return on equity Jim MacDougall , P.Eng. Manager, Feed - In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto , ON M5H 1T1 , Canada tel 416.969.6415 3635 Rooftop (10kW) Ground mounted with Fixed Ground Mounted↵ tracking (10 kW) (10 kW)↵ Cost to Install $92,000 $85,000 $60,000↵ Capacity Factor 13% 19% 13%↵ Annual Production 11,300 kWh 16,600 kWh 11,300 kWh↵ FIT price $0.802/kWh $0.802/kWh $0.802/kWh↵ Annual Revenue $9,100 $9,800 $6,700↵ Return on Investment 11% 26% 25.5%↵ As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin ; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground- mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin 3636 Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3637 Kristin Jenkins↵ From: Kristin Jenkins Sent: July-13-10 11:16 AM To: Sarah Simmons Cc: Jim MacDougall Subject: Re: Rationale for GM Price - Web Posting Thanks! -----Original Message----From: Sarah Simmons To: Kristin Jenkins CC: Jim MacDougall Sent: Tue Jul 13 11:08:57 2010 Subject: RE: Rationale for GM Price - Web Posting @$0.802/kWh Ground mounted with tracking (10 kW) Fixed Ground Mounted (10 kW) Cost to Install $90,000 $60,000 Capacity Factor 19% 13% Annual Production 16,600 kWh 11,300 kWh FIT price 3638 $0.802/kWh $0.802/kWh Annual Revenue $13,300 $9,100 Return on Investment 23% 24% Here's were we landed. Sarah Simmons Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email 3639 ________________________________ From: Jim MacDougall Sent: July 13, 2010 10:55 AM To: Sarah Simmons Subject: RE: Rationale for GM Price - Web Posting Can you modify things back to $90k? Jim MacDougall, P.Eng. Manager, Feed-In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ________________________________ From: Sarah Simmons Sent: July 13, 2010 10:29 AM To: Kristin Jenkins; Jim MacDougall Cc: Ben Chin Subject: RE: Rationale for GM Price - Web Posting Jim and I are just working on which scenario should be presented in this table. Really, there is a range of values and scenarios, both cost and capacity factors. We'll put our heads together and come up with the best approach. Sarah Simmons 3640 Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto, ON, M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email ________________________________ From: Kristin Jenkins Sent: July 13, 2010 10:26 AM To: Jim MacDougall; Sarah Simmons Cc: Ben Chin Subject: RE: Rationale for GM Price - Web Posting Importance: High I just notice that the cost to install in this table was revised to 85K but in table Sarah sent today for GM at 80.2 cents its back to 90K. Can you please confirm correct number and recalculate which ever table needs to be changed and resend to me? Thanks. ________________________________ From: Jim MacDougall Sent: July 13, 2010 9:37 AM To: Sarah Simmons; Kristin Jenkins Subject: RE: Rationale for GM Price - Web Posting Let's drop the reference to “ Simple Payback ” . 3641 We assume 70/30 debt/equity project investment. Assumptions for ground mount tracking as an example: $85,000 project cost 70% of the cost or $59,500 is project debt borrowed from the bank at 7% interest 30% of the cost or $25,500 is equity invested from personal savings earning the Return on Investment which we target at 11% return on investment or return on equity Jim MacDougall, P.Eng. Manager, Feed-In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ________________________________ Rooftop (10kW) Ground mounted with tracking (10 kW) 3642 Fixed Ground Mounted (10 kW) Cost to Install $92,000 $85,000 $60,000 Capacity Factor 13% 19% 13% Annual Production 11,300 kWh 16,600 kWh 11,300 kWh FIT price $0.802/kWh $0.802/kWh $0.802/kWh Annual Revenue $9,100 $9,800 $6,700 Return on Investment 3643 11% 26% 25.5% As requested, here is the comparison with the rooftop. And, yes, for internal use, not for posting on the website. Take The Power Pledge at www.powerpledge.ca This e-mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e-mail message. ________________________________ From: MacLennan, Craig (MEI) [mailto:Craig.MacLennan@ontario.ca] Sent: July 12, 2010 1:02 PM To: Kristin Jenkins; Johnston, Alicia (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: RE: Rationale for GM Price - Web Posting 3644 Do we have a chart or explanation of what it used to be as a comparison to contrast the 80.2 cent decision from the 58.8. I think if we compare the two that we would be able to further justify why the change was so important. CM ________________________________ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca] Sent: July 12, 2010 12:41 PM To: Johnston, Alicia (MEI); MacLennan, Craig (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Colin Andersen Subject: Rationale for GM Price - Web Posting Attached for you to take a look at and comment on is the price rationale for ground-mount that we would like to post on the OPA website as soon as possible (and we will email to microFIT applicants). Kristin Take The Power Pledge at www.powerpledge.ca This e-mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e-mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e-mail message. 3645 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-13-10 11:40 AM↵ To: 'MacLennan, Craig (MEI)'; 'Tang, Amy (MEI)'; Ungerman, Paul (MEI)↵ Cc: Ben Chin; Jim MacDougall; Sarah Simmons; Mary Bernard↵ Subject: Rationale for GM Price↵ Attachments: Rationale for GM Price - 07-12-10.doc↵ Attached is the updated document with the two price tables - one at 80.2 cents and the other 58.8 cents. Please◆ let me know if you have any further comments. Once approved we will post on OPA website and email to microFIT applicants. Thanks.◆ Kristin 3646 Rationale for new Ground-Mount FIT Price Category FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⌫ the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⌫ maintenance costs, financing costs, and expected electricity production over the life of the⌫ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⌫ amount of energy a project produces, are BOTH key elements in determining a project’s rate of✓ return. Ground-mounted projects generally have higher upfront capital costs and generate more⌫ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⌫ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with the same rate of return that rooftop generators receive at 80.2⌫ cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⌫ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⌫ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⌫ results in a rate of return that is comparable to rooftop solar projects as well as other FIT⌫ projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⌫ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⌫ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⌫ costs of these projects in particular which have come down relative to rooftop installations since⌫ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⌫ is conducting a 30 day consultation period on the new price category and invites proponents to⌫ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $9,800 9 years 11% Fixed - No Tracking (10 kW) $60,000 13% 11,300 kWh $6,700 9 years 11% 3647 Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3648 Tang, Amy (MEI)✏ From: Tang, Amy (MEI)✏ Sent: July-13-10 5:35 PM✏ To: Kristin Jenkins; MacLennan, Craig (MEI); Ungerman, Paul (MEI)✏ Cc: Ben Chin; Jim MacDougall; Sarah Simmons; Mary Bernard✏ Subject: RE: Rationale for GM Price✏ Attachments: Rationale for GM Price - 07-12-10 (9).doc✏ Importance: High✏ Kristen – here is the rationale. Added the highlighted section at the top per PO ’ s feedback.⇠ I think this is good to go.✏ Amy Tang amy.tang@ontario.ca (o) 416 - 327 - 6747 From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 13, 2010 11:40 AM⇢ To: MacLennan, Craig (MEI); Tang, Amy (MEI); Ungerman, Paul (MEI)⇢ Cc: Ben Chin; Jim MacDougall; Sarah Simmons; Mary Bernard⇢ Subject: Rationale for GM Price⇢ Attached is the updated document with the two price tables - one at 80.2 cents and the other 58.8 cents. Please✏ let me know if you have any further comments. Once approved we will post on OPA website and email to microFIT⇠ applicants. Thanks.✏ Kristin⇠ Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3649 Rationale for new Ground⇣ -Mount FIT Price Category⇣ Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ program that was highlighted because of the unexpected popularity of ground⇡ -mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure⇡ the program remains sustainable and electricity ratepayers – Ontario families – receive good⇡ value for new renewable energy. FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⇡ the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⇡ maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⇡ amount of energy a project produces, are BOTH key elements in determining a project’s rate of↵ return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with the same rate of return that rooftop generators receive at 80.2⇡ cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return that is comparable to rooftop solar projects as well as other FIT⇡ projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⇡ costs of these projects in particular which have come down relative to rooftop installations since⇡ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⇡ is conducting a 30 day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Tracking (10 kW) $⇡ 90,000 19% Fixed - No Tracking (10 kW) $60,000⇡ 13% 3650 Annual Production Annual Revenue Simple Payback Return on Investment 16,600 kWh $9,800 9 years 11% 11,300 kWh $6,700 9 years 11% Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3651 Kristin Jenkins↵ From: Kristin Jenkins Sent: July-13-10 5:55 PM To: Sarah Simmons; Jim MacDougall; Ben Chin Subject: Fw: Rationale for GM Price Attachments: Rationale for GM Price - 07-12-10 (9).doc; image001.gif Importance: High Will change where needed to return on investment etc. ----- Original Message ----From: Tang, Amy (MEI) To: Kristin Jenkins; MacLennan, Craig (MEI) ; Ungerman, Paul (MEI) CC: Ben Chin; Jim MacDougall; Sarah Simmons; Mary Bernard Sent: Tue Jul 13 17:34:47 2010 Subject: RE: Rationale for GM Price <> Kristen – here is the rationale. Added the highlighted section at the top per PO ’ s feedback. I think this is good to go.✏ Amy Tang amy.tang@ontario.ca (o) 416 - 327 - 6747 _________________________ _____ __ From: Kristin Jenkins [ mailto:Kristin.Jenkins@powerauthority.on.ca ] Sent: July 13, 2010 11:40 AM To: MacLennan, Craig (MEI); Tang, Amy (MEI); Ungerman, Paul (MEI) Cc: Ben Chin; Jim MacDougall; Sarah Simmons; Mary Bernard Subject: Rationale for GM Price Attached is the updated document with the two price tables - one at 80.2 cents and the other 58.8 cents. Please let me✏ know if you have any further comments. Once approved we will post on OPA website and email to microFIT applicants.✏ Tha <> nks. 3652 Kristin < http://www.powerpledge.ca> Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3653 Rationale for new Ground⇣ -Mount FIT Price Category⇣ Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ program that was highlighted because of the unexpected popularity of ground⇡ -mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure⇡ the program remains sustainable and electricity ratepayers – Ontario families – receive good⇡ value for new renewable energy. FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⇡ the developer which is roughly 11% per year over the 20 years of the FIT contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⇡ maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor, that is the⇡ amount of energy a project produces, are BOTH key elements in determining a project’s rate of↵ return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with the same rate of return that rooftop generators receive at 80.2⇡ cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return that is comparable to rooftop solar projects as well as other FIT⇡ projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⇡ costs of these projects in particular which have come down relative to rooftop installations since⇡ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⇡ is conducting a 30 day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Tracking (10 kW) $⇡ 90,000 19% Fixed - No Tracking (10 kW) $60,000⇡ 13% 3654 Annual Production Annual Revenue Simple Payback Return on Investment 16,600 kWh $9,800 9 years 11% 11,300 kWh $6,700 9 years 11% Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3655 Kristin Jenkins↵ From: Kristin Jenkins Sent: July-13-10 11:16 PM To: Claire Willison; Glenna Ford; Sheri Bizarro Cc: Ben Chin; Colin Andersen; JoAnne Butler; Jason Chee-Aloy; Jim MacDougall; Sarah Simmons; Mary Bernard; Tim Butters; Mark Dodick; Luisa Da Rocha; Cindy Roks Subject: Fw: Rationale for Ground-Mount Price Attachments: Rationale for GM Price 07-14-10.doc See below. ----- Original Message ----From: Kristin Jenkins To: Kristin Jenkins Sent: Tue Jul 13 23:12:17 2010 Subject: Rationale for Ground - Mount Price <> Claire, Glenna, Sheri Attached is the final text for the rationale for the new ground - mount price. Claire, please send to FIT stakeholder database. Sheri, please coordinate sending to microFIT applicants like we did with the original announcement of the price change. Glenna, please coordinate with IT to get it posted on the microFIT website. Let me know if you need more information. Thanks. Kristin 3656 Rationale for New Ground⌘ -Mount FIT Price Category⌘ Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ program that was highlighted because of the unexpected popularity of ground⇡ -mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure⇡ the program remains sustainable and electricity ratepayers – Ontario families – receive good⇡ value for new renewable energy. FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⇡ the developer which is roughly an 11% return on investment over the 20 years of the FIT⇡ contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⇡ maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor - that is⇡ the amount of energy a project produces - are BOTH key elements in determining a project’s⌘ rate of return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with a comparable return on investment that rooftop generators receive at⇡ 80.2 cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return on investment that is comparable to rooftop solar projects as well as⇡ other FIT projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⇡ costs of these projects in particular which have come down relative to rooftop installations since⇡ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⇡ is conducting a 30 day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Tracking (10 kW) $90,000⇡ 19% Fixed - No Tracking (10 kW) $60,000⇡ 13% 3657 Annual Production Annual Revenue Simple Payback Return on Investment 16,600 kWh $9,800 9 years 11% 11,300 kWh $6,700 9 years 11% Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3658 Claire Willison From: Claire Willison Sent: July-14-10 9:53 AM To: Glenna Ford; Sheri Bizarro Cc: Kristin Jenkins; Luisa Da Rocha; Cindy Roks; webmaster Subject: Ground Mount Rationale notification Glenna / Sheri, Per Kristen ’ s email and the attachment, Rationale for New Ground- Mount FIT Price Category, please advise once this rationale has been posted on the microFIT website. At that time I will send the following message to my FIT/microFIT stakeholder lists and also have Connie send it to the self- subscribed FIT/microFIT list. The proposed text of the notification I send will be: “ The Ontario Power Authority has posted on the microFIT website the “ Rationale for New Ground- Mount FIT Price Category ” at the following link: XXXX The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010. ”⇧ Please advise if you have any changes to the proposed text. Connie: I have to put in the full link for my email; your text will be: “ The Ontario Power Authority has posted on the microFIT website the “ Rationale for New Ground- Mount FIT Price Category. ” To see the rationale document, click here. The new price category levels the playing field with other FIT⇧ and microFIT categories. The OPA is conducting a 30 - day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010. ”⇧ Claire Willison Program Response Analyst/Coordinator Corporate Communications Direct: 416- 969 - 6080 Fax: 416- 967 - 1947 claire.willison@powerauthority.on.ca www.powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 3659 Glenna Ford↵ From: Glenna Ford& Sent: July-14-10 10:07 AM& To: Claire Willison; Sheri Bizarro& Cc: Kristin Jenkins; Luisa Da Rocha; Cindy Roks; webmaster& Subject: RE: Ground Mount Rationale notification& Attachments: Rationale for GM Price 07-14-10-1.doc& I have asked IT to do this and will let you know. I included reference to microFIT in the text as I think just referencing FIT on the microFIT website may confuse people. Attached is what I've sent. ----- Original Message ----From: Claire Willison& Sent: Wed 7/14/2010 9:53 AM& To: Glenna Ford; Sheri Bizarro& Cc: Kristin Jenkins; Luisa Da Rocha; Cindy Roks; webmaster& Subject: Ground Mount Rationale notification& Glenna / Sheri,& Per Kristen's email and the attachment, Rationale for New Ground - Mount FIT Price Category, please advise once this rationale has been posted on the microFIT website. At that time I will send the following message to my FIT/microFIT stakeholder lists and also have Connie send it to the self - subscribed FIT/microFIT list.& The proposed text of the notification I send will be:& "The Ontario Power Authority has posted on the microFIT website the "Rationale for New Ground - Mount FIT Price Category" at the following link: XXXX& The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30 - day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010."& Please advise if you have any changes to the proposed text.& Connie: I have to put in the full link for my email; your text will be:& 3660 "The Ontario Power Authority has posted on the microFIT website the "Rationale for New Ground - Mount FIT Price Category." To see the rationale document, click here. The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30 - day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010."& Claire Willison& Program Response Analyst/Coordinator& Corporate Communications& Direct: 416 - 969 - 6080& Fax: 416 - 967 - 1947& claire.willison@powerauthority.on.ca& www.powerauthority.on.ca& Ontario Power Authority& 120 Adelaide Street West, Suite 1600& Toronto, ON M5H 1T1 3661 Rationale for New Ground-Mount microFIT and FIT Program Price Category Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ programs that was highlighted because of the unexpected popularity of ground-mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure the⇡ program remains sustainable and electricity ratepayers – Ontario families – receive good value⇡ for new renewable energy. FIT and microFIT Program rates for all project types are set to cover costs plus provide a⇡ reasonable rate of return to the developer which is roughly an 11 percent return on investment⇡ over the 20 years of the project contract. In setting FIT and microFIT rates, OPA took into account typical project capital costs, operating⇡ and maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7 percent. Projects can come in many different configurations. Project costs and capacity factor - that is the⇡ amount of energy a project produces - are BOTH key elements in determining a project’s rate of⇢ return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with a comparable return on investment that rooftop generators receive at⇡ 80.2 cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return on investment that is comparable to rooftop solar projects as well as⇡ other FIT projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent rate. It is the costs of⇡ these projects in particular that have come down relative to rooftop installations since the⇡ program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other program categories. The OPA is⇡ conducting a 30-day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Tracking (10 kW) Fixed - No Tracking (10 kW) 3662 Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment $90,000 19% 16,600 kWh $9,800 9 years 11% $60,000 13% 11,300 kWh $6,700 9 years 11% Tracking (10 kW) Fixed – No Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% $60,000 13% 11,300 kWh $9,100 7 years 24% 3663 Kristin Jenkins↵ From: Kristin Jenkins Sent: July-14-10 10:10 AM To: Glenna Ford; Claire Willison; Sheri Bizarro Cc: Luisa Da Rocha; Cindy Roks; webmaster Subject: Re: Ground Mount Rationale notification Good point ----- Original Message ----From: Glenna Ford To: Claire Willison; Sheri Bizarro CC: Kristin Jenkins; Luisa Da Rocha; Cindy Roks; webmaster Sent: Wed Jul 14 10:06:57 2010 Subject: RE: Ground Mount Rationale notification I have asked IT to do this and will let you know. I included reference to microFIT in the text as I think just referencing FIT on the microFIT website may confuse people. Attached is what I've sent. ----- Original Message ----From: Claire Willison Sent: Wed 7/14/2010 9:53 AM To: Glenna Ford; Sheri Bizarro Cc: Kristin Jenkins; Luisa Da Rocha; Cindy Roks; webmaster Subject: Ground Mount Rationale notification Glenna / Sheri, Per Kristen's email and the attachment, Rationale for New Ground - Mount FIT Price Category, please advise once this rationale has been posted on the microFIT website. At that time I will send the following message to my FIT/microFIT stakeholder lists and also have Connie send it to the self - subscribed FIT/microFIT list. The proposed text of the notification I send will be: "The Ontario Power Authority has posted on the microFIT website the "Rationale for New Ground - Mount FIT Price Category" at the following link: XXXX The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30 - day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010." 3664 Please advise if you have any changes to the proposed text. Connie: I have to put in the full link for my email; your text will be: "The Ontario Power Authority has posted on the microFIT website the "Rationale for New Ground - Mount FIT Price Category." To see the rationale document, click here. The new price category levels the playing field with other FIT and microFIT categories. The OPA is conducting a 30 - day consultation period on the new price category and invites proponents to submit feedback by August 3, 2010." Claire Willison Program Response Analyst/Coordinator Corporate Communications Direct: 416 - 969 - 6080 Fax: 416 - 967 - 1947 claire.willison@powerauthority.on.ca www.powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, ON M5H 1T1 3665 Jim MacDougall From: Jim MacDougall⌅ Sent: July-14-10 11:48 AM⌅ To: Patricia Lightburn; Travis Lusney⌅ Subject: FW: Rationale for Ground-Mount Price⌅ Attachments: Rationale for GM Price 07-14-10.doc⌅ FYI⌅ Jim MacDougall, P.Eng.⌅ Manager, Feed- In Tariff Program⌅ Electricity Resources⌅ Ontario Power Authority⌅ 120 Adelaide St W, Suite 1600⌅ Toronto, ON M5H 1T1, Canada⌅ tel 416.9 <> 69.6415⌅ ----- Original Message ----From: Kristin Jenkins⌅ Sent: July 13, 2010 11:16 PM⌅ To: Claire Willison; Glenna Ford; Sheri Bizarro⌅ Cc: Ben Chin; Colin Andersen; JoAnne Butler; Jason Chee- Aloy; Jim MacDougall; Sarah Simmons; Mary Bernard; Tim Butters; Mark Dodick; Luisa Da Rocha; Cindy Roks⌅ Subject: Fw: Rationale for Ground - Mount Price⌅ See below.⌅ ----- Original Message ----From: Kristin Jenkins ⌅ To: Kristin Jenkins⌅ Sent: Tue Jul 13 23:12:17 2010⌅ Subject: Rationale for Ground - Mount Price⌅ Claire, Glenna, Sheri⌅ Attached is the final text for the rationale for the new ground - mount price.⌅ Claire, please send to FIT stakeholder database.⌅ Sheri, please coordinate sending to microFIT applicants like we did with the original announcement of the price change.⌅ Glenna, please coordinate with IT to get it posted on the microFIT website.⌅ Let me know if you need more information. Thanks. Kristin⌅ 3666 Rationale for New Ground⌘ -Mount FIT Price Category⌘ Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ program that was highlighted because of the unexpected popularity of ground⇡ -mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure⇡ the program remains sustainable and electricity ratepayers – Ontario families – receive good⇡ value for new renewable energy. FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⇡ the developer which is roughly an 11% return on investment over the 20 years of the FIT⇡ contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⇡ maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor - that is⇡ the amount of energy a project produces - are BOTH key elements in determining a project’s⌘ rate of return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with a comparable return on investment that rooftop generators receive at⇡ 80.2 cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return on investment that is comparable to rooftop solar projects as well as⇡ other FIT projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⇡ costs of these projects in particular which have come down relative to rooftop installations since⇡ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⇡ is conducting a 30 day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Tracking (10 kW) $90,000⇡ 19% Fixed - No Tracking (10 kW) $60,000⇡ 13% 3667 Annual Production Annual Revenue Simple Payback Return on Investment 16,600 kWh $9,800 9 years 11% 11,300 kWh $6,700 9 years 11% Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3668 Jim MacDougall From: Jim MacDougall Sent: July-14-10 12:14 PM To: Ruth Covich; 'Clarke-Whistler, Karen' Cc: 'Zeldin, Cheryl'; 'Curran, Jonathan' Subject: RE: Question re: OPA pricing Attachments: Rationale for GM Price 07-14-10.doc Got your message Cheryl⇣ The attached is for immediate posting.⇣ John⇣ Please call if you have any questions.⇣ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program⇣ Electricity Resources⇣ Ontario Power Authority⇣ 120 Adelaide St W, Suite 1600⇣ Toronto , ON M5H 1T1 , Canada⇣ tel 416.969.6415⇣ From: Ruth Covich↵ Sent: July 13, 2010 2:21 PM↵ To: Clarke-Whistler, Karen; Jim MacDougall↵ Cc: Zeldin, Cheryl; Curran, Jonathan; Jason Chee-Aloy↵ Subject: RE: Question re: OPA pricing↵ Karen,⇣ I have forwarded your email to Jim McDougall to respond to your query about the change in the microFIT tariff for⇣ ground mount solar.⇣ Regards,⇣ Ruth From: Clarke-Whistler, Karen [mailto:Karen.Clarke-Whistler@td.com]↵ Sent: July 13, 2010 2:02 PM↵ To: Ruth Covich↵ Cc: Zeldin, Cheryl; Curran, Jonathan↵ Subject: Question re: OPA pricing↵ Ruth,⇣ I am wondering if you can provide m with a contact name.⇣ The changes in the OPA tariff for ground mounted have caused a lot of questions to be raised within our financing⇣ group, with respect to the pricing model for our financing products.⇣ 3669 We has been going on an assumption of an installed price $8500- 10,000 per kwh for ground mounted, and we need⇣ to now if this has now changes so we can adjust accordingly.⇣ Can you provide us with a technical contact who we can speak to? Our Small Business/Agriculture contact is Jon Curran – he is the one in need of the information.⇣ Many thanks, Karen ___________________________________⇥ Karen Clarke- Whistler⇢ Chief Environment Officer↵ TD Bank Financial Group↵ TD Tower↵ 66 Wellington Street West , 10th Floor↵ Toronto , Ontario M5K1A2↵ F: 416 308 6426↵ T: 416 983 0785 Karen.Clarke- Whistler@td.com↵ *********************⇥ NOTICE OF CONFIDENTIALITY⇥ This communication including any information transmitted with it is⇥ intended only for the use of the addressees and is confidential.⇥ If you are not an intended recipient or responsible for delivering⇥ the message to an intended recipient, any review, disclosure,⇥ conversion to hard copy, dissemination, reproduction or other use⇥ of any part of this communication is strictly prohibited, as is the⇥ taking or omitting of any action in reliance upon this communication.⇥ If you receive this communication in error or without authorization⇥ please notify us immediately by return e -mail or otherwise and⇥ permanently delete the entire communication from any computer,⇥ disk drive, or other storage medium.⇥ If the above disclaimer is not properly readable, it can be found at⇥ www.td.com/legal⇥ AVERTISSEMENT DE CONFIDENTIALITE⇥ Ce courriel, ainsi que tout renseignement ci- inclus, destiné uniquement✏ aux destinataires susmentionnés, est confidentiel. Si vous✏ n'êtes pas le destinataire prévu ou un agent responsable de la✏ livraison de ce courriel, tout examen, divulgation, copie, impression,⇥ reproduction, distribution, ou autre utilisation d'une partie de ce⇥ courriel est strictement interdit de même que toute intervention ou✏ abstraction à cet égard. Si vous avez reçu ce message par erreur ou✏ sans autorisation, veuillez en aviser immédiatement l'expéditeur par✏ retour de courriel ou par un autre moyen et supprimer immédiatement✏ cette communication entière de tout système électronique.✏ Si l'avis de non - responsabilité ci -dessus n'est pas lisible, vous⇥ pouvez le consulter à www.td.com/francais/legale⇥ 3670 Rationale for New Ground⌘ -Mount FIT Price Category⌘ Thousands of Ontarians are taking part in brand new and unique program by becoming⇡ renewable electricity generators in their backyards, on their roofs and around their farms while⇡ earning a reasonable rate of return over the life of the contract. We are fixing a glitch in the⇡ program that was highlighted because of the unexpected popularity of ground⇡ -mounted solar⇡ projects. We are now creating a separate price category for ground-mounted solar to ensure⇡ the program remains sustainable and electricity ratepayers – Ontario families – receive good⇡ value for new renewable energy. FIT rates for all project types are set to cover costs plus provide a reasonable rate of return to⇡ the developer which is roughly an 11% return on investment over the 20 years of the FIT⇡ contract. In setting FIT rates, OPA took into account typical project capital costs, operating and⇡ maintenance costs, financing costs, and expected electricity production over the life of the⇡ project. A 70/30 debt/equity split was assumed and debt borrowing costs were assumed at 7%. Projects can come in many different configurations. Project costs and capacity factor - that is⇡ the amount of energy a project produces - are BOTH key elements in determining a project’s⌘ rate of return. Ground-mounted projects generally have higher upfront capital costs and generate more⇡ electricity - and therefore more revenue - relative to rooftop installations. Higher revenues⇡ offset the higher project costs and mean the lower rate of 58.8 cents/kWh provides groundmount developers with a comparable return on investment that rooftop generators receive at⇡ 80.2 cents/kWh. Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher⇡ upfront capital costs but produce more energy (higher capacity factor) and therefore generate⇡ more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and⇡ results in a rate of return on investment that is comparable to rooftop solar projects as well as⇡ other FIT projects. Ground-mounted projects without tracking systems have lower capital costs but also generate⇡ less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower⇡ revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the⇡ costs of these projects in particular which have come down relative to rooftop installations since⇡ the program was introduced, enabling a reduction in the tariff rate. The new price category levels the playing field with other FIT and microFIT categories. The OPA⇡ is conducting a 30 day consultation period on the new price category and invites proponents to⇡ submit feedback. Typical Ground-Mount Project at 58.8 cents/kWh Cost to Install Capacity Factor Tracking (10 kW) $90,000⇡ 19% Fixed - No Tracking (10 kW) $60,000⇡ 13% 3671 Annual Production Annual Revenue Simple Payback Return on Investment 16,600 kWh $9,800 9 years 11% 11,300 kWh $6,700 9 years 11% Typical Ground-Mount Project at 80.2 cents/kWh Cost to Install Capacity Factor Annual Production Annual Revenue Simple Payback Return on Investment Tracking (10 kW) $90,000 19% 16,600 kWh $13,300 7 years 23% Fixed – No Tracking (10 kW) $60,000 13% 11,300 kWh $9,100 7 years 24% 3672 Patricia Lightburn From: Patricia Lightburn Sent: July-14-10 4:59 PM To: Sarah Simmons Subject: project splitting guidelines Attachments: FIT Guidelines - Multiple FIT Projects on One Property 2010-03-09.doc Saved here - \\pafilesrv\Gen- Dev$\Procurement\Domestic Supply\Feed In Tariff (FIT)\Briefing Notes and Policy# Issues\Property Definition - Project Splitting\FIT Guidelines - Multiple FIT Projects on One Property 2010 - 03 - 09.doc# To reflect the fact that it is permitted to have a roof mFIT v1.4 and a FIT ground and vice versa# Thank you!# Patricia Lightburn Analyst, FIT Program 3673 FIT Guidelines: Multiple Projects on One Property March 09, 2010 Issue⇣ Are multiple FIT contracts of the same technology, including incremental projects, permitted on the same property, and if so, how are they treated in regards to pricing? Background⇣ Section 7.3 (e) of the FIT Rules prohibits applicants from splitting one project into smaller projects for the purpose of obtaining a higher price or any other benefit. The guidelines below provide greater clarity on how this rule is applied by the OPA Solar PV Rooftop In order to provide greater clarity to applicants on how rooftop solar PV projects are evaluated under Section 7. 3 (e), an addition was made to Section 2.1 (Eligibility Requirements) in November 2009, which specifies that only one rooftop solar PV project is permitted on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only one rooftop facility shall be permitted on any single property. For greater certainty,⌫ a single rooftop facility may have generating equipment located on multiple buildings on a single property so long as the total capacity of the generating equipment located⌫ on the property is reflected in a single application and shares a common connection⌫ point." The guidelines provided below are intended to provide greater flexibility to applicants who are unable to submit a single application with a common connection point (for example when multiple buildings are located on a single property), and for applicants that wish to install their projects in a phased approach. Other Technologies Currently the rules are silent on how incremental projects, or multiple projects of the same renewable fuel on a single property, are treated in regards to pricing. The guidelines below provide clarity on how the OPA will apply Section 7.3 (e) to all technologies, including solar, wind, water and bioenergy. FIT Guidelines – Multiple Projects on One Property 1 3674 Guidelines For all technologies: 1. In general, only one FIT project per renewable fuel will be permitted on a single property. Notwithstanding the above, a rooftop solar PV under FIT and a ground-mounted solar PV under FIT are permitted on the same property. 2. The sum of the nameplate capacity of any microFIT and FIT project (or projects) of the same renewable fuel on the same legal property must not be greater than 10 kW. For greater clarity, if the sum of the nameplate capacity of a proposed FIT project and an existing microFIT project is greater than 10kW, the FIT project is ineligible. 3. Where the OPA deems a series of projects does not constitute project splitting, the OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a single property will be used to establish the FIT contract price. This permission allows for phased in-service dates, as well as multiple connection points where a single connection point is not feasible. The following provisions must be met: (a) Applications must be submitted within the same business day. (b) It is not permitted to combine the capacities of multiple FIT and microFIT applications. In order to submit multiple applications and qualify for the aggregate price, all applications must be submitted under the FIT program. (c) If the aggregate capacity of the initial group of applications is equal to or less than the highest project size tranche (for example in the case of solar PV, 500kW or less), subsequent applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of applications submitted. Each subsequent application would receive the price associated with the project size tranche established by the initial group of applications, regardless of the size of the project. o For example: If a 400 kW project is submitted as an initial group of four 100kW applications, the contract price for all applications would be determined based on the aggregate capacity (400kW at 63.5 cents/kWh). At a later date, a subsequent 100kW application (or FIT Guidelines – Multiple Projects on One Property 2 3675 multiple applications totalling 100kW) could be submitted, since the total capacity would remain within the 500kW project size tranche. The subsequent application(s) would also qualify for the 63.5 cents/kWh price. (d) If the aggregate capacity of the initial group of applications is in the highest project size tranche (for example, in the case of solar PV rooftop, greater than 500kW), there is no limit on the number or size of subsequent applications. Each subsequent application would receive the price associated with the highest project size tranche regardless of the size of the project. o For example: Three 200 kW applications for solar PV rooftop are submitted. The aggregate capacity is 600 kW. Each would qualify for the greater than 500kW size tranche at 53.9 cents/kWh. Subsequent applications of any size may be submitted. All projects would be eligible and would qualify for the 53.9 cents/kWh price. The FIT Program will be reviewed in two years. At that time, OPA will explore the possibility of allowing additional applications of the same renewable fuel on the same property. This will allow the OPA to ensure that proponents are not taking advantage of splitting projects to obtain higher prices, while still appropriately encourage incremental renewable energy capacity in a manner that makes sense. FIT Guidelines Multiple Projects on One Property –⇥ 3 3676 Appendix A FIT Price Schedule Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel SizeTranches Contract Price Percentage ?IkWh Escalated? Biomass? 10 13.8 20% 10 l?v'lW 13.0 20% Biogas? On-Fami 100 kW 195 20% On-Fann 100 kW 250 kW 18.5 20% Biogas 500 kW 16.0 20% Biogas >500 kW 5 10 MW 14.7 20% Biogas 10 l?v'fW 10.4 20% Waterpowertu 10 13.1 20% 10 50 12.2 20% Landfill gas? 11.1 20% 10 MW 10.3 20% Solar PV Any type S10 kW 80.2 0% Rooftop 10 250 kW 71.3 0% Rooftop 250 500 kW 63.5 0% Rooftop 500 kW 539 0% Ground Mounted2 10 Pv'lV't" 44.3 0% Wind2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% FIT Guidelines Multiple Projects on One Property 3677 Appendix B: Examples QUESTION FIT and microFIT 1. Can I put a 5 kW FIT solar PV project and then a 5 kW microFIT solar PV project on the same property? 2. Can I put a 10 kW microFIT solar PV rooftop project and then later add a 200 kW FIT solar PV ground-mounted project on the same property? 3. Can I install a 10 kW solar PV rooftop project under microFIT and one 100 kW rooftop PV under FIT on the same legal property. RESPONSE Yes. No. No. Alternatively, you could submit two applications at the same time under the FIT program, made up of a 10 kW and a 100 kW. Both projects would be eligible for the 110 kW price of 71.3 cents/kWh. This scenario also applies of both of the projects are ground-mounted. 4. Can I install a 100kW solar rooftop PV under FIT and a 10 kW ground-mounted project under microFIT at the same time? No. In order for both projects to be eligible, you could submit both applications under the FIT program. The 10 kW project would be eligible for the ground-mount price of 44.3 cents/kWh. 5. Can I install a 158 kW solar PV project on the roof, and later an additional 6 kW ground mount? The 6 kW project would not be eligible for a contract under the microFIT program. However, you could apply to the FIT program as a 6kW ground-mounted project and be eligible for the 44.3 cents/kWh price. 6. Can I put a microFIT solar PV and a FIT project of a different renewable fuel on the same property? Yes. 7. If the owner's land is leased to an outside company for wind turbines can a homeowner put a microFIT solar PV on their property? Yes. FIT Solar PV 8. Can I put a FIT solar PV rooftop project and a FIT solar PV ground-mounted project on FIT Guidelines Yes Multiple Projects on One Property –⇥ 5 3678 the same property? 9. Can I submit a 200 kW solar PV rooftop application and apply for a 100 kW solar PV rooftop project on the next day? No, the second application would not be eligible. 10. I have a property with two buildings; unfortunately one connection point is not possible. Can I have panels on both buildings, constructed at the same time? Yes, both applications must be submitted in the same business day and the aggregate capacity will be used to determine the FIT price. 11. A university campus with many buildings but only one legal property wants to have 10 solar PV rooftop projects, 100kW each on different buildings, with separate FIT contracts constructed over time. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 1,000kW. Each project would be eligible for the 53.9 cents/kWh price. In this case, since the aggregate capacity of the initial applications exceeds the 500kW project size tranche, there is no limit on the number or size of projects that can be submitted at a later date. Each of the subsequent projects would be eligible for the 53.9 cents/kWh. 12. A shopping centre has one very large roof and wants 10 solar PV rooftop projects, 20kW each, located at different connection points. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 200kW. Each project would be eligible for the 71.3 cents/kWh price. In this case, subsequent applications may be submitted. However the aggregate capacity of the existing projects and the new projects must not exceed the 250 kW project size tranche (for example, two additional 25 kW applications may be submitted). The subsequent applications would also be eligible for the 71.3 cents/kWh price. FIT – Other Technologies 13. Can I apply for a 5 MW landfill gas project and subsequently apply for a 10 MW incremental landfill gas project? No. In this case, you could submit two applications for both projects at the same time. Both would qualify for the 10.3cents/kWh price. Each project would have a separate contract and would be allowed to come into service at different dates. 14. I have an existing FIT biogas project already. Can I build a new separate small biogas project at another location on the farm? This would only be permitted if the total capacity of the existing project and the new project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the second project is not eligible. 15. Can I add an expansion (incremental project) to an This would only be permitted if the total project capacity of the existing project and the incremental FIT Guidelines Multiple Projects on One Property –⇥ 6 3679 existing FIT waterpower project? project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the incremental project is not eligible. 16. Can I put a FIT solar PV project and a FIT project of a different renewable fuel on the same property? FIT Guidelines Yes. – Multiple Projects on One Property 7 3680 Jim MacDougall From: Jim MacDougall⇣ Sent: July-20-10 1:25 PM⇣ To: Ben Chin⇣ Cc: Sarah Simmons⇣ Subject: RE: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground⇣ mounte...⇣ Attachments: Overview of finanical model (2).ppt⇣ Attached is the basic approach ....⇣ Not sure what Tyler doesn't get, but we tried to be fairly open in the April 7 and May 12 2009⇣ stakeholder session on price, # 4 and # 8.⇣ http://fit.powerauthority.on.ca/Page.as p?PageID=751&SiteNodeID=1061&BL_ExpandID=272⇣ Jim MacDougall, P.Eng.⇣ Manager, Feed-In Tariff Program⇣ Electricity Resources⇣ Ontario Power Authority⇣ 120 Adelaide St W, Suite 1600⇣ Toronto, ON M5H 1T1, Canada⇣ tel 416.969.6415⇣ -----Original Message----From: Jim MacDougall⇣ Sent: July 20, 2010 11:56 AM⇣ To: Ben Chin⇣ Cc: Sarah Simmons⇣ Subject: Re: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Sarah⇣ Can u send Ben the draft deck on ROI calculations you prepared a a week amd a a bit ago?⇣ Jim MacDougall, P.Eng.⇣ Manager, FIT Program⇣ Ontario Power Authority⇣ 416 969 6415⇣ Sent from my BB⇣ -----Original Message-----⇣ 3681 From: Jim MacDougall⇣ To: Ben Chin⇣ Sent: Tue Jul 20 11:52:47 2010⇣ Subject: Re: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Let me send you a a draft deck sarah prepared as basic background...Vi⇣ Jim MacDougall, P.Eng.⇣ Manager, FIT Program⇣ Ontario Power Authority⇣ 416 969 6415⇣ Sent from my BB⇣ -----Original Message----From: Ben Chin⇣ To: Jim MacDougall⇣ Sent: Tue Jul 20 11:48:11 2010⇣ Subject: RE: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ That's great. I might read it out loud at my stupid town hall on Thursday night (without the name). btw⇣ Do you have time to explain the way we calculate ROI for Tyler Hamilton?⇣ fdfd⇣ -----Original Message----From: Jim MacDougall⇣ Sent: July 20, 2010 11:22 AM⇣ To: Ben Chin⇣ Subject: FW: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ This one was quite well presented ...⇣ Jim⇣ -----Original Message----From: Steven Kayser ⇣ To: Jim MacDougall⇣ Sent: Thu Jul 15 09:20:21 2010⇣ Subject: RE: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Hi Jim⇣ I sent this out to my key people, but my vote is yes.⇣ Very few of my competitors are ever going to buy one of my systems. And there is that saying ‘ as long 3682 as they spell your name right' J⇣ Thanks for your comments, and I will get back to you asap.⇣ Steven Kayser⇣ GreenWorks Solar Power⇣ Tel: 613 299-7595⇣ ________________________________⇣ From: Jim MacDougall [mailto:Jim.MacDougall@powerauthority.on.ca]⇣ Sent: Thursday, July 15, 2010 8:30 AM⇣ To: stevenkayser@xplornet.ca⇣ Subject: FW: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Hello Steven;⇣ Can you give some thought to whether you would allow us to post your feedback on our website?⇣ It is the most thoughtful and balanced remark we have seen.⇣ I know it could be awkward for you, but let me know if you would like the free advertising.⇣ Your competitors likely won't like it.⇣ I have also not sought internal approval yet, but I think it likely to be received.⇣ Thanks again and we do review these comments !⇣ 3683 Jim MacDougall, P.Eng.⇣ Manager, Distributed Generation⇣ Ontario Power Authority⇣ (416) 969-6415⇣ ________________________________⇣ From: Sarah Simmons⇣ Sent: Wed 14/07/2010 6:01 PM⇣ To: Patricia Lightburn; Jim MacDougall⇣ Subject: FW: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Positive feedback.. for a change. J⇣ Sarah Simmons⇣ Analyst⇣ Electricity Resources⇣ Ontario Power Authority⇣ 120 Adelaide St. W. Suite 1600⇣ Toronto, ON, M5H 1T1⇣ Tel 416.969.6213⇣ Fax 416.967.1947⇣ www.powerauthority.on.ca ⇣ P please consider the environment before printing this email⇣ ________________________________⇣ From: microFIT⇣ 3684 Sent: July 14, 2010 6:01 PM⇣ To: Sarah Simmons⇣ Subject: Ticket 11090 Open (Updated) --> Positive comments on the proposed ground mounte...⇣ Client Name:⇣ Steven Kayser ⇣ Ticket Info Ticket No.:⇣ 11090 ⇣ Report Date:⇣ 14 -07-2010 10:41 am⇣ Due Date:⇣ 23 -07-2010 10:41 am⇣ Reporter:⇣ Steven Kayser ⇣ 3685 Tech:⇣ Ground Mount ⇣ Priority:⇣ Medium Status:⇣ Open Request Type:⇣ E -Mail Report > MicroFIT General⇣ Subject:⇣ Positive comments on the proposed ground mounted rate change from an Ontario Manufacturer. Request Detail: This email is intended to thank the OPA for the proposed rate change in 10 kW Ground Mounted Solar Category.⇣ As someone with 25 years experience owning and running a manufacturing⇣ business, I was attracted to the MicroFit program and especially the 10 kW 2⇣ axis tracking category. GreenWorks immediately invested in factory space,⇣ industrial machinery, and staff to design and build a 2 axis tracker that will stay in producting for at least 100 years. As the original intention of the program was to help bring manufacturing jobs back into Ontario, I⇣ felt that it was a good industry to ply my trade in.⇣ As was mentioned in the information sessions on July 6 and July 8, the⇣ original intention of the program was an 11% Return on Investment. The data⇣ point they used was an $82,000 installation cost for a 10kW DC rooftop. At⇣ 80.2 cents per kWh this would yield $9,000 in revenue, At this rate, rooftop⇣ installations were achieving the desired 11% ROI. 3686 The original pricing for 10 kW Ground-mounted systems was going to be only⇣ 44 cents per kWh. The Solar Industry went to the Ontario Power Authority⇣ with the request that both systems receive the 80.2 cents per kWh, since the⇣ installation cost for a ground-mounted system was higher than that of a⇣ rooftop system before the program launched.⇣ The Solar Industry, although under no intention of misleading the OPA, did⇣ not take into consideration the effect of volume on pricing. Since each⇣ rooftop installation must be customized, pricing cannot be streamlined.⇣ Ground-mounts on the other hand, can be standardized, therefore⇣ manufacturing and installation costs could be significantly reduced over time, especially with significant volume. With the inception of the program in October 2009, GreenWorks focused on⇣ manufacturing and promoting our own two-axis Century Tracker. Since we have⇣ designed, manufacture, and install our own system, our price can be made to⇣ be extremely competitive without sacrificing quality.⇣ At an installation cost of $96,000, the revenue at the proposed new rate⇣ will be approximately $11,000. This is in fact an 11% Return on Investment.⇣ With an annual payment of $7863 our customers will be left with a $3,327⇣ annual profit, an attractive enough return to continue to win customers.⇣ Although we have certainly lost more than half our potential customers since⇣ the proposed rate change, we will still likely sell more than our production⇣ capacity for the foreseeable future.⇣ The proposed rate change will foster the development of sustainable⇣ manufacturing businesses that have focused on investing in those areas that improve product performance and lower over all customer costs. By⇣ promoting the development of professional manufacturers and high quality,⇣ world class products, Ontario will be creating lasting jobs and getting a good value for hydro rate payers.⇣ I would especially like to thank those people who are on the front lines of⇣ receiving so much anger from the public and the industry. Although it is⇣ easy to understand that there are a great many disappointed investors and⇣ suppliers, it is a tough job to take in and respond to what must be a lot of⇣ feedback. Everyone at GreenWorks is behind you.⇣ 3687 GreenWorks remains a strong supporter of the microFIT program. We look⇣ forward to the opportunity to flourish as a green energy company and to help⇣ bring manufacturing jobs back into Ontario.⇣ Steven Kayser⇣ Steven Kayser⇣ GreenWorks Solar Power⇣ Tel: 613 299-7595⇣ Notes Date⇣ Name Note Text 14-07-2010 6:00 pm⇣ Simmons, Sarah Holy smokes! Positive feedback. This one should be framed - makes me happy!⇣ 3688 ONTARIO POWER AUTHORITY ONTARIO POWER AUTHORITY [insert date] 3689 Presentation Overview • Overview of Financial Model • Financial Assumptions • Simplified Example • Factors that impact FIT rate • Scenario Analysis 2 3690 Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – • DCF models are commonly used in project finance The DCF model calculates the prices required to – – – Cover the cost of investment Cover ongoing operating expenses Earn a reasonable rate of return over a 20-year contact term 3 3691 Financial Assumptions Variable Assumption⌘ Percent Investment 30% After Tax Return on 11% Investment • Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% Inflation Rate 2.25% These financial assumptions are held constant for all technologies. 4 3692 Simplified Example • This is a highly simplified example, for the purpose of illustrating how the financial model works. • Let’s assume that a renewable energy project has⇠ capital cost of $50,000 – 70% of the cost of the project is borrowed from the bank $50,000 x 70% = $35,000 (from bank) $50,000 x 30% = $15,000 (Investment from savings) 5 3693 Simplified Example (continued) • Payback Payments on borrowed amount are to the bank at 7% $35,000 @ 7% = approx. $270 per month (20 years) (Assumes annuity payment, i.e., constant) Return on Investment is paid to the Supplier at 11% $15,000 @ 11% = approx. $155 per month (20 years) Therefore, the annual revenue requirement is: ($270 + $155) x 12 = $5100 6 3694 Simplified Example (continued) • Electricity Output – The electricity output from the facility depends on the facility’s capacity factor. In this case, let’s assume that this⇠ renewable energy project produces 10000 kWh in one year. • The FIT rate is derived to ensure that the revenue requirements are met given the expected output from the renewable energy project. $5100 FIT x 10000 kWh * * Note: the actual calculation is much more complicated, because it includes factors such as O&M, taxes, inflation, etc. 7 3695 Factors that affect the FIT rate • Efficiency of the system (Capacity Factor) – A more efficient renewable technology will produce more electricity per year – Projects that produce more electricity per kW installed will require a lower the FIT rate – E.g., $5100 FIT x 10000 kWh (higher FIT) FIT x 20000 kWh (lower FIT) versus $5100 More electricity produced per kW installed 8 3696 Factors that affect the FIT rate (continued) • Revenue Requirement – A project with a lower revenue requirement will have a lower FIT rate – E.g., $5100 FIT x 10000 kWh (higher FIT) FIT x 10000 kWh (lower FIT) versus $3000 Lower revenue requirement per kW installed – Factors that impact the revenue requirement, include: • • • • Capital costs (Lower costs O&M costs (lower costs lower FIT) lower FIT) Debt/Equity share (More debt Cost of debt (Lower cost lower FIT) lower FIT) 9 3697 Cost per unit energy (example) • Solar PV rooftop fixed mounted – – – – – 3 kW Capacity Capital costs is $9600 per kW Total installed cost = $28,800 Capacity Factor = 13% Electricity produced per year 3400 kWh (e.g., 13% x 3kW x 8760h/year) • Solar PV ground-mounted with tracking system – – – – – 10 kW Capacity Capital costs is $9600 per kW Total installed costs = $96,000 Capacity Factor = 19% Electricity produced per year 16600 kWh (e.g., 19% x 10kW x 8760h/year) 10 3698 Data Sources • Project cost information was developed from a range of sources using best available information in early 2009 – – Consistent with literature and industry experience Sources clearly documented NTD: from slides from stakeholder session (April 7, 2009) • Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary The OPA used a wide rate of sources as inputs into the applicable models. The OPA necessarily applied professional judgment were applicable. 11 3699 Cost and Performance Assumptions • Project costs can vary significantly depending on site conditions, proponent experience, and the cost and performance characteristics of the various technologies • Project cost estimates are part of an integrated package – Care needs to be taken when changing just one element of the cost estimates note: see slide from stakeholder session (April 7, 2009) 12 3700 Scenario Analysis-Ground Mount Solar PV • Scenarios evaluated FIT price sensitivity to changes to the following key assumptions: – – – – – – – • Capital Cost Capacity Factor Debt Equity ratio Cost of Debt Return on Equity Fuel Cost Tax Treatment The following slides review the results of the scenario Analysis for Ground Mount Solar PV, and the proposed changes to the FIT price schedule. 13 3701 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8 cents per kWh A B C 8500 8500 8500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 55.6 57.3 58.8 Scenario-IV Capital Cost Capacity Factor 14 3702 Sarah Simmons↵ From: Sarah Simmons↵ Sent: July-22-10 12:45 PM↵ To: Jim MacDougall; Travis Lusney↵ Subject: FIT rate derivation - simplified example.doc↵ Attachments: FIT rate derivation - simplified example.doc↵ for discussion. 3703 ---DRAFT--Explanation of the how FIT rates are determined. Background This is a simplified example, for the purpose of illustrating how the FIT rates are derived. For all technologies, the OPA makes the following assumptions: Percent Investment After Tax Return on Investment Percent Debt Cost of Debt Income Tax Rate Inflation Rate 30% 11% 70% 7% 30.5% 2.25% Project cost information was developed from a range of sources using best available, information. Preference was given to more recent cost estimates from reliable sources, with transparent assumptions, which can be updated as appropriate and necessary. The, OPA used a wide rate of sources as inputs into the applicable models. The OPA, necessarily applied professional judgment were applicable. Capital costs for a 10 kW solar PV ground-mounted project is assumed to be $90,000., Therefore, for a 10 kW ground-mounted solar PV project, $90,000 x 70% = $63,000 (borrowed) $90,000 x 30% = $27,000 (invested from savings) Payments on borrowed amount are to the bank at 7% interest. Assuming annuity, payments (i.e., constant) over a 20 year period, the cost of debt would be approximately, $370 per month. e.g., $63,000 @ 7% = $370 per month Return on investment is paid monthly at 11% to the contract holder, the Supplier., Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the, Supplier would be approximately per month. e.g., $27,000 @ 11% = $245 per month Therefore, excluding on-going monthly, the annual revenue requirement is $615 per, month, or $7,380 per year. e.g., ($370 + $245) x 12 = $7,380 per year The FIT rate is derived to ensure that the revenue requirements are met given the, expected output from the renewable energy project. The expected output of a facility is, 1 3704 based on the efficiency of the renewable energy technology and the amount of time, that it is producing power – know as the capacity factor. In Ontario, the capacity factor of solar PV projects vary regionally and depends on solar, irradiation. For example, the capacity factor of a solar PV project with a 2-axis tracking, system in Toronto may be approximately 17%, while the capacity factor of the same, system may be approximately 21% in Thunder Bay. The OPA chose a capacity factor, when the range of capacity factors that are typical for Ontario. For the purpose of deriving the FIT rate, the capacity factor of a 10 kW solar PV groundmounted project is assumed to be 19%. Therefore, over the course of one year, the, project would produce approximately 16,600 kWh per year. e.g., 10 kW x 8760 hours per year x 19% = 16,600 kWh per year The FIT rate will be proportional to the revenue requirements divided by the expected, output of typical projects. Projects with lower revenue requirements require a lower FIT rate to meet the desired, return on equity. The revenue requirements of a project include a number of factors,, for instance, o Upfront capital costs of equipment o Operations and maintenance costs o Cost of debt payments to lenders o Cost of return on investment payments to Supplier o Income taxes Since the FIT rate is proportional to the revenue requirements divided by the expected, output, projects with higher electricity outputs require a lower FIT rate. The expected, electricity output of a facility is based on the capacity factor of the project. The capacity, factor is based on, o Efficiency of the technology (e.g., the ability to convert solar irradiation to, electricity) o The proportion of the time that the facility is able to operate (e.g., solar only, produces electricity during the daytime. Please note that that the actual derivation the FIT price is much more complicated,, because it includes factors such as inflation, taxes and O&M costs. However the, example above is suitable for demonstration purposes. A fulsome explanation of the model used by the OPA was provided to stakeholders, during the FIT consultation period April 7, 2009. The FIT prices are developed using a, Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to, 2 3705 o Cover the cost of investment o Cover ongoing operating expenses o Earn a reasonable rate of return over a 20-year contact term The DCF model uses a seven step process to calculate prices: 1. Annual generation output is estimated for a given project based on the, project capacity and assumed capacity factor 2. Operating expenses estimated and include variable operation and, maintenance cost, fixed operation and maintenance cost, and property, tax 3. Annual depreciation calculated using an appropriate capital cost, allowance rate 4. Operating expenses, depreciation, interests, and income taxes deducted, from revenue to arrive at net income 5. Depreciation added back to net income to estimate actual cash flow 6. Capital investment, debt borrowing, and debt repayment added to, calculate free cash flow for each year 7. Free cash flows are then discounted using the target return on equity 3 3706 Jim MacDougall From: Jim MacDougall Sent: July-22-10 3:36 PM To: Sarah Simmons Attachments: FIT rate derivation - simplified example v2.doc Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St W, Suite 1600◆ Toronto , ON M5H 1T1 , Canada◆ tel 416.969.6415◆ 3707 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the assumptions made in deriving the new proposed price, as well as the methodology for calculating the Return on Equity for the typical project. Background Project cost information was developed from a range of sources using best available information. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as Equity Investment Percentage of project cost as Debt, borrowed from bank After Tax Return on Equity from Investment Cost of Debt, repaid to bank Income Tax Rate on profit from Equity Investment Inflation Rate 30% 70% 11% 7% 30.5% 2.25% The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70% = $63,000 (Debt, borrowed from bank) $90,000 x 30% = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7% interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. 1 3708 e.g., $63,000 @ 7% = $370 per month for 20 years Return on the Equity investment is paid monthly at 11% to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the Equity investor would be approximately $245 per month. e.g., $27,000 @ 11% = $245 per month or $/yr On the basis of this simplified example, this would represent an annual profit of $3000 on the initial $27k or 11%. Qualify MORE DETAILED TABLE (FROM WEB) LANGUAGE Additional detail on Therefore, excluding on-going monthly operations and maintenance costs, the annual revenue requirement is $615 per month, or $7,380 per year. e.g., ($370 + $245) x 12 = $7,380 per year The FIT rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing power – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a 2-axis tracking system in Toronto may be approximately 17%, while the capacity factor of the same system may be approximately 21% in Thunder Bay. The OPA chose a capacity factor when the range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20 year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19%. Over the course of one year, the project would produce approximately 16,600 kWh. 2 3709 e.g., 10 kW x 8760 hours per year x 19% = 16,600 kWh per year The proposed microFIT rate would reflect the revenue requirements and the expected output of typical projects. Projects with lower revenue requirements require a lower FIT rate to meet the desired return on equity. The revenue requirements of a project include a number of factors, for instance, Upfront capital costs of equipment Operations and maintenance costs Cost of debt payments to lenders Cost of return on investment payments to Supplier Income taxes Since the FIT rate is proportional to the revenue requirements divided by the expected output, projects with higher electricity outputs require a lower FIT rate. The expected electricity output of a facility is based on the capacity factor of the project. The capacity factor is based on, Efficiency of the technology (e.g., the ability to convert solar irradiation to electricity) The proportion of the time that the facility is able to operate (e.g., solar only produces electricity during the daytime. Please note that that the actual derivation the FIT price is much more complicated, because it includes factors such as inflation, taxes and O&M costs. However the example above is suitable for demonstration purposes. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to, Cover the cost of investment Cover ongoing operating expenses Earn a reasonable rate of return over a 20-year contact term The DCF model uses a seven step process to calculate prices: Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 3 3710 Operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax Annual depreciation calculated using an appropriate capital cost allowance rate Operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income Depreciation added back to net income to estimate actual cash flow Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year Free cash flows are then discounted using the target return on equity 4 3711 Sarah Simmons↵ From: Sarah Simmons⇢ Sent: July-22-10 4:26 PM⇢ To: Jim MacDougall⇢ Subject: FIT rate derivation - simplified example v2.doc⇢ Attachments: FIT rate derivation - simplified example v2.doc⇢ <>⇢ 3712 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the assumptions made in deriving the new proposed price, as well as the methodology for calculating the Return on Equity for the typical project. Background Project cost information was developed from a range of sources using best available information. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as Equity Investment Percentage of project cost as Debt, borrowed from bank After Tax Return on Equity from Investment Cost of Debt, repaid to bank Income Tax Rate on profit from Equity Investment Inflation Rate 30% 70% 11% 7% 30.5% 2.25% The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70% = $63,000 (Debt, borrowed from bank) $90,000 x 30% = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7% interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7% = $370 per month or $4440 per year 1 3713 Return on the Equity investment is paid monthly at 11% to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the Equity investor would be approximately $245 per month. e.g., $27,000 @ 11% = $245 per month or $2940 per year On the basis of this simplified example, this would represent an annual profit of $2940% per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11% Return on Equity Please note that that return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is suitable for demonstration purposes. Additional detail on OPA assumptions for the proposed ground-mounted price. Cost to Install Annual O&M costs Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $90,000 $100 19% 16,600 kWh $9,800 9 years The FIT rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a 2-axis tracking system in Toronto may be approximately 17%, while the capacity factor of the same system may be approximately 21% in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20 year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19%. Over the course of one year, the project would produce approximately 16,600 kWh. 2 3714 e.g., 10 kW x 8760 hours per year x 19% = 16,600 kWh per year The proposed microFIT rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to, o Cover the cost of investment o Cover ongoing operating expenses o Earn a reasonable rate of return over a 20-year contact term The DCF model uses a seven step process to calculate prices: 1. Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. Operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. Annual depreciation calculated using an appropriate capital cost allowance rate 4. Operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. Depreciation added back to net income to estimate actual cash flow 6. Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. Free cash flows are then discounted using the target return on equity 3 3715 Jim MacDougall From: Jim MacDougall Sent: July-22-10 4:31 PM To: Kristin Jenkins Cc: Sarah Simmons; Jason Chee-Aloy Subject: additional detail on FIT price Attachments: FIT rate derivation - simplified example v3.doc Please take a look.↵ We tried to spell out the methodology for the ROE calculation, as well as some additional detail on the price calculation.↵ The attached is very long, and could be cut off after the table on page 2.↵ To note, we are very vulnerable on the assumed O and M costs of $100 per year, but that may be OK as we can increase it in response to stakeholder feedback.↵ Pls note – I have taken no steps to ask IT to be ready to post this tonight …⌅ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program↵ Electricity Resources↵ Ontario Power Authority↵ 120 Adelaide St W, Suite 1600↵ Toronto , ON M5H 1T1 , Canada↵ tel 416.969.6415↵ 3716 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the assumptions made in deriving the new proposed price, as well as the methodology for calculating the Return on Equity for the typical project. Background Project cost information was developed from a range of sources using best available information. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as Equity Investment Percentage of project cost as Debt, borrowed from bank After Tax Return on Equity from Investment Cost of Debt, repaid to bank Income Tax Rate on profit from Equity Investment Inflation Rate 30% 70% 11% 7% 30.5% 2.25% The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70% = $63,000 (Debt, borrowed from bank) $90,000 x 30% = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7% interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7% = $370 per month or $4440 per year 1 3717 Return on the Equity investment is paid monthly at 11% to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the Equity investor would be approximately $245 per month. e.g., $27,000 @ 11% = $245 per month or $2940 per year On the basis of this simplified example, this would represent an annual profit of $2940% per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11% Return on Equity Please note that that return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is suitable for demonstration purposes. Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8% c/kWh. Cost to Install Annual O&M costs Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $90,000 $100 19% 16,600 kWh $9,800 9 years The FIT rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a 2-axis tracking system in Toronto may be approximately 17%, while the capacity factor of the same system may be approximately 21% in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20 year life, and take into account expected module performance degradation. 2 3718 For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19%. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19% = 16,600 kWh per year The proposed microFIT rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to, o Cover the cost of investment o Cover ongoing operating expenses o Earn a reasonable rate of return over a 20-year contact term The DCF model uses a seven step process to calculate prices: 1. Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. Operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. Annual depreciation calculated using an appropriate capital cost allowance rate 4. Operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. Depreciation added back to net income to estimate actual cash flow 6. Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. Free cash flows are then discounted using the target return on equity 3 3719 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-22-10 4:40 PM↵ To: Jim MacDougall↵ Cc: Sarah Simmons; Jason Chee-Aloy↵ Subject: RE: additional detail on FIT price↵ Thanks Jim. Glenna has given IT heads up for tomorrow morning posting.⇢ From: Jim MacDougall Sent: July 22, 2010 4:31 PM To: Kristin Jenkins Cc: Sarah Simmons; Jason Chee-Aloy Subject: additional detail on FIT price Please take a look.↵ We tried to spell out the methodology for the ROE calculation, as well as some additional detail on the price calculation.↵ The attached is very long, and could be cut off after the table on page 2.↵ To note, we are very vulnerable on the assumed O and M costs of $100 per year, but that may be OK as we can increase it in response to stakeholder feedback.↵ Pls note – I have taken no steps to ask IT to be ready to post this tonight …⇢ Jim MacDougall , P.Eng.✓ Manager, Feed - In Tariff Program↵ Electricity Resources↵ Ontario Power Authority↵ 120 Adelaide St W, Suite 1600↵ Toronto , ON M5H 1T1 , Canada↵ tel 416.969.6415↵ 3720 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-22-10 4:50 PM↵ To: Johnston, Alicia (MEI)↵ Cc: 'Block, Andrew (MEI)'; 'Lewyckyj, Maryanna (MEI)'; Tasca, Leo (MEI); Nutter,↵ George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters↵ Subject: Additional FIT Price Info↵ Attachments: FIT rate derivation - simplified example v3.doc↵ Hi Alicia, As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.⌧ Kristin 3721 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the assumptions made in deriving the new proposed price, as well as the methodology for calculating the Return on Equity for the typical project. Background Project cost information was developed from a range of sources using best available information. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as Equity Investment Percentage of project cost as Debt, borrowed from bank After Tax Return on Equity from Investment Cost of Debt, repaid to bank Income Tax Rate on profit from Equity Investment Inflation Rate 30% 70% 11% 7% 30.5% 2.25% The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70% = $63,000 (Debt, borrowed from bank) $90,000 x 30% = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7% interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7% = $370 per month or $4440 per year 1 3722 Return on the Equity investment is paid monthly at 11% to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the Equity investor would be approximately $245 per month. e.g., $27,000 @ 11% = $245 per month or $2940 per year On the basis of this simplified example, this would represent an annual profit of $2940% per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11% Return on Equity Please note that that return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is suitable for demonstration purposes. Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8% c/kWh. Cost to Install Annual O&M costs Capacity Factor Annual Production Annual Revenue Simple Payback Tracking (10 kW) $90,000 $100 19% 16,600 kWh $9,800 9 years The FIT rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a 2-axis tracking system in Toronto may be approximately 17%, while the capacity factor of the same system may be approximately 21% in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20 year life, and take into account expected module performance degradation. 2 3723 For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19%. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19% = 16,600 kWh per year The proposed microFIT rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to, o Cover the cost of investment o Cover ongoing operating expenses o Earn a reasonable rate of return over a 20-year contact term The DCF model uses a seven step process to calculate prices: 1. Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. Operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. Annual depreciation calculated using an appropriate capital cost allowance rate 4. Operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. Depreciation added back to net income to estimate actual cash flow 6. Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. Free cash flows are then discounted using the target return on equity 3 3724 Johnston, Alicia (MEI)◆ From: Johnston, Alicia (MEI)◆ Sent: July-22-10 5:46 PM◆ To: Kristin Jenkins◆ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter,◆ George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters◆ Subject: RE: Additional FIT Price Info◆ Thanks for this. Will you be announcing the next webinar date tomorrow, as well? From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca]⇢ Sent: July 22, 2010 4:50 PM⇢ To: Johnston, Alicia (MEI)⇢ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna⇢ Ford; Jim MacDougall; Mary Bernard; Tim Butters⇢ Subject: Additional FIT Price Info⇢ Hi Alicia, As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.⌧ Kristin Take The Power Pledge at www.powerpledge.ca" This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3725 Ben Chin From: Ben Chin⌫ Sent: July-22-10 5:55 PM⌫ To: 'Alicia.Johnston@ontario.ca'; Kristin Jenkins⌫ Cc: 'andrew.block@ontario.ca'; 'Maryanna.Lewyckyj@ontario.ca'; 'Leo.Tasca@ontari⌫ o.ca'; 'george.nutter@ontario.ca'; Glenna Ford; Jim MacDougall; Mary Bernard;⌫ Tim Butters⌫ Subject: Re: Additional FIT Price Info⌫ Our thinking is changing on webinar to immediately after announcement now⌫ ----- Original Message ----From: Johnston, Alicia (MEI) ⌫ To: Kristin Jenkins⌫ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters⌫ Sent: Thu Jul 22 17:45:44 2010⌫ Subject: RE: Additional FIT Price Info⌫ Thanks for this.⌫ Will you be announcing the next webinar date tomorrow, as well?⌫ _________________________ _____ __⌫ From: Kristin Jenkins [ mailto:Kristin.Jenkins@powerauthority.on.ca ]⌫ Sent: July 22, 2010 4:50 PM⌫ To: Johnston, Alicia (MEI)⌫ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters⌫ Subject: Additional FIT Price Info⌫ Hi Alicia,⌫ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin⌫ < http://www.powerpledge.ca>⌫ 3726 Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⌫ 3727 Johnston, Alicia (MEI)◆ From: Johnston, Alicia (MEI)◆ Sent: July-22-10 5:57 PM◆ To: Ben Chin; Kristin Jenkins◆ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter,◆ George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters◆ Subject: RE: Additional FIT Price Info◆ Immediately after which announcement? From: Ben Chin [mailto:Ben.Chin@powerauthority.on.ca]⇠ Sent: July 22, 2010 5:55 PM⇠ To: Johnston, Alicia (MEI); Kristin Jenkins⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim⇠ MacDougall; Mary Bernard; Tim Butters⇠ Subject: Re: Additional FIT Price Info⇠ Our thinking is changing on webinar to immediately after announcement now⌫ ----- Original Message ----From: Johnston, Alicia (MEI) ⌫ To: Kristin Jenkins⌫ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ;⌫ Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim⌫ MacDougall; Mary Bernard; Tim Butters⌫ Sent: Thu Jul 22 17:45:44 2010⌫ Subject: RE: Additional FIT Price Info⌫ Thanks for this.⌫ Will you be announcing the next webinar date tomorrow, as well?⌫ _________________________ _____ __⌫ From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca ]⌫ Sent: July 22, 2010 4:50 PM⌫ To: Johnston, Alicia (MEI)⌫ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim⌫ MacDougall; Mary Bernard; Tim Butters⌫ Subject: Additional FIT Price Info⌫ Hi Alicia,⌫ 3728 As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin⌫ < http://www.powerpledge.ca >⌫ Take The Power Pledge at www.powerpledge.ca This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⌫ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⌫ 3729 Ben Chin From: Ben Chin! Sent: July-22-10 6:02 PM! To: 'Alicia.Johnston@ontario.ca'; Kristin Jenkins! Cc: 'andrew.block@ontario.ca'; 'Maryanna.Lewyckyj@ontario.ca'; 'Leo.Tasca@ontari! o.ca'; 'george.nutter@ontario.ca'; Glenna Ford; Jim MacDougall; Mary Bernard;! Tim Butters! Subject: Re: Additional FIT Price Info! Yes, as soon as possible after the consultation is over. We were originally going to schedule a webinar to talk about the different economics associated with trackers. But there doesn't seem a need to do that anymore. We could do one before August 4, but I would be concerned that it would either result in the same old list of complaints or speculation on what we are going to announce. But we can talk later.! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Ben Chin; Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:56:44 2010! Subject: RE: Additional FIT Price Info! Immediately after which announcement?! _________________________ _____ __! From: Ben Chin [ mailto:Ben.Chin@powerauthority.on.ca ]! Sent: July 22, 2010 5:55 PM! To: Johnston, Alicia (MEI); Kristin Jenkins! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters! Subject: Re: Additional FIT Price Info! Our thinking is changing on webinar to immediately after announcement now! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:45:44 2010! Subject: RE: Additional FIT Price Info! Thanks for this.! Will you be announcing the next webinar date tomorrow, as well?! 3730 _________________________ _____ __! From: Kristin Jenkins [ mailto:Kristin.Jenkins@powerauthority.on.ca ]! Sent: July 22, 2010 4:50 PM! To: Johnston, Alicia (MEI)! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters! Subject: Additional FIT Price Info! Hi Alicia,! As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin! < http://www.powerpledge.ca>! Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.! 3731 Johnston, Alicia (MEI)◆ From: Johnston, Alicia (MEI)◆ Sent: July-22-10 6:14 PM◆ To: Ben Chin; Kristin Jenkins◆ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter,◆ George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters;◆ MacLennan, Craig (MEI); Levitan, Daniel (MEI)◆ Subject: RE: Additional FIT Price Info◆ Given the fact we put out the assumptions on the 58 cents last week and are putting more info out tomorrow then would it not be important to allow people to feed in and respond to the new info? I ’ m concerned that if we don ’ t give⌧ people a controlled platform to show that “ we are listening ” then they will continue to find more creative ways to express their frustration.⌧ I understand there are other considerations, so let ’ s talk later.⌧ A⌧ From: Ben Chin [mailto:Ben.Chin@powerauthority.on.ca]⇠ Sent: July 22, 2010 6:02 PM⇠ To: Johnston, Alicia (MEI); Kristin Jenkins⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim⇠ MacDougall; Mary Bernard; Tim Butters⇠ Subject: Re: Additional FIT Price Info⇠ Yes, as soon as possible after the consultation is over. We were originally going to schedule a webinar to talk about the different economics associated with trackers. But there doesn't seem a need to do that anymore. We could do one before August 4, but I would be concerned that it would either result in the same old list of complaints or speculation on what we are going to announce. But we can talk later.! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Ben Chin; Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ;! Tasca, Leo (MEI) ; Nutter, George (MEI) ; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:56:44 2010! Subject: RE: Additional FIT Price Info! Immediately after which announcement?! _________________________ _____ __! From: Ben Chin [ mailto:Ben.Chin@powerauthority.on.ca ]! Sent: July 22, 2010 5:55 PM! To: Johnston, Alicia (MEI); Kristin Jenkins! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Subject: Re: Additional FIT Price Info! 3732 Our thinking is changing on webinar to immediately after announcement now! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ;! Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:45:44 2010! Subject: RE: Additional FIT Price Info! Thanks for this.! Will you be announcing the next webinar date tomorrow, as well?! _________________________ _____ __! From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca ]! Sent: July 22, 2010 4:50 PM! To: Johnston, Alicia (MEI)! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Subject: Additional FIT Price Info! Hi Alicia,! As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin! < http://www.powerpledge.ca >! Take The Power Pledge at www.powerpledge.ca This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly! prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.! 3733 MacLennan, Craig (MEI)⌘ From: MacLennan, Craig (MEI)⌘ Sent: July-22-10 6:18 PM⌘ To: Johnston, Alicia (MEI); Ben Chin; Kristin Jenkins⌘ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter,⌘ George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; Levitan,⌘ Daniel (MEI)⌘ Subject: Re: Additional FIT Price Info⌘ Agreed.⌥ From: Johnston, Alicia (MEI) To: 'Ben Chin' ; Kristin Jenkins  Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters ; MacLennan, Craig (MEI); Levitan, Daniel (MEI) Sent: Thu Jul 22 18:14:21 2010 Subject: RE: Additional FIT Price Info Given the fact we put out the assumptions on the 58 cents last week and are putting more info out tomorrow then would it not be important to allow people to feed in and respond to the new info? I ’ m concerned that if we don ’ t give⌥ people a controlled platform to show that “ we are listening ” then they will continue to find more creative ways to express their frustration.⌥ I understand there are other considerations, so let ’ s talk later.⌥ A⌥ From: Ben Chin [mailto:Ben.Chin@powerauthority.on.ca] Sent: July 22, 2010 6:02 PM To: Johnston, Alicia (MEI); Kristin Jenkins Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Subject: Re: Additional FIT Price Info Yes, as soon as possible after the consultation is over. We were originally going to schedule a webinar to talk about the different economics associated with trackers. But there doesn't seem a need to do that anymore. We could do one before August 4, but I would be concerned that it would either result in the same old list of complaints or speculation on what we are going to announce. But we can talk later.! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Ben Chin; Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ;! Tasca, Leo (MEI) ; Nutter, George (MEI) ; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:56:44 2010! Subject: RE: Additional FIT Price Info! Immediately after which announcement?! 3734 _________________________ _____ __! From: Ben Chin [ mailto:Ben.Chin@powerauthority.on.ca ]! Sent: July 22, 2010 5:55 PM! To: Johnston, Alicia (MEI); Kristin Jenkins! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Subject: Re: Additional FIT Price Info! Our thinking is changing on webinar to immediately after announcement now! ----- Original Message ----From: Johnston, Alicia (MEI) ! To: Kristin Jenkins! CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ;! Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Sent: Thu Jul 22 17:45:44 2010! Subject: RE: Additional FIT Price Info! Thanks for this.! Will you be announcing the next webinar date tomorrow, as well?! _________________________ _____ __! From: Kristin Jenkins [mailto:Kristin.Jenkins@powerauthority.on.ca ]! Sent: July 22, 2010 4:50 PM! To: Johnston, Alicia (MEI)! Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim! MacDougall; Mary Bernard; Tim Butters! Subject: Additional FIT Price Info! Hi Alicia,! As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin! < http://www.powerpledge.ca >! Take The Power Pledge at www.powerpledge.ca 3735 This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly! prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.! 3736 Ben Chin From: Ben Chin Sent: July-22-10 6:18 PM To: 'Alicia.Johnston@ontario.ca'; Kristin Jenkins Cc: 'andrew.block@ontario.ca'; 'Maryanna.Lewyckyj@ontario.ca'; 'Leo.Tasca@ontari o.ca'; 'george.nutter@ontario.ca'; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; 'craig.maclennan@ontario.ca'; 'Daniel.Levitan@ontario.ca' Subject: Re: Additional FIT Price Info Good points all. We can't say no to anything! Let's plot it out after I get ground mounted. Dealt with tonight, that is. ----- Original Message ----From: Johnston, Alicia (MEI) To: Ben Chin; Kristin Jenkins CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Levitan, Daniel (MEI) Sent: Thu Jul 22 18:14:21 2010 Subject: RE: Additional FIT Price Info Given the fact we put out the assumptions on the 58 cents last week and are putting more info out tomorrow then would it not be important to allow people to feed in and respond to the new info? I ’ m concerned that if we don ’ t give people a controlled platform to show that “ we are listening ” then they will continue to find more creative ways to express their frustration. I understand there are other considerations, so let ’ s talk later. A _________________________ _____ __ From: Ben Chin [ mailto:Ben.Chin@powerauthority.on.ca ] Sent: July 22, 2010 6:02 PM To: Johnston, Alicia (MEI); Kristin Jenkins Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Subject: Re: Additional FIT Price Info Yes, as soon as possible after the consultation is over. We were originally going to schedule a webinar to talk about the different economics associated with trackers. But there doesn't seem a need to do that anymore. We could do one before August 4, but I would be concerned that it would either result in the same old list of complaints or speculation on what we are going to announce. But we can talk later. ----- Original Message ----From: Johnston, Alicia (MEI) To: Ben Chin; Kristin Jenkins CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, 3737 Leo (MEI) ; Nutter, George (MEI) ; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Sent: Thu Jul 22 17:56:44 2010 Subject: RE: Additional FIT Price Info Immediately after which announcement? _________________________ _____ __ From: Ben Chin [ mailto:Ben.Chin@powerauthority.on.ca ] Sent: July 22, 2010 5:55 PM To: Johnston, Alicia (MEI); Kristin Jenkins Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Subject: Re: Additional FIT Price Info Our thinking is changing on webinar to immediately after announcement now ----- Original Message ----From: Johnston, Alicia (MEI) To: Kristin Jenkins CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Sent: Thu Jul 22 17:45:44 2010 Subject: RE: Additional FIT Price Info Thanks for this. Will you be announcing the next webinar date tomorrow, as well? _________________________ _____ __ From: Kristin Jenkins [ mailto:Kristin.Jenkins@powerauthority.on.ca ] Sent: July 22, 2010 4:50 PM To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters Subject: Additional FIT Price Info Hi Alicia, As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. Kristin 3738 < http://www.powerpledge.ca> Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3739 Johnston, Alicia (MEI)◆ From: Johnston, Alicia (MEI)◆ Sent: July-23-10 12:09 AM◆ To: Kristin Jenkins◆ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter,◆ George (MEI); Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim◆ Butters; MacLennan, Craig (MEI); Cooper, Linda (MEI)◆ Subject: Re: Additional FIT Price Info◆ Kristin, FYI - here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below. - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. - is it worthwhile adding a fixed groundmount example? - in the examples of capacity factors of different cities, can we use a SW Ont example? - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"? - what are the pieces of this that will be picked apart and criticised as wrong? - will this satisfy requests for "more detailed info"? - will this satisfy the environment commissioner's request? - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Alicia From: Kristin Jenkins ⇠ To: Johnston, Alicia (MEI)⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin⇠ ; Glenna Ford ; Jim MacDougall⇠ ; Mary Bernard ; Tim Butters⇠ ⇠ Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info⇠ Hi Alicia, As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.⌧ 3740 Can you please review and let me know if you have any comments/changes? Thanks.⌧ Kristin Take The Power Pledge at www.powerpledge.ca✓ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law . If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e mail message. 3741 Jim MacDougall From: Jim MacDougall⇧ Sent: July-23-10 7:28 AM⇧ To: Kristin Jenkins; Sarah Simmons⇧ Subject: Fw: Additional FIT Price Info⇧ Attachments: powerpledge_2010.gif⇧ Sarah⇧ Can you take the first crack?⇧ Jim MacDougall, P.Eng.⇧ Manager, FIT Program⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Johnston, Alicia (MEI) ⇧ To: Kristin Jenkins⇧ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) ⇧ Sent: Fri Jul 23 00:09:15 2010⇧ Subject: Re: Additional FIT Price Info⇧ Kristin,⇧ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇧ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇧ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇧ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions.⇧ - is it worthwhile adding a fixed groundmount example?⇧ - in the examples of capacity factors of different cities, can we use a SW Ont example?⇧ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇧ - what are the pieces of this that will be picked apart and criticised as wrong?⇧ - will this satisfy requests for "more detailed info"?⇧ - will this satisfy the environment commissioner's request?⇧ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument?⇧ 3742 Alicia⇧ _________________________ _____ __⇧ From: Kristin Jenkins ⇧ To: Johnston, Alicia (MEI)⇧ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters ⇧ Sent: Thu Jul 22 16:50:02 2010⇧ Subject: Additional FIT Price Info⇧ Hi Alicia,⇧ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <>⇧ Kristin⇧ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇧ 3743 Kristin Jenkins↵ From: Kristin Jenkins⌦ Sent: July-23-10 8:06 AM⌦ To: Glenna Ford; Jim MacDougall⌦ Subject: Fw: Additional FIT Price Info⌦ Attachments: powerpledge_2010.gif⌦ Glenna/Jim⌦ Below are the first comments from MEI. Glenna can you please start incorporating the straightforward non - technical ones. Jim can you please provide answers to the questions and send to me and Glenna. I will be in office around 11 am but am on Blackberry. My cell is 4163029717.⌦ Kristin⌦ -------------------------Sent using BlackBerry⌦ ----- Original Message ----From: Johnston, Alicia (MEI) ⌦ To: Kristin Jenkins⌦ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) ⌦ Sent: Fri Jul 23 00:09:15 2010⌦ Subject: Re: Additional FIT Price Info⌦ Kristin,⌦ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⌦ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⌦ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⌦ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. - is it worthwhile adding a fixed groundmount example?⌦ - in the examples of capacity factors of different cities, can we use a SW Ont example?⌦ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⌦ - what are the pieces of this that will be picked apart and criticised as wrong?⌦ 3744 - will this satisfy requests for "more detailed info"?⌦ - will this satisfy the environment commissioner's request?⌦ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument?⌦ Alicia⌦ _________________________ _____ __⌦ From: Kristin Jenkins To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⌦ Subject: Additional FIT Price Info Hi Alicia,⌦ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <>⌦ Kristin⌦ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3745 Kristin Jenkins↵ From: Kristin Jenkins⌧ Sent: July-23-10 8:08 AM⌧ To: Jim MacDougall; Sarah Simmons; Glenna Ford⌧ Subject: Re: Additional FIT Price Info⌧ i've asked Glenna to incorporate straight forward comments. Sarah if you can do questions and send to Glenna that's great⌧ -------------------------Sent using BlackBerry⌧ ----- Original Message ----From: Jim MacDougall⌧ To: Kristin Jenkins; Sarah Simmons⌧ Sent: Fri Jul 23 07:28:06 2010⌧ Subject: Fw: Additional FIT Price Info⌧ Sarah⌧ Can you take the first crack?⌧ Jim MacDougall, P.Eng.⌧ Manager, FIT Program⌧ Ontario Power Authority⌧ 416 969 6415⌧ Sent from my BB⌧ ----- Original Message ----From: Johnston, Alicia (MEI) ⌧ To: Kristin Jenkins⌧ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) ⌧ Sent: Fri Jul 23 00:09:15 2010⌧ Subject: Re: Additional FIT Price Info⌧ Kristin,⌧ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⌧ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⌧ 3746 - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⌧ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. - is it worthwhile adding a fixed groundmount example?⌧ - in the examples of capacity factors of different cities, can we use a SW Ont example?⌧ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⌧ - what are the pieces of this that will be picked apart and criticised as wrong?⌧ - will this satisfy requests for "more detailed info"?⌧ - will this satisfy the environment commissioner's request?⌧ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument?⌧ Alicia⌧ _________________________ _____ __⌧ From: Kristin Jenkins To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⌧ Subject: Additional FIT Price Info Hi Alicia,⌧ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <> Kristin⌧ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain 3747 Jim MacDougall From: Jim MacDougall⌘ Sent: July-23-10 8:24 AM⌘ To: Kristin Jenkins; Sarah Simmons; Glenna Ford⌘ Subject: Re: Additional FIT Price Info⌘ I will do in sarahs absence.⌘ Jim MacDougall, P.Eng.⌘ Manager, FIT Program⌘ Ontario Power Authority⌘ 416 969 6415⌘ Sent from my BB⌘ ----- Original Message ----From: Kristin Jenkins⌘ To: Jim MacDougall; Sarah Simmons; Glenna Ford⌘ Sent: Fri Jul 23 08:07:37 2010⌘ Subject: Re: Additional FIT Price Info⌘ i've asked Glenna to incorporate straight forward comments. Sarah if you can do questions and send to Glenna that's great⌘ -------------------------Sent using BlackBerry⌘ ----- Original Message ----From: Jim MacDougall⌘ To: Kristin Jenkins; Sarah Simmons⌘ Sent: Fri Jul 23 07:28:06 2010⌘ Subject: Fw: Additional FIT Price Info⌘ Sarah⌘ Can you take the first crack?⌘ Jim MacDougall, P.Eng.⌘ Manager, FIT Program⌘ Ontario Power Authority⌘ 416 969 6415⌘ Sent from my BB⌘ ----- Original Message ----From: Johnston, Alicia (MEI) ⌘ To: Kristin Jenkins⌘ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) ⌘ Sent: Fri Jul 23 00:09:15 2010⌘ Subject: Re: Additional FIT Price Info⌘ Kristin,⌘ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⌘ 3748 - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⌘ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⌘ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions.⌘ - is it worthwhile adding a fixed groundmount example?⌘ - in the examples of capacity factors of different cities, can we use a SW Ont example?⌘ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⌘ - what are the pieces of this that will be picked apart and criticised as wrong?⌘ - will this satisfy requests for "more detailed info"?⌘ - will this satisfy the environment commissioner's request?⌘ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument?⌘ Alicia⌘ _________________________ _____ __⌘ From: Kristin Jenkins ⌘ To: Johnston, Alicia (MEI)⌘ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters ⌘ Sent: Thu Jul 22 16:50:02 2010⌘ Subject: Additional FIT Price Info⌘ Hi Alicia,⌘ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <> Kristin⌘ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⌘ 3749 Jim MacDougall From: Jim MacDougall Sent: July-23-10 9:03 AM To: Kristin Jenkins; Jason Chee-Aloy Cc: Travis Lusney Subject: Re: Additional FIT Price Info Pls note I will be on the road by noon so will get rewrite asap. Travis may need to be on standby for any number cruches late todday Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Jim MacDougall To: Kristin Jenkins; Sarah Simmons; Glenna Ford Sent: Fri Jul 23 08:24:11 2010 Subject: Re: Additional FIT Price Info I will do in sarahs absence. Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Kristin Jenkins To: Jim MacDougall; Sarah Simmons; Glenna Ford Sent: Fri Jul 23 08:07:37 2010 Subject: Re: Additional FIT Price Info i've asked Glenna to incorporate straight forward comments. Sarah if you can do questions and send to Glenna that's great -------------------------Sent using BlackBerry ----- Original Message ----From: Jim MacDougall To: Kristin Jenkins; Sarah Simmons Sent: Fri Jul 23 07:28:06 2010 Subject: Fw: Additional FIT Price Info Sarah Can you take the first crack? Jim MacDougall, P.Eng. 3750 Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Johnston, Alicia (MEI) To: Kristin Jenkins CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) Sent: Fri Jul 23 00:09:15 2010 Subject: Re: Additional FIT Price Info Kristin, FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below. - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. - is it worthwhile adding a fixed groundmount example? - in the examples of capacity factors of different cities, can we use a SW Ont example? - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"? - what are the pieces of this that will be picked apart and criticised as wrong? - will this satisfy requests for "more detailed info"? - will this satisfy the environment commissioner's request? - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Alicia _________________________ _____ __ From: Kristin Jenkins To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010 Subject: Additional FIT Price Info Hi Alicia, 3751 As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <> Kristin < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3752 Glenna Ford↵ From: Glenna Ford⇠ Sent: July-23-10 9:31 AM⇠ To: Kristin Jenkins; Jim MacDougall; Sarah Simmons⇠ Subject: RE: Additional FIT Price Info⇠ Attachments: FIT rate derivation - simplified example v3 - GF.doc⇠ I have addressed the following two comments in the attached and edited for style, etc.:⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ The other comments are better left to Jim. I would be happy to edit for clarity. ----- Original Message ----From: Kristin Jenkins Sent: July 23, 2010 8:08 AM⇠ To: Jim MacDougall; Sarah Simmons; Glenna Ford⇠ Subject: Re: Additional FIT Price Info⇠ i've asked Glenna to incorporate straight forward comments. Sarah if you can do questions and send to Glenna that's great⇠ -------------------------Sent using BlackBerry⇠ ----- Original Message ----From: Jim MacDougall⇠ To: Kristin Jenkins; Sarah Simmons⇠ Sent: Fri Jul 23 07:28:06 2010⇠ Subject: Fw: Additional FIT Price Info⇠ Sarah⇠ Can you take the first crack?⇠ Jim MacDougall, P.Eng.⇠ Manager, FIT Program⇠ Ontario Power Authority⇠ 416 969 6415⇠ Sent from my BB⇠ ----- Original Message -----⇠ 3753 From: Johnston, Alicia (MEI) ⇠ To: Kristin Jenkins⇠ CC: Block, Andrew (MEI) ; Lewyckyj, Maryanna (MEI) ; Tasca, Leo (MEI) ; Nutter, George (MEI) ; Ben Chin; Glenna Ford; Jim MacDougall; Mary Bernard; Tim Butters; MacLennan, Craig (MEI) ; Cooper, Linda (MEI) ⇠ Sent: Fri Jul 23 00:09:15 2010⇠ Subject: Re: Additional FIT Price Info⇠ Kristin,⇠ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. - is it worthwhile adding a fixed groundmount example?⇠ - in the examples of capacity factors of different cities, can we use a SW Ont example?⇠ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇠ - what are the pieces of this that will be picked apart and criticised as wrong?⇠ - will this satisfy requests for "more detailed info"?⇠ - will this satisfy the environment commissioner's request?⇠ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument?⇠ Alicia⇠ _________________________ _____ __⇠ From: Kristin Jenkins To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info 3754 Hi Alicia,⇠ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks. <> Kristin⇠ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3755 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the assumptions made in deriving the new proposed price, as well as the methodology for calculating the return on equity for the typical project. The rationale for the proposed price was posted on the microFIT website on July 14, including the assumptions used. The OPA is now providing further detail for the proposal. Background Project cost information was developed from a range of sources using best available information. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. The microFIT Program is a standard offer program, intended to provide a straightforward way to contract for renewable energy generation. As such, it provides standardized program rules, prices and contracts. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as equity investment Percentage of project cost as debt, borrowed from bank After tax return on equity from investment Cost of debt, repaid to bank Income tax rate on profit from equity investment Inflation rate 30 percent 70 percent 11 percent 7 percent 30.5 percent 2.25 percent The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70 percent = $63,000 (Debt, borrowed from bank) $90,000 x 30 percent = $27,000 (Equity invested from savings) 1 3756 Payments on borrowed amount are repaid to the bank at 7 percent interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7 percent = $370 per month or $4,440 per year Return on the Equity investment is paid monthly at 11 percent to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the Equity investor would be approximately $245 per month. e.g., $27,000 @ 11 percent = $245 per month or $2,940 per year On the basis of this simplified example, this would represent an annual profit of $2,940 per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11 percent return on equity Please note that that return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is suitable for demonstration purposes. Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8 c/kWh. Cost to install Annual O&M costs Capacity factor Annual production Annual revenue Simple payback Tracking (10 kW) $90,000 $100 19 percent 16,600 kWh $9,800 9 years The proposed rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a two-axis tracking system in Toronto may be approximately 17 percent, while the capacity factor of the same system may be approximately 21 percent in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of 2 3757 the system over its expected 20-year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19 percent. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19 percent = 16,600 kWh per year The proposed rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to: o cover the cost of investment o cover ongoing operating expenses o earn a reasonable rate of return over a 20-year contact term. The DCF model uses a seven step process to calculate prices: 1. annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. annual depreciation calculated using an appropriate capital cost allowance rate 4. operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. depreciation added back to net income to estimate actual cash flow 6. capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. free cash flows are then discounted using the target return on equity. 3 3758 Jim MacDougall From: Jim MacDougall⇠ Sent: July-23-10 11:09 AM⇠ To: Glenna Ford; Kristin Jenkins⇠ Cc: Travis Lusney⇠ Subject: RE: Additional FIT Price Info⇠ Attachments: FIT rate derivation -additional detail, example v4 - GF Jm.doc⇠ attached track changes commentary below in Alicia's email Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Glenna Ford↵ Sent: Fri 23/07/2010 9:30 AM↵ To: Kristin Jenkins; Jim MacDougall; Sarah Simmons↵ Subject: RE: Additional FIT Price Info↵ I have addressed the following two comments in the attached and edited for style, etc.:⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ The other comments are better left to Jim. I would be happy to edit for clarity. Kristin,⇠ FYI- here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. GF did↵ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) GF did↵ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. JM did↵ - is it worthwhile adding a fixed groundmount example? no, it will get too long⇠ 3759 - in the examples of capacity factors of different cities, can we use a SW Ont example? don't have readily available - point is its is range and we are taking typical⇠ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇠ the FIT assumptions always emphasized that we assume a 70/30 debt / equity split. microFIT↵ proponents may not have understood that. By using "equity" instaed of "invedstment" we are making↵ it clearer that 70% of project costs are assumed to be borrowed from a bank at a 7% interest rate,⇠ - what are the pieces of this that will be picked apart and criticised as wrong?⇠ The main area of legitimate critcism is on the O and M costs of $10/kW/year. This was taken from the↵ fixed rooftop system with very little maintenacne, and the trackers do in fact require more than this,⇠ perhaps 50 or 70 $ /kW/yr⇠ - will this satisfy requests for "more detailed info"?⇠ It should⇠ - will this satisfy the environment commissioner's request?⇠ It should⇠ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Jim did↵ WILL PEOPLE STOP CRITICISING? NO - they criticized the initial 80.2 as too low !!!!⇠ Alicia⇠ _________________________ _____ __⇠ From: Kristin Jenkins To: Johnston, Alicia (MEI) Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info Hi Alicia,⇠ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.↵ 3760 <>↵ Kristin⇠ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca↵ This e- mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message. 3761 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the calculations and the assumptions made in deriving the new proposed price, as well as the methodology for calculating the return on equity for the typical project. The rationale for the proposed price was posted on the microFIT website on July 14, including the assumptions used. The OPA is now providing further detail for the proposal. Background Project cost information was developed from a range of sources using best available information. The OPA’s financial model was developed with the assistance of Power Advisory LLC and the initial cost assumptions were developed with the assistance of Navigant Consulting Inc. Cost and perfromance data was updated on the basis of more recent Ontario market information, and of course reflected a ranges of cost and performance data. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. The microFIT Program is a standard offer program, intended to provide a straightforward way to contract for renewable energy generation. As such, it provides standardized program rules, prices and contracts, and will not match every project’s specific circumstances. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as equity investment Percentage of project cost as debt, borrowed from bank After tax return on equity from investment Cost of debt, repaid to bank Income tax rate on profit from equity investment Inflation rate 30 percent 70 percent 11 percent 7 percent 30.5 percent 2.25 percent The following is a detailed example of a ground mounted, dual axis tracker based project. These projects typically cost more than fixed ground mounted systems, 1 3762 however the electricity production from these projects generates more electricity and money. Fixed ground mount systems are less expensive than tracker based systems, and typically more cost effective than rooftop projects. Rooftop projects are typically smaller, between 3 and 5 kW, than fixed ground mount projects and can benefit from this increase in economy of scale. As well, fixed ground mount projects have the advantage of being able to be located facing south, to optimize electricity production. The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70 percent = $63,000 (Debt, borrowed from bank) $90,000 x 30 percent = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7 percent interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7 percent = $370 per month or $4,440 per year Return on the equity investment is paid monthly at 11 percent to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the equity investor would be approximately $245 per month. e.g., $27,000 @ 11 percent = $245 per month or $2,940 per year On the basis of this simplified example, this would represent an annual profit of $2,940 per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11 percent return on equity Please note that the return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is for illustrative purposes to explain the basic approach taken by the OPA. Again, these financail assumptions are used for all FIT technologies Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8 c/kWh. Cost to install Annual O&M costs Capacity factor Annual production Tracking (10 kW) $90,000 $100 19 percent 16,600 kWh 2 3763 Annual revenue Simple payback $9,800 9 years The proposed rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a two-axis tracking system in Toronto may be approximately 17 percent, while the capacity factor of the same system may be approximately 21 percent in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20-year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19 percent. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19 percent = 16,600 kWh per year The proposed rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to: o cover the cost of investment o cover ongoing operating expenses o earn a reasonable rate of return over a 20-year contact term. The DCF model uses a seven step process to calculate prices: 1. annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. annual depreciation calculated using an appropriate capital cost allowance rate 3 3764 4. operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. depreciation added back to net income to estimate actual cash flow 6. capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. free cash flows are then discounted using the target return on equity. 4 3765 Glenna Ford↵ From: Glenna Ford↵ Sent: July-23-10 11:32 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Cc: Travis Lusney↵ Subject: RE: Additional FIT Price Info↵ Thank you. I am in a meeting until noon. Kristin, can you please weigh in and let me know when our posting will happen (more or less)? From: Jim MacDougall Sent: July 23, 2010 11:09 AM To: Glenna Ford; Kristin Jenkins Cc: Travis Lusney Subject: RE: Additional FIT Price Info attached track changes commentary below in Alicia's email Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Glenna Ford Sent: Fri 23/07/2010 9:30 AM To: Kristin Jenkins; Jim MacDougall; Sarah Simmons Subject: RE: Additional FIT Price Info I have addressed the following two comments in the attached and edited for style, etc.:⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ The other comments are better left to Jim. I would be happy to edit for clarity. Kristin,⇠ FYI - here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. GF did↵ 3766 - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) GF did↵ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. JM did↵ - is it worthwhile adding a fixed groundmount example? no, it will get too long⇠ - in the examples of capacity factors of different cities, can we use a SW Ont example? don't have readily available - point⇠ is its is range and we are taking typical⇠ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇠ the FIT assumptions always emphasized that we assume a 70/30 debt / equity split. microFIT proponents may↵ not have understood that. By using "equity" instaed of "invedstment" we are making it clearer that 70% of↵ project costs are assumed to be borrowed from a bank at a 7% interest rate,⇠ - what are the pieces of this that will be picked apart and criticised as wrong?⇠ The main area of legitimate critcism is on the O and M costs of $10/kW/year. This was taken from the fixed↵ rooftop system with very little maintenacne, and the trackers do in fact require more than this, perhaps 50 or 70⇠ $ /kW/yr⇠ - will this satisfy requests for "more detailed info"?⇠ It should⇠ - will this satisfy the environment commissioner's request?⇠ It should⇠ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Jim did↵ WILL PEOPLE STOP CRITICISING? NO - they criticized the initial 80.2 as too low !!!!⇠ Alicia⇠ _________________________ _____ __⇠ From: Kristin Jenkins To: Johnston, Alicia (MEI)⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin⇠ ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info⇠ 3767 Hi Alicia,⇠ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.↵ <>↵ Kristin⇠ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca↵ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇠ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇠ 3768 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-23-10 11:34 AM↵ To: Glenna Ford; Jim MacDougall↵ Cc: Travis Lusney↵ Subject: RE: Additional FIT Price Info↵ Hopefully this afternoon. I will want to run the revised document by MEI. From: Glenna Ford↵ Sent: July 23, 2010 11:32 AM↵ To: Jim MacDougall; Kristin Jenkins↵ Cc: Travis Lusney↵ Subject: RE: Additional FIT Price Info↵ Thank you. I am in a meeting until noon. Kristin, can you please weigh in and let me know when our posting will happen (more or less)? From: Jim MacDougall↵ Sent: July 23, 2010 11:09 AM↵ To: Glenna Ford; Kristin Jenkins↵ Cc: Travis Lusney↵ Subject: RE: Additional FIT Price Info↵ attached track changes commentary below in Alicia's email Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Glenna Ford↵ Sent: Fri 23/07/2010 9:30 AM↵ To: Kristin Jenkins; Jim MacDougall; Sarah Simmons↵ Subject: RE: Additional FIT Price Info↵ I have addressed the following two comments in the attached and edited for style, etc.:⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ The other comments are better left to Jim. I would be happy to edit for clarity. 3769 Kristin,⇠ FYI - here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. GF did↵ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) GF did↵ - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. JM did↵ - is it worthwhile adding a fixed groundmount example? no, it will get too long⇠ - in the examples of capacity factors of different cities, can we use a SW Ont example? don't have readily available - point⇠ is its is range and we are taking typical⇠ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇠ the FIT assumptions always emphasized that we assume a 70/30 debt / equity split. microFIT proponents may⇠ not have understood that. By using "equity" instaed of "invedstment" we are making it clearer that 70% of↵ project costs are assumed to be borrowed from a bank at a 7% interest rate,⇠ - what are the pieces of this that will be picked apart and criticised as wrong?⇠ The main area of legitimate critcism is on the O and M costs of $10/kW/year. This was taken from the fixed↵ rooftop system with very little maintenacne, and the trackers do in fact require more than this, perhaps 50 or 70⇠ $ /kW/yr⇠ - will this satisfy requests for "more detailed info"?⇠ It should⇠ - will this satisfy the environment commissioner's request?⇠ It should⇠ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Jim did↵ WILL PEOPLE STOP CRITICISING? NO - they criticized the initial 80.2 as too low !!!!⇠ Alicia⇠ _________________________ _____ __⇠ From: Kristin Jenkins 3770 From: Kristin Jenkins To: Johnston, Alicia (MEI)⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin⇠ ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters⇠ Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info⇠ Hi Alicia,⇠ As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.↵ <>↵ Kristin⇠ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca↵ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇠ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇠ 3771 Kristin Jenkins↵ From: Kristin Jenkins↵ Sent: July-23-10 12:35 PM↵ To: Johnston, Alicia (MEI); 'Lewyckyj, Maryanna (MEI)'↵ Cc: Jim MacDougall; Travis Lusney; Glenna Ford; Andrew Yates↵ Subject: Revised Additional Price Information↵ Attachments: FIT rate derivation -additional detail example v4 - GF Jm.doc↵ Importance: High↵ Attached is the revised document incorporating your comments and questions. Please review and let me know as⇢ soon as possible if you have any further changes. Thanks.⇢ Kristin⌥ 3772 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the calculations and the assumptions made in deriving the new proposed price, as well as the methodology for calculating the return on equity for the typical project. The rationale for the proposed price was posted on the microFIT website on July 14, including the assumptions used. The OPA is now providing further detail for the proposal. Background Project cost information was developed from a range of sources using best available information. The OPA’s financial model was developed with the assistance of Power Advisory LLC and the initial cost assumptions were developed with the assistance of Navigant Consulting Inc. Cost and perfromance data was updated on the basis of more recent Ontario market information, and of course reflected a ranges of cost and performance data. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. The microFIT Program is a standard offer program, intended to provide a straightforward way to contract for renewable energy generation. As such, it provides standardized program rules, prices and contracts, and will not match every project’s specific circumstances. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as equity investment Percentage of project cost as debt, borrowed from bank After tax return on equity from investment Cost of debt, repaid to bank Income tax rate on profit from equity investment Inflation rate 30 percent 70 percent 11 percent 7 percent 30.5 percent 2.25 percent The following is a detailed example of a ground mounted, dual axis tracker based project. These projects typically cost more than fixed ground mounted systems, 1 3773 however the electricity production from these projects generates more electricity and money. Fixed ground mount systems are less expensive than tracker based systems, and typically more cost effective than rooftop projects. Rooftop projects are typically smaller, between 3 and 5 kW, than fixed ground mount projects and can benefit from this increase in economy of scale. As well, fixed ground mount projects have the advantage of being able to be located facing south, to optimize electricity production. The capital cost for a 10 kW solar PV ground-mounted project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70 percent = $63,000 (Debt, borrowed from bank) $90,000 x 30 percent = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7 percent interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7 percent = $370 per month or $4,440 per year Return on the equity investment is paid monthly at 11 percent to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the equity investor would be approximately $245 per month. e.g., $27,000 @ 11 percent = $245 per month or $2,940 per year On the basis of this simplified example, this would represent an annual profit of $2,940 per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11 percent return on equity Please note that the return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is for illustrative purposes to explain the basic approach taken by the OPA. Again, these financail assumptions are used for all FIT technologies Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8 c/kWh. Cost to install Annual O&M costs Capacity factor Annual production Tracking (10 kW) $90,000 $100 19 percent 16,600 kWh 2 3774 Annual revenue Simple payback $9,800 9 years The proposed rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a two-axis tracking system in Toronto may be approximately 17 percent, while the capacity factor of the same system may be approximately 21 percent in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20-year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19 percent. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19 percent = 16,600 kWh per year The proposed rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to: o cover the cost of investment o cover ongoing operating expenses o earn a reasonable rate of return over a 20-year contact term. The DCF model uses a seven step process to calculate prices: 1. annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3. annual depreciation calculated using an appropriate capital cost allowance rate 3 3775 4. operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. depreciation added back to net income to estimate actual cash flow 6. capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. free cash flows are then discounted using the target return on equity. 4 3776 Glenna Ford↵ From: Glenna Ford↵ Sent: July-23-10 12:36 PM↵ To: Jim MacDougall↵ Subject: RE: Additional FIT Price Info↵ Thanks, Jim. From: Jim MacDougall Sent: July 23, 2010 11:09 AM To: Glenna Ford; Kristin Jenkins Cc: Travis Lusney Subject: RE: Additional FIT Price Info attached track changes commentary below in Alicia's email Jim MacDougall, P.Eng. Manager, Distributed Generation Ontario Power Authority (416) 969 - 6415 From: Glenna Ford Sent: Fri 23/07/2010 9:30 AM To: Kristin Jenkins; Jim MacDougall; Sarah Simmons Subject: RE: Additional FIT Price Info I have addressed the following two comments in the attached and edited for style, etc.:⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received.⇠ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.)⇠ The other comments are better left to Jim. I would be happy to edit for clarity. Kristin,⇠ FYI - here are a few initial observations I have. We'll try to turn around consolidated feedback from MEI quickly to you tomorrow, but please have a look at the questions below.⇠ - let's state in the second paragraph that we posted assumptions last week, and this is adding detail to questions we've received. GF did↵ - In the background section, first paragraph: let's build on the line "not all projects will match the typical assumptions.." by stating clearly that this is a Standard Offer program (and explain what that means.) GF did↵ 3777 - "project cost information was developed from a range of sources" Let's state some of those source areas, to give some credibility and context to the assumptions. JM did↵ - is it worthwhile adding a fixed groundmount example? no, it will get too long⇠ - in the examples of capacity factors of different cities, can we use a SW Ont example? don't have readily available - point⇠ is its is range and we are taking typical⇠ - what is the reaction going to be to us shifting from saying "11 per cent ROI" to "11 per cent ROE"?⇠ the FIT assumptions always emphasized that we assume a 70/30 debt / equity split. microFIT proponents may↵ not have understood that. By using "equity" instaed of "invedstment" we are making it clearer that 70% of↵ project costs are assumed to be borrowed from a bank at a 7% interest rate,⇠ - what are the pieces of this that will be picked apart and criticised as wrong?⇠ The main area of legitimate critcism is on the O and M costs of $10/kW/year. This was taken from the fixed↵ rooftop system with very little maintenacne, and the trackers do in fact require more than this, perhaps 50 or 70⇠ $ /kW/yr⇠ - will this satisfy requests for "more detailed info"?⇠ It should⇠ - will this satisfy the environment commissioner's request?⇠ It should⇠ - people still aren't buying that fixed groundmounted is cheaper than rooftop. What info can we present to further our argument? Jim did↵ WILL PEOPLE STOP CRITICISING? NO - they criticized the initial 80.2 as too low !!!!⇠ Alicia⇠ _________________________ _____ __⇠ From: Kristin Jenkins To: Johnston, Alicia (MEI)⇠ Cc: Block, Andrew (MEI); Lewyckyj, Maryanna (MEI); Tasca, Leo (MEI); Nutter, George (MEI); Ben Chin⇠ ; Glenna Ford ; Jim MacDougall ; Mary Bernard ; Tim Butters Sent: Thu Jul 22 16:50:02 2010⇠ Subject: Additional FIT Price Info⇠ Hi Alicia,⇠ 3778 As discussed with Ben, attached is the additional information on FIT pricing that we would like to post tomorrow. Can you please review and let me know if you have any comments/changes? Thanks.↵ <>↵ Kristin⇠ < http://www.powerpledge.ca > Take The Power Pledge at www.powerpledge.ca↵ This e - mail message and any files transmitted with it are intended only for the named recipient(s) above and may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient(s), any dissemination, distribution or copying of this e - mail message or any files transmitted with it is strictly⇠ prohibited. If you have received this message in error, or are not the named recipient(s), please notify the sender immediately and delete this e - mail message.⇠ 3779 Travis Lusney From: Travis Lusney Sent: July-23-10 12:49 PM To: Kristin Jenkins; 'Johnston, Alicia (MEI)'; 'Lewyckyj, Maryanna (MEI)' Cc: Jim MacDougall; Glenna Ford; Andrew Yates Subject: RE: Revised Additional Price Information Attachments: FIT rate derivation -additional detail example v4 - GF Jm tl.doc Some minor edits, looks good other then that✓ Travis✓ Travis Lusney OPA - Senior Business Analyst, Generation Procurement T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca From: Kristin Jenkins↵ Sent: Friday, July 23, 2010 12:35 PM↵ To: Johnston, Alicia (MEI); 'Lewyckyj, Maryanna (MEI)'↵ Cc: Jim MacDougall; Travis Lusney; Glenna Ford; Andrew Yates↵ Subject: Revised Additional Price Information↵ Importance: High↵ Attached is the revised document incorporating your comments and questions. Please review and let me know as⇢ soon as possible if you have any further changes. Thanks.⇢ Kristin✓ 3780 ---DRAFT--The OPA has received a significant response to the request for stakeholder feedback on the proposed new price category for ground mounted solar PV projects under the microFIT program. The OPA has also received a number of questions asking for more detail on the calculations and the assumptions made in deriving the new proposed price, as well as the methodology for calculating the return on equity for the typical project. The rationale for the proposed price was posted on the microFIT website on July 14, including the assumptions used. The OPA is now providing further detail for the proposal. Background Project cost information was developed from a range of sources using best available information. The OPA’s financial model was developed with the assistance of Power Advisory LLC and the initial cost assumptions were developed with the assistance of Navigant Consulting Inc. Cost and perfromance data was updated on the basis of more recent Ontario market information, and of course reflected a ranges of cost and performance data. All costs and other specific assumptions are derived from a range of possible numbers, and represent a typical project. Of course, not all projects will match the typical project assumptions, and some project specific data would either result in a higher or lower FIT price. The microFIT Program is a standard offer program, intended to provide a straightforward way to contract for renewable energy generation. As such, it provides standardized program rules, prices and contracts, and will not match every project’s specific circumstances. This is a simplified explanation and example, for the purpose of illustrating how the FIT and microFIT prices are derived. For all technologies, the OPA makes the following financial assumptions for a typical renewable energy project: Percentage of project cost as equity investment Percentage of project cost as debt, borrowed from bank After tax return on equity from investment Cost of debt, repaid to bank Income tax rate on profit from equity investment Inflation rate 30 percent 70 percent 11 percent 7 percent 30.5 percent 2.25 percent The following is a detailed example of a ground mounted, dual axis tracker based project. These projects typically cost more than fixed ground mounted systems, 1 3781 however the electricity production from these projects generates more electricity and money. Fixed ground mount systems are less expensive than tracker based systems, and typically more cost effective than rooftop projects. Rooftop projects are typically smaller, between 3 and 5 kW, than fixed ground mount projects and can benefit from this increase in economy of scale. As well, fixed ground mount projects have the advantage of being able to be located facing south, to optimize electricity production. The capital cost for a 10 kW solar PV ground-mounted dual axis tracker based project is assumed to be $90,000. Therefore, for a 10 kW ground-mounted solar PV project under microFIT: $90,000 x 70 percent = $63,000 (Debt, borrowed from bank) $90,000 x 30 percent = $27,000 (Equity invested from savings) Payments on borrowed amount are repaid to the bank at 7 percent interest. Assuming annuity payments (i.e., constant) over a 20 year period, the cost of debt would be approximately $370 per month. e.g., $63,000 @ 7 percent = $370 per month or $4,440 per year Return on the equity investment is paid monthly at 11 percent to the contract holder, the Supplier. Assuming annuity payments (i.e., constant) over a 20 year period, the payments to the equity investor would be approximately $245 per month. e.g., $27,000 @ 11 percent = $245 per month or $2,940 per year On the basis of this simplified example, this would represent an annual profit of $2,940 per year on an initial $27,000 equity investment. e.g., $2,940 / $27,000 = 11 percent return on equity Please note that the return on equity calculations are much more complicated than described above, because it includes factors such as inflation, compounding interest, taxes and O&M costs. However the example above is for illustrative purposes to explain the basic approach taken by the OPA. Again, these financial assumptions are used for all FIT technologies Additional detail on OPA assumptions for the proposed ground-mounted price of 58.8 c/kWh. Cost to install Annual O&M costs Capacity factor Tracking (10 kW) $90,000 $100 19 percent 2 3782 Annual production Annual revenue Simple payback 16,600 kWh $9,800 9 years The proposed rate is derived to ensure that the total payments made are based on the expected output from the renewable energy project. The expected output of a facility is based on the efficiency of the renewable energy technology and the amount of time that it is producing electricity – known as the capacity factor. In Ontario, the capacity factor of solar PV projects will vary regionally and depends on solar irradiation. For example, the capacity factor of a solar PV project with a two-axis tracking system in Toronto may be approximately 17 percent, while the capacity factor of the same system may be approximately 21 percent in Thunder Bay. The OPA assumed a capacity factor that is consistent with a range of capacity factors that are typical for Ontario. The capacity factors chosen are an average of the expected capacity factor of the system over its expected 20-year life, and take into account expected module performance degradation. For the purpose of deriving the proposed microFIT rate, the capacity factor of a 10 kW solar PV ground-mounted project dual-axis tracker system is assumed to be 19 percent. Over the course of one year, the project would produce approximately 16,600 kWh. e.g., 10 kW x 8760 hours per year x 19 percent = 16,600 kWh per year The proposed rate reflects the revenue requirements and the expected output of typical projects. A fulsome explanation of the model used by the OPA was provided to stakeholders during the FIT consultation period April 7, 2009. The FIT prices are developed using a Discounted Cash Flow (DCF) model, which are commonly used in project finance. The DCF model calculates the prices required to: o cover the cost of investment o cover ongoing operating expenses o earn a reasonable rate of return over a 20-year contact term. The DCF model uses a seven step process to calculate prices: 1. annual generation output is estimated for a given project based on the project capacity and assumed capacity factor 2. operating expenses estimated and include variable operation and maintenance cost, fixed operation and maintenance cost, and property tax 3 3783 3. annual depreciation calculated using an appropriate capital cost allowance rate 4. operating expenses, depreciation, interests, and income taxes deducted from revenue to arrive at net income 5. depreciation added back to net income to estimate actual cash flow 6. capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year 7. free cash flows are then discounted using the target return on equity. 4 3784 Bonnie Hiltz↵ From: Bonnie Hiltz↵ Sent: July-28-10 4:17 PM↵ To: Michael Killeavy↵ Cc: Susan Kennedy; Jim MacDougall; Yvonne Huang; Anshul Mathur; Travis Lusney↵ Subject: project splitting note↵ Attachments: Potential project splitting july 27-10.doc↵ Michael, Here is a draft note with background and recommended next steps for the project splitting issue. Changes are welcome. Bonnie 3785 Potential Project Splitting July 28, 2010 Background The FIT rules prohibit suppliers from breaking larger projects into smaller ones! for the purposes of seeking a higher FIT price or to circumvent the total MW project size cap. This is commonly referred to as ‘project splitting’. This prohibition is implemented via a number of mechanisms in the rules and! definitions: o For any single property, the total Gross Nameplate Capacity of all solar! (PV) generating facilities participating in the FIT Program and located on! such property may not exceed 10 MW. For any single property, the total! Gross Nameplate Capacity of all waterpower generating facilities! participating in the FIT Program and located on such property may not! exceed 50 MW. o Property is defined as the lands encompassed by the legal description of! the Site and includes and lands adjacent to the lands set out in the legal! description of the Site which are owned by an Affiliate of, or the same! Person as, any Person who owns any of the lands encompassed by the! legal description of the Site. o Affiliate means any Person that i) controls a party; ii) is Controlled by a! Party; or iii) is Controlled by the same Person that Controls a Party. Essentially, what this means is that there is a cap (10MW for solar and 50MW for! waterpower) on the total capacity allowed on the same or adjacent property! owned by the same individual or their Affiliate. The OPA has become aware of three contracts and one ECT project which may be! in violation of the FIT project splitting rules. All are 10MW ground mount solar! facilities owned by Canadian Solar. Two contracts appear to be located on the! same site and one contract appears to be located on a site adjacent to an ECT! project. Same Site! It has come to the OPA’s attention that two 10MW ground mounted solar FIT! contracts are located on land which has the same parcel number and roll number. This would be considered the same property for the purposes of the FIT program! and therefore would surpass the total capacity limit allowable for solar PV. This! means that the projects are ineligible for the FIT program. These two projects have received contract offers, but the OPA has not executed! the contracts, nor returned the application securities. However, they would need! to be treated as executed contracts because the contract offer could be considered! legally binding on the OPA. 3786 In the FIT application, there is a section that reads: By submitting this! Application, the Applicant agrees and acknowledges that the Applicant has read! and understood the FIT Rules, obtained independent legal advice, and agrees to! comply with all requirements contained therein. Furthermore, the FIT contract states: 6.1 (f) All statements, specifications, data,! confirmations, and information that have been set out in the Application are! complete and accurate in all material respects and are hereby restated and! reaffirmed by the Supplier as representations made to the OPA hereunder and! there is no material information omitted from the Application which makes the information in the Application misleading or inaccurate. Untrue representations on the part of the supplier qualify as a Supplier Event of! Default under section 9.1(d) of the contract. This means that OPA has the right to! terminate one or both contracts and retain the Completion and Performance! Securities. Next Steps The OPA proposes to contact the supplier to identify the apparent breach of FIT! rules and request clarification from the proponent. If they are unable to provide a satisfactory clarification, the OPA proposes to! initiate measures for the termination of one or both contracts. We would retain! the Completion and Performance Securities for the terminated project(s). The! security fees that would be forfeited equal $500,000 per project1. Adjacent Lands The OPA is also exploring a potential case of project splitting involving one FIT! contract and one ECT application. These projects appear to be on adjacent land,! which is considered the same property in the FIT contract. The Supplier (Canadian Solar) has also requested a project location change for the! contracted project, from the original project site to the adjacent site of the ECT! project. They further request that the location of the ECT project be moved. Next Steps The OPA is seeking legal advice on the ownership of the adjacent lands in order! to determine whether they are owned by the same person (they are currently! identified as corporations of a city and town which have been amalgamated).! If it is in fact found to be the same property according to FIT rules, we propose! contacting the supplier to identify the issue and request clarification. If the clarification does not resolve the matter, we would request that the supplier! withdraw the ECT project. 1 Note: The OPA has not yet returned the Application Securities for any of these projects. If terminated, the OPA would return the Application Securities and retain the Completion and Performance Securities. 3787 Once the ECT project is withdrawn, Contract Management could consider the! merits of approving a location change of the contracted facility to the adjacent! land. 3788 Michael Killeavy From: Michael Killeavy Sent: July-28-10 7:53 PM To: Colin Andersen; Kevin Dick; Jim MacDougall Cc: Amir Shalaby; Michael Lyle Subject: RE: Biogas Attachments: APAO_Briefing_Note_-_OPA_FIT_Contract_Provisions.pdf Basically, they are byproducts from the facility that could not be traded or sold at the time the contract was entered into.⇠ Amir and Kevin are right in describing what related products are, but in this context the stakeholders are likely to be referring to new products that can be created from the process used to create the biogas. The attached document might⇠ help provide more detailed information. I also found this: http://www.jgpress.com/archives/_free/002067.html Michael Killeavy, LL.B., MBA, P.Eng.⇠ Director, Contract Management Ontario Power Authority 120 Adelaide St. West, Suite 1600 Toronto, Ontario, M5H 1T1 416 - 969 - 6288 (office) 416 - 969 - 6071 (fax) 416 - 520 - 9788 (cell) Michael.killeavy@powerauthority.on.ca ----- Original Message ----From: Colin Andersen Sent: Wed 7/28/2010 7:18 PM To: Kevin Dick; Michael Killeavy; Jim MacDougall Cc: Amir Shalaby; Michael Lyle Subject: Biogas One of the issues that may come up on a tour we are taking of a biogas facility is the opa's approach in contracts to taking ownership of "future products" (I may have the terminology wrong). Can I get an email refresher including an example of what a product might be. Do we distinguish non electricity products from electricity related? 3789 Briefing Note Date: June 17, 2010⇣ Prepared By: Jennifer Green⇣ Regarding: OPA FIT Contract Provisions Issue⇡ The introduction of the Green Energy and Green Economy Act was intended to promote and support the⇣ development of renewable energy and stimulate the economy, in part, by the creation of green jobs.⇣ Biogas has the potential to contribute to each of these targets; however, several provisions within the⇣ Ontario Power Authority (OPA) Feed-In Tariff (FIT) Program are not satisfactory to support existing and⇣ continued developments of the biogas industry in Ontario. Specific provisions include: i) FIT pricing, ii)⇣ Canadian Price Index (CPI) escalation, iii) transmission cost exemption under RESOP, iv) future contract⇣ related products, v) environmental attributes, and vi) ecoEnergy Program.⇣ Key Messages⇡ FIT pricing for biogas need to be higher per category to achieve the 11% rate of return.⇣ CPI escalation for biogas must be set at 45% to keep pace with on-going operation and⇣ maintenance costs unlike other renewables. Transmission and demand charges for the electricity required to operate a biogas facility should not⇣ be additional costs incurred by biogas proponents. The previous OPA RESOP clause should be⇣ reinstated.⇣ Biogas development has the potential for significant innovation opportunities and system⇣ improvements that will be hindered by OPA’s Future Contract Related Products clause. Reference⇣ to Future Contract Related Products should be removed from the FIT program.⇣ Environmental attributes, or at a minimum the methane destruction credits, should remain with⇣ the proponent for biogas technology and the responsibility to authenticate the environmental⇣ attributes should rest with the entity that retains the rights and ownership of them.⇣ Reference to the ecoEnergy Program (a federal combined heat and power program) should be⇣ removed from the FIT program. AgriEnergy Producers’ Association of Ontario · Association Des Producteurs d’AgriÉnergie De l’Ontario⇡ 275 Slater Street, Suite 900⇣ Ottawa, Ontario K1P 5H9⇣ T: 613 822-1004⇣ www.apao.ca exec_coord@apao.ca 3790 Briefing Note Background⇡ FIT Pricing⇣ FIT Pricing for biogas is currently set at the following rates:⇣ o On-Farm Biogas: @100kW - 19.5¢/kWh and >100kW @250kW - 18.5¢/kWh⇣ o Biogas: @500kW - 16¢/kWh, >500 @10MW - 14.7¢/kWh, >10MW - 10.4¢/kWh⇣ Capital expenditures and operating/maintenance costs for biogas development demand higher⇣ prices than are currently offered by OPA under the FIT program.⇣ The majority of biogas developments within Ontario were supported by provincial funding provided⇣ under the OMAFRA Biogas Financial Assistance Program, which has fully allocated all funds.⇣ OPA has not disclosed data or information to substantiate the rationale for biogas FIT pricing.⇣ Current OPA rates will not permit the increased development of biogas across Ontario on farms and⇣ in turn will not encourage the development of a biogas industry to support existing systems.⇣ CPI Escalation⇣ The OPA Price Schedule dated September 30, 2009 identifies an escalation percentage of 20% for⇣ all biogas technology over a 20 year term.⇣ Unlike wind, solar and water power, biogas must create, collect and process the ‘fuel’ necessary for⇣ generation (‘fuel’ includes on-farm materials and/or off-farm materials). These activities incur⇣ significant operating expenses such as⇣ o producing, assembling or acquiring the ‘fuel’;⇣ o preparing and delivering fuel for biogas (biological) processing;⇣ o designing and constructing the conditions to establish and maintain that process;⇣ o actively managing, stimulating and controlling that process; and,⇣ o managing the recovery, storage and ultimate fate of the spent ‘fuel’.⇣ CPI impact is greater on biogas ‘fuel’ costs and overall O&M costs for biogas systems.⇣ Biogas facilities are comprised of tanks, heaters, pumps, mixers, control systems, not to mention⇣ the generator. All such components will require investment in maintenance, replacement or⇣ refurbishment over a 20 year period which is not satisfied by the 20% CPI.⇣ AgriEnergy Producers’ Association of Ontario · Association Des Producteurs d’AgriÉnergie De l’Ontario⇡ 275 Slater Street, Suite 900⇣ Ottawa, Ontario K1P 5H9⇣ T: 613 822-1004⇣ www.apao.ca exec_coord@apao.ca 3791 Briefing Note Transmission Costs⇣ A biogas facility, unlike other renewables, requires energy to process the fuel that generates⇣ electricity.⇣ Under RESOP, transmission and demand charges for the power required to operate a biogas facility⇣ were not incurred by the proponent.⇣ In most cases, biogas facilities connected to a distribution system are providing local power for⇣ community use. This results in a lower cost to the ratepayer for transmission in comparison to⇣ traditional sources of generation more distant from the load.⇣ The OPA has since reneged on this opportunity under FIT resulting in duplication of fees related to⇣ transmission, debt charges, demand charges and energy consumption prices.⇣ This previous OPA RESOP clause should be reinstated for biogas systems.⇣ Future Contract Related Products⇣ The biogas industry has the potential to be a significant contributor to attaining the renewable⇣ energy targets and economic growth as set by the Provincial government, in part by applying⇣ innovation to develop alternative products.⇣ Currently, the OPA must be informed of any Future Contract Related Products resulting from a⇣ generation project that earns revenue and demands 80% of profits generated from said byproduct.⇣ This type of provision will stifle any form of innovation and/or system improvements that could be⇣ realized by biogas. These same opportunities could not be realized by other renewable⇣ technologies such as wind or solar.⇣ Further this provision directly contradicts the underlying premise of job creation and leading edge⇣ development in Ontario as intended under the Green Energy and Green Economy Act.⇣ Reference to Future Contract Related Products should be removed from the FIT program.⇣ Environmental⇣ Methane is 23 times more potent as a greenhouse gas than CO2. Biogas systems capture the⇣ methane to convert into a renewable energy source.⇣ AgriEnergy Producers’ Association of Ontario · Association Des Producteurs d’AgriÉnergie De l’Ontario⇡ 275 Slater Street, Suite 900⇣ Ottawa, Ontario K1P 5H9⇣ T: 613 822-1004⇣ www.apao.ca exec_coord@apao.ca 3792 Briefing Note The process of anaerobic digestion, and therefore destruction of methane, is being done by the⇣ producer (farmer) at the site of generation (on farms).⇣ Biogas, unlike any other renewable technology, provides many environmental benefits which⇣ improve our:⇣ o land - by adding enriched nutrient value back for crops,⇣ o water - by protecting our surface and ground water resources, and⇣ o air - by reducing the greenhouse gas emissions into the atmosphere by capturing⇣ methane.⇣ All Ontarians benefit from the environmental improvements resulting from biogas.⇣ Environmental benefits resulting from biogas technology have not been factored into the OPA Price⇣ Schedule and are therefore being realized for free.⇣ In addition, OPA can request that the generator authenticate the attributes thereby incurring the⇣ associated expenses before handing them over to OPA. This provision could result in significant⇣ financial loss when/if a trading market was to develop.⇣ All environmental attributes should be maintained by the biogas proponent, or at a minimum, the⇣ methane destruction credits.⇣ ecoEnergy Program⇣ Biogas systems utilize the waste heat in a closed loop circuit for operations and other ancillary⇣ heating applications. In turn, this reduces the dependence on fossil based fuels.⇣ ecoEnergy Program is a federally funded combined heat and power program which is now phasing⇣ out. Other countries provide incentives for these type of initiatives; however, the OPA is claiming a⇣ portion of profits under such programs.⇣ The principle behind this clause could be replicated to other such programs established in future⇣ and should not be accepted.⇣ Such a clause limits any advancement in technology and or improvements made to system⇣ technology.⇣ Reference to this provision within the OPA FIT contract should be removed.⇣ AgriEnergy Producers’ Association of Ontario · Association Des Producteurs d’AgriÉnergie De l’Ontario⇡ 275 Slater Street, Suite 900⇣ Ottawa, Ontario K1P 5H9⇣ T: 613 822-1004⇣ www.apao.ca exec_coord@apao.ca 3793 Briefing Note Contacts⇡ Jennifer Green ( exec_coord@apao.ca)⇣ AgriEnergy Producers’ Association of Ontario · Association Des Producteurs d’AgriÉnergie De l’Ontario⇡ 275 Slater Street, Suite 900⇣ Ottawa, Ontario K1P 5H9⇣ T: 613 822-1004⇣ www.apao.ca exec_coord@apao.ca 3794 Michael Killeavy From: Michael Killeavy Sent: July-29-10 8:51 AM To: Bonnie Hiltz Cc: Susan Kennedy; Jim MacDougall; Yvonne Huang; Anshul Mathur; Travis Lusney Subject: RE: project splitting note Attachments: MK-Potential project splitting july 27-10.doc Importance: High Just a couple of minor comments and a note – what happens if the Applicant does not agree to withdraw the project⌫ from the ECT? Presumably, it’ s not eligible under the FIT Rule so we could remove it, is this correct?⌫ Michael Killeavy, LL.B., MBA, P.Eng.⌫ Director, Contract Management⌫ Ontario Power Authority⌫ 1 20 Adelaide Street West, Suite 1 600 Toronto , Ontario M5H 1T1⌫ 416 - 969 - 6288 (voice)⌫ 416 - 969 - 6071 (fax)⌫ 416 - 520 - 9788 (cell)⌫ michael.killeavy@powerauthority.on.ca⌫ From: Bonnie Hiltz↵ Sent: July 28, 2010 4:17 PM↵ To: Michael Killeavy↵ Cc: Susan Kennedy; Jim MacDougall; Yvonne Huang; Anshul Mathur; Travis Lusney↵ Subject: project splitting note↵ Michael,⌫ Here is a draft note with background and recommended next steps for the project splitting issue. Changes are welcome.⌫ Bonnie⌫ 3795 Potential Project Splitting July 28, 2010 Background The FIT rules prohibit Suppliers from breaking larger projects into smaller ones" for the purposes of seeking a higher FIT price or to circumvent the total MW project size cap. This is commonly referred to as ‘project splitting’. This prohibition is implemented via a number of mechanisms in the rules and" definitions: o For any single property, the total Gross Nameplate Capacity of all solar" (PV) generating facilities participating in the FIT Program and located on" such property may not exceed 10 MW. For any single property, the total" Gross Nameplate Capacity of all waterpower generating facilities" participating in the FIT Program and located on such property may not" exceed 50 MW. o Property is defined as the lands encompassed by the legal description of" the Site and includes and lands adjacent to the lands set out in the legal" description of the Site which are owned by an Affiliate of, or the same" Person as, any Person who owns any of the lands encompassed by the" legal description of the Site. o Affiliate means any Person that i) controls a party; ii) is Controlled by a" Party; or iii) is Controlled by the same Person that Controls a Party. Essentially, what this means is that there is a cap (10MW for solar and 50MW for" waterpower) on the total capacity allowed on the same or adjacent property" owned by the same individual or their Affiliate. The OPA has become aware of three contracts and one ECT project which may be" in violation of the FIT project splitting rules. All are 10MW ground mount solar" facilities owned by Canadian Solar. Two contracts appear to be located on the" same site and one contract appears to be located on a site adjacent to an ECT" project. Same Site" It has come to the OPA’s attention that two 10MW ground mounted solar FIT" contracts are located on land which has the same parcel number and roll number. This would be considered the same property for the purposes of the FIT program" and therefore would surpass the total capacity limit allowable for solar PV. This" means that the projects are ineligible for the FIT program. These two projects have received executed contract offers, but the OPA has not executed the contracts, nor returned the application securities. However, they" would need to be treated as executed contracts because the contract offer could be" considered legally binding on the OPA. 3796 In the FIT application, there is a section that reads: By submitting this" Application, the Applicant agrees and acknowledges that the Applicant has read" and understood the FIT Rules, obtained independent legal advice, and agrees to" comply with all requirements contained therein. Furthermore, the FIT contract states: 6.1 (f) All statements, specifications, data," confirmations, and information that have been set out in the Application are" complete and accurate in all material respects and are hereby restated and" reaffirmed by the Supplier as representations made to the OPA hereunder and" there is no material information omitted from the Application which makes the" information in the Application misleading or inaccurate. Material misrepresentations on the part of the Supplier can be a Supplier Event of" Default under section 9.1(d) of the contract. This means that OPA could have the" right to terminate one or both contracts and retain the Completion and" Performance Securities. Next Steps The OPA proposes to contact the Supplier to request clarification and additional" information about this matter from the Supplier. If the Suppliers are unable to provide a satisfactory clarification, the OPA" proposes to initiate measures for the termination of one or both contracts, subject" to counsel’s advice on the OPA right to terminate. We would retain the" Completion and Performance Securities for the terminated project(s). The security" fees that would be forfeited equal $500,000 per project1. Adjacent Lands The OPA is also exploring a potential case of project splitting involving one FIT" contract and one ECT application. These projects appear to be on adjacent land," which is considered the same property in the FIT contract. The Supplier (Canadian Solar) has also requested a project location change for the" contracted project, from the original project site to the adjacent site of the ECT" project. They further request that the location of the ECT project be moved. Next Steps The OPA is seeking legal advice on the ownership of the adjacent lands in order" to determine whether they are owned by the same person (they are currently" identified as corporations of a city and town which have been amalgamated)." If it is in fact found to be the same property according to FIT rules, we propose" contacting the Supplier to identify the issue and request clarification. If the clarification does not resolve the matter, we would request that the Supplier" withdraw the ECT project." 1 Note: The OPA has not yet returned the Application Securities for any of these projects. If terminated, the OPA would return the Application Securities and retain the Completion and Performance Securities. 3797 Once the ECT project is withdrawn, Contract Management could consider the" merits of approving a location change of the contracted facility to the adjacent" land. 3798 Travis Lusney From: Travis Lusney↵ Sent: August-04-10 8:44 AM↵ To: 'MacLennan, Craig (MEI)'↵ Cc: Jim MacDougall; JoAnne Butler; Colin Andersen; Ben Chin↵ Subject: RE:↵ Hello Craig↵ Utilizing the hatch report numbers and the range of installation costs that they quoted ($70,000 - $90,000), I have done the analysis on the following↵ At $70,000 and 17.5% Capacity Factor (P50* estimate) - 50.8 c/kWh↵ At $80,000 and 17.5% Capacity Factor (P50* estimate) - 57.9 c/kWh↵ At $90,000 and 17.5% Capacity Factor (P50* estimate) - 65.1 c/kWh↵ At $70,000 and 15.5% Capacity Factor (P90* estimate) - 57.4 c/kWh↵ At $80,000 and 15.5% Capacity Factor (P90* estimate) - 65.4 c/kWh↵ At $90,000 and 15.5% Capacity Factor (P90* estimate) - 73.5 c/kWh↵ With an installation cost of $70,000, they can make 58.8 c/kWh work. However, $70,000 was lower then most of the feed back which ranged from $80 - $120. Using the low end of the range of $80k, low 60s would work for most projects. This is again assuming a low capacity factor which limits yearly revenue.↵ I will reiterate that the microFIT program was not intended to be financeable for large suppliers, so I am unsure how accurate it would be to utilize the P90 estimate (which I believe is a lenders criteria). There has been many requests about the microFIT and financing from lenders and our general response is that the project can apply to the FIT program if it would like to get a more financeable contract. The price schedule is for both microFIT and FIT. It is applied based on size and technology type.↵ * - P50 and P90 estimates are used to provide a guarantee of energy production. For P50, the expectation is that 50% of the time the energy production (capacity factor) will be at the level quoted or higher. For P90, the expectation is that 90% of the time the energy production will be at the level quoted or higher. Therefore, using P90 capacity factor estimates, the project is guaranteed 90% of the time to reach that energy production. I mention it as a lending criteria because the lenders are looking for a plausible worst case scenario to run their financing models to determine their lending rate. This is not the same as the capacity factor most likely used in the project model to determine if the project is economic.↵ Thanks↵ Travis↵ Travis Lusney↵ OPA - Senior Business Analyst, Generation Procurement↵ T 416- 969 - 6280↵ E Travis.Lusney@powerauthority.on.ca↵ ----- Original Message ----From: MacLennan, Craig (MEI) [ mailto:Craig.MacLennan@ontario.ca ]↵ Sent: Tuesday, August 03, 2010 6:50 PM↵ To: Travis Lusney↵ Subject: Re:↵ 3799 What was the price after you looked at the hatch report.↵ ----- Original Message ----From: Travis Lusney ↵ To: MacLennan, Craig (MEI)↵ Sent: Tue Aug 03 17:55:03 2010↵ Subject: RE:↵ Hello Craig↵ I have sent it off to Colin for review.↵ Thanks↵ Travis↵ Travis Lusney↵ OPA - Senior Business Analyst, Generation Procurement↵ T 416- 969 - 6280↵ E Travis.Lusney@powerauthority.on.ca↵ ----- Original Message ----From: MacLennan, Craig (MEI) [ mailto:Craig.MacLennan@ontario.ca ]↵ Sent: Tuesday, August 03, 2010 5:55 PM↵ To: Travis Lusney↵ Subject: Fw:↵ Any luck with what we were chatting about this am?↵ Cm↵ ----- Original Message ----From: MacLennan, Craig (MEI)↵ To: 'Travis.Lusney@powerauthority.on.ca'↵ ↵ Sent: Tue Aug 03 15:16:18 2010↵ Subject: Fw:↵ For consideration.↵ Maybe this is an easier way to get at it, by using our existing tools.↵ Cm↵ ----- Original Message ----From: MacLennan, Craig (MEI)↵ To: 'Colin.Andersen@powerauthority.on.ca'↵ ↵ Sent: Tue Aug 03 15:14:39 2010↵ Instead of waiting to completely revamp the application could we put "conditions" on the conditional offer to have someone qualify for an adder?↵ Ie in order to get a higher price you must own the land, not be leasing it out, whatever they are.... Is this a cleaner way at getting to the seperation.↵ Cm↵ 3800 Sarah Simmons↵ From: Sarah Simmons↵ Sent: August-04-10 8:56 AM↵ To: Mary Bernard↵ Cc: Travis Lusney; Jim MacDougall; Patricia Lightburn↵ Subject: RE: guidelines: multiple projects on one property↵ Attachments: FIT Guidelines - Multiple FIT Projects on One Property VERSION 2_Final.doc↵ Mary,⌃ These are the final version of the guidelines for multiple projects on one property. We’ d like to post them on the FIT and microFIT websites. ’⇢ Thanks,⌃ Sarah Simmons↵ Analyst⌃ Electricity Resources⌃ Ontario Power Authority⌃ 120 Adelaide St. W. Suite 1600⌃ Toronto , ON , M5H 1T1⌃ Tel 416.969.6213⌃ Fax 416.967.1947⌃ www.powerauthority.on.ca⌃ P please consider the environment before printing this email From: Pat Finnegan⌦ Sent: August 3, 2010 4:17 PM⌦ To: Sarah Simmons⌦ Cc: Travis Lusney; Mary Bernard⌦ Subject: RE: guidelines: multiple projects on one property⌦ Hi Sarah.⇢ My suggested edits are tracked in the attached document. Please note that I wasn ’ t sure if certain acronyms (like PV and KW) have already been defined. If they have, please ignore where I have defined them. Also look for a few⇢ questions posed in comments format.⌃ Please send final version to Mary for posting.⌃ I ’ ll start on the rooftop guidelines now and should have them to you early Thursday.⌃ Regards,⌃ Pat⌃ From: Sarah Simmons Sent: August 3, 2010 9:01 AM⌦ To: Pat Finnegan⌦ Cc: Travis Lusney⌦ 3801 Subject: FW: guidelines: multiple projects on one property⌦ Hey Pat,⌃ I got Glenna ’ s out of office message, can you help me with this?⌃ Also, I need to talk to someone regarding:⌃ - posting of rooftop guidelines⌃ - Measurement Canada update.⌃ Thanks,⌃ Sarah Simmons↵ Analyst⌃ Electricity Resources⌃ Ontario Power Authority⌃ 120 Adelaide St. W. Suite 1600⌃ Toronto , ON , M5H 1T1⌃ Tel 416.969.6213⌃ Fax 416.967.1947⌃ www.powerauthority.on.ca⌃ P please consider the environment before printing this email From: Sarah Simmons Sent: August 3, 2010 9:00 AM⌦ To: Glenna Ford⌦ Cc: Travis Lusney⌦ Subject: guidelines: multiple projects on one property⌦ Glenna,⌃ We ’d like to post the revised guidelines this week for multiple projects on one property. The guidelines should be⇢ posted on both the FIT and microFIT website.⌃ Can you please review this document? Then we can discuss posting.⇢ Thanks a bunch,⌃ Sarah⌃ Sarah Simmons↵ Analyst⌃ Electricity Resources⌃ Ontario Power Authority⌃ 120 Adelaide St. W. Suite 1600⌃ Toronto , ON , M5H 1T1⌃ Tel 416.969.6213⌃ Fax 416.967.1947⌃ www.powerauthority.on.ca⌃ P please consider the environment before printing this email 3802 FIT Guidelines: Multiple Projects on One Property August 4, 2010 Issue Are multiple FIT contracts for the same technology, including incremental projects, permitted on the same property, and if so, how are they treated with regard to pricing? Background Section 7.3 (e) of the FIT Rules prohibits applicants from splitting one project into smaller projects for the purpose of obtaining a higher price or any other benefit. The guidelines below describe how this rule is applied by the OPA. Solar Photovoltaic (PV) Rooftop To provide greater clarity to applicants on how rooftop solar PV projects are evaluated under Section 7. 3 (e), an addition was made to Section 2.1 (Eligibility Requirements) in November 2009, which specifies that only one rooftop solar PV project is permitted on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only one rooftop facility shall be permitted on any single property. For greater certainty,⌫ a single rooftop facility may have generating equipment located on multiple buildings on a single property so long as the total capacity of the generating equipment located⌫ on the property is reflected in a single application and shares a common connection⌫ point." The guidelines provided below are intended to provide greater flexibility to applicants who are unable to submit a single application with a common connection point (for example, when multiple buildings are located on a single property), and for applicants who wish to install their projects in a phased approach. This version of the guidelines has been revised to include additional scenarios that have arisen as a result of the implementation of version 1.4 of the microFIT Program, which includes a separate price for ground-mounted solar PV projects. Other Technologies Currently, the rules are silent on how incremental projects, or multiple projects using the same renewable fuel on a single property, are treated with regard to pricing. The guidelines below describe how the OPA will apply Section 7.3 (e) to all technologies, including solar, wind, water and bioenergy. FIT Guidelines Multiple Projects on One Property –⇥ 1 3803 Principles In developing these guidelines, the OPA used the following principles to ensure that projects are not divided into smaller projects for the purpose of obtaining a higher price or any other benefit. 1. Under the microFIT Program, only 10 kilowatts (kW) per renewable fuel per property is permitted. 2. A microFIT project and a FIT project may be constructed on the same property provided that they do not use the same renewable fuel or fuel type. 3. Multiple FIT projects using the same renewable fuel type will be permitted provided that the contract price for each project is within one price tranche. 4. A microFIT project will not be permitted on the same property as a FIT project if it uses the same renewable fuel as the FIT project. Guidelines For all technologies: 1. In general, only one FIT project per renewable fuel will be permitted on a single property. Notwithstanding the above, a rooftop solar PV project and a ground-mounted solar PV project are permitted on the same property, under the FIT Program. Important note: For the purposes of assessing whether an additional FIT rooftop project would be permitted on the same property, a ground-mounted solar PV microFIT project that has a microFIT contract at a price of 80.2 cents/kWh is considered a rooftop project. Therefore, a 10 kW ground-mounted facility that has a contract price of 80.2 cents per kilowatt-hour (kWh) will not be permitted on the same property as a solar PV rooftop or ground-mounted project under the FIT Program. Under the microFIT Program, only 10 kW of solar PV generation, either rooftop or ground-mounted, is permitted per property. 2. The sum of the nameplate capacity of any microFIT and FIT project (or projects) using the same renewable fuel on the same legal property must not be greater than 10 kW. For greater clarity, if the sum of the nameplate capacity of a proposed FIT project and an existing microFIT project is greater than 10 kW, the FIT project is ineligible. FIT Guidelines Multiple Projects on One Property –⇥ 2 3804 3. Where the OPA deems that a series of projects does not constitute project splitting, the OPA will accept multiple FIT applications using the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a single property will be used to establish the FIT contract price. This permission allows for phased in-service dates, as well as multiple connection points where a single connection point is not feasible. The following provisions must be met: (a) Applications must be submitted within the same business day. (b) It is not permitted to combine the capacities of multiple FIT and microFIT applications. To submit multiple applications and qualify for the aggregate price, all applications must be submitted under the FIT Program. (c) If the aggregate capacity of the initial group of applications is equal to or less than the highest project size tranche (for example in the case of solar PV projects, 500 kW or less), subsequent applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of applications submitted. Each subsequent application would receive the price associated with the project size tranche established by the initial group of applications, regardless of the size of the project. o (d) For example: If a 400 kW project is submitted as an initial group of four 100 kW applications, the contract price for all applications would be determined based on the aggregate capacity (400 kW at 63.5 cents/kWh). At a later date, a subsequent 100 kW application (or multiple applications totalling 100 kW) could be submitted, since the total capacity would remain within the 500 kW project size tranche. The subsequent application(s) would also qualify for the 63.5 cents/kWh price. If the aggregate capacity of the initial group of applications is in the highest project size tranche (for example, in the case of solar PV rooftop projects, greater than 500 kW), there is no limit on the number or size of subsequent applications. Each subsequent application would receive the price associated with the highest project size tranche regardless of the size of the project. o For example: Applications for three 200 kW solar PV rooftop projects are submitted. The aggregate capacity is 600 kW. Each would qualify for the greater than 500kW size tranche at 53.9 cents/kWh. Subsequent applications of any size may be submitted. All projects would be eligible and would qualify for the 53.9 cents/kWh price. FIT Guidelines Multiple Projects on One Property –⇥ 3 3805 The FIT Program will be reviewed in two years. At that time, the OPA will explore the possibility of allowing additional applications for the same renewable fuel on the same property. This will allow the OPA to ensure that proponents are not splitting projects to obtain higher prices, and still appropriately encourage incremental renewable energy capacity in a manner that makes sense. FIT Guidelines Multiple Projects on One Property –⇥ 4 3806 Appendix A – FIT Price Schedule Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 2, 2010 Renewable Fuel Contract Price (¢/kWh) Percentage Escalated4 1 0 MW 13.8 20 > 10 MW 13.0 20 1 00 kW 19.5 20 18.5 20 16.0 20 14.7 20 > 10 MW 10.4 20 1 0 MW 13.1 20 12.2 20 1 0MW 11.1 20 > 10 MW 10.3 20 Size Tranche Biomass1,2 Biogas1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 1 0 MW 50 MW Landfill gas1,2 Solar PV Rooftop 1 0 kW 80.2 0 Ground-mounted* 10 kW 58.8 0 71.3 0 63.5 0 > 500 kW 53.9 0 1 0 MW 44.3 0 Onshore Any size 13.5 20 Offshore Any size 19.0 20 Rooftop > 10 250 kW Rooftop > 250 500 kW Rooftop Ground-mounted2 Wind2 FIT Guidelines – Multiple Projects on One Property 5 3807 Appendix B: Examples QUESTION FIT and microFIT 1. Can I put a 5 kW FIT solar PV project and then a 5 kW microFIT solar PV project on the same property? 2. Can I put a 10 kW microFIT solar PV rooftop project and then later add a 200 kW FIT solar PV ground-mounted project on the same property? RESPONSE Yes. If one project is a rooftop project and one project is a ground-mounted project, then the projects must be separately metered. Yes. If the 10 kW solar PV rooftop project received version 1.3 of the microFIT contract, then an amendment to the microFIT contract will be required to ensure that the existing facility complies with the definition of rooftop facility. 3. If I installed a 10 kW groundmounted project on my property, can I install a 200 kW FIT solar PV rooftop project on the same property? Yes, provided that the ground-mounted project did not receive a contract price of 80.2 cents/kWh. 4. Can I install a 3 kW solar PV rooftop project and then later add a 7 kW solar PV rooftop project as an incremental project, both under the microFIT program? Yes. If the 3 kW solar PV rooftop project received version 1.3 of the microFIT contract, then an amendment to the microFIT contract will be required to ensure that the existing facility complies with the definition of rooftop facility. 5. If I installed an 8 kW solar PV ground-mounted project, can I install a 2 kW solar PV rooftop project on the same property under the microFIT Program? Yes. Note that the projects must be metered separately (e.g., they cannot be incremental to each other). 6. Can I install a 10 kW solar PV rooftop project under microFIT and one 100 kW rooftop PV project under FIT on the same property? No. Alternatively, you could submit two applications at the same time under the FIT Program, one for a 10 kW project and the other for a 100 kW project. Both projects would be eligible for the 110 kW price of 71.3 cents/kWh. FIT Guidelines Multiple Projects on One Property –⇥ 6 3808 7. Can I install a 100 kW solar PV rooftop project under FIT and a 10 kW solar PV groundmounted project under microFIT on the same property? Yes, provided that the 10 kW ground-mounted solar PV project did not receive a contract price of 80.2 cents/kWh. 8. Can I install a 100 kW FIT solar PV ground-mounted project and a 10 kW microFIT solar PV ground-mounted project on the same property? No. Alternatively, you could submit two applications at the same time under the FIT Program, one for a 10 kW project and one for a 100 kW project. Both projects would be eligible for the 110 kW price of 44.3 cents/kWh. Both projects would be subject to the agricultural land restrictions. 9. Can I install a 10 kW solar PV rooftop project and a 10 kW solar PV ground-mounted facility on the same property, both under the microFIT program? 10. Can I put a microFIT solar PV project and a FIT project using a different renewable fuel on the same property? 11. If the owner's land is leased to an outside company for wind turbines can a homeowner put a microFIT solar PV on their property? No, only 10 kW of solar PV is permitted per property under the microFIT Program. FIT Solar PV 12. Can I put a FIT solar PV rooftop project and a FIT solar PV ground-mounted project on the same property? 13. Can I submit a 200 kW solar PV rooftop application and apply for a 100 kW solar PV rooftop project on the next day? 14. I have a property with two buildings; unfortunately one connection point is not possible. Can I have panels on both buildings, constructed at the same time? FIT Guidelines Note that if a connection impact assessment for the project is required by the LDC, then it is not eligible under the microFIT Program, however, it would be eligible under the FIT Program. Yes. Yes. Note that if a connection impact assessment for the project is required by the LDC, then it is not eligible under the microFIT Program, however, it would be eligible under the FIT Program. Yes. No, the second application would not be eligible. Yes, both applications must be submitted on the same business day and the aggregate capacity will be used to determine the FIT price. Multiple Projects on One Property –⇥ 7 3809 15. A university campus with many buildings but only one legal property wants to have 10 solar PV rooftop projects, 100 kW each on different buildings, with separate FIT contracts constructed over time. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 1,000 kW. Each project would be eligible for the 53.9 cents/kWh price. In this case, since the aggregate capacity of the initial applications exceeds the 500 kW project size tranche, there is no limit on the number or size of projects that can be submitted at a later date. Each of the subsequent projects would be eligible for the 53.9 cents/kWh. 16. A shopping centre has one very large roof and wants 10 solar PV rooftop projects, 20 kW each, located at different connection points. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 200 kW. Each project would be eligible for the 71.3 cents/kWh price. In this case, subsequent applications may be submitted. However, the aggregate capacity of the existing projects and the new projects must not exceed the 250 kW project size tranche (for example, two additional 25 kW applications may be submitted). The subsequent applications would also be eligible for the 71.3 cents/kWh price. FIT – Other Technologies 17. Can I apply for a 5 MW landfill gas project and subsequently apply for a 10 MW incremental landfill gas project? No. In this case, you could submit two applications for both projects at the same time. Both would qualify for the 10.3cents/kWh price. Each project would have a separate contract and would be allowed to come into service on different dates. 18. I have an existing FIT biogas project already. Can I build a new separate small biogas project at another location on the farm? This would only be permitted if the total capacity of the existing project and the new project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the second project is not eligible. 19. Can I add an expansion (incremental project) to an existing FIT waterpower project? This would only be permitted if the total project capacity of the existing project and the incremental project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the incremental project is not eligible. 20. Can I put a FIT solar PV project and a FIT project using a different renewable fuel on the same property? Yes. FIT Guidelines Multiple Projects on One Property –⇥ 8 3810 Sarah Simmons↵ From: Sarah Simmons↵ Sent: August-04-10 9:02 AM↵ To: Mary Bernard↵ Cc: Jim MacDougall; Patricia Lightburn; Travis Lusney↵ Subject: RE: FIT Guidelines - Rooftop Facility.doc↵ Attachments: FIT Guidelines - Rooftop Facility_Final.doc↵ Mary,⌃ These are the final version of the rooftop guidelines to be posted on the FIT and microFIT website (as secured PDF).⌃ Thanks!⌃ Sarah Simmons↵ Analyst⌃ Electricity Resources⌃ Ontario Power Authority⌃ 120 Adelaide St. W. Suite 1600⌃ Toronto , ON , M5H 1T1⌃ Tel 416.969.6213⌃ Fax 416.967.1947⌃ www.powerauthority.on.ca⌃ P please consider the environment before printing this email From: Pat Finnegan⌦ Sent: August 3, 2010 4:39 PM⌦ To: Sarah Simmons⌦ Cc: Mary Bernard⌦ Subject: RE: FIT Guidelines - Rooftop Facility.doc⌦ Hi Sarah:⌃ My edits are tracked in the attachment. Please see questions in comments form. Once you ’ re happy with the final⌃ document, please send directly to Mary for posting.⌃ I won ’t be in the office tomorrow, but will check my emails when I can. I ’ m back on Thursday.⌃ Regards,⌃ Pat⌃ From: Sarah Simmons Sent: August 3, 2010 12:50 PM⌦ To: Pat Finnegan⌦ Cc: Mary Bernard⌦ Subject: FIT Guidelines - Rooftop Facility.doc⌦ These are the draft guidelines for rooftop facilities. If you have an comments, please let me know.! 3811 Cheers, Sarah 3812 Guidelines – Definition of Rooftop Facility August 4, 2010 Definition Rooftop Facility means a solar (PV) Renewable Generating Facility that is integrated into or⇢ forms part of the wall facing, roof, cover, or other architectural element that forms part of a⇢ permanent Existing Building that has been designed to be used for the purpose of providing⇢ enclosure, shelter or protection to people or property, provided that one of its main purposes is not to support a solar power installation or to provide shelter from the sun. An Existing Building⇢ will be considered to have a main purpose of supporting a solar power installation or providing⇢ shelter from the sun where the building or part of that building would not reasonably have been⇢ constructed in the absence of the solar (PV) Renewable Generating Facility. Existing Building means a building (a) that was in existence and completely constructed on the⇢ date that the Applicant first submitted its Application, or (b) in respect of which the OPA has⇢ issued a written confirmation that the building will be deemed an Existing Building for the⇢ purposes of the definition of Rooftop Facility. Guidelines The changes to the definition of rooftop facility are intended to provide greater clarity to⇢ stakeholders about which projects qualify for rooftop solar PV prices under the FIT price⇢ schedule. In order to qualify for the definition of Rooftop Facility, the OPA must be satisfied that: the building on which the solar PV project is located is an appropriate building the primary intent of the building is not to support a solar installation the building would have been built in the absence of the solar PV project. Under the new definition, the building must be an existing, permanent building. A building is⇢ considered to be existing if it is in existence and completely constructed at the time of the⇢ application. This change provides the OPA with greater certainty that the building would have⇢ been built otherwise. If the building does not exist at the time of application, the applicant may request written consent⇢ from the OPA to allow the proposed project to qualify. Buildings such as “solar-ready” home developments are expected to be accommodated through this process. The OPA will consider the following factors when evaluating what constitutes a building and⇢ when reviewing requests to allow proposed buildings to qualify: 1) What type of building is the project located on? 2) What is the primary purpose of the building? 3813 3) Whether the building has: plumbing⇢ electricity supply⇢ at least three walls a roof a roof over 10 feet high a foundation below grade a building permit. Appendix A: Prior Definition used in FIT Program Rooftop facility means a facility that is integrated into or forms part of the wall facing, roof,⇢ cover, or other architectural element that is part of a permanent building or structure that has⇢ been designed to be used for the purpose of providing enclosure, shelter or protection to people⇢ or property, provided that it is not principally for the purpose of supporting a solar power⇢ installation or providing shelter from the sun. A building or structure will be considered to have a⇢ principal purpose of supporting a solar power installation or providing shelter from the sun when⇢ the facility is located on a part of the building or structure that would not reasonably have been⇢ constructed in the absence of the solar installation. 3814 Luisa Da Rocha From: Luisa Da Rocha Sent: August-09-10 4:44 PM To: Jim MacDougall; Travis Lusney Cc: Kristin Jenkins Subject: For review - Draft ground mount consultation report Attachments: DRAFT ground-mount consultation report v3.doc Importance: High Hi Jim and Travis: Attached for your review is the draft ground- mount consultation report.⇣ Could you please review the report and provide us with your comments by early afternoon tomorrow (Tuesday) . Please let me know if you have any questions. Thanks, Luisa 3815 DRAFT Consultation Summary Report Proposed New Price Category for microFIT Ground-Mounted Solar PV Projects August x, 201 0 3816 Table of Contents Executive Summary .................................................................... 1 Background ................................................................................. 3 Consultation Process ................................................................. 3 Feedback Review Process ......................................................... 4 Feedback Summary and Resulting Program Changes ............ 4 Summary of microFIT Program Changes .................................. 8 3817 Executive Summary On July 2, 2010, the Ontario Power Authority (OPA) announced a proposed new price⌧ category for microFIT ground-mounted solar PV projects. The announcement indicated⌧ that ground-mounted solar PV projects of 10 kilowatts or less would be eligible to receive⌧ a new proposed price of 58.8 cents per kilowatt-hour and that there would be a 30-day⌧ comment period for stakeholders to provide feedback on the proposed new price⌧ category. Stakeholders were invited to provide feedback through a variety of methods, primarily⌧ through written submissions made via email and mail. Stakeholders could also contact⌧ the OPA call centre or participate in a number of web-enabled teleconferences held⌧ during the comment period. Each of the submissions made during the 30-day comment period were reviewed by⌧ OPA staff. The following process was used to collect data and information to review the⌧ proposed new price category: 1. 2. 3. Staff logged and read each submission. Raw data and feedback was extracted from the submissions and from⌧ feedback received via the call centre and during the web-enabled⌧ teleconferences. Initial project assumptions were reviewed in comparison to the submission⌧ data and information. 4. The OPA’s approach to FIT pricing and the policy intentions of the program⇢ 5. were reviewed to ensure they remained valid throughout the review process. Program changes were developed based on the data and feedback received⌧ from the submissions. During the comment period, three web-enabled teleconferences were held with a total of 1,665 participants. During these sessions, stakeholders were encouraged to send⌧ information via email and mail. A total of 1,645 written submissions were received. An⌧ additional x,xxx individuals contacted the OPA call centre to provide their feedback. Stakeholders shared their individual experiences with the program and provided a⌧ wealth of research and price estimates for the review team. The following identifies the⌧ key concerns conveyed to the OPA during the consultation period. 1. 2. 3. 4. 5. Capital, operating and maintenance costs can be higher than those⌧ calculated by the OPA. The challenges of completing projects by December 31 2010 and meeting the⌧ 40-percent domestic provision. The need for greater transparency and notice regarding program changes in⌧ order to maintain confidence and investment in the program.⌧ Processing applications has taken longer than the original 30-day⌧ commitment. Existing applications should be “grand-fathered” at 80.2 cents/kWh. 3818 Summary of microFIT Program Changes As a result of the submissions received during the comment period, the following changes have been made to the microFIT program effective immediately: 1. The price for ground-mounted solar PV projects will be increased to xx.x cents/kWh⌧ to reflect a wider variation of cost models than were used to set the proposed price of 58.8 cents/kWh. 2. A project will be deemed to have met the 2010 domestic content provisions if it is⌧ installed and a connection request has been submitted to the local distribution⌧ company or the Electrical Safety Authority before December 31, 2010. As of August xx, applications will be required to meet 2011 domestic content levels due to the time⌧ required to develop projects following the issuance of a conditional offer.. 3. A Solar Advisory Panel of renewable energy industry leaders and experts will be⌧ established with clear terms of reference and expected deliverables: a. b. c. d. The first task of the Solar Advisory Panel is to investigate the use of an adder to support cooperative and Aboriginal projects. The Panel will be asked to provide advice on an improved microFIT⌧ application form. The aggregator definition, identification and future handling will be addressed⌧ by the Panel. The advancement and scheduling of future program and price reviews would⌧ be handled by the Panel; led by the OPA. The Solar Advisory Panel will be established immediately and is expected to⌧ include representatives from the Canadian Solar Industries Association, the⌧ Ontario Federation of Agriculture, the Ontario Sustainable Energy Association, the Association of Power Producers of Ontario, the Canadian Wind Energy⌧ Association, Hydro One and other local distribution companies, the Green⌧ Energy Act Alliance, Environmental Defence, the Community Power Fund and⌧ the academic community. 3819 Background On July 2, 2010, the OPA announced a new price category for microFIT groundmounted solar PV projects. The announcement indicated that ground-mounted solar PV⌧ projects of 10 kilowatts or less would be eligible to receive a new proposed price of 58.8⌧ cents per kilowatt-hour and that there would be a 30-day comment period for⌧ stakeholders to provide feedback on the proposed price. This consultation report summarizes the feedback received during the comment period,⌧ along with the key findings and the resulting changes made to the microFIT program. Consultation Process Stakeholders were invited to provide feedback on the proposed new price for microFIT⌧ ground-mounted solar PV projects through a variety of methods, primarily through⌧ written submissions made via email and mail. Stakeholders could also contact the OPA⌧ call centre or participate in a number of web-enabled teleconferences held during the⌧ comment period. Below is a summary of the activities undertaken by the OPA during the 30-day comment⌧ period to provide information and solicit feedback from stakeholders. Summary of OPA Activities DATE ACTIVITY July 2 Announcement that the OPA has created a new price category for groundmounted solar PV projects 10 kilowatts or less in size. Beginning of 30-day⌧ consultation period - stakeholders encouraged to submit written feedback via mail and email. July 6 First web-enabled teleconference to discuss the proposed new price with⌧ stakeholders July 8 Second web-enabled teleconference with stakeholders July 14 Information posted to the microFIT website on the rationale for the new groundmounted microFIT program price category July 22 Ben Chin, OPA VP of Communications, attends the Ontario Solar Network’s⇢ microFIT Town Hall Meeting to discuss the new price category July 23 Information posted to the microFIT website providing details of the rate⌧ calculation, as well as the ground-mounted solar PV questions and answers. July 29 Third web-enabled teleconference with stakeholders August 3 End of 30-day consultation period 3820 On July 16th, Gord Miller, the Environmental Commissioner of Ontario, wrote to the OPA⌧ to request that more detailed information be released regarding the microFIT calculations. More information was posted on the microFIT website on July 23, along⌧ with the most frequently asked questions regarding the announcement.⌧ Feedback Review Process Each of the submissions made during the 30-day comment period were reviewed by⌧ OPA staff. The following process was used to collect data and information to review the⌧ proposed new price category: 1. 2. 3. 4. 5. Staff logged and read each submission.⌧ Raw data and feedback was extracted from the submissions and from⌧ feedback received via the call centre and during the web-enabled⌧ teleconferences. Initial project assumptions were reviewed in comparison to the submission⌧ data and information. The OPA’s approach to FIT pricing and the policy intentions of the program⇢ (see below) were reviewed to ensure they remained valid throughout the⌧ review process. Program changes were developed based on the data and feedback received⌧ from the submissions. The OPA’s approach to microFIT pricing was a key component of the review and⇢ includes the following components:⌧ Need to find the right balance between promotion of renewable energy and impact on ratepayers Use standard assumptions for a typical project (recognizing that the price will not work for everyone) Use current market information and market foresight to set prices to remain stable for⌧ one to two years For solar PV in particular, stimulate a new industry and anticipate price/cost reductions Introduce a price that will create opportunity, while recognizing that not all projects⌧ will/should be viable. Feedback Summary and Resulting Program Changes The OPA established several channels of communication to encourage a high level of feedback on the proposed new price. A total of three web-enabled teleconferences were⌧ held throughout the consultation period with 1,665 participants. During these sessions, stakeholders were encouraged to send information via email and mail. A total of 1,645⌧ written submissions were received. An additional x,xxx individuals contacted the OPA⌧ call centre to provide their feedback. 3821 Stakeholders shared their individual experiences with the program and provided a⌧ wealth of research and price estimates for the review team. The following table⌧ identifies the key messages conveyed to the OPA during the consultation period, along⌧ with the OPA response and resulting changes that have been made to the microFIT⌧ program.(Note: Table needs to be checked with ER) Feedback Summary and Resulting Program Changes Feedback OPA Response Capital, operating and maintenance costs can be higher than those calculated by the OPA. The capital costs used in the model are too Many of the submissions received during the⌧ comment period include price estimates and⌧ quotes from suppliers for a variety of systems. Based on this information, several of the⌧ assumptions used in the modeling have been⌧ modified to take into account a broader range⌧ of prices, including an increase in the capital costs and operating and maintenance costs for⌧ tracking systems. low and don’t reflect the quotes people are receiving. The operating and maintenance costs used in the model are too low and don’t take into account higher costs for tracking-based systems, tracker maintenance and insurance. Ground-mounted solar is more expensive than roof-top systems. The new price will not have a favourable payback period. Annual capacity decreases should be taken into consideration in the financial model. A greater level of certainty is needed for businesses and people looking to invest in the development of Ontario’s solar industry. An assumption that has remained unchanged⌧ in the financial model is the productivity⌧ attributed to ground-mounted systems versus rooftop systems; while ground-mounted⌧ systems have higher upfront costs, they also⌧ generate a greater amount of electricity and⌧ therefore revenue. As well, a decreasing annual capacity factor of X% has always been⌧ included in the financial model. Resulting Program Changes: The price for ground-mounted solar PV# projects will be increased to xx.x cents/kWh to reflect a wider variation of cost models# than were used to set the proposed price of 58.8 cents/kWh. The high level of interest in the microFIT program is a strong indicator of the# province-wide interest in solar and renewable energy. To provide greater certainty and transparency, a Solar# Advisory Panel of renewable energy# industry leaders and experts will be# established with clear terms of reference, which will provide advice on future price# reviews. 3822 The challenges of completing projects by# December 31 2010 and meeting the 40percent domestic provision. Concerns were expressed regarding the ability to meet the lower domestic content⌧ requirements at the end of the year. Stakeholders are also concerned about the⌧ ability of the LDCs to connect all of the⌧ microFIT projects before the end of the⌧ year. Some expressed a belief that prices for⌧ materials will increase on January 1, 2011,⌧ due to the higher domestic content requirement. The domestic content provisions in the⌧ microFIT program remain unchanged. For projects that will reach commercial operation in⌧ 2010, a minimum of 40 percent of the project⌧ must be manufactured or produced in Ontario. That level rises to 60 percent in 2011. However, due to the delays in processing⌧ applications, a key change was made as outlined below. Resulting Program Change: A project will be deemed to have met the# 2010 domestic content requirements if it is# installed and a connection request has# been submitted to the ESA or local# distribution company before December 31,# 2010. As of August XX, all new applications will# be required to meet 2011 domestic content levels due to the time required to develop projects following the issuance of a# conditional offer. The need for greater transparency and notice regarding program changes in order# to maintain confidence and investment in# the program Greater transparency is needed in how⌧ these changes are made. More notice is needed in communicating changes about the microFIT program. Broader industry consultation will be undertaken prior to making changes to the⌧ microFIT program. Resulting Program Change: The Solar Advisory Panel of renewable# energy industry leaders and experts will be# established and will be involved in making recommendations on all future revisions to the microFIT program as well as how they# are implemented, including the# advancement and scheduling of future# program and price reviews. The panel will# also be asked to provide advice on an# improved microFIT application form. 3823 Processing applications has taken longer# than the original 30-day commitment. Applicants have spent time and money to⌧ perform their due diligence and apply for the program, and there has been quite a⌧ delay in processing applications. Applications need to be processed within⌧ the stated 30-days outlined on the⌧ microFIT website. The level of interest in the microFIT program and the high number of applications far⌧ exceeded expectations. The OPA has continued to process applications during the⌧ consultation period, and we anticipate issuing 500 conditional offers one week after the⌧ decision on the ground-mounted solar PV⌧ category has been finalized. The OPA is working to respond quickly to⌧ microFIT applicants. Those who submitted or resubmitted their applications in July will have⌧ their applications processed by the end of September. Those who submitted or resubmitted in August will hear back from the⌧ OPA by the early fall. The previous deadline of August 16 to resubmit applications will be⌧ extended to September 7. Resubmitted⌧ applications will be processed before new⌧ applications in the order they are received . Resulting Program Change: One of the tasks of the Solar Advisory# Panel will be to provide advice on the# microFIT application form and in future# program reviews. Both of these should# help streamline and shorten the approvals# process. Existing applications should be “grand fathered” at 80.2 cents/kWh. In establishing prices for all microFIT categories, the OPA has an obligation to⌧ Many stakeholders suggested that all ensure good value for ratepayers and promote⌧ existing applications be grand-fathered with⌧ the long-term sustainability of the program by⌧ the original solar PV price of 80.2⌧ paying rates that are fair and reasonable. cents/kWh. The OPA is honouring all contracts and⌧ conditional offers. Applicants who received a conditional offer or contract before July 2 will⌧ receive 80.2 cents/kWh. All applicants receiving their conditional offers after July 2 will⌧ receive the new ground-mounted solar PV⌧ price of xx.x cents/kWh. 3824 Summary of microFIT Program Changes As a result of the submissions received during the comment period, the following changes have been made to the microFIT program effective immediately: 1. The price for ground-mounted solar PV projects will be increased to xx.x cents/kWh⌧ to reflect a wider variation of cost models than were used to set the proposed price of 58.8 cents/kWh. 2. A project will be deemed to have met the 2010 domestic content requirements if it is⌧ installed and a connection request has been submitted to the local distribution⌧ company or the Electrical Safety Authority before December 31, 2010. As of August XX, applications will be required to meet 2011 domestic content levels due to the⌧ time required to develop projects following the issuance of a conditional offer. 3. A Solar Advisory Panel of renewable energy industry leaders and experts will be⌧ established with clear terms of reference and expected deliverables: The first task of the Solar Advisory Panel is to investigate the use of an adder to support cooperative and Aboriginal projects. The Panel will be asked to provide advice on an improved microFIT⌧ application form. The aggregator definition, identification and future handling will be addressed⌧ by the Panel. The advancement and scheduling of future program and price reviews would⌧ be handled by the Panel; led by the OPA. The Solar Advisory Panel will be established immediately and is expected to⌧ include representatives from the Canadian Solar Industries Association, the⌧ Ontario Federation of Agriculture, the Ontario Sustainable Energy Association, the Association of Power Producers of Ontario, the Canadian Wind Energy⌧ Association, Hydro One and other local distribution companies, the Green⌧ Energy Act Alliance, Environmental Defence, the Community Power Fund and⌧ the academic community. 3825 Sarah Simmons↵ From: Sarah Simmons↵ Sent: August-11-10 1:26 PM↵ To: Susan Kennedy; Sheri Bizarro; Jim MacDougall↵ Subject: RE: Website Updates↵ Attachments: FIT Guidelines - Multiple FIT Projects on One Property 2010-03-09.doc↵ Here ya go.⌦ Sarah Simmons↵ Analyst⌦ Electricity Resources⌦ Ontario Power Authority⌦ 120 Adelaide St. W. Suite 1600⌦ Toronto , ON , M5H 1T1⌦ Tel 416.969.6213⌦ Fax 416.967.1947⌦ www.powerauthority.on.ca⌦ P please consider the environment before printing this email From: Susan Kennedy↵ Sent: August 11, 2010 1:25 PM↵ To: Sheri Bizarro; Jim MacDougall; Sarah Simmons↵ Subject: Website Updates↵ I see we recently updated the FIT Guidelines: Multiple Projects on One Property.⌦ May I please get a copy of the prior version of the Guidelines (actually all prior versions if there is more than one).⌦ Susan H. Kennedy⌦ Director, Corporate/Commercial Law Group⌦ Ontario Power Authority⌦ T: 41 6 - 969 - 6054⌦ F: 41 6 - 969 - 6383⌦ E: susan.kennedy@powerauthority.on.ca⌦ 3826 FIT Guidelines: Multiple Projects on One Property March 09, 2010 Issue⇣ Are multiple FIT contracts of the same technology, including incremental projects, permitted on the same property, and if so, how are they treated in regards to pricing? Background⇣ Section 7.3 (e) of the FIT Rules prohibits applicants from splitting one project into smaller projects for the purpose of obtaining a higher price or any other benefit. The guidelines below provide greater clarity on how this rule is applied by the OPA Solar PV Rooftop In order to provide greater clarity to applicants on how rooftop solar PV projects are evaluated under Section 7. 3 (e), an addition was made to Section 2.1 (Eligibility Requirements) in November 2009, which specifies that only one rooftop solar PV project is permitted on a single property: Section 2.1 (c) of the FIT Rules states that “with respect to solar PV projects, only one rooftop facility shall be permitted on any single property. For greater certainty,⌫ a single rooftop facility may have generating equipment located on multiple buildings on a single property so long as the total capacity of the generating equipment located⌫ on the property is reflected in a single application and shares a common connection⌫ point." The guidelines provided below are intended to provide greater flexibility to applicants who are unable to submit a single application with a common connection point (for example when multiple buildings are located on a single property), and for applicants that wish to install their projects in a phased approach. Other Technologies Currently the rules are silent on how incremental projects, or multiple projects of the same renewable fuel on a single property, are treated in regards to pricing. The guidelines below provide clarity on how the OPA will apply Section 7.3 (e) to all technologies, including solar, wind, water and bioenergy. FIT Guidelines – Multiple Projects on One Property 1 3827 Guidelines For all technologies: 1. In general, only one FIT project per renewable fuel will be permitted on a single property. Notwithstanding the above, a rooftop solar PV under FIT and a ground-mounted solar PV under FIT are permitted on the same property. 2. The sum of the nameplate capacity of any microFIT and FIT project (or projects) of the same renewable fuel on the same legal property must not be greater than 10 kW. For greater clarity, if the sum of the nameplate capacity of a proposed FIT project and an existing microFIT project is greater than 10kW, the FIT project is ineligible. 3. Where the OPA deems a series of projects does not constitute project splitting, the OPA will accept multiple FIT applications of the same renewable fuel located on a single legal property provided that the aggregate capacity of all FIT applications on a single property will be used to establish the FIT contract price. This permission allows for phased in-service dates, as well as multiple connection points where a single connection point is not feasible. The following provisions must be met: (a) Applications must be submitted within the same business day. (b) It is not permitted to combine the capacities of multiple FIT and microFIT applications. In order to submit multiple applications and qualify for the aggregate price, all applications must be submitted under the FIT program. (c) If the aggregate capacity of the initial group of applications is equal to or less than the highest project size tranche (for example in the case of solar PV, 500kW or less), subsequent applications may be submitted provided that the aggregate capacity of all of the FIT applications does not exceed the price tranche established by the initial group of applications submitted. Each subsequent application would receive the price associated with the project size tranche established by the initial group of applications, regardless of the size of the project. o For example: If a 400 kW project is submitted as an initial group of four 100kW applications, the contract price for all applications would be determined based on the aggregate capacity (400kW at 63.5 cents/kWh). At a later date, a subsequent 100kW application (or FIT Guidelines – Multiple Projects on One Property 2 3828 multiple applications totalling 100kW) could be submitted, since the total capacity would remain within the 500kW project size tranche. The subsequent application(s) would also qualify for the 63.5 cents/kWh price. (d) If the aggregate capacity of the initial group of applications is in the highest project size tranche (for example, in the case of solar PV rooftop, greater than 500kW), there is no limit on the number or size of subsequent applications. Each subsequent application would receive the price associated with the highest project size tranche regardless of the size of the project. o For example: Three 200 kW applications for solar PV rooftop are submitted. The aggregate capacity is 600 kW. Each would qualify for the greater than 500kW size tranche at 53.9 cents/kWh. Subsequent applications of any size may be submitted. All projects would be eligible and would qualify for the 53.9 cents/kWh price. The FIT Program will be reviewed in two years. At that time, OPA will explore the possibility of allowing additional applications of the same renewable fuel on the same property. This will allow the OPA to ensure that proponents are not taking advantage of splitting projects to obtain higher prices, while still appropriately encourage incremental renewable energy capacity in a manner that makes sense. FIT Guidelines Multiple Projects on One Property –⇥ 3 3829 Appendix A FIT Price Schedule Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel SizeTranches Contract Price Percentage ?IkWh Escalated? Biomass? 10 13.8 20% 10 l?v'lW 13.0 20% Biogas? On-Fami 100 kW 195 20% On-Fann 100 kW 250 kW 18.5 20% Biogas 500 kW 16.0 20% Biogas >500 kW 5 10 MW 14.7 20% Biogas 10 l?v'fW 10.4 20% Waterpowertu 10 13.1 20% 10 50 12.2 20% Landfill gas? 11.1 20% 10 MW 10.3 20% Solar PV Any type S10 kW 80.2 0% Rooftop 10 250 kW 71.3 0% Rooftop 250 500 kW 63.5 0% Rooftop 500 kW 539 0% Ground Mounted2 10 Pv'lV't" 44.3 0% Wind2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% FIT Guidelines Multiple Projects on One Property 3830 Appendix B: Examples QUESTION FIT and microFIT 1. Can I put a 5 kW FIT solar PV project and then a 5 kW microFIT solar PV project on the same property? 2. Can I put a 10 kW microFIT solar PV rooftop project and then later add a 200 kW FIT solar PV ground-mounted project on the same property? 3. Can I install a 10 kW solar PV rooftop project under microFIT and one 100 kW rooftop PV under FIT on the same legal property. RESPONSE Yes. No. No. Alternatively, you could submit two applications at the same time under the FIT program, made up of a 10 kW and a 100 kW. Both projects would be eligible for the 110 kW price of 71.3 cents/kWh. This scenario also applies of both of the projects are ground-mounted. 4. Can I install a 100kW solar rooftop PV under FIT and a 10 kW ground-mounted project under microFIT at the same time? No. In order for both projects to be eligible, you could submit both applications under the FIT program. The 10 kW project would be eligible for the ground-mount price of 44.3 cents/kWh. 5. Can I install a 158 kW solar PV project on the roof, and later an additional 6 kW ground mount? The 6 kW project would not be eligible for a contract under the microFIT program. However, you could apply to the FIT program as a 6kW ground-mounted project and be eligible for the 44.3 cents/kWh price. 6. Can I put a microFIT solar PV and a FIT project of a different renewable fuel on the same property? Yes. 7. If the owner's land is leased to an outside company for wind turbines can a homeowner put a microFIT solar PV on their property? Yes. FIT Solar PV 8. Can I put a FIT solar PV rooftop project and a FIT solar PV ground-mounted project on FIT Guidelines Yes Multiple Projects on One Property –⇥ 5 3831 the same property? 9. Can I submit a 200 kW solar PV rooftop application and apply for a 100 kW solar PV rooftop project on the next day? No, the second application would not be eligible. 10. I have a property with two buildings; unfortunately one connection point is not possible. Can I have panels on both buildings, constructed at the same time? Yes, both applications must be submitted in the same business day and the aggregate capacity will be used to determine the FIT price. 11. A university campus with many buildings but only one legal property wants to have 10 solar PV rooftop projects, 100kW each on different buildings, with separate FIT contracts constructed over time. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 1,000kW. Each project would be eligible for the 53.9 cents/kWh price. In this case, since the aggregate capacity of the initial applications exceeds the 500kW project size tranche, there is no limit on the number or size of projects that can be submitted at a later date. Each of the subsequent projects would be eligible for the 53.9 cents/kWh. 12. A shopping centre has one very large roof and wants 10 solar PV rooftop projects, 20kW each, located at different connection points. 10 applications should be submitted on the same business day. The aggregate capacity of all of the applications is 200kW. Each project would be eligible for the 71.3 cents/kWh price. In this case, subsequent applications may be submitted. However the aggregate capacity of the existing projects and the new projects must not exceed the 250 kW project size tranche (for example, two additional 25 kW applications may be submitted). The subsequent applications would also be eligible for the 71.3 cents/kWh price. FIT – Other Technologies 13. Can I apply for a 5 MW landfill gas project and subsequently apply for a 10 MW incremental landfill gas project? No. In this case, you could submit two applications for both projects at the same time. Both would qualify for the 10.3cents/kWh price. Each project would have a separate contract and would be allowed to come into service at different dates. 14. I have an existing FIT biogas project already. Can I build a new separate small biogas project at another location on the farm? This would only be permitted if the total capacity of the existing project and the new project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the second project is not eligible. 15. Can I add an expansion (incremental project) to an This would only be permitted if the total project capacity of the existing project and the incremental FIT Guidelines Multiple Projects on One Property –⇥ 6 3832 existing FIT waterpower project? project does not exceed the price tranche established by the first project. If the aggregate capacity exceeds the price tranche, the incremental project is not eligible. 16. Can I put a FIT solar PV project and a FIT project of a different renewable fuel on the same property? FIT Guidelines Yes. – Multiple Projects on One Property 7 3833 Patricia Lightburn From: Patricia Lightburn Sent: August-11-10 4:43 PM To: Jim MacDougall; Travis Lusney Subject: New Price Schedule Attachments: FIT Price Schedule_August 2010.doc For posting Friday???✏ Patricia Lightburn✏ FIT Program✏ 3834 August 10, 2010 Feed-in-Tariff Program Prices for Renewable Energy Projects in the FIT Program Base Date: August 10, 2010 Contract Price ¢/kWh Escalation Percentage5 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 250 kW 71.3 0% 63.5 0% > 500 kW 53.9 0% 1 0 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Size tranches Biomass1,2 Biogas1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Rooftop Rooftop Rooftop Ground Mounted2, 4 > 250 500 kW Wind2 1⇥ Peak performance factor applies.⇥ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.⇥ 3⇥ In the case of an incremental waterpower project, the incremental project, together with the existing⇥ generating facility to which it is⇥ incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating⇥ facility to which it is incremental cannot exceed 10 MW.⇥ 5 The percentage⇥ escalated⇥ will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT⇥ contract.⇥ 2⇥ 3835 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. micro Feed-in-Tariff Program Prices for Renewable Energy Projects 10 kW or less in the microFIT Program Base Date: August 10, 2010 Renewable Fuel Contract Price ¢/kWh Biomass 13.8 Biogas 16.0 Waterpower 13.1 Landfill gas 11.1 Solar PV Rooftop 80.2 Solar PV Ground Mounted 64.2 Wind 13.5 3836 Jim MacDougall From: Jim MacDougall⇧ Sent: August-11-10 9:51 PM⇧ To: Patricia Lightburn; Travis Lusney⇧ Subject: Re: New Price Schedule⇧ Nope⇧ I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time⇧ Jim MacDougall, P.Eng.⇧ Manager, FIT Program⇧ Ontario Power Authority⇧ 416 969 6415⇧ Sent from my BB⇧ ----- Original Message ----From: Patricia Lightburn⇧ To: Jim MacDougall; Travis Lusney⇧ Sent: Wed Aug 11 16:42:46 2010⇧ Subject: New Price Schedule⇧ For posting Friday???⇧ Patricia Lightburn⇧ FIT Program⇧ 3837 Jim MacDougall From: Jim MacDougall✓ Sent: August-11-10 9:52 PM✓ To: Jim MacDougall✓ Subject: Fw: New Price Schedule✓ Jim MacDougall, P.Eng.✓ Manager, FIT Program✓ Ontario Power Authority✓ 416 969 6415✓ Sent from my BB✓ ----- Original Message ----From: Jim MacDougall✓ To: Patricia Lightburn; Travis Lusney✓ Sent: Wed Aug 11 21:51:15 2010✓ Subject: Re: New Price Schedule✓ Nope✓ I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time✓ Jim MacDougall, P.Eng.✓ Manager, FIT Program✓ Ontario Power Authority✓ 416 969 6415✓ Sent from my BB✓ ----- Original Message ----From: Patricia Lightburn✓ To: Jim MacDougall; Travis Lusney✓ Sent: Wed Aug 11 16:42:46 2010✓ Subject: New Price Schedule✓ For posting Friday???✓ Patricia Lightburn✓ FIT Program✓ 3838 Patricia Lightburn From: Patricia Lightburn" Sent: August-12-10 10:52 AM" To: Jim MacDougall; Travis Lusney" Subject: RE: New Price Schedule" I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way..." Patricia Lightburn" FIT Program" ----- Original Message ----From: Jim MacDougall" Sent: Wednesday, August 11, 2010 9:51 PM" To: Patricia Lightburn; Travis Lusney" Subject: Re: New Price Schedule" Nope" I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time" Jim MacDougall, P.Eng." Manager, FIT Program" Ontario Power Authority" 416 969 6415" Sent from my BB" ----- Original Message ----From: Patricia Lightburn" To: Jim MacDougall; Travis Lusney" Sent: Wed Aug 11 16:42:46 2010" Subject: New Price Schedule" For posting Friday???" Patricia Lightburn" FIT Program" 3839 Jim MacDougall From: Jim MacDougall✓ Sent: August-12-10 12:03 PM✓ To: Patricia Lightburn; Travis Lusney✓ Subject: RE: New Price Schedule✓ But we may want them to apply for an entirely new contract under new rules ... new program⌫ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ----- Original Message ----From: Patricia Lightburn✓ Sent: August 12, 2010 10:52 AM✓ To: Jim MacDougall; Travis Lusney✓ Subject: RE: New Price Schedule✓ I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way...✓ Patricia Lightburn✓ FIT Program✓ ----- Original Message ----From: Jim MacDougall✓ Sent: Wednesday, August 11, 2010 9:51 PM✓ To: Patricia Lightburn; Travis Lusney✓ Subject: Re: New Price Schedule✓ Nope✓ I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time✓ Jim MacDougall, P.Eng.✓ Manager, FIT Program✓ Ontario Power Authority✓ 416 969 6415✓ Sent from my BB✓ ----- Original Message ----From: Patricia Lightburn✓ To: Jim MacDougall; Travis Lusney✓ Sent: Wed Aug 11 16:42:46 2010✓ Subject: New Price Schedule✓ For posting Friday???✓ 3840 Patricia Lightburn FIT Program 3841 Patricia Lightburn From: Patricia Lightburn Sent: August-12-10 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⌫ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 3842 416 969 6415 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 Subject: New Price Schedule For posting Friday??? Patricia Lightburn FIT Program 3843 Jim MacDougall From: Jim MacDougall Sent: August-12-10 12:59 PM To: Ben Chin; Kristin Jenkins Subject: FW: New Price Schedule I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???" Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⌫ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on 3844 appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 Subject: New Price Schedule For posting Friday??? Patricia Lightburn FIT Program 3845 Ben Chin From: Ben Chin Sent: August-12-10 1:18 PM To: Jim MacDougall; Kristin Jenkins Subject: Re: New Price Schedule Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⌧ ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins Sent: Thu Aug 12 12:59:00 2010 Subject: FW: New Price Schedule I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???" Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⌧ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 3846 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 Subject: New Price Schedule For posting Friday??? Patricia Lightburn FIT Program 3847 Jim MacDougall From: Jim MacDougall✓ Sent: August-12-10 1:23 PM✓ To: Ben Chin; Kristin Jenkins✓ Cc: Patricia Lightburn✓ Subject: RE: New Price Schedule✓ But rooftop aggregators are frozen out of fit and microfit until we set a new price and design a new contract ... Right?⇡ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ----- Original Message ----From: Ben Chin✓ Sent: August 12, 2010 1:18 PM✓ To: Jim MacDougall; Kristin Jenkins✓ Subject: Re: New Price Schedule✓ Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⇡ ----- Original Message ----From: Jim MacDougall✓ To: Ben Chin; Kristin Jenkins✓ Sent: Thu Aug 12 12:59:00 2010✓ Subject: FW: New Price Schedule✓ I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???"✓ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ----- Original Message ----From: Patricia Lightburn✓ Sent: August 12, 2010 12:08 PM✓ To: Jim MacDougall; Travis Lusney✓ Subject: RE: New Price Schedule✓ Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months✓ Patricia Lightburn✓ 3848 FIT Program✓ ----- Original Message ----From: Jim MacDougall✓ Sent: Thursday, August 12, 2010 12:03 PM✓ To: Patricia Lightburn; Travis Lusney✓ Subject: RE: New Price Schedule✓ But we may want them to apply for an entirely new contract under new rules ... new program⇡ Jim MacDougall, P.Eng.✓ Manager, Feed- In Tariff Program✓ Electricity Resources✓ Ontario Power Authority✓ 120 Adelaide St W, Suite 1600✓ Toronto, ON M5H 1T1, Canada✓ tel 416.969.6415✓ ----- Original Message ----From: Patricia Lightburn✓ Sent: August 12, 2010 10:52 AM✓ To: Jim MacDougall; Travis Lusney✓ Subject: RE: New Price Schedule✓ I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way...✓ Patricia Lightburn✓ FIT Program✓ ----- Original Message ----From: Jim MacDougall✓ Sent: Wednesday, August 11, 2010 9:51 PM✓ To: Patricia Lightburn; Travis Lusney✓ Subject: Re: New Price Schedule✓ Nope✓ I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time✓ Jim MacDougall, P.Eng.✓ Manager, FIT Program✓ Ontario Power Authority✓ 416 969 6415✓ Sent from my BB✓ ----- Original Message ----From: Patricia Lightburn✓ To: Jim MacDougall; Travis Lusney✓ Sent: Wed Aug 11 16:42:46 2010✓ Subject: New Price Schedule✓ For posting Friday???✓ Patricia Lightburn✓ FIT Program✓ 3849 Patricia Lightburn From: Patricia Lightburn Sent: August-12-10 1:39 PM To: Mary Bernard Subject: FW: New Price Schedule Another item that needs to change in the press release - we say that aggregators are not allowed in microFIT and should go to FIT. Now apparently they are not allowed in FIT either. They have to wait until the Advisory Panel issues its recommendations. I would like to know if this is for sure confirmed... have you heard anything? Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 1:23 PM To: Ben Chin; Kristin Jenkins Cc: Patricia Lightburn Subject: RE: New Price Schedule But rooftop aggregators are frozen out of fit and microfit until we set a new price and design a new contract ... Right?⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Ben Chin Sent: August 12, 2010 1:18 PM To: Jim MacDougall; Kristin Jenkins Subject: Re: New Price Schedule Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⇡ ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins Sent: Thu Aug 12 12:59:00 2010 Subject: FW: New Price Schedule I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???" Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources 3850 Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 3851 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 Subject: New Price Schedule For posting Friday??? Patricia Lightburn FIT Program 3852 Ben Chin From: Ben Chin Sent: August-12-10 1:44 PM To: Jim MacDougall; Kristin Jenkins Cc: Patricia Lightburn Subject: Re: New Price Schedule Yes that's what they said ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins CC: Patricia Lightburn Sent: Thu Aug 12 13:23:21 2010 Subject: RE: New Price Schedule But rooftop aggregators are frozen out of fit and microfit until we set a new price and design a new contract ... Right?⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Ben Chin Sent: August 12, 2010 1:18 PM To: Jim MacDougall; Kristin Jenkins Subject: Re: New Price Schedule Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⇡ ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins Sent: Thu Aug 12 12:59:00 2010 Subject: FW: New Price Schedule I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???" Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----- 3853 From: Patricia Lightburn Sent: August 12, 2010 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 3854 Subject: New Price Schedule For posting Patricia Lightburn FIT Program 3855 Mary Bernard⌦ From: Mary Bernard⌫ Sent: August-12-10 1:44 PM⌫ To: Patricia Lightburn⌫ Subject: RE: New Price Schedule⌫ I haven't heard anything about this -- it is new to me.⌫ Mary Bernard⌫ Corporate Communications⌫ Ontario Power Authority⌫ 416 - 969 - 6084⌫ ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 1:39 PM⌫ To: Mary Bernard⌫ Subject: FW: New Price Schedule⌫ Another item that needs to change in the press release - we say that aggregators are not allowed in microFIT and should go to FIT. Now apparently they are not allowed in FIT either. They have to wait until the Advisory Panel issues its recommendations. I would like to know if this is for sure confirmed... have you heard anything?⌫ Patricia Lightburn⌫ FIT Program⌫ ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 1:23 PM⌫ To: Ben Chin; Kristin Jenkins⌫ Cc: Patricia Lightburn⌫ Subject: RE: New Price Schedule⌫ But rooftop aggregators are frozen out of fit and microfit until we set a new price and design a new contract ... Right?⇡ Jim MacDougall, P.Eng.⌫ Manager, Feed- In Tariff Program⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St W, Suite 1600⌫ Toronto, ON M5H 1T1, Canada⌫ tel 416.969.6415⌫ 3856 ----- Original Message ----From: Ben Chin Sent: August 12, 2010 1:18 PM⌫ To: Jim MacDougall; Kristin Jenkins⌫ Subject: Re: New Price Schedule⌫ Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⇡ ----- Original Message ----From: Jim MacDougall⌫ To: Ben Chin; Kristin Jenkins⌫ Sent: Thu Aug 12 12:59:00 2010⌫ Subject: FW: New Price Schedule⌫ I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???"⌫ Jim MacDougall, P.Eng.⌫ Manager, Feed- In Tariff Program⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St W, Suite 1600⌫ Toronto, ON M5H 1T1, Canada⌫ tel 416.969.6415⌫ ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 12:08 PM⌫ To: Jim MacDougall; Travis Lusney⌫ Subject: RE: New Price Schedule⌫ Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months⌫ Patricia Lightburn⌫ FIT Program⌫ ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM⌫ To: Patricia Lightburn; Travis Lusney⌫ Subject: RE: New Price Schedule⌫ But we may want them to apply for an entirely new contract under new rules ... new program⇡ Jim MacDougall, P.Eng.⌫ Manager, Feed- In Tariff Program⌫ 3857 Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St W, Suite 1600⌫ Toronto, ON M5H 1T1, Canada⌫ tel 416.969.6415⌫ ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM⌫ To: Jim MacDougall; Travis Lusney⌫ Subject: RE: New Price Schedule⌫ I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way...⌫ Patricia Lightburn⌫ FIT Program⌫ ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM⌫ To: Patricia Lightburn; Travis Lusney⌫ Subject: Re: New Price Schedule⌫ Nope⌫ I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time⌫ Jim MacDougall, P.Eng.⌫ Manager, FIT Program⌫ Ontario Power Authority⌫ 416 969 6415⌫ Sent from my BB⌫ ----- Original Message ----From: Patricia Lightburn⌫ To: Jim MacDougall; Travis Lusney⌫ Sent: Wed Aug 11 16:42:46 2010⌫ Subject: New Price Schedule⌫ For posting Friday???⌫ Patricia Lightburn⌫ FIT Program⌫ 3858 Patricia Lightburn From: Patricia Lightburn Sent: August-12-10 1:45 PM To: Mary Bernard Subject: FW: New Price Schedule Sounds like we need to revise the communications materials... Patricia Lightburn FIT Program ----- Original Message ----From: Ben Chin Sent: Thursday, August 12, 2010 1:44 PM To: Jim MacDougall; Kristin Jenkins Cc: Patricia Lightburn Subject: Re: New Price Schedule Yes that's what they said ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins CC: Patricia Lightburn Sent: Thu Aug 12 13:23:21 2010 Subject: RE: New Price Schedule But rooftop aggregators are frozen out of fit and microfit until we set a new price and design a new contract ... Right?⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Ben Chin Sent: August 12, 2010 1:18 PM To: Jim MacDougall; Kristin Jenkins Subject: Re: New Price Schedule Well, you know I agree with your staff. October is fine with me as long as we can deliver in October⇡ ----- Original Message ----From: Jim MacDougall To: Ben Chin; Kristin Jenkins Sent: Thu Aug 12 12:59:00 2010 Subject: FW: New Price Schedule I understand the sentiment of my staff but think we want to be firm on both ground mount and roof top aggregators - and just come to a resolution on how to treat the aggregators "in October???" 3859 Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 12:08 PM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule Agreed - eventually - but it would be easier to message if we said they can apply to FIT until the new program is available so as not to exclude them entirely for months and months Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Thursday, August 12, 2010 12:03 PM To: Patricia Lightburn; Travis Lusney Subject: RE: New Price Schedule But we may want them to apply for an entirely new contract under new rules ... new program⇡ Jim MacDougall, P.Eng. Manager, Feed- In Tariff Program Electricity Resources Ontario Power Authority 120 Adelaide St W, Suite 1600 Toronto, ON M5H 1T1, Canada tel 416.969.6415 ----- Original Message ----From: Patricia Lightburn Sent: August 12, 2010 10:52 AM To: Jim MacDougall; Travis Lusney Subject: RE: New Price Schedule I thought we were ok with aggregators in FIT but not at 80.2 or 64.2 - as long as we emphasize that further discussion on appropriate aggregator pricing is on its way... Patricia Lightburn FIT Program ----- Original Message ----From: Jim MacDougall Sent: Wednesday, August 11, 2010 9:51 PM To: Patricia Lightburn; Travis Lusney Subject: Re: New Price Schedule Nope I gotta do a a red rules warning on the front page noting microfit and fitis unavailable for aggregators at this time 3860 Jim MacDougall, P.Eng. Manager, FIT Program Ontario Power Authority 416 969 6415 Sent from my BB ----- Original Message ----From: Patricia Lightburn To: Jim MacDougall; Travis Lusney Sent: Wed Aug 11 16:42:46 2010 Subject: New Price Schedule For posting Friday??? Patricia Lightburn FIT Program 3861 Patricia Lightburn From: Patricia Lightburn Sent: August-12-10 4:51 PM To: Mary Bernard Subject: Price Schedule Attachments: FIT Price Schedule_August 13 2010.doc Not sure if anyone in your shop has done this, but if Glenna were here I would send it to her. Attached is the updated price schedule. I would assume we want to post it tomorrow Is this something communications will manage? Patricia Lightburn FIT Program 3862 August 13, 2010 Feed-In⌥ Tariff Prices for Renewable⌥ Energy Projects⌥ in Ontario⌥ Base Date: August 13, 2010 Renewable Fuel Size tranches Contract Price ¢/kWh 5 Escalation⌥ Percentage⌥ Biomass1,2 Biogas 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% 53.9 0% 64.2 0% 44.3 0% 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Rooftop 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted Ground Mounted2, 4 250 kW 500 kW > 500 kW 1 0 kW > 1 0 kW 1 0 MW Wind2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1⇥ Peak performance factor applies. Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.⇥ 3⇥ In the case of an incremental waterpower project, the incremental project, together⇥ with the existing⇥ generating facility to which it is incremental, cannot exceed 50 MW.⇥ 4 In the case of an incremental solar project, the incremental project together with the existing generating⇥ facility to which it is incremental cannot exceed 10 MW.⇥ 5 The percentage⇥ escalated⇥ will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT⇥ contract.⇥ 2⇥ 3863 Appendix A: Maximum Aboriginal Price Adder and Maximum Community⌥ Price Adder*: Wind PV⌥ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌥ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3864 Mary Bernard⌦ From: Mary Bernard⌦ Sent: August-12-10 4:53 PM⌦ To: Patricia Lightburn⌦ Subject: RE: Price Schedule⌦ Yes, ma ’am. I have a list of pages that need to be updated. I ’m Glenna for FIT and microFIT websites. Let’ s just say I ’ m glad she ’ s back on Monday.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Patricia Lightburn Sent: August 12, 2010 4:51 PM To: Mary Bernard Subject: Price Schedule Not sure if anyone in your shop has done this, but if Glenna were here I would send it to her. Attached is the updated price schedule. I would assume we want to post it tomorrow⇠ Is this something communications will manage?⇠ Patricia Lightburn⇠ FIT Program⇠ 3865 Patricia Lightburn From: Patricia Lightburn Sent: August-13-10 3:30 PM To: Mary Bernard Subject: RE: Change to FIT Rules -- version 1.3.1 Attachments: FIT Price Schedule_August 13 2010.pdf The new price schedule is also needed on the FIT pages (Key Documents, Whats New, Program Resources) Patricia Lightburn FIT Program From: Mary Bernard⌦ Sent: Friday, August 13, 2010 2:51 PM⌦ To: webmaster⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: RE: Change to FIT Rules -- version 1.3.1⌦ Yes please. Thanks for catching. Mary Bernard Corporate Communications Ontario Power Authority 416 - 969 - 6084 From: Connie Ellison-Johnson On Behalf Of webmaster⌦ Sent: August 13, 2010 2:51 PM⌦ To: Mary Bernard⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: RE: Change to FIT Rules -- version 1.3.1⌦ Would you like the attached version to replace the FIT Rules housed on the Rules, Exhibits and Forms page? If so, it will be placed on the Program Archive page.$ http://fit.powerauthority.on.ca/Page.asp?$ PageID=122&ContentID=10262&SiteNodeID=1054&BL_ExpandID=262$ Thanks,$ Connie$ From: Mary Bernard⌦ Sent: Friday, August 13, 2010 2:40 PM⌦ To: webmaster⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: Change to FIT Rules -- version 1.3.1⌦ Change to FIT website: On the home page: Box at the bottom of the page should now read: 3866 Box at the bottom of the page should now read: August 13, 2010 The OPA has updated the FIT Rules to advise that applications for 10 kilowatts or less are not permitted at this time. Key Documents: August 13, 2010 FIT Rules What ’ s New: FIT Rules August 13, 2010 The program update doesn ’ t have an entry for July 2 when the FiT Rules were last updated, so let ’ s not put it there. Also, the My FIT home page needs to be updated. Thanks. Mary Bernard Corporate Communications Ontario Power Authority 416 - 969 - 6084 3867 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: August 13, 2010 Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 64.2 0% 44.3 0% Rooftop > 500 kW Ground Mounted Ground Mounted Wind 10 kW 2, 4 > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3868 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel5 Wind PV (Ground Mounted)5 Water Biogas Biomass Landfill5 Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder5 (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3869 Mary Bernard⌦ From: Mary Bernard⌦ Sent: August-13-10 4:03 PM⌦ To: webmaster; Gaurav Patel⌦ Cc: Damian Amole; Tim Aliev; Patricia Lightburn⌦ Subject: FW: Change to FIT Rules -- version 1.3.1⌦ Attachments: FIT Price Schedule_August 13 2010.pdf⌦ Can you please post the attached document on the FIT website.⇠ Key Documents⇠ FIT Price Schedule⇠ August 13, 2010⇠ (please remove the one that says July 2)⇠ What ’ s New⇠ August 13, 2010⇠ FIT Price Schedule⇠ On this page:⇠ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10202&SiteNodeID=1054&BL_ExpandID=262⇠ update the link with the new document. Old one can be archived.⌫ My FIT homepage needs to be updated too.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Patricia Lightburn Sent: August 13, 2010 3:30 PM To: Mary Bernard Subject: RE: Change to FIT Rules -- version 1.3.1 The new price schedule is also needed on the FIT pages (Key Documents, Whats New, Program Resources)⇠ Patricia Lightburn⇠ FIT Program⇠ 3870 From: Mary Bernard Sent: Friday, August 13, 2010 2:51 PM To: webmaster Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev Subject: RE: Change to FIT Rules -- version 1.3.1 Yes please. Thanks for catching.⌫ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Connie Ellison-Johnson On Behalf Of webmaster Sent: August 13, 2010 2:51 PM To: Mary Bernard Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev Subject: RE: Change to FIT Rules -- version 1.3.1 Would you like the attached version to replace the FIT Rules housed on the Rules, Exhibits and Forms page? If so, it will be placed on the Program Archive page.$ http://fit.powerauthority.on.ca/Page.asp?$ PageID=122&ContentID=10262&SiteNodeID=1054&BL_ExpandID=262$ Thanks,$ Connie$ From: Mary Bernard Sent: Friday, August 13, 2010 2:40 PM To: webmaster Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev Subject: Change to FIT Rules -- version 1.3.1 Change to FIT website:⇠ On the home page:⇠ Box at the bottom of the page should now read:⇠ August 13, 2010⇠ The OPA has updated the FIT Rules to advise that applications for 10 kilowatts or less are not permitted at this time.⇠ Key Documents:⇠ August 13, 2010⇠ FIT Rules⇠ What ’ s New:⇠ FIT Rules⇠ August 13, 2010⇠ 3871 The program update doesn ’ t have an entry for July 2 when the FiT Rules were last updated, so let ’ s not put it there.⇠ Also, the My FIT home page needs to be updated.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ 3872 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: August 13, 2010 Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 64.2 0% 44.3 0% Rooftop > 500 kW Ground Mounted Ground Mounted Wind 10 kW 2, 4 > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3873 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel5 Wind PV (Ground Mounted)5 Water Biogas Biomass Landfill5 Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder5 (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3874 Connie Ellison-Johnson From: Connie Ellison-Johnson Sent: August-13-10 4:41 PM To: Mary Bernard; Gaurav Patel Cc: Damian Amole; Tim Aliev; Patricia Lightburn Subject: RE: Change to FIT Rules -- version 1.3.1 Requests complete, including My FIT.⇠ Thanks,⇠ Connie⇠ From: Mary Bernard⌦ Sent: Friday, August 13, 2010 4:03 PM⌦ To: webmaster; Gaurav Patel⌦ Cc: Damian Amole; Tim Aliev; Patricia Lightburn⌦ Subject: FW: Change to FIT Rules -- version 1.3.1⌦ Can you please post the attached document on the FIT website.⇠ Key Documents⇠ FIT Price Schedule⇠ August 13, 2010⇠ (please remove the one that says July 2)⇠ What ’ s New⇠ August 13, 2010⇠ FIT Price Schedule⇠ On this page:⇠ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10202&SiteNodeID=1054&BL_ExpandID=262⇠ update the link with the new document. Old one can be archived.⌫ My FIT homepage needs to be updated too.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Patricia Lightburn⌦ Sent: August 13, 2010 3:30 PM⌦ 3875 To: Mary Bernard⌦ Subject: RE: Change to FIT Rules -- version 1.3.1⌦ The new price schedule is also needed on the FIT pages (Key Documents, Whats New, Program Resources)⇠ Patricia Lightburn⇠ FIT Program⇠ From: Mary Bernard⌦ Sent: Friday, August 13, 2010 2:51 PM⌦ To: webmaster⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: RE: Change to FIT Rules -- version 1.3.1⌦ Yes please. Thanks for catching.⌫ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Connie Ellison-Johnson On Behalf Of webmaster⌦ Sent: August 13, 2010 2:51 PM⌦ To: Mary Bernard⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: RE: Change to FIT Rules -- version 1.3.1⌦ Would you like the attached version to replace the FIT Rules housed on the Rules, Exhibits and Forms page? If so, it will be placed on the Program Archive page.⇠ http://fit.powerauthority.on.ca/Page.asp?⇠ PageID=122&ContentID=10262&SiteNodeID=1054&BL_ExpandID=262⇠ Thanks,⇠ Connie⇠ From: Mary Bernard⌦ Sent: Friday, August 13, 2010 2:40 PM⌦ To: webmaster⌦ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev⌦ Subject: Change to FIT Rules -- version 1.3.1⌦ Change to FIT website:⇠ On the home page:⇠ Box at the bottom of the page should now read:⇠ August 13, 2010⇠ The OPA has updated the FIT Rules to advise that applications for 10 kilowatts or less are not permitted at this time.⇠ Key Documents:⇠ August 13, 2010⇠ 3876 FIT Rules⇠ What ’ s New:⇠ FIT Rules⇠ August 13, 2010⇠ The program update doesn ’ t have an entry for July 2 when the FiT Rules were last updated, so let ’ s not put it there.⇠ Also, the My FIT home page needs to be updated.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ 3877 Connie Ellison-Johnson From: Connie Ellison-Johnson Sent: August-13-10 4:45 PM To: Mary Bernard; Gaurav Patel Cc: Damian Amole; Tim Aliev; Patricia Lightburn Subject: RE: Change to FIT Rules -- version 1.3.1 Under Program Archive, a new section was created for the Price Schedule:⇢ http://fit.powerauthority.on.ca/Page.asp?PageID=1226&SiteNodeID=1041&BL_ExpandID=262⇢ Thanks,⇢ Connie⇢ From: Connie Ellison-Johnson On Behalf Of webmaster◆ Sent: Friday, August 13, 2010 4:41 PM◆ To: Mary Bernard; Gaurav Patel◆ Cc: Damian Amole; Tim Aliev; Patricia Lightburn◆ Subject: RE: Change to FIT Rules -- version 1.3.1◆ Requests complete, including My FIT.⇢ Thanks,⇢ Connie⇢ From: Mary Bernard◆ Sent: Friday, August 13, 2010 4:03 PM◆ To: webmaster; Gaurav Patel◆ Cc: Damian Amole; Tim Aliev; Patricia Lightburn◆ Subject: FW: Change to FIT Rules -- version 1.3.1◆ Can you please post the attached document on the FIT website.⇠ Key Documents⇠ FIT Price Schedule⇠ August 13, 2010⇠ (please remove the one that says July 2)⇠ What ’ s New⇠ August 13, 2010⇠ FIT Price Schedule⇠ On this page:⇠ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10202&SiteNodeID=1054&BL_ExpandID=262⇠ update the link with the new document. Old one can be archived.⌫ 3878 My FIT homepage needs to be updated too.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Patricia Lightburn◆ Sent: August 13, 2010 3:30 PM◆ To: Mary Bernard◆ Subject: RE: Change to FIT Rules -- version 1.3.1◆ The new price schedule is also needed on the FIT pages (Key Documents, Whats New, Program Resources)⇠ Patricia Lightburn⇠ FIT Program⇠ From: Mary Bernard◆ Sent: Friday, August 13, 2010 2:51 PM◆ To: webmaster◆ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev◆ Subject: RE: Change to FIT Rules -- version 1.3.1◆ Yes please. Thanks for catching.⌫ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ From: Connie Ellison-Johnson On Behalf Of webmaster◆ Sent: August 13, 2010 2:51 PM◆ To: Mary Bernard◆ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev◆ Subject: RE: Change to FIT Rules -- version 1.3.1◆ Would you like the attached version to replace the FIT Rules housed on the Rules, Exhibits and Forms page? If so, it will be placed on the Program Archive page.⇢ http://fit.powerauthority.on.ca/Page.asp?⇢ PageID=122&ContentID=10262&SiteNodeID=1054&BL_ExpandID=262⇢ Thanks,⇢ Connie⇢ From: Mary Bernard◆ Sent: Friday, August 13, 2010 2:40 PM◆ To: webmaster◆ Cc: Patricia Lightburn; Damian Amole; Gaurav Patel; Tim Aliev◆ Subject: Change to FIT Rules -- version 1.3.1◆ Change to FIT website:⇠ 3879 On the home page:⇠ Box at the bottom of the page should now read:⇠ August 13, 2010⇠ The OPA has updated the FIT Rules to advise that applications for 10 kilowatts or less are not permitted at this time.⇠ Key Documents:⇠ August 13, 2010⇠ FIT Rules⇠ What ’ s New:⇠ FIT Rules⇠ August 13, 2010⇠ The program update doesn ’ t have an entry for July 2 when the FiT Rules were last updated, so let ’ s not put it there.⇠ Also, the My FIT home page needs to be updated.⇠ Thanks.⇠ Mary Bernard⇠ Corporate Communications⇠ Ontario Power Authority⇠ 416 - 969 - 6084⇠ 3880 Phil Winters From: Phil Winters Sent: August-13-10 5:39 PM To: Jim MacDougall; Ben Chin Subject: Fwd: ( CA ) 08/13 12:00PM Ontario Power Authority Finalizes Price for New Ground-mounted Solar Category: Attachments: 12817152002560CA2.pdf; ATT415021.htm Well done! 3881 The following story was published on Thomson ONE:⇢ ( CA ) 08/13 12:00PM Ontario Power Authority Finalizes Price for New Ground-mounted Solar Category: Consultations Inform Fair Outcome TORONTO, Aug. 13 /CNW/ - The Ontario Power Authority today announced that following a 30-day consultation period, it has finalized the price for the new microFIT ground-mounted solar price category at 64.2 cents per kilowatt-hour (kWh). The finalized price reflects input received during the consultation period and incorporates a wider variation of cost inputs and project configurations, including higher operating and maintenance costs for ground-mounted tracking systems. The price strikes the right balance between providing a reasonable rate of return to electricity generators and protecting ratepayers from higher than necessary electricity prices. "The outcome of a constructive consultation process is that these changes provide fairness for those who have applied to the existing program and good value for clean energy," said Minister of Energy and Infrastructure Brad Duguid. "The microFIT program will continue to be a sustainable program that encourages residents to participate in the growing clean energy economy." "The microFIT program has been tremendously successful since it was launched in October 2009," says Colin Andersen, Chief Executive Officer of the Ontario Power Authority. "With these changes, it has been made even stronger going forward." The new price category is effective immediately for eligible projects with applications submitted after noon on July 2, 2010, when a new price category was proposed. Eligible ground-mounted applications submitted prior to noon on July 2, 2010, will receive the original price of 80.2 cents/kWh whether or not they have received a contract or conditional offer. These applicants will also have until May 31, 2011, to install and request a connection for their projects before higher domestic content requirements are required. Ground-mounted solar microFIT contracts signed and conditional offers received before July 2 will continue to be eligible for the original price of 80.2 cents/kWh. During the 30-day consultation period, the OPA held three web-enabled teleconferences with 1,665 participants and received 1,645 written submissions For information on Thomson ONE go to www.thomson.com/financial⇢ 3882 The following story was published on Thomson ONE:⇢ about the proposed price. Based on this input, the OPA is also making the following announcements: << - To improve communication and increase transparency, the OPA is establishing a microFIT program advisory panel that will provide advice on program evolution, including the two-year review process. The panel will be made up of industry, academic and other stakeholder representatives. - Commercial aggregators (e.g., businesses that lease land or rooftops from individuals for multiple renewable energy projects) will no longer be allowed to participate in the microFIT program. This will ensure that the microFIT program is focused on its original purpose encouraging homeowners, farmers, farm co-operatives, First Nations, small businesses and institutions such as schools, to own and develop small renewable projects. - The panel will make recommendations, on an expedited basis, about appropriate contracting provisions for aggregators to reflect the unique nature of commercial micro projects. This will help ensure that commercial aggregators can continue to participate in the clean energy economy but do so outside of the microFIT program structure. >> To implement these changes announced today, new microFIT applications will be accepted beginning on Friday, August 20. The OPA has received almost 19,000 microFIT applications since the program was launched less than a year ago. More than 6,100 conditional offers have been sent to applicants and almost 800 microFIT projects are now feeding clean energy into Ontario's grid. The OPA is working to respond quickly to microFIT applicants. Most ground-mounted applications that have been submitted will be processed by the For information on Thomson ONE go to www.thomson.com/financial⇢ 3883 The following story was published on Thomson ONE:⇢ end of September. Details on the timeline goals for offering conditional contracts are available on the microFIT website, microfit.powerauthority.on.ca. The OPA will host a webinar on August 18 from 2 to 4 p.m. to answer questions about the finalized price, the advisory panel and other details. Information on how to participate can be found on the microFIT website. The new microFIT program encourages the development of small-scale renewable energy projects (solar, wind, water, bioenergy) of 10 kilowatts or less from a diverse range of producers, including homeowners, farmers, schools, First Nations and small businesses. It is part of a broader Ontario feed-in tariff (FIT) program, the most comprehensive of its kind in North America. The Ontario Power Authority is responsible for ensuring a reliable, sustainable supply of electricity for Ontario. Its four key areas of focus are: planning the power system for the long term, leading and co-ordinating conservation initiatives across the province, ensuring development of needed generation resources, and supporting the continued evolution of the electricity sector. /For further information: Media contacts: Tim Butters, Ontario Power Authority, 416-969-6307, Toll Free: 1-800-797-9604; Andrew Block, Office of the Honourable Brad Duguid, Minister of Energy and Infrastructure, 416-327-6747/ CO: Ontario Power Authority ST: Ontario O/GEN I/OIL For information on Thomson ONE go to www.thomson.com/financial⇢ 3884 Patricia Lightburn From: Patricia Lightburn Sent: August-16-10 3:24 PM To: Glenna Ford Subject: RE: Out-of-date page - Leasing your roof Yeah that ’ s old and totally out of date at this point … ⇤ Patricia Lightburn⌫ FIT Program⌫ From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:13 PM↵ To: Patricia Lightburn↵ Subject: RE: Out-of-date page - Leasing your roof↵ Patricia: I am just starting to go through the websites. I have a few questions for you about the text on this page: http://microfit.powerauthority.on.ca/Program -updates/ground -mount.php Extension of deadline to resubmit microFIT applications Thank you to all microFIT applicants who submitted feedback during the recent 30day consultation period on the new price category for ground-mounted solar PV proj ects. The microFIT team will make an announcement about the new price category as soon as possible following review of the materials and information received. On July 2, microFIT applicants received a notice advising that their application had been unlocked, with instructions to resubmit their application with additional information. [all? Note which ones unlocked and which ones have to act and when maybe a table? Also mention that won ’ t be unlocked until the 20 th – here as well?] The deadline to resubmit microFIT applications has been extended to Tuesday, September 7 at 5 p. m. This extension will provide applicants with more time, if needed, to assess their project under the new category for ground-mounted solar PV projects. Resubmitted applications for ground-mounted projects will be offered the price that is to be finalized after the consultation period. In the meantime, the OPA is processing resubmitted applications so that conditional offers for ground-mounted solar PV projects can be made as quickly as possible following the announcement. Applicants are encouraged to resubmit their application as soon as possible if they have decided to go ahead with their project. Applications that have not been resubmitted by September 7 will be withdrawn from the program. A new application can be submitted at any time 3885 -----Original Message----From: Patricia Lightburn Sent: August 16, 2010 11:30 AM To: Glenna Ford Subject: RE: Out-of-date page - Leasing your roof I think It would be better if we could put the red box saying at this tome this arrangement is not possible etc.. I can send you the text if you don't have it We also need to update both program overviews with the new price schedule.. -----Original Message----From: Glenna Ford Sent: Mon 8/16/2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: webmaster Subject: FW: Out-of-date page - Leasing your roof Do you want this page removed? _________________________ _______ From: Connie Ellison-Johnson On Behalf Of webmaster Sent: August 16, 2010 11:20 AM To: Glenna Ford Subject: FW: Out-of-date page - Leasing your roof Importance: High Thank you, Connie _________________________ _______ From: Abdulrasul, Fatima (ENE) [mailto:Fatima.Abdulrasul@ontario.ca] Sent: Monday, August 16, 2010 11:01 AM To: webmaster Subject: Out-of-date page - Leasing your roof Importance: High This page seems to be out-of-date since commercial aggregators (e.g., businesses that lease land or rooftops from individuals for multiple renewable energy projects) will no longer be allowed to participate in the microFIT program. Please delete to avoid confusion on the part of potential proponents: http://microfit.powerauthority.on.ca/Participating -in-microFIT /How-to-getinvolved/Leasing -your-roof.php 3886 involved/Leasing -your-roof.php Regards, Fatima Abdulrasul Ministry of the Environment Air Policy Instruments and Program Design Branch Air Policy Instruments Section Telephone: 416-314-4195 Mobile: 416-436-6488 Fax: 416-314-4128 Email: fatima.abdulrasul@ontario.ca 3887 Patricia Lightburn From: Patricia Lightburn Sent: August-16-10 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed. I don ’ t think any text is required on that page – only the new price schedule Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:25 PM↵ To: Patricia Lightburn↵ Subject: FIT website↵ Patricia: I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated: http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3888 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 3:29 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Can you send me the correct document? It will have to be reposted everywhere.⇡ From: Patricia Lightburn Sent: August 16, 2010 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed.⇡ I don ’ t think any text is required on that page – only the new price schedule⇡ Patricia Lightburn⇡ FIT Program⇡ From: Glenna Ford Sent: Monday, August 16, 2010 3:25 PM To: Patricia Lightburn Subject: FIT website Patricia:⇡ I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated:⇡ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor⇡ Direct: 416- 969 - 6305⇡ Cell: 416- 392 - 9905⇡ Email: glenna.ford@powerauthority.on.ca⇡ Ontario Power Authority⇡ 120 Adelaide Street West, Suite 1600⇡ Toronto , ON M5H 1T1⇡ www.powerauthority.on.ca⇡ P Please consider the environment before printing this email. 3889 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 3:30 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ The base date says August 13 as well … .◆ From: Patricia Lightburn Sent: August 16, 2010 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed.◆ I don ’ t think any text is required on that page – only the new price schedule◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford Sent: Monday, August 16, 2010 3:25 PM To: Patricia Lightburn Subject: FIT website Patricia:◆ I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated:◆ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor◆ Direct: 416- 969 - 6305◆ Cell: 416- 392 - 9905◆ Email: glenna.ford@powerauthority.on.ca◆ Ontario Power Authority◆ 120 Adelaide Street West, Suite 1600◆ Toronto , ON M5H 1T1◆ www.powerauthority.on.ca◆ P Please consider the environment before printing this email. 3890 Patricia Lightburn From: Patricia Lightburn Sent: August-16-10 3:32 PM To: Glenna Ford Subject: RE: FIT website Attachments: FIT Price Schedule_August 13 2010.pdf Here you go It is supposed to say August 13.. So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2 Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:29 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Can you send me the correct document? It will have to be reposted everywhere. From: Patricia Lightburn↵ Sent: August 16, 2010 3:28 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed. I don ’ t think any text is required on that page – only the new price schedule Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:25 PM↵ To: Patricia Lightburn↵ Subject: FIT website↵ Patricia: I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated: http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? 3891 Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3892 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: August 13, 2010 Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 64.2 0% 44.3 0% Rooftop > 500 kW Ground Mounted Ground Mounted Wind 10 kW 2, 4 > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3893 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel5 Wind PV (Ground Mounted)5 Water Biogas Biomass Landfill5 Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder5 (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3894 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 4:03 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Just to confirm – you didn ’ t make any changes to this, right? From: Patricia Lightburn Sent: August 16, 2010 3:32 PM To: Glenna Ford Subject: RE: FIT website Here you go It is supposed to say August 13.. So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2 Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 3:29 PM To: Patricia Lightburn Subject: RE: FIT website Can you send me the correct document? It will have to be reposted everywhere. From: Patricia Lightburn Sent: August 16, 2010 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed. I don ’ t think any text is required on that page – only the new price schedule Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 3:25 PM To: Patricia Lightburn Subject: FIT website Patricia: 3895 Patricia: I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated: http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3896 Patricia Lightburn From: Patricia Lightburn Sent: August-16-10 4:03 PM To: Glenna Ford Subject: RE: FIT website Changes to the price schedule?◆ Correct, no changes◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 4:03 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Just to confirm – you didn ’ t make any changes to this, right?◆ From: Patricia Lightburn↵ Sent: August 16, 2010 3:32 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Here you go◆ It is supposed to say August 13..◆ So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:29 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Can you send me the correct document? It will have to be reposted everywhere.◆ From: Patricia Lightburn↵ Sent: August 16, 2010 3:28 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed.◆ 3897 I don ’ t think any text is required on that page – only the new price schedule◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:25 PM↵ To: Patricia Lightburn↵ Subject: FIT website↵ Patricia:◆ I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated:◆ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor◆ Direct: 416- 969 - 6305◆ Cell: 416- 392 - 9905◆ Email: glenna.ford@powerauthority.on.ca◆ Ontario Power Authority◆ 120 Adelaide Street West, Suite 1600◆ Toronto , ON M5H 1T1◆ www.powerauthority.on.ca◆ P Please consider the environment before printing this email. 3898 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 4:04 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Okay, thanks. You had sent me a schedule, but it matches what ’ s posted I believe.⇢ From: Patricia Lightburn Sent: August 16, 2010 4:03 PM To: Glenna Ford Subject: RE: FIT website Changes to the price schedule?⇢ Correct, no changes⇢ Patricia Lightburn⇢ FIT Program⇢ From: Glenna Ford Sent: Monday, August 16, 2010 4:03 PM To: Patricia Lightburn Subject: RE: FIT website Just to confirm – you didn ’ t make any changes to this, right?⇢ From: Patricia Lightburn Sent: August 16, 2010 3:32 PM To: Glenna Ford Subject: RE: FIT website Here you go⇢ It is supposed to say August 13..⇢ So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2⇢ Patricia Lightburn⇢ FIT Program⇢ From: Glenna Ford Sent: Monday, August 16, 2010 3:29 PM To: Patricia Lightburn Subject: RE: FIT website Can you send me the correct document? It will have to be reposted everywhere.⇢ 3899 From: Patricia Lightburn Sent: August 16, 2010 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed.⇢ I don ’ t think any text is required on that page – only the new price schedule⇢ Patricia Lightburn⇢ FIT Program⇢ From: Glenna Ford Sent: Monday, August 16, 2010 3:25 PM To: Patricia Lightburn Subject: FIT website Patricia:⇢ I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated:⇢ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor⇢ Direct: 416- 969 - 6305⇢ Cell: 416- 392 - 9905⇢ Email: glenna.ford@powerauthority.on.ca⇢ Ontario Power Authority⇢ 120 Adelaide Street West, Suite 1600⇢ Toronto , ON M5H 1T1⇢ www.powerauthority.on.ca⇢ P Please consider the environment before printing this email. 3900 Patricia Lightburn From: Patricia Lightburn Sent: August-16-10 4:04 PM To: Glenna Ford Subject: RE: FIT website True – its just the date on the website that needs to change◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 4:04 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Okay, thanks. You had sent me a schedule, but it matches what ’ s posted I believe.◆ From: Patricia Lightburn↵ Sent: August 16, 2010 4:03 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Changes to the price schedule?◆ Correct, no changes◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 4:03 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Just to confirm – you didn ’ t make any changes to this, right?◆ From: Patricia Lightburn↵ Sent: August 16, 2010 3:32 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Here you go◆ It is supposed to say August 13..◆ So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2◆ 3901 Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:29 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Can you send me the correct document? It will have to be reposted everywhere.◆ From: Patricia Lightburn↵ Sent: August 16, 2010 3:28 PM↵ To: Glenna Ford↵ Subject: RE: FIT website↵ Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed.◆ I don ’ t think any text is required on that page – only the new price schedule◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford↵ Sent: Monday, August 16, 2010 3:25 PM↵ To: Patricia Lightburn↵ Subject: FIT website↵ Patricia:◆ I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated:◆ http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor◆ Direct: 416- 969 - 6305◆ Cell: 416- 392 - 9905◆ Email: glenna.ford@powerauthority.on.ca◆ Ontario Power Authority◆ 120 Adelaide Street West, Suite 1600◆ Toronto , ON M5H 1T1◆ www.powerauthority.on.ca◆ P Please consider the environment before printing this email. 3902 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 4:06 PM↵ To: Patricia Lightburn↵ Subject: RE: FIT website↵ Done. Thanks. From: Patricia Lightburn Sent: August 16, 2010 4:04 PM To: Glenna Ford Subject: RE: FIT website True – its just the date on the website that needs to change Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 4:04 PM To: Patricia Lightburn Subject: RE: FIT website Okay, thanks. You had sent me a schedule, but it matches what ’ s posted I believe. From: Patricia Lightburn Sent: August 16, 2010 4:03 PM To: Glenna Ford Subject: RE: FIT website Changes to the price schedule? Correct, no changes Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 4:03 PM To: Patricia Lightburn Subject: RE: FIT website Just to confirm – you didn ’ t make any changes to this, right? From: Patricia Lightburn Sent: August 16, 2010 3:32 PM To: Glenna Ford Subject: RE: FIT website 3903 Here you go It is supposed to say August 13.. So I think the only place it needs to go is in the FIT Program section. And then the date under key documents needs to be August 13 rather than july 2 Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 3:29 PM To: Patricia Lightburn Subject: RE: FIT website Can you send me the correct document? It will have to be reposted everywhere. From: Patricia Lightburn Sent: August 16, 2010 3:28 PM To: Glenna Ford Subject: RE: FIT website Yes that should have been updated with the August 13 price schedule. It was on the list but I guess it was missed. I don ’ t think any text is required on that page – only the new price schedule Patricia Lightburn FIT Program From: Glenna Ford Sent: Monday, August 16, 2010 3:25 PM To: Patricia Lightburn Subject: FIT website Patricia: I am not sure if you were working with Mary last Friday, but it seems this page didn ’ t get updated: http://fit.powerauthority.on.ca/Page.asp?PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260. We should discuss messaging. I haven ’ t checked the rest of the site, but I did notice that the first item in Key documents has August 13 on the price schedule. Should that be changed? Glenna Ford↵ Senior Regulatory Communications Advisor Direct: 416- 969 - 6305 Cell: 416- 392 - 9905 Email: glenna.ford@powerauthority.on.ca Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto , ON M5H 1T1 www.powerauthority.on.ca P Please consider the environment before printing this email. 3904 Glenna Ford↵ From: Glenna Ford↵ Sent: August-16-10 4:39 PM↵ To: Patricia Lightburn↵ Subject: RE: Out-of-date page - Leasing your roof↵ Do you want to take a stab at updating this page? I can then edit and finalize for posting. Thanks.⌧ From: Patricia Lightburn Sent: August 16, 2010 3:25 PM To: Glenna Ford Subject: RE: Out-of-date page - Leasing your roof Maybe we should post a table⌧ Here is one that I drafted for the students as a reference – we could expand on it for the website …⌅ Patricia Lightburn⌧ FIT Program⌧ From: Glenna Ford Sent: Monday, August 16, 2010 3:13 PM To: Patricia Lightburn Subject: RE: Out-of-date page - Leasing your roof Patricia: I am just starting to go through the websites. I have a few questions for you about the text on this page: http://microfit.powerauthority.on.ca/Program -updates/ground -mount.php Extension of deadline to resubmit microFIT applications Thank you to all microFIT applicants who submitted feedback during the recent 30day consultation period on the new price category for ground-mounted solar PV proj ects. The microFIT team will make an announcement about the new price category as soon as possible following review of the materials and information received. On July 2, microFIT applicants received a notice advising that their application had been unlocked, with instructions to resubmit their application with additional information. [all? Note which ones unlocked and which ones have to act and when maybe a table? Also mention that won ’ t be unlocked until the 20 th – here as well?] The deadline to resubmit microFIT applications has been extended to Tuesday, September 7 at 5 p. m. This extension will provide applicants with more time, if needed, to assess their project under the new category for ground-mounted solar PV projects. 3905 Resubmitted applications for ground-mounted projects will be offered the price that is to be finalized after the consultation period. In the meantime, the OPA is processing resubmitted applications so that conditional offers for ground-mounted solar PV projects can be made as quickly as possible following the announcement. Applicants are encouraged to resubmit their application as soon as possible if they have decided to go ahead with their project. Applications that have not been resubmitted by September 7 will be withdrawn from the program. A new application can be submitted at any time -----Original Message----From: Patricia Lightburn Sent: August 16, 2010 11:30 AM To: Glenna Ford Subject: RE: Out-of-date page - Leasing your roof I think It would be better if we could put the red box saying at this tome this arrangement is not possible etc.. I can send you the text if you don't have it We also need to update both program overviews with the new price schedule.. -----Original Message----From: Glenna Ford Sent: Mon 8/16/2010 11:20 AM To: Patricia Lightburn; Sarah Simmons Cc: webmaster Subject: FW: Out-of-date page - Leasing your roof Do you want this page removed? _________________________ _______ From: Connie Ellison-Johnson On Behalf Of webmaster Sent: August 16, 2010 11:20 AM To: Glenna Ford Subject: FW: Out-of-date page - Leasing your roof Importance: High Thank you, Connie _________________________ _______ From: Abdulrasul, Fatima (ENE) [mailto:Fatima.Abdulrasul@ontario.ca] Sent: Monday, August 16, 2010 11:01 AM To: webmaster Subject: Out-of-date page - Leasing your roof Importance: High 3906 This page seems to be out-of-date since commercial aggregators (e.g., businesses that lease land or rooftops from individuals for multiple renewable energy projects) will no longer be allowed to participate in the microFIT program. Please delete to avoid confusion on the part of potential proponents: http://microfit.powerauthority.on.ca/Participating -in-microFIT /How-to-getinvolved/Leasing -your-roof.php Regards, Fatima Abdulrasul Ministry of the Environment Air Policy Instruments and Program Design Branch Air Policy Instruments Section Telephone: 416-314-4195 Mobile: 416-436-6488 Fax: 416-314-4128 Email: fatima.abdulrasul@ontario.ca 3907 Glenna Ford↵ From: Glenna Ford⌦ Sent: August-16-10 5:13 PM⌦ To: Patricia Lightburn⌦ Subject: FW: FIT web-site changes⌦ FYI.⇧ From: Cindy Roks↵ Sent: August 16, 2010 4:54 PM↵ To: Glenna Ford↵ Subject: FIT web-site changes↵ HI Glenna,⌦ Here is what I found on the FIT web-site that concerns the new price⌦ http://fit.powerauthority.on.ca/Page.asp?⌦ PageID=122&ContentID=10195&SiteNodeID=1098&BL_ExpandID=259⌦ Should add the microFIT price for ground-mounted solar⌦ Link to FIT Rules is still September 30, 2009 rules⌦ http://fit.powerauthority.on.ca/Page.asp?⌦ PageID=122&ContentID=10543&SiteNodeID=1103&BL_ExpandID=260⌦ http://fit.powerauthority.on.ca/Storage/102/11123_FIT_Price_Schedule_July_2_2010.pdf⌦ Links above still has proposed price of 58.8⌦ http://fit.powerauthority.on.ca/Page.asp?⌦ PageID=834&ContentID=10509&SiteNodeID=1126&BL_ExpandID=262⌦ Changes to microFIT FAQs must be made to the following link as well⌦ Program Overview – will need to be updated with changes to multiple properties, rooftop and price⌦ Does FIT Rules, definitions and contract need any changes?⌦ 3908 Patricia Lightburn From: Patricia Lightburn Sent: August-17-10 1:34 PM To: Glenna Ford Subject: RE: edit check Attachments: FIT Price Schedule_August 13 2010.doc Here you go Not Responsive Patricia Lightburn FIT Program Not Responsive 3909 August 13, 2010 Feed-In⌥ Tariff Prices for Renewable⌥ Energy Projects⌥ in Ontario⌥ Base Date: August 13, 2010 Renewable Fuel Size tranches Contract Price ¢/kWh 5 Escalation⌥ Percentage⌥ Biomass1,2 Biogas 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% 53.9 0% 64.2 0% 44.3 0% 1,2 On-Farm On-Farm Biogas Biogas Biogas > 1 00 kW 250 kW 500 kW >500 kW 1 0 MW Waterpower1,2,3 > 10 MW 50 MW Landfill gas1,2 Solar PV Rooftop 10 kW Rooftop > 10 Rooftop > 250 Rooftop Ground Mounted Ground Mounted2, 4 250 kW 500 kW > 500 kW 1 0 kW > 1 0 kW 1 0 MW Wind2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1⇥ Peak performance factor applies. Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.⇥ 3⇥ In the case of an incremental waterpower project, the incremental project, together⇥ with the existing⇥ generating facility to which it is incremental, cannot exceed 50 MW.⇥ 4 In the case of an incremental solar project, the incremental project together with the existing generating⇥ facility to which it is incremental cannot exceed 10 MW.⇥ 5 The percentage⇥ escalated⇥ will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT⇥ contract.⇥ 2⇥ 3910 Appendix A: Maximum Aboriginal Price Adder and Maximum Community⌥ Price Adder*: Wind PV⌥ (Ground Mounted) Water Biogas Biomass Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Landfill⌥ Gas * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3911 Patricia Lightburn From: Patricia Lightburn Sent: August-17-10 3:12 PM To: Glenna Ford Subject: price schedule Attachments: FIT Price Schedule.pdf We need the September 2009 price schedule on the archives page as well⇢ Patricia Lightburn⇢ FIT Program⇢ 3912 September 24, 2009 Feed-In⌥ Tariff⌥ Prices for⌥ Renewable⌥ Energy⌥ Projects⌥ in Ontario⌥ Base Date: September 24, 2009⌥ Renewable Fuel Size tranches Contract Price ¢/kWh⌥ 4 Escalation⌥ Percentage 1,2 Biomass 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 80.2 0% 71.3 0% 63.5 0% > 500 kW 53.9 0% > 10 kW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1,2 Biogas On-Farm On-Farm > 100 kW Biogas 250 kW 500 kW Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW 50 MW 1,2 Landfill gas Solar PV Any type 10 kW Rooftop > 10 Rooftop > 250 Rooftop 2 Ground Mounted 250 kW 500 kW 2 Wind 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 3913 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV⌥ (Ground Mounted) Water Biogas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel Biomass⌥ Landfill Gas⌥ * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3914 Glenna Ford↵ From: Glenna Ford↵ Sent: August-17-10 5:05 PM↵ To: Patricia Lightburn↵ Subject: RE: price schedule↵ Done. I won ’ t be doing any work on the two sites until Friday, unless I hear otherwise from you. From: Patricia Lightburn Sent: August 17, 2010 3:12 PM To: Glenna Ford Subject: price schedule We need the September 2009 price schedule on the archives page as well" Patricia Lightburn" FIT Program" 3915 Travis Lusney From: Travis Lusney Sent: August-26-10 10:11 AM To: 'Palmer, Mary (MEI)' Cc: Jim MacDougall; 'Tasca, Leo (MEI)' Subject: RE: Small Wind FIT Attachments: Domestic content small wind grid 1-10kW july (tl advice).xls; Domestic content small wind grid compiled 11-300 kW (tl advice).xls; Small Wind FIT Price Advice 2010-08-26.xls Hello Mary and Leo Attached is the latest price analysis for micro and small wind. I have taken into account the costs and assumptions⇡ provided by CanWEA, along with other suppliers and manufactures. In keeping with the FIT programs pricing⇡ principles, I have moved the price to the lower band to encourage efficiency and innovation gains along with ensuring that uptake remains sustainable. Although I have identified a 10 - 100 kW range, I am still unsure that this would be the best approach at this time given the lack of small wind producers in the province at this time. It is unclear what a proper price should be once⇡ the industry starts to grow, however if the ministry and Minister is looking to grow this industry, I believe this is a fair price. With respect to Domestic content, I believe that it would be best to work on this issue through the Domestic Content Working Group. In my opinion, the CanWEA proposal would not encourage any investment in Ontario for⇡ small or micro wind turbines. For example, if the Domestic Content level was set at 50%, a Supplier could reach⇡ that amount utilizing just construction, towers, inverters and/or wiring and electrical. Without discussing with⇡ DCWG, I would suggest that for micro Wind (1- 10kW) Wind Turbines represent 45% - 50% to encourage investment in Wind Turbine Manufacturing. For small Wind (1 1 - 100 kW), I would suggest that blades and generator/breaks both receive an extra 5% on CanWEA's suggestion at the expense of Towers and Construction. I have attached this⇡ advice for your reference. Finally, the key question that the OPA continues to ask is what is the goal for micro Wind and small Wind pricing.⇡ The cost and lack of established manufactures makes setting a solid starting price difficult without a clear definition of expectations. If Ontario wishes to encourage micro and small wind installations, then the CanWEA suggested⇡ prices and Domestic Content grids should be adopted. The downside is that investment in manufactures will not be encouraged and the rate impact could be costly. If Ontario wishes to encourage micro and small wind installation⇡ and manufacturing, then a stiffer Domestic Content grid is required, however rate impacts could remain. The OPA's⇡ suggested price and Domestic Content grid attempts to strike a balance between the cost and benefits of micro Wind and small Wind. One last thing is that I have not gotten a chance to sit down with Jim to review the final price and domestic content suggestions in details, but I will report back when he has returned from holidays. Thank you, please feel free to contact me with any questions Travis Travis Lusney OPA - Senior Business Analyst, Generation T 416- 969 - 6280 E Travis.Lusney@powerauthority.on.ca Procurement 3916 From: Palmer, Mary (MEI) [mailto:Mary.Palmer@ontario.ca]⇡ Sent: Friday, August 20, 2010 11:49 AM⇡ To: Travis Lusney⇡ Subject: FW: Small Wind FIT⇡ Importance: High⇡ Hi Travis, I would be happy to discuss this with you. Would it be possible to have something for us certainly by Wedns./Thurs. or next week? Thanks.⇡ From: Palmer, Mary (MEI)⇡ Sent: August 16, 2010 2:01 PM⇡ To: Travis Lusney⇡ Cc: Tasca, Leo (MEI); Kirschbaum, Alan (MEI)⇡ Subject: Small Wind FIT⇡ Hello Travis: Upon reviewing policy options for the proposed small wind FIT, we are giving due consideration for revised “ tranches ”⇡ for same. Could you please recalculate for 1 1 61 00kW?⇡ Assumptions: Capacity factor of 20%⇡ Capital costs —pls recalculate with the cc as per the initial cc as provided by CanWEA; in addition,⇡ could you please calculate the FIT with the higher cc as provided subsequently to the initial CanWEA amounts (you had indicated that the OPA has upward flexibility for a small wind FIT) ROE 11% Debt/Equity 70/30 Etc. Given the higher capital costs (which include installation) that Cleanfield and Wind Simplicity provided (as well as CanWEA ’ s revised capital costs), please either confirm the OPA ’s position on the FIT <1 0kW or please provide us⇡ with the revised FIT for this tranche. It is highly likely that the Small Wind FIT proposed tranches would be <1 0kW and 1 1 61 00kW.⇡ We look forward to hearing from you on this.⇡ Thank you, Mary L. Palmer Ministry of Energy and Infrastructure◆ Renewables and Energy Facilitation Branch◆ Senior Policy Analyst◆ 77 Grenville Street, 9th Floor◆ Toronto, ON M5S 1B3◆ tel. 416 212 7706 fax 416 314 2175⌘ mary.palmer@ontario.ca www.ontario.ca/renewableenergyprojects◆ 3917 Not Responsive Not Responsive Capacity Capital Cost ACF ACF Variable O&M Fixed O&M D/E Ratio Interest Rate ROE kW $/kW % Hours $/MWh $/kW/year % % % FIT Price c/kWh Micro Wind Small Wind Wind 1-10 kW 11-100 kW >100 kW 3.5 65 10000 $ 7,000 $ 6,000 $ 2,710 20% 25% 30% 1752 2190 2628 16 16 0 24 24 55 70% 70% 70% 7% 7% 7% 11% 11% 11% 46.6 32.7 13.5 3920 Glenna Ford↵ From: Glenna Ford↵ Sent: August-27-10 10:07 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Travis Lusney↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010. From: Patricia Lightburn Sent: August 26, 2010 4:16 PM To: Glenna Ford; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⌅ J⇥ Patricia Lightburn FIT Program From: Glenna Ford Sent: Thursday, August 26, 2010 4:02 PM To: Sarah Simmons Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Sarah: Thanks very much. I have a few questions for you: 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed everywhere? Not Responsive Thanks again. From: Sarah Simmons Sent: August 26, 2010 3:59 PM To: Glenna Ford Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Everything looks great. 3921 Two comments 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⌅ just want to say “ DATE OF PRICE SCHEDULE ”⌅ Not Responsive Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email Not Responsive 3922 Patricia Lightburn From: Patricia Lightburn Sent: August-27-10 10:19 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Attachments: FIT Price Schedule_August 13 2010.pdf Here is the FIT one I am having trouble locating the microFIT one …⇥ Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Friday, August 27, 2010 10:07 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Travis Lusney↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010. From: Patricia Lightburn↵ Sent: August 26, 2010 4:16 PM↵ To: Glenna Ford; Sarah Simmons↵ Cc: Travis Lusney↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⇥ J⇥ Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Thursday, August 26, 2010 4:02 PM↵ To: Sarah Simmons↵ Cc: Travis Lusney; Patricia Lightburn↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Sarah: Thanks very much. I have a few questions for you: 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed 3923 everywhere? Not Responsive Thanks again. From: Sarah Simmons↵ Sent: August 26, 2010 3:59 PM↵ To: Glenna Ford↵ Cc: Travis Lusney; Patricia Lightburn↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Everything looks great. Two comments 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⇥ just want to say “ DATE OF PRICE SCHEDULE ”⇥ Not Responsive Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email Not Responsive 3924 Not Responsive 3925 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario August 13, 2010" Renewable Fuel Biomass Biogas Size tranches 5 Contract Price ¢/kWh Escalation Percentage 10 MW 13.8 20% > 10 MW 13.0 20% 100 kW 19.5 20% 18.5 20% 16.0 20% 14.7 20% > 10 MW 10.4 20% 10 MW 13.1 20% 12.2 20% 10MW 11.1 20% > 10 MW 10.3 20% 1,2 1,2 On-Farm On-Farm > 100 kW 250 kW 500 kW Biogas Biogas >500 kW Biogas 10 MW 1,2,3 Waterpower > 10 MW Landfill gas 50 MW 1,2 Solar PV 80.2 0% Rooftop Rooftop > 10 10 kW 250 kW 71.3 0% Rooftop > 250 500 kW 63.5 0% 53.9 0% 64.2 0% 44.3 0% Rooftop > 500 kW Ground Mounted Ground Mounted Wind 10 kW 2, 4 > 10 kW 10 MW 2 Onshore Any size 13.5 20% Offshore Any size 19.0 20% 1 Peak performance factor applies.◆ Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule.◆ 3 In the case of an incremental waterpower project, the incremental project, together with the existing◆ generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremen tal cannot exceed 10 MW.◆ 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract.◆ 2 3926 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Renewable Fuel" Wind PV (Ground Mounted)" Water Biogas Biomass Landfill" Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder" (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 3927 Glenna Ford↵ From: Glenna Ford↵ Sent: August-27-10 10:22 AM↵ To: Patricia Lightburn↵ Cc: Travis Lusney; Sarah Simmons↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ I don ’ t seem to have a microFIT price schedule either … . It was posted while I was on vacation.⌫ From: Patricia Lightburn Sent: August 27, 2010 10:19 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Here is the FIT one⌫ I am having trouble locating the microFIT one …⇤ Patricia Lightburn⌫ FIT Program⌫ From: Glenna Ford Sent: Friday, August 27, 2010 10:07 AM To: Patricia Lightburn; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010.⌫ From: Patricia Lightburn Sent: August 26, 2010 4:16 PM To: Glenna Ford; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⇤ J⇥ Patricia Lightburn⌫ FIT Program⌫ From: Glenna Ford Sent: Thursday, August 26, 2010 4:02 PM To: Sarah Simmons 3928 Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Sarah:⌫ Thanks very much. I have a few questions for you:⌫ 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed everywhere?⌫ Not Responsive Thanks again.⌫ From: Sarah Simmons Sent: August 26, 2010 3:59 PM To: Glenna Ford Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Everything looks great.⌫ Two comments⌫ 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⇤ just want to say “ DATE OF PRICE SCHEDULE ”⇤ Not Responsive Sarah Simmons↵ Analyst⌫ Electricity Resources⌫ Ontario Power Authority⌫ 120 Adelaide St. W. Suite 1600⌫ Toronto , ON , M5H 1T1⌫ Tel 416.969.6213⌫ Fax 416.967.1947⌫ www.powerauthority.on.ca⌫ P please consider the environment before printing this email Not Responsive 3929 Not Responsive 3930 Glenna Ford↵ From: Glenna Ford↵ Sent: August-27-10 10:24 AM↵ To: Patricia Lightburn↵ Cc: Travis Lusney; Sarah Simmons↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Shall we just leave this one as Revised August 13, 2010 then?⇢ From: Patricia Lightburn Sent: August 27, 2010 10:22 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Here is microFIT⇢ Patricia Lightburn⇢ FIT Program⇢ From: Glenna Ford Sent: Friday, August 27, 2010 10:07 AM To: Patricia Lightburn; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010.⇢ From: Patricia Lightburn Sent: August 26, 2010 4:16 PM To: Glenna Ford; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⌅ J⇥ Patricia Lightburn⇢ FIT Program⇢ From: Glenna Ford Sent: Thursday, August 26, 2010 4:02 PM To: Sarah Simmons Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits 3931 Sarah:⇢ Thanks very much. I have a few questions for you:⇢ 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed everywhere?⇢ Not Responsive Thanks again.⇢ From: Sarah Simmons Sent: August 26, 2010 3:59 PM To: Glenna Ford Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Everything looks great.⇢ Two comments⇢ 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⌅ just want to say “ DATE OF PRICE SCHEDULE ”⌅ Not Responsive Sarah Simmons↵ Analyst⇢ Electricity Resources⇢ Ontario Power Authority⇢ 120 Adelaide St. W. Suite 1600⇢ Toronto , ON , M5H 1T1⇢ Tel 416.969.6213⇢ Fax 416.967.1947⇢ www.powerauthority.on.ca⇢ P please consider the environment before printing this email Not Responsive 3932 Not Responsive 3933 Patricia Lightburn From: Patricia Lightburn Sent: August-27-10 10:25 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Im good with that The microFIT one is not official anyways Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Friday, August 27, 2010 10:24 AM↵ To: Patricia Lightburn↵ Cc: Travis Lusney; Sarah Simmons↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Shall we just leave this one as Revised August 13, 2010 then? From: Patricia Lightburn↵ Sent: August 27, 2010 10:22 AM↵ To: Glenna Ford↵ Cc: Travis Lusney; Sarah Simmons↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Here is microFIT Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Friday, August 27, 2010 10:07 AM↵ To: Patricia Lightburn; Sarah Simmons↵ Cc: Travis Lusney↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010. From: Patricia Lightburn↵ Sent: August 26, 2010 4:16 PM↵ To: Glenna Ford; Sarah Simmons↵ Cc: Travis Lusney↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ 3934 Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⌅ J⇥ Patricia Lightburn FIT Program From: Glenna Ford↵ Sent: Thursday, August 26, 2010 4:02 PM↵ To: Sarah Simmons↵ Cc: Travis Lusney; Patricia Lightburn↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Sarah: Thanks very much. I have a few questions for you: 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed everywhere? Not Responsive Thanks again. From: Sarah Simmons↵ Sent: August 26, 2010 3:59 PM↵ To: Glenna Ford↵ Cc: Travis Lusney; Patricia Lightburn↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Everything looks great. Two comments 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⌅ just want to say “ DATE OF PRICE SCHEDULE ”⌅ Not Responsive Sarah Simmons↵ Analyst Electricity Resources Ontario Power Authority 120 Adelaide St. W. Suite 1600 Toronto , ON , M5H 1T1 Tel 416.969.6213 Fax 416.967.1947 www.powerauthority.on.ca P please consider the environment before printing this email 3935 Not Responsive 3936 Glenna Ford↵ From: Glenna Ford↵ Sent: August-27-10 10:31 AM↵ To: Patricia Lightburn↵ Cc: Travis Lusney; Sarah Simmons↵ Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits↵ Great – I ’ ll get the FIT one updated.◆ From: Patricia Lightburn Sent: August 27, 2010 10:25 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Im good with that◆ The microFIT one is not official anyways Patricia Lightburn◆ FIT Program◆ From: Glenna Ford Sent: Friday, August 27, 2010 10:24 AM To: Patricia Lightburn Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Shall we just leave this one as Revised August 13, 2010 then?◆ From: Patricia Lightburn Sent: August 27, 2010 10:22 AM To: Glenna Ford Cc: Travis Lusney; Sarah Simmons Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Here is microFIT◆ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford Sent: Friday, August 27, 2010 10:07 AM To: Patricia Lightburn; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we 3937 Can you please send me updated price schedules for FIT and microFIT so that we can repost them? Maybe we don ’ t even include the word date, but just have the date. Or we could say Prices effective as of August 13, 2010.◆ From: Patricia Lightburn Sent: August 26, 2010 4:16 PM To: Glenna Ford; Sarah Simmons Cc: Travis Lusney Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Regarding 1), Base Date is simply the terminology which has been used on all of the price schedules. It is not meant to refer to the defined term. For clarity ’ s sake, I agree with Sarah that we should just change it to “ Date ”⌃ J⇥ Patricia Lightburn◆ FIT Program◆ From: Glenna Ford Sent: Thursday, August 26, 2010 4:02 PM To: Sarah Simmons Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Sarah:◆ Thanks very much. I have a few questions for you:◆ 1. I think the FIT price is wrong now because it shows August 13 as the base date. Should this be changed everywhere?◆ Not Responsive Thanks again.◆ From: Sarah Simmons Sent: August 26, 2010 3:59 PM To: Glenna Ford Cc: Travis Lusney; Patricia Lightburn Subject: RE: microFIT Program Overview draft August 24 v 1 5 - gf edits Everything looks great.◆ Two comments◆ 1 ) Price schedule. The “ Base Date ” is actually still Sept 30, 2009, since this is used for price escalation. You may⌃ just want to say “ DATE OF PRICE SCHEDULE ”⌃ Not Responsive Sarah Simmons↵ Analyst◆ 3938 Analyst◆ Electricity Resources◆ Ontario Power Authority◆ 120 Adelaide St. W. Suite 1600◆ Toronto , ON , M5H 1T1◆ Tel 416.969.6213◆ Fax 416.967.1947◆ www.powerauthority.on.ca◆ P please consider the environment before printing this email Not Responsive 3939 Aboriginal and Community Adder Cost Scenarios Project Number On-shore Wind Community Wind On-shore Wind Community Wind 10% higher capital cost 20% higher O&M Community Wind 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 30% 20 30% 20 30% 20 30% 20 30% 20 30% 20 52% 20 52% 20 52% 20 Debt:Equity Ratio Debt Term Interest Rate Return on Equity 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share Output 5% 50% 8% 60% 40% 5% 50% 8% 0% 100% 5% 50% 8% 60% 40% 5% 50% 8% 0% 100% 5% 50% 8% 60% 40% 5% 50% 8% 50% 50% 5% 50% 8% 60% 40% 5% 50% 8% 0% 100% 5% 50% 8% 60% 40% 14.76 15.95 13.53 14.64 14.49 15.05 12.61 14.07 12.88 Technology Type Original Capital Costs Revised Capital Costs 15% higher capital 20 % higher O&M Aboriginal Wind Original Capital Costs Revised Capital Costs Waterpower Community Waterpower Waterpower Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) IRR NPV Section 18(1) Feed-in Tarrif Adder - cents / kWh MWh / year Adder ($) / MW / year Adder ($) - MW / year Annual Adder ($) - Capital Cost / MW Average Adder Across Tech 1.19 26280.00 31,339.69 31,339.69 9.82 14.92 1.11 29,260.28 10.19 0.96 25,275.26 8.80 1.53 1.46 66,514.31 13.44 3940 Deriving Adder / Capital Cost / MW Annual Adder ($) - Capital Cost / MW Adder ($)MW / year Adder / MWh 14.92 47596.17585 18.11 14.92 42836.55826 16.30 14.92 73856.13494 16.21 1 26,280.00 0.55 25,053.60 Derived Adder Aboriginal / Community Equity % Total Aboriginal / Community investment / MW Cost of borrowing for equity % Annual Cost of Aboriginal / Community Equity per MW Incremental adder required to cover cost of borrowing community / aboriginal equity / MW (cents / kWh Community Adder Community Adder cents / kWh Community Adder $/ MWh Technology Capacity Factor MWh / year Total adder / year / MW Capital Investment / MW Adder / MW Capital Investment 0.1 95,700.00 6% $8,343.56 6,699.00 0.32 1 10.00 Wind - 0.58 5.77 Water 0.3 2628 26280 3200 8.21 0.15 129,195.00 10% -$15,175.20 0.36 3.61 Biomass 0.52 4555.2 26280 5000 5.26 0.58 0.25 215,325.00 10% -$25,291.99 - 0.36 3.61 Landfill 0.83 7270.8 26280 3850 6.83 0.96 0.40 4.00 Biogas 0.83 7270.8 26280 3190 8.24 0.25 371,250.00 10% -$43,606.89 0.75 6570 26280 7370 3.57 - 2.31 23.08 Rooftop Solar PV 0.13 1138.8 26280 9200 2.86 0.96 2.14 21.43 Ground Solar 0.14 1226.4 26280 4600 5.71 Notes: Community Adder is based on the incremental cost for a 10 MW wind project, where the capital costs are assumed to be 10% higher and the O&M is assumed to be 20% higher Aboriginal Adder Aboriginal Adder cents / kWh Aboriginal Adder $/ MWh Technology Capacity Factor MWh / year Total adder / year / MW Capital Investment / MW Adder / MW Capital Investment 1.5 15.00 Wind 0.87 8.65 Water 0.3 2628 39420 3335 11.82 0.54 5.42 Biomass 0.52 4555.2 39420 5175 7.62 0.54 5.42 Landfill 0.83 7270.8 39420 4025 9.79 0.60 6.00 Biogas 0.83 7270.8 39420 3335 11.82 0.75 6570 39420 7705 5.12 Notes: Aboriginal Adder is based on the incremental cost for a 10 MW wind project, where the capital costs are assumed to be 15% higher and the O&M is assumed to be 20% higher Technology Community Adder cents / kWh Aboriginal Adder cents / kWh Wind Water 1.00 1.50 Biomass 0.58 0.87 Landfill 0.36 0.54 Biogas 0.36 0.54 0.40 0.60 3941 Section 18(1) Community Waterpower Biomass Community Biomass Biogas Community Biogas Lanfill Gas Community Lanfill Gas Rooftop Solar PV 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 0% 52% 20 85.0% 20 85.0% 20 75.0% 20 75.0% 20 83.0% 20 83.0% 20 13% 20 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 5% 50% 8% 0% 100% 5% 50% 8% 60% 40% 5% 50% 8% 0% 100% 5% 50% 8% 60% 40% 5% 50% 8% 0% 100% 5% 50% 8% 70% 30% 5% 50% 8% 0% 100% 5% 50% 8% 0% 100% 11.16 11.73 Section 18(1) 2009 2.25% 20% Section 18(1) Section 18(1) Section 18(1) 14.37 13.80 1.49 67,990.51 13.44 15.33 1.52 113,483.60 25.79 14.80 16.16 1.36 89,444.52 12.14 82.10 0.57 41,614.28 13.05 3942 - 14.92 75497.38238 16.57 14.92 65649.89772 8.82 14.92 109963.5787 16.74 14.92 47596.17585 6.546 0.55 25,053.60 0.35 26,061.00 0.4 26,280.00 0.35 25,447.80 0.1 151,800.00 7% -$14,328.85 0.25 330,000.00 7% -$31,149.67 0.25 552,750.00 10% -$64,925.81 0.25 239,250.00 10% -$28,102.22 0.31 - 0.42 - 0.99 - 0.39 3943 Section 18(1) Community Rooftop Solar PV Rooftop Solar PV Community Rooftop Solar PV Rooftop Solar PV Community Rooftop Solar PV Rooftop Solar PV Community Rooftop Solar PV Ground Solar PV Community Ground Solar PV 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 13% 20 13% 20 13% 20 13% 20 13% 20 13% 20 13% 20 14% 20 14% 20 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 5% 50% 8% 0% 100% 5% 50% 8% 80% 20% 0 5% 50% 8% 0% 100% 0 5% 50% 8% 80% 20% 5% 50% 8% 0% 100% 5% 50% 8% 80% 20% 5% 50% 8% 0% 100% 5% 50% 8% 80% 20% 5% 50% 8% 0% 100% 71.33 80.14 63.28 71.12 53.91 60.55 44.32 49.73 Section 18(1) Section 18(1) Section 18(1) Section 18(1) 90.20 8.11 92,314.17 10.19 8.81 100,325.39 12.50 7.84 89,265.13 13.29 6.64 75,573.44 13.29 5.42 66,456.37 13.29 3944 14.92 135140.3145 118.669 3945 3946 Section 18(1) 3948 Section 18(1) Calculation of Aboriginal adder for FIT pricing Wind Project adder Aboriginal Equity % 50 - 100 Water Project adder Aboriginal Equity % 51 - 100 1 CF % of adder 100% 40 80% 25 50% 10 20% Aboroginal pricing / kWh 14.50 14.30 14.00 13.70 1 CF Aboroginal % of adder pricing / kWh 100% 13.90 40 80% 13.70 25 50% 13.40 10 20% 13.10 0.3 Incremental Annual PV per MW of revenue per MW over incremental non-Aboriginal Project annual payment 26,280.00 $327,506.89 21,024.00 $262,005.51 13,140.00 $163,753.44 5,256.00 $65,501.38 0.5 Incremental Annual PV per MW of revenue per MW over incremental non-Aboriginal Project annual payment 43,800.00 $545,844.81 35,040.00 $436,675.85 21,900.00 $272,922.41 8,760.00 $109,168.96 3950 FIT Program Approach to Ground-Mounted Solar PV The OPA has proposed an approach to Solar PV procurement for ground- mounted installations under the FIT Program that is unique among the range of renewable technologies eligible under the FIT. • The proposed FIT contract price for ground-mounted Solar PV is high, relative to other renewable technologies. Many jurisdictions offer this high level of compensation on the basis that PV technology is rapidly advancing, and that prices will decline to make PV competitive with conventional sources within the next 5-10 years. Price decreases have been witnessed worldwide and Ontario wants to make sure that its procurement approach takes advantagesrecognizes of these declining prices. Formatted: Bullets and Numbering Prices for ground mounted PV are proposed to start at 44.3 cents/kWh a l(evel slightly greater than under RESOP) and decline by 9% every 100 MW of contracted capacity. Formatted: Bullets and Numbering Formatted: Indent: Left: 0" Significant potential of ground-mounted solar PV • The potential and interest is ground-mounted PV in Ontario is significant. The RESOP created huge interest among international developers in Ontario. TThere are currently approximately 2000 MW of projects at some level of development in the distribution connection queue, with at least 1000 MW located in Eastern Ontario where there are no transmission bottlenecks. • • • The proposed FIT approach would stimulate an additional 1700 MW of groundbased PV. This 1700 MW is in addition to the current 500 MW contracted under RESOP totaling 2200 MW – or approaching 10% of Ontario demand. Ground-mount vs. roof-top • Proposed solar PV prices are designed to prioritize distributed small-scale systems such as roof-top PV. • In Germany, where the solar PV industry has experienced rapid growth, the majority of PV systems have been installed on rooftops. Only 5-10% of the installed PV capacity is attributed to ground-mounted systems. The Ontario FIT program seeks to incentivize a similar rate of rapid development of rooftop systems. Formatted: Font: Bold, Italic Formatted: Bullets and Numbering Formatted: Bullets and Numbering Formatted: Bulleted + Level: 1 + Aligned at: 0.25" + Tab after: 0.5" + Indent at: 0.5" Formatted: Bullets and Numbering Formatted: Indent: Left: 0" Managing uptake • Solar PV prices are high in comparison to other technologies. Allowing many hundreds or thousands of megawatts of ground-mounted solar PV under FIT would mean a significant burden on rate-payers. Formatted: Font: Bold, Italic Formatted: Bullets and Numbering Formatted: Font: Bold 3951 • • • To ensure the long-term sustainability of the Ontario FIT program, it is important that the ground mounted PV industry is grown gradually over time, in order not to unduly burden rate-payers during the initial years of the program. Most jurisdictions procure ground-mounted PV under a MW target or annual cap. This is driven on the basis of managing customer rate impact due to the very high contract prices offered and to reflect declining prices of solar PV. o Spain (a country with overall electricity demand 3X greater than Ontario) has an annual ground mounted PV capacity cap of 233 MW, and a project size limit of 10 MW. FIT prices are reduced by up to 10% per year, with exact degression based on prior year subscription. Most jurisdictions procure ground mounted PV under a MW target or annual cap. This is driven on the basis of managing customer rate impact due to the very high contract prices offered. This approach of price degression triggered by contracted capacity is comparable to the introduction of caps in Ontario. The proposed approach would stimulate an additional 1700 MW of ground based PV in future years until the price dropped below 10 cents/kWh. This 1700 MW is in addition to the current 500 MW under RESOP totaling 2200 MW or approaching 10% of Ontario demand. oSpain has a project size limit of 10 MW. oSpain has an annual ground mounted PV capacity cap of 233 MW o Spain reduces its FIT prices by up to 10% per year, with exact degression based on prior year subscription o Formatted: Bulleted + Level: 1 + Aligned at: 0.25" + Tab after: 0.5" + Indent at: 0.5" Formatted: Bulleted + Level: 2 + Aligned at: 0.75" + Tab after: 1" + Indent at: 1" Formatted: Indent: Left: -0.25" Formatted: Bullets and Numbering Formatted: Bullets and Numbering Formatted: Indent: Left: 0.75" Scenario Analysis for Solar PV Farms •In Germany, where the solar PV industry has experienced rapid growth, the majority of PV systems have been installed on rooftops. Only 6% of the installed PV capacity is attributed to ground mounted systems. The Ontario FIT program proposes higher prices for rooftop PV systems to incentivize this type of rapid development. Formatted: Font: Italic Formatted: No bullets or numbering Formatted: Bullets and Numbering Formatted: Indent: Left: 0" 3952 The analysis in the table below is intended to demonstrate the significance of the potential costs associated with the PV ground- mounted program, based on a number of program design optionss and uptake scenarios. Formatted: Indent: Left: 0.25" The Base Scenario calculates the NPV of above market costs paid to FIT PV Ground Mounted generation over an assumed market price of $60/MWh. Each degression of the initial FIT rate of $443/MWh is assumed to occur every calendar year, and the analysis continues until the price is reduced below $100/MWh or 20302029, whichever comes first. Section 18(1) The current proposed approach that the price reduction will occur after 100 MW of solar PV has been contracted. Alternatively, the price reduction could occur at the year end (on an annual basis). In the latter scenario, an annual capacity cap would limit uptake during the year. Ontario manufacturing In order to ensure the long-term sustainability of the Ontario FIT program, it is important that the ground mounted PV industry is grown gradually overtime. If the price for ground mounted PV is not subjected to a capacity based trigger, then the Ontario ratepayers would be at greater risk of bill increase at the onset of the FIT program. Formatted: Bullets and Numbering 3953 As there is cCurrently there is minimal PV manufacturing capability in Ontario, and heavy investment in ground- mounted PV at the onset of the FIT program would representsult in little investment in Ontario. Formatted: Bullets and Numbering Gradual growth of the ground mounted PV industry would provide a long-term opportunity for manufacturers to located in Ontario. FIT prices will be re-evaluated consistent with regular program review. Should more PV content be manufactured in Ontariodomestically, the OPA could reassess the capacity limits and price degression to reflect the added benefits of local productionprice for ground mounted PV that to reflect of local production capabilities. Formatted: Bullets and Numbering Impact of unlimited uptake Below are two cost scenarios highlighting what the cost to rate-payers would be if all or a large portion of the projects that are currently in the distribution connection queue were contracted under the current FIT price. Total contract MW 2000 MW 1000 MW Last year of Price cents/kWh FIT contract 44.3 2019 44.3 2019 Above Market NPV (HOEP = $60) Range of annual costs ($) Max sector impact (% of revenue) Formatted: Font: Bold 3954 Section 18(1) Capacity Factor References used in FIT model: Technology Capacity Factor Solar 13 - 14% On-shore Wind 30% Off-shore Wind 37% Water Power 52% Water Power 52% Biomass 85% On-Farm Biogas 75% Biogas 75% Land Fill gas 83 - 85% Reference Navigant, January 2009 Navitgant, June 2007 Navigant June 2007 (via PSP) Navigant June 2007 (via PSP) Navigant June 2007/ Suzuki 2004 / DOE 2009 (via PSP) Navigant June 2007/ Suzuki 2004 (via PSP) Navigant June 2007/ Suzuki 2004 (via PSP) Navigant June 2007/ Suzuki 2004 (via PSP) 3956 Section 18(1) Technology Type On-shore Wind On-shore Wind Off-shore Wind Waterpower Waterpower Biomass Biomass Biogas Biogas Biogas Lanfill Gas Lanfill Gas % % 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% % years 0.3 20 30% 20 37% 20 52% 40 52% 40 85.0% 20 85.0% 20 75.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 % years % % 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 40 7% 11% 70% 40 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% % 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 3% 50% 8% 60% 40% 3% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% 13.5 19.0 13.1 12.2 13.8 13.0 16.0 14.7 10.4 11.1 10.3 Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share % % Yes Stand-Alone Entity ? IRR NPV Section 18(1) Feed-in Tarrif % c/kW 11.00% $0.00 Section 18(1) Yes Calculate No FiT Legend: Original Input Revised Input Formula - don't touch Ouput 3957 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 3958 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 3959 3960 Section 18(1) Section 18(1) 3962 Section 18(1) Section 18(1) 3964 Section 18(1) Section 18(1) 3966 Section 18(1) Technology Type Waterpower Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Waterpower Waterpower Biomass Biomass Biogas Biogas Biogas Lanfill Gas Lanfill Gas Section 18(1) Base Year for Costs Inflation Rate Indexing Factor % % 2009 2.25% 20% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% Section 18(1) ACF Project Life % years 0.52 20 13% 20 13% 20 13% 20 13% 20 14% 20 30% 20 30% 20 37% 20 52% 20 52% 20 85.0% 20 85.0% 20 75.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 % years % % 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share % 5% 50% 8% 60% 40% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% IRR NPV % 63.57 53.91 44.36 14.49 13.53 19.03 13.09 12.22 14.68 10.46 11.16 10.30 Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity % % Section 18(1) Feed-in Tarrif c/kW 11.00% ($0.00) Section 18(1) 80.29 71.33 13.05 13.81 15.99 Section 18(1) Calculate FiT Section 18(1) Section 18(1) 3967 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 3968 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 3969 Section 18(1) Section 18(1) Section 18(1) Section 18(1) Section 18(1) 3974 ri mm DRAFT - Confidential l?mu-r \ulhurln? 3975 Aboriginal and Community Project Adder • Original rules required Aboriginal and Community control of projects as majority equity partners • Propose varying adder in proportion to % of equity ownership by Aboriginal or Community Group, for example: – 50+% » 100% of price adder – 40% » 80% of price adder – 25% » 50% of price adder – 10% » 20% of price adder (minimum level required) • Rationale – Stakeholders suggest that many projects likely to be structured as partnerships – Encourages partnerships with local Aboriginal and Community members – Encourages Aboriginal and Community partners to maximize their equity share 3976 Why an Aboriginal and Community Project Adder? • Aboriginal and Community Projects are expected to incur higher costs for equipment and construction – Estimated to be 10% higher capital costs and 20% higher O&M costs for a 10 MW wind project • Adder calculated in order to compensate for these additional costs • Adder than levelized across other technologies in relation to capacity factor – Avoids larger total payments to technologies with high capacity factors 3977 Why a differentiated adder for Aboriginal projects? • Aboriginal groups are expected to have to borrow in order to buy an equity share of project • These incremental borrowing costs are incorporated into the Aboriginal adder 3978 Derivation of incremental Aboriginal Adder Technology Wind Cost / MW 3190 Aboriginal Equity 10 % Total Aboriginal / Community investment / MW 95,700 Cost of borrowing for equity % 7 % - 10% Annual Cost of Aboriginal Equity / MW $9,000 – 11,250 Incremental adder to cover cost of borrowing (cents / kWh) 0.34 – 0.43* *Adder was rounded to 0.5 cents / kWh to cover a broader range of borrowing scenarios Assumes a twenty year borrowing term 3979 Aboriginal and Community Adder Technology Maximum Aboriginal Adder (cents / kWh) Maximum Community Adder (cents / kWh) PV Landfill Wind (Ground Water Biogas Biomass Gas Mounted) 1.5 1.5 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 Adder for Aboriginal and Community projects reflects 10% incremental capital costs Adder for Aboriginal projects reflects incremental cost of debt financing for equity portion Adder is available on a sliding scale based on equity interest 3980 Aboriginal Project - Examples Scenario Technology FIT Full Adder Company A Equity % Aboriginal Group B Equity % Eligible Adder % (Ratio of Aboriginal Group Equity / 50% equity) Applicable Adder (cents / kWh) {Full Adder x Eligible Adder %} All-in FIT Price (cents / kWh) {FIT+ Applicable Adder} A Biomass (> 10 MW) 13 0.6 75% 25% B Wind (On-Shore) 13.5 1.5 90% 10% = 25 / 50 = 50% = 10 / 50 = 20 % = 0.6 x 50% = 0.30 = 13 + 0.30 = 13.30 = 1.5x 20% = 0.3 =13.5 + 0.3 = 13.8 • Note that the adder may not cover the total incremental borrowing cost. 3981 Impact of borrowing on Aboriginal ROE • Aboriginal Adder may not cover total borrowing cost for equity share • Cost of debt influences the impact on Aboriginal ROE • Assumes total incremental payment is paid to Aboriginal Partner Wind Cost of Debt 5% 7% 9% 10% Net Aboriginal ROE 11.3% 9.9% 8.4% 7.7% Water Cost of Debt 5% 7% 9% 10% Net Aboriginal ROE 8.5% 7.1% 5.6% 4.8% 3982 OPA Derivation of Feed-in Tariffs Last updated: Thursday, March 5, 2009 DRAFT FOR INTERNAL REVIEW ONLY Introduction The purpose of this report is to transparently and comprehensively describe the Ontario Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FITs) for Ontario. This report outlines the approach for establishing contract prices for each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and proponents (e.g., recognizing the unique circumstances of community-based and First Nations projects) to promote broad participation in the program. This will allow for development over the full range of cost-effective project sizes and technologies. Formatted: Line spacing: single The proposed FIT prices are established to allow the proponent to recover project costs and earn a reasonable rate of return of the investment. Prices account for the following components: • Project capital costs; • Operating and maintenance costs; • Connection costs; • Contract term; and • Reasonable rate of return. Formatted: Line spacing: single Formatted: No bullets or numbering Comment [JD1]: Do we also want to embed in the analysis the foregone revenues from transmission/distribution constraints Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary. Given that project costs can vary significantly depending on site conditions, proponent experience and the cost and performance characteristics of the various technologies, the FIT prices are based on lower cost projects. This incents the development of the lowest cost projects and mitigates the cost risks to Ontario consumers. The OPA will closely monitor market uptake of FIT contracts to assess whether FIT prices are too low. The FIT is designed to provide participants and associated industries with a high measure of price stability. As such, by design it is more difficult to decrease than increase FIT prices. 1 3983 FIT prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual contract capacity targets for specific technologies are exceeded. The OPA will modify contract prices for future years (but with no impact on any FIT projects that have applied for or executed contracts with the OPA) to reflect major changes in foreign exchange rates and other variables that have a dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. PV prices for greater than 100 kW projects will decline at an established rate (i.e., percentage reduction in the FIT) after a specific amount of PV contracts have been approved. The price decline for larger rooftop projects (>100 kW) will be 6% and will occur after 50 MW of capacity has been awarded for the size tranche. The price reduction for ground mounted projects will be 9% and will occur after contracts representing 100 MW of capacity have been awarded. Formatted: Line spacing: single Comment [JD2]: Jim – 100kW or > 500kW. It will take a lot of projects to represent 50 MW for the > 100 kW and < 500 kW category. Might want price for this group to decline over time rather than by capacity target. The contract price is fixed based on the contract application date, assuming that the application is approved. The table below summarizes the FIT schedule for 2009. Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index (CPI). PV prices are constant and do not escalate over time. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week, eight hours per day for all business days) and .9 for all off-peak hours (all other hours). Summary of FIT Schedule for 2009 Technology Rooftop Solar PV Capacity Range ≤ 10 kW > 10 kW ≤ 100 kW FIT (cents/kWh) 80.2 71.3 Adjustments Comment [JD3]: What about community-based and First Nations projects? Comment [JD4]: Might want to insert Table number. I was having problems with having the table numbering and updating automatically, Formatted: Left Formatted: Left 6% price reduction Formatted: Font: 10 pt Formatted: Left 2 3984 Ground mounted Solar PV 1 Community Based Wind On-shore Wind Off-shore Wind Waterpower Biomass Biogas Landfill gas Other resources: Geothermal, Concentrated Solar Power, Solar Thermal Electric, Storage > 100 kW ≤ 500 kW > 500 kW 63.5 56.7 < 10 MW 44.3 ≤ 10 MW Any size Any size <50 MW Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW Any size 14.4 [12.9] 15.0-19.8 12.9 10.5 14.7 10.4 9.3 8.7 TBD triggered when 50 MW reached (in aggregate of these 3 sizes) 9% price reduction triggered when 100 MW reached Formatted: Left Formatted: Left Formatted: Font: 10 pt Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left TBD Formatted: Left Model Used to Derive FITs Cost of New Entry Model The Cost of New Entry (CONE) model was developed for the OPA by Navigant Consulting, Inc. (Navigant) in February 2007. The OPA solicited Navigant to assess the market entry costs for new generators; and develop a methodology for comparing the costs of various generation technologies. 1 Also applies to First Nations wind projects. 3 3985 The CONE model allows for comparison of various generation technologies by calculating the revenue requirement. To estimate the cost of new entry, a number of parameters are required, including capital cost, fixed operating and maintenance (O&M) cost, variable O&M cost, heat rate (for thermal generation technologies), capacity factor, and project life. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These assumptions were applied to all cases. Table 1. Financing Assumptions Input Percent Equity After Tax Return on Equity Percent Debt Cost of Debt Income Tax Rate Assumption 30% 11% 70% 7% 30.5% Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left The CONE model assumes that the majority of costs of the renewable energy technology qualify for Class 43.2 Capital Cost Allowance treatment, with the exact percentage varying from 60 to 80% depending on the expected portion of project costs represented by the specific technology. The remaining depreciable projects costs are assumed to be subject to an 8% declining balance Capital Cost Allowance treatment. No credit was taken for potential revenues from the participation in the Federal Government’s ecoEnergy Renewable Initiative program. Solar Photovoltaics Input Sources and Assumptions The OPA requested Navigant to assess the costs and performance of solar photovoltaics in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic module and balance of system performance characteristics, installed system prices, supply and demand issues, key market player and job impacts. This report characterized the typical costs associated with a 5kW Residential project, a 500kW Commercial Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant determined costs in consultation with industry players from Ontario, as well as North America as a whole. The OPA used this report as a basis for all solar photovoltaic cost and performance assumptions. 4 3986 Table 2. Cost Components for Solar PV from Navigant Consulting Inc. Characteristic Residential (5kW) Commercial Building Rooftop (500kW) Central Ground mounted (20MW), Fixed Axis 2010 Low cost Estimate Section 18(1) of Installed System Prices ($/kW) 2010 High Cost Estimate of Installed System Prices ($/kW) Capacity Factor Fixed O&M ($/kW/year) 2 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left FIT prices were developed for five categories of PV projects based on the anticipated range of project sizes and project sizes for different applications. Capital costs for the solar PV systems were derived by taking a simple average of the 2010 high and low cost estimates of installed system prices for all but the greater than 500kW rooftop projects and the ground mounted PV. For the greater than 500kW rooftop PV projects, the OPA used the Navigant low capital cost estimates given the potential rate impacts of these larger PV projects and the recent reported reductions in the costs of PV panels which will have the greatest cost impact on the larger PV systems. Since Navigant provided cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated a typical 100 kW system and a 1 MW system were estimated. The costs associated with a 100 kW system was derived by taking a simple average of the cost of a 5 kW and a 500 kW system. Similarly, for a 1 MW system, a simple average of the 500 kW and a 20 MW system was taken. This assumes that the economies of scale are non-linear and the most significant economies are realized at increases in the scale of smaller projects. The assumptions that were used for PV are shown in Table 3. 2 Includes inverter replacement costs of $0.20/Watt. 5 3987 Table 3. Solar PV Assumptions for FIT derivation Rooftop ≤10kW Rooftop 10-100kW Rooftop Rooftop 100-500kW >500kW Ground mounted Typical Size (kW) Section 18(1) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT derivation Table 4 reviews the FITs for PV projects based on the assumptions outlined in Table 3. Table 4. Solar PV FIT derivation Description Rooftop (≤ 10 kW) Rooftop (> 10 ≤ 100 kW) Rooftop (> 100 ≤ 500 kW) Rooftop (> 500 kW) Ground-mounted (<10MW) Typical End-Use Residential Small Commercial Large Commercial Industrial Solar PV farms FIT (cents/kWh) 80.2 71.3 67.3 53.9 44.3 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left 6 3988 Wind Input Sources and Assumptions The capital and operating costs and performance characteristics for wind projects are presented below in Table 4. The capital costs for large wind are based on the publicly reported capital costs for the wind projects contracted under the OPA’s Renewable Energy Supply III RFP.3 The capital costs for the 10MW community-based and First Nations wind projects are based on the foregone economies of scale for a smaller wind project as well as the higher assumed development costs for these projects. As such, these capital cost assumptions are only appropriate for and apply to community-based and First Nations wind projects. Table 5. Wind Assumptions for FIT derivation Community Based Wind4 (≤10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) On-shore Wind Off-shore Wind Section 18(1) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left 3 http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6791 This press release indicated total project capital costs of $1.32 billion for 492.1 MW, representing approximately $2,600 per kW. Several wind turbine manufacturers have subsequently announced layoffs and the queue for wind turbines has disappeared. As expected, this has been accompanied by declines in the prices for wind turbines. 4 Incudes First Nations projects. 7 3989 Fixed O&M ($/kW/yr) 45 35 100 Formatted: Left Model Outputs and FIT Derivation As outlined in Table 6, there are three FIT categories for wind projects: (1) communitybased and First Nations wind projects which is projects that are 10MW or less and satisfy the requirements of a community-owned or First Nations project; (2) on-shore wind which covers all sizes of on shore wind projects; and (3) off-shore which covers all sizes of off shore wind projects. Table 6. Wind Derivation of FIT Description Community Based Wind (≤ 10 MW) On-shore Wind (any size) Off-shore Wind (any size) FIT (cents/kWh) 14.4 11.6 19.8 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Waterpower Input Sources and Assumptions The generation technologies used in waterpower projects are mature, lLeading to stability in costs. However, project capital costs and capacity factors are very site specific. While uptake of waterpower projects has been fairly limited, that is mainly due to environmental and permitting restrictions, not the inability to finance projects given RESOP prices. Industry representatives have indicated that the RESOP offers a viable price. The increase in the FIT price is to adjust for the increase in capital costs that have occurred since 2007. Table 7. Waterpower Assumptions for FIT derivation Waterpower (<50MW) Section 18(1) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left 8 3990 Model Outputs and FIT derivation Table 8 shows the FIT for Waterpower projects less than 50 MW. Table 8. Waterpower Derivation of FIT Description Waterpower (<50MW) FIT (cents/kWh) 12.9 Formatted: Left Formatted: Left Biomass Input Sources and Assumptions The capital and operating cost and performance assumptions for biomass projects are based on the U.S. Department of Energy’s Energy Information Administration (EIA), Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. Table 9. Biomass Assumptions for FIT derivation Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Biomass Formatted: Left Section 18(1) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 10 shows the FIT for Biomass projects of any size. Table 10. Biomass FIT of derivation Description Biomass (any size) FIT (cents/kWh) 10.5 Formatted: Left Formatted: Left 9 3991 Biogas Input Sources and Assumptions The biogas assumptions used were from a Navigant Report (Renewable Energy: Costs, Performance and Markets – An Outlook to 2015, June 5, 2007). The capital cost estimates were adjusted to reflect assumed economies of scale. The larger biogas projects, i.e., 500 kW and greater, were assumed to realize revenues from tipping fees associated with the disposal of bio-solids and other waste material. Table 11. Biogas assumptions for FIT Derivation Small Biogas (≤5MW) Typical Size (kW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues($/MMBtu) Large Biogas (>5MW) Formatted: Left Formatted: Left Section 18(1) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 12 shows the FIT for small (≤ 5MW) and large (>5MW) biogas projects. Table 12. Biogas FIT Derivation Description Typical End-Use Biogas (≤ 5 MW) Biogas (> 5 MW) Farm AD Mixed Waste Digester FIT (cents/kWh) 14.7 10.4 Formatted: Left Formatted: Left Formatted: Left Landfill gas Input Sources and Assumptions The capital and operating cost and performance assumptions for landfill gas projects are based on the EIA Assumptions to the Annual Energy Outlook 2008. The cost 10 3992 assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. These landfill gas capital cost estimates are also consistent with the reported costs of reciprocating engine gen sets and the estimated costs of landfill gas cleaning equipment. A 5 MW application was assumed to offer economies of scale relative to a 2.5 MW project. Table 13. Landfill gas assumptions for FIT Derivation Small Landfill Gas (≤5MW) Large Landfill Gas (>5MW) Section 18(1) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/year) Variable O&M ($/kWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 14 shows the FIT for small (≤ 5MW) and large (> 5MW) landfill gas projects. Table 14. Landfill gas FIT Derivation Description Landfill gas (≤ 5 MW) Landfill gas (> 5 MW) FIT (cents/kWh) 9.3 8.7 Formatted: Left Formatted: Left Formatted: Left Comment [JD5]: Is this actually needed here? Customized For renewable energy supply technologies where there is limited experience that can be used to estimate the technologies’ costs (e.g., off-shore wind) or where costs and performance can vary widely based on site specific conditions (e.g., large water power and pumped storage) alternative procurement approaches may be used. These alternative procurement approaches will include RFPs where there are a significant number of prospective suppliers that can satisfy the identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. • • 11 Geothermal Concentrated Solar Power or Thermal Electric Solar Formatted: No bullets or numbering 3993 12 Pumped Storage Large Water 3994 OPA Derivation of Feed-in Tariffs Last updated: FridayMonday, March 69, 2009 DRAFT FOR INTERNAL REVIEW ONLY Introduction The purpose of this report is to transparently and comprehensively describe the Ontario Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FITs) for Ontario. This report outlines the approach for establishing contract prices for each of the renewable energy supply technologies covered under the FIT program. The FIT contract rate will vary for different technologies, project sizes and proponents (e.g., recognizing the unique circumstances of community-based and Aboriginal projects) to promote broad participation in the program. This will allow for development over the full range of cost-effective project sizes and technologies. Formatted: Line spacing: single The proposed FIT prices are established to allow the proponent to recover project costs and earn a reasonable rate of return of the investment. Prices account for the following components: • Project capital costs; • Operating and maintenance costs; • Connection costs; • Contract term; and • Reasonable rate of return. Formatted: Line spacing: single Formatted: No bullets or numbering Comment [JD1]: Do we also want to embed in the analysis the foregone revenues from transmission/distribution constraints Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary. Given that project costs can vary significantly depending on site conditions, proponent experience and the cost and performance characteristics of the various technologies, the FIT prices are based on lower cost projects. This incents the development of the lowest cost projects and mitigates the cost risks to Ontario consumers. The OPA will closely monitor market uptake of FIT contracts to assess whether FIT prices are too low. The FIT is designed to provide participants and associated industries with a high measure of price stability. As such, by design it is more difficult to decrease than increase FIT prices. Comment [c2]: Does this give developers a wait & see if prices will go up attitude? 1 3995 FIT prices will only be revised under specific conditions. First of all, the OPA will perform a price review every three years or sooner if annual contract capacity targets for specific technologies are exceeded. The OPA will modify contract prices for future years (but with no impact on any FIT projects that have applied for or executed contracts with the OPA) to reflect major changes in foreign exchange rates and other variables that have a dramatic impact on the cost of FIT projects, at the sole discretion of the OPA. PV prices for greater than 100 kW projects will decline at an established rate (i.e., percentage reduction in the FIT) after a specific amount of PV contracts have been approved. The price decline for larger rooftop projects (>100 kW) will be 6% and will occur after 50 MW of capacity has been awarded for the size tranche. The price reduction for ground mounted projects will be 9% and will occur after contracts representing 100 MW of capacity have been awarded. Formatted: Line spacing: single Comment [JD3]: Jim – 100kW or > 500kW. It will take a lot of projects to represent 50 MW for the > 100 kW and < 500 kW category. Might want price for this group to decline over time rather than by capacity target. The contract price is fixed based on the contract application date, assuming that the application is approved. The table below summarizes the FIT schedule for 2009. Other than for PV projects twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index (CPI). PV prices are constant and do not escalate over time. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week, eight hours per day for all business days) and .9 for all off-peak hours (all other hours). Summary of FIT Schedule for 2009 Technology Rooftop Solar PV Capacity Range ≤ 10 kW > 10 kW ≤ 100 kW FIT (cents/kWh) 80.2 71.3 Adjustments Comment [JD4]: What about community-based and First Nations projects? Comment [JD5]: Might want to insert Table number. I was having problems with having the table numbering and updating automatically, Formatted: Left Formatted: Left 6% price reduction Formatted: Font: 10 pt Formatted: Left 2 3996 Ground mounted Solar PV 1 Community Based Wind On-shore Wind Off-shore Wind Waterpower Biomass Biogas Landfill gas Other resources: Geothermal, Concentrated Solar Power, Solar Thermal Electric, Storage > 100 kW ≤ 500 kW > 500 kW 63.5 56.7 < 10 MW 44.3 ≤ 10 MW Any size Any size <50 MW Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW Any size 14.4 [12.9] 15.0-19.8 12.9 10.5 14.7 10.4 9.3 8.7 TBD triggered when 50 MW reached (in aggregate of these 3 sizes) 9% price reduction triggered when 100 MW reached Formatted: Left Formatted: Left Formatted: Font: 10 pt Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left TBD Formatted: Left Model Used to Derive FITs The FIT prices were derived using a Discounted Cash Flow (DCF) model developed by the OPA. The DCF analysis is a valuation method widely used in investment finance to value a project, a company or an asset. This approach is based on the concept of the time value of money. In a DCF model, all future cash flows are estimated and discounted to arrive at a present value. The discount rate used is generally the weighted average cost of capital or a desired rate of return, which may incorporate judgments of the 1 Also applies to Aboriginal wind projects. 3 3997 uncertainty (riskiness) of the future cash flows. If the present value of future cash flows arrived at through DCF analysis is higher than the current cost of the investment, the investment opportunity is considered attractive. The DCF model developed to calculate FIT determines a sufficient price (on a $/MWh basis) required to cover the cost of investment in renewable energy supply technologies and ongoing operating expenses as well as to earn a reasonable rate of return over the contact term of 20 years. First, annual generation output is estimated for a given project based on the size of the project (i.e. capacity) and assumed capacity factor (ratio of actual annual output to output at full capacity). Second, annual revenue is projected using preliminary capacity payment and estimated generation output. Third, applicable operating expenses are estimated. These may include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost and property tax. Annual depreciation is then calculated using an appropriate capital cost allowance rate. Operating expenses, depreciation, interests and income taxes are deducted from revenue to arrive at net income. Depreciation is added back to net income since it is not an actual cash flow (it is deducted for tax purposes only). Capital investment (negative cash flow), debt borrowing (positive cash flow) and debt repayment (negative cash flow) are also added to calculate free cash flow for each year. These free cash flows are then discounted using a reasonable rate of return. The sum of discounted cash flows is the net present value of a given project. Finally, the preliminary capacity payment is adjusted until the net present value is equal to zero. The net present value of zero means that earned revenue was sufficient to cover all costs and earn the reasonable rate of return. Cost of New Entry Model The Cost of New Entry (CONE) model was developed for the OPA by Navigant Consulting, Inc. (Navigant) in February 2007. The OPA solicited Navigant to assess the market entry costs for new generators; and develop a methodology for comparing the costs of various generation technologies. The CONE model allows for comparison of various generation technologies by calculating the revenue requirement. To estimate the cost of new entry, a number of parameters are required, including capital cost, fixed operating and maintenance (O&M) cost, variable O&M cost, heat rate (for thermal generation technologies), capacity factor, and project life. 4 3998 Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These assumptions were applied to all cases. Table 1. Financing Assumptions Input Percent Equity After Tax Return on Equity Percent Debt Cost of Debt Income Tax Rate Formatted: Left Assumption 30% 11% 70% 7% 30.5% Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left The CONE model assumes that the majority of costs of the renewable energy technology qualify for Class 43.2 Capital Cost Allowance treatment, with the exact percentage varying from 60 to 80% depending on the expected portion of project costs represented by the specific technology. The remaining depreciable projects costs are assumed to be subject to an 8% declining balance Capital Cost Allowance treatment. No credit was taken for potential revenues from the participation in the Federal Government’s ecoEnergy Renewable Initiative program. Solar Photovoltaics Input Sources and Assumptions The OPA requested Navigant to assess the costs and performance of solar photovoltaics in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic module and balance of system performance characteristics, installed system prices, supply and demand issues, key market player and job impacts. This report characterized the typical costs associated with a 5kW Residential project, a 500kW Commercial Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant determined costs in consultation with industry players from Ontario, as well as North America as a whole. The OPA used this report as a basis for all solar photovoltaic cost and performance assumptions. Table 2. Cost Components for Solar PV from Navigant Consulting Inc. Characteristic Residential (5kW) 2010 Low cost Estimate Section 18(1) of Installed System Prices ($/kW) 5 Commercial Building Rooftop (500kW) Central Ground mounted (20MW), Fixed Axis Formatted: Left Formatted: Left 3999 2010 High Cost Estimate Section 18(1) of Installed System Prices ($/kW) Capacity Factor Fixed O&M ($/kW/year) 2 Formatted: Left Formatted: Left Formatted: Left FIT prices were developed for five categories of PV projects based on the anticipated range of project sizes and project sizes for different applications. Capital costs for the rooftop ≤10kW were derived by taking a simple average of the 2010 high and low cost estimates of 5kW installed system prices. Since Navigant provided cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated with a typical 100 kW system and a 1 MW system were estimated. The costs associated with a 100 kW system was derived by taking a simple average of the cost of a 5 kW and a 500 kW system. Similarly, for a 1 MW system, an average of the low capital costs for a 500 kW and a 20 MW system was taken. This assumes that the economies of scale are nonlinear and the most significant economies are realized at increases in the scale of smaller projects. for all but the greater than 500kW rooftop projects and the ground mounted PV. For the greater than greater than 500kW rooftop PV projects and the ground mounted projects, the OPA used the Navigant low capital cost estimates given the potential rate impacts of these larger PV projects and the recent reported reductions in the costs of PV panels which will have the greatest cost impact on the larger PV systems. Since Navigant provided cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated a typical 100 kW system and a 1 MW system were estimated. The costs associated with a 100 kW system was derived by taking a simple average of the cost of a 5 kW and a 500 kW system. Similarly, for a 1 MW system, a simple average of the 500 kW and a 20 MW system was taken. This assumes that the economies of scale are non- 2 Includes inverter replacement costs of $0.20/Watt. 6 4000 linear and the most significant economies are realized at increases in the scale of smaller projects. The assumptions that were used for PV are shown in Table 3. Table 3. Solar PV Assumptions for FIT derivation Rooftop ≤10kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Section 18(1) Rooftop 10-100kW Rooftop Rooftop 100-500kW >500kW Ground mounted Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT derivation Table 4 reviews the FITs for PV projects based on the assumptions outlined in Table 3. Table 4. Solar PV FIT derivation Description Rooftop (≤ 10 kW) Rooftop (> 10 ≤ 100 kW) Rooftop (> 100 ≤ 500 kW) Rooftop (> 500 kW) Ground-mounted (<10MW) Typical End-Use Residential Small Commercial Large Commercial Industrial Solar PV farms FIT (cents/kWh) 80.2 71.3 63.567.3 53.9 44.3 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left 7 4001 Wind Input Sources and Assumptions The capital and operating costs and performance characteristics for wind projects are presented below in Table 4. The capital costs for large wind are based on the publicly reported capital costs for the wind projects contracted under the OPA’s Renewable Energy Supply III RFP.3 The capital costs for the 10MW community-based and Aboriginal wind projects are based on the foregone economies of scale for a smaller wind project as well as the higher assumed development costs for these projects. As such, these capital cost assumptions are only appropriate for and apply to community-based and Aboriginal wind projects. Table 5. Wind Assumptions for FIT derivation Community Based Wind4 (≤10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) On-shore Wind Off-shore Wind Section 18(1) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Comment [c6]: Need to write a statement or edit footnote to explain the increase in capital costs. Formatted: Left 3 http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6791 This press release indicated total project capital costs of $1.32 billion for 492.1 MW, representing approximately $2,600 per kW. Several wind turbine manufacturers have subsequently announced layoffs and the queue for wind turbines has disappeared. As expected, this has been accompanied by declines in the prices for wind turbines. 4 Includes Aboriginal projects. 8 4002 Fixed O&M ($/kW/yr) 45 35 100 Formatted: Left Model Outputs and FIT Derivation As outlined in Table 6, there are three FIT categories for wind projects: (1) communitybased and Aboriginal wind projects which is projects that are 10MW or less and satisfy the requirements of a community-owned or Aboriginal project; (2) on-shore wind which covers all sizes of on shore wind projects; and (3) off-shore which covers all sizes of off shore wind projects. Table 6. Wind Derivation of FIT Description Community Based Wind (≤ 10 MW) On-shore Wind (any size) Off-shore Wind (any size) FIT (cents/kWh) 14.4 11.612.9 15.0 - 19.8 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Waterpower Input Sources and Assumptions The generation technologies used in waterpower projects are mature, leading to stability in costs. However, project capital costs and capacity factors are very site specific. While uptake of waterpower projects has been fairly limited, that is mainly due to environmental and permitting restrictions, not the inability to finance projects given RESOP prices. Industry representatives have indicated that the RESOP offers a viable price. The increase in the FIT price is to adjust for the increase in capital costs that have occurred since 2007. 5 Capital costs are a rough estimate: these numbers yield 19.8; need to determine whether these capital costs are too high. Formatted: English (U.S.) 9 4003 Table 7. Waterpower Assumptions for FIT derivation Waterpower (<50MW) Section 18(1) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT derivation Table 8 shows the FIT for Waterpower projects less than 50 MW. Table 8. Waterpower Derivation of FIT Description Waterpower (<50MW) FIT (cents/kWh) 12.9 Formatted: Left Formatted: Left Biomass Input Sources and Assumptions The capital and operating cost and performance assumptions for biomass projects are based on the U.S. Department of Energy’s Energy Information Administration (EIA), Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. Table 9. Biomass Assumptions for FIT derivation Biomass Section 18(1) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) 10 Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left 4004 Section 18(1) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 10 shows the FIT for Biomass projects of any size. Table 10. Biomass FIT of derivation Description Biomass (any size) Formatted: Left FIT (cents/kWh) 10.5 Formatted: Left Biogas Input Sources and Assumptions The biogas assumptions used were from a Navigant Report (Renewable Energy: Costs, Performance and Markets – An Outlook to 2015, June 5, 2007). The capital cost estimates were adjusted to reflect assumed economies of scale. The larger biogas projects, i.e., 500 kW and greater, were assumed to realize revenues from tipping fees associated with the disposal of bio-solids and other waste material. Table 11. Biogas assumptions for FIT Derivation Small Biogas (≤5MW) Typical Size (kW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues($/MMBtu) Large Biogas (>5MW) Section 18(1) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 12 shows the FIT for small (≤ 5MW) and large (>5MW) biogas projects. Table 12. Biogas FIT Derivation Description Typical End-Use FIT Formatted: Left 11 4005 Biogas (≤ 5 MW) Biogas (> 5 MW) Farm AD Mixed Waste Digester (cents/kWh) 14.7 10.4 Formatted: Left Formatted: Left Landfill gas Input Sources and Assumptions The capital and operating cost and performance assumptions for landfill gas projects are based on the EIA Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. These landfill gas capital cost estimates are also consistent with the reported costs of reciprocating engine gen sets and the estimated costs of landfill gas cleaning equipment. A 5 MW application was assumed to offer economies of scale relative to a 2.5 MW project. Table 13. Landfill gas assumptions for FIT Derivation Small Landfill Gas (≤5MW) Large Landfill Gas (>5MW) Section 18(1) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/year) Variable O&M ($/kWh) Heat Rate (Btu/kWh) Fuel Costs ($/MMBtu) Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Formatted: Left Model Outputs and FIT Derivation Table 14 shows the FIT for small (≤ 5MW) and large (> 5MW) landfill gas projects. Table 14. Landfill gas FIT Derivation Description Landfill gas (≤ 5 MW) Landfill gas (> 5 MW) FIT (cents/kWh) 9.3 8.7 Formatted: Left Formatted: Left Formatted: Left 12 4006 Comment [JD7]: Is this actually needed here? Customized For renewable energy supply technologies where there is limited experience that can be used to estimate the technologies’ costs (e.g., off-shore wind) or where costs and performance can vary widely based on site specific conditions (e.g., large water power and pumped storage) alternative procurement approaches may be used. These alternative procurement approaches will include RFPs where there are a significant number of prospective suppliers that can satisfy the identified requirement and sole source negotiations where there is one party that is best positioned to satisfy the requirement. • • • • Geothermal Concentrated Solar Power or Thermal Electric Solar Pumped Storage Large Water Formatted: No bullets or numbering 13 4007 Draft for internal review only. Do not distribute. Proposed FIT Price Schedule Friday, March 27, 2009 1. Summary of the Proposed FIT Price Schedule for 2009 Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 kW ≤ 500 kW > 500 kW ≤ 10 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 ≤ 10 MW 14.4 Automatic Price Adjustment None None None None 9% price reduction triggered for every 100 MW None Any size Any size ≤ 50 MW ≤ 2 MW 13.5 19.0 12.9 13.4 None None None None Ground mounted Solar PV Community Based or Aboriginal Wind On-shore Wind Off-shore Wind Waterpower Community Based Waterpower Biomass* Biogas* Any size 12.2 None ≤ 5 MW 14.7 None > 5 MW 10.4 None Landfill gas* ≤ 5 MW 11.1 None > 5 MW 10.3 None * on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours 2. Introduction The purpose of this report is to describe the Ontario Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FIT) prices. This report outlines the approach for establishing contract prices for each of the renewable energy supply technologies covered under the FIT program. The FIT contract price will vary for different technologies, project sizes and proponents (e.g., recognizing the unique circumstances of community-based and Aboriginal projects) to promote broad participation in the program. This will allow for development over the full range of cost-effective project sizes and technologies. 1 4008 Draft for internal review only. Do not distribute. The proposed FIT prices are established to allow the proponent to recover project costs and earn a reasonable rate of return of the investment. Prices account for the following components: • Project capital costs; • Operating and maintenance costs; • Connection costs; • Contract term; and • Reasonable rate of return. Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary. Project costs can vary significantly depending on site conditions, proponent experience and the cost and performance characteristics of the various technologies. To develop a FIT price schedule, the OPA is required to make broad assumptions about the costs and performance characteristics of a ‘typical’ project. The OPA will closely monitor market uptake of FIT contracts and will regularly assess FIT prices. The FIT is designed to provide participants and associated industries with a high measure of price stability. However, the FIT prices for each category will favour the most cost effective projects in order to manage customer rate impacts. FIT prices for new contracts will only be revised under specific conditions. The OPA will perform a price review every three years or sooner if annual contract capacity targets for specific technologies are exceeded. The OPA will modify contract prices for future years (with no impact on executed FIT Contracts) to reflect major changes in foreign exchange rates and other variables that have a dramatic impact on the cost of FIT projects. As per the draft FIT Rules (March 13, 2009) section 5.2 (a), “The Price Schedule may indicate that for certain categories of Projects, after the OPA has executed FIT Contracts for an aggregate Contract Capacity beyond a specified amount, the applicable Contract Price will automatically adjust by an amount specified in the Price Schedule (an “Automatic Price Adjustment”). For greater certainty, this shall not affect any executed FIT Contracts.” The proposed FIT price schedule includes an automatic price reduction for Ground Mounted PV prices. The price reduction for Ground Mount PV will be 9% and will occur for every 100 MW of capacity have been executed. For projects other than PV projects, twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index (CPI). PV prices will no escalate over time. 2 4009 Draft for internal review only. Do not distribute. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week, eight hours per day for all business days) and .9 for all off-peak hours (all other hours). 3. Model Used to Derive FITs The FIT prices were derived using a Discounted Cash Flow (DCF) model developed by the OPA. The DCF analysis is a valuation method widely used in investment finance to value a project, a company or an asset. This approach is based on the concept of the time value of money. In a DCF model, all future cash flows are estimated and discounted to arrive at a present value. The discount rate used is generally the weighted average cost of capital or a desired rate of return, which may incorporate judgments of the uncertainty (riskiness) of the future cash flows. If the present value of future cash flows arrived at through DCF analysis is higher than the current cost of the investment, the investment opportunity is considered attractive. The DCF model developed to calculate FIT determines a sufficient price (on a $/MWh basis) required to cover the cost of investment in renewable energy supply technologies and ongoing operating expenses as well as to earn a reasonable rate of return over the contact term of 20 years. First, annual generation output is estimated for a given project based on the size of the project (i.e. capacity) and assumed capacity factor (ratio of actual annual output to output at full capacity). Second, annual revenue is projected using preliminary capacity payment and estimated generation output. Third, applicable operating expenses are estimated. These may include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost and property tax. Annual depreciation is then calculated using an appropriate capital cost allowance rate. Operating expenses, depreciation, interests and income taxes are deducted from revenue to arrive at net income. Depreciation is added back to net income since it is not an actual cash flow (it is deducted for tax purposes only). Capital investment (negative cash flow), debt borrowing (positive cash flow) and debt repayment (negative cash flow) are also added to calculate free cash flow for each year. These free cash flows are then discounted using a reasonable rate of return. The sum of discounted cash flows is the net present value of a given project. Finally, the preliminary capacity payment is adjusted until the net present value is equal to zero. The net present value of zero means that earned revenue was sufficient to cover all costs and earn the reasonable rate of return. 3 4010 Draft for internal review only. Do not distribute. 4. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These assumptions were applied to all cases. Table 1. Financing Assumptions Input Percent Equity After Tax Return on Equity Percent Debt Cost of Debt Income Tax Rate Assumption 30% 11% 70% 7% 30.5% No credit was taken for potential revenues from the participation in the Federal Government’s ecoEnergy Renewable Initiative program. 5. Solar Photovoltaics The OPA requested Navigant to assess the costs and performance of solar photovoltaics in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic module and balance of system performance characteristics, installed system prices, supply and demand issues, key market player and job impacts. This report characterized the typical costs associated with a 5kW Residential project, a 500kW Commercial Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant determined costs in consultation with industry players from Ontario, as well as North America as a whole. The OPA used this report as a basis for all solar photovoltaic cost and performance assumptions. Table 2. Cost Components for Solar PV from Navigant Consulting Inc. Characteristic 2010 Low cost Estimate of Installed System Prices ($/kW) 2010 High Cost Estimate of Installed System Prices ($/kW) Capacity Factor Fixed O&M ($/kW/year) 1 1 Residential Rooftop (5kW) Commercial Rooftop (500kW) Ground mounted (20MW) Section 18(1) Includes inverter replacement costs of $0.20/Watt. 4 4011 Draft for internal review only. Do not distribute. FIT prices were developed for five categories of PV projects based on the anticipated range of project sizes and project sizes for different applications. Description Rooftop (≤ 10 kW) Rooftop (> 10 ≤ 100 kW) Rooftop (> 100 ≤ 500 kW) Rooftop (> 500 kW) Ground-mounted (<10MW) Typical End-Use Residential Small Commercial Large Commercial Industrial Solar PV farms Capital costs for the rooftop ≤ 10kW were derived by taking a simple average of the 2010 high and low cost estimates of 5kW installed system prices. Since Navigant provided cost estimates for 5 kW, 500 kW and 20 MW systems, the costs associated with a typical 100 kW system and a 1 MW system were estimated. The costs associated with a 100 kW system was derived by taking a simple average of the cost of a 5 kW and a 500 kW system. Similarly, for a 1 MW system, an average of the low capital costs for a 500 kW and a 20 MW system was taken. This assumes that the economies of scale are non-linear and the most significant economies are realized at increases in the scale of smaller projects. For the greater than 500kW rooftop PV projects and the ground mounted projects, the OPA used the Navigant low capital cost estimates given the potential rate impacts of these larger PV projects and the recent reported reductions in the costs of PV panels which will have the greatest cost impact on the larger PV systems. The assumptions that were used for PV are shown in Table 3. Table 3. Solar PV Assumptions Rooftop ≤ 10kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Rooftop 10-100kW Rooftop 100-500kW Rooftop > 500kW Ground mounted Section 18(1) 5 4012 Draft for internal review only. Do not distribute. 6. Wind Assumptions for wind resources were derived from a number of sources, including the OPA’s Integrated Power System Plan (IPSP, 2007), the U.S. Department of Energy’s Energy Information Administration (EIA), and the Cambridge Energy Research Associates (CERA). The capacity factors used are consistent with the OPA’s IPSP, which have been influenced by Helimax’s wind potential estimates. The assumptions for the capital costs for Off-shore Wind are based on the EIA’s Annual Energy Outlook for 2009. The assumptions for the capital costs for On-shore Wind are based on are based on CERA’s Captial Costs Analysis Forum – Power: Market Review, November 2008. Community Based or Aboriginal Wind projects are expected to have higher capital costs due to limited buying power and smaller economies of scale. Therefore, the capital costs for Community Based or Aboriginal Wind are assumed to be approximately 10% greater than On-shore Wind. Table 4. Wind Assumptions Community Based or Aboriginal Wind (≤ 10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) On-shore Wind Off-shore Wind Section 18(1) 7. Waterpower The main source of information for capital costs assumptions for Waterpower projects is the Hatch Acres report from 2005 entitled Evaluation and Assessment of Ontario’s Water Power Potential. This Hatch Acres report was used as a reference to the IPSP filed in 2007. For Community Based And Aboriginal Waterpower, the assumptions are consistent with the development of a Greenfield sites. For general waterpower projects, the assumptions are consistent with the average cost of a Greenfield site and the redevelopment of existing dams. Table 5. Waterpower Assumptions Community Based and Aboriginal Waterpower (≤ 2 MW) Waterpower (≤ 50MW) 6 4013 Draft for internal review only. Do not distribute. Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Section 18(1) 8. Bio-Energy The capital and operating cost and performance assumptions for biomass projects are based on the U.S. Department of Energy’s Energy Information Administration (EIA), Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. The biogas assumptions used were from a Navigant Report (Renewable Energy: Costs, Performance and Markets – An Outlook to 2015, June 5, 2007). The capital cost estimates were adjusted to reflect assumed economies of scale. The larger biogas projects, i.e., 500 kW and greater, were assumed to realize revenues from tipping fees associated with the disposal of bio-solids and other waste material. The capital and operating cost and performance assumptions for landfill gas projects are based on the EIA Assumptions to the Annual Energy Outlook 2008. The cost assumptions were converted to Canadian dollars using a $1.00 Can to $0.84 US exchange rate. These landfill gas capital cost estimates are also consistent with the reported costs of reciprocating engine gen sets and the estimated costs of landfill gas cleaning equipment. A 5 MW application was assumed to offer economies of scale relative to a 2.5 MW project. Table 6. Bio-Energy assumptions Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Small Biogas (≤5MW) Large Biogas (>5MW) Small Landfill Gas (≤5MW) Large Landfill Gas (>5MW) Section 18(1) 7 4014 Draft for internal review only. Do not distribute. Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/kWh) Fuel Revenues ($/MMBtu) Section 18(1) 8 4015 Proposed FIT Price Schedule Monday, March 30, 2009 1. Summary of the Proposed FIT Price Schedule for 2009 Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 kW ≤ 500 kW > 500 kW ≤ 10 MW Ground mounted Solar PV Community Based or Aboriginal Wind On-shore Wind Off-shore Wind Waterpower Community Based Waterpower Biomass* Biogas* FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 ≤ 10 MW 14.4 Automatic Price Adjustment None None None None 9% price reduction triggered for every 100 MW None Any size Any size ≤ 50 MW ≤ 2 MW 13.5 19.0 12.9 13.4 None None None None Any size 12.2 None ≤ 5 MW 14.7 None > 5 MW 10.4 None Landfill gas* ≤ 5 MW 11.1 None > 5 MW 10.3 None * on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours 4016 Draft for internal review only. Do not distribute. Note – from November 26, 2010 This document was an early draft report that described the derivation and approach to FIT price setting. It provides useful context around the pricing table and spreadsheets. A number of policy decisions were made during government and stakeholder consultation that impacted the FIT prices and approach that are not documented in this report. 1 4017 Draft for internal review only. Do not distribute. Proposed FIT Price Schedule Monday, March 30, 2009 1. Summary of the Proposed FIT Price Schedule for 2009 Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 kW ≤ 500 kW > 500 kW ≤ 10 MW Ground mounted Solar PV Community Based or Aboriginal Wind On-shore Wind Off-shore Wind Waterpower Community Based Waterpower Biomass* Biogas* FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 ≤ 10 MW 14.4 Automatic Price Adjustment None None None None 9% price reduction triggered for every 100 MW None Any size Any size ≤ 50 MW ≤ 2 MW 13.5 19.0 12.9 13.4 None None None None Any size 12.2 None ≤ 5 MW 14.7 None > 5 MW 10.4 None Landfill gas* ≤ 5 MW 11.1 None > 5 MW 10.3 None * on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours 2. Introduction The purpose of this report is to describe the Ontario Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FIT) prices. This report outlines the approach for establishing contract prices for each of the renewable energy supply technologies covered under the FIT program. The FIT contract price will vary for different technologies, project sizes and proponents (e.g., recognizing the unique circumstances of community-based and Aboriginal projects) to promote broad participation in the program. This will allow for development over the full range of cost-effective project sizes and technologies. 2 4018 Draft for internal review only. Do not distribute. The proposed FIT prices are established to allow the proponent to recover project costs and earn a reasonable rate of return of the investment. Prices account for the following components: • Project capital costs; • Operating and maintenance costs; • Connection costs; • Contract term; and • Reasonable rate of return. Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary. Project costs can vary significantly depending on site conditions, proponent experience and the cost and performance characteristics of the various technologies. To develop a FIT price schedule, the OPA is required to make broad assumptions about the costs and performance characteristics of a ‘typical’ project. The OPA will closely monitor market uptake of FIT contracts and will regularly assess FIT prices. The FIT is designed to provide participants and associated industries with a high measure of price stability. However, the FIT prices for each category will favour the most cost effective projects in order to manage customer rate impacts. FIT prices for new contracts will only be revised under specific conditions. The OPA will perform a price review every three years or sooner if annual contract capacity targets for specific technologies are exceeded. The OPA will modify contract prices for future years (with no impact on executed FIT Contracts) to reflect major changes in foreign exchange rates and other variables that have a dramatic impact on the cost of FIT projects. As per the draft FIT Rules (March 13, 2009) section 5.2 (a), “The Price Schedule may indicate that for certain categories of Projects, after the OPA has executed FIT Contracts for an aggregate Contract Capacity beyond a specified amount, the applicable Contract Price will automatically adjust by an amount specified in the Price Schedule (an “Automatic Price Adjustment”). For greater certainty, this shall not affect any executed FIT Contracts.” The proposed FIT price schedule includes an automatic price reduction for Ground Mounted PV prices. The price reduction for Ground Mount PV will be 9% and will occur for every 100 MW of capacity have been executed. For projects other than PV projects, twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index (CPI). PV prices will no escalate over time. 3 4019 Draft for internal review only. Do not distribute. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week, eight hours per day for all business days) and .9 for all off-peak hours (all other hours). 3. Model Used to Derive FITs The FIT prices were derived using a Discounted Cash Flow (DCF) model developed by the OPA. The DCF analysis is a valuation method widely used in investment finance to value a project, a company or an asset. This approach is based on the concept of the time value of money. In a DCF model, all future cash flows are estimated and discounted to arrive at a present value. The discount rate used is generally the weighted average cost of capital or a desired rate of return, which may incorporate judgments of the uncertainty (riskiness) of the future cash flows. If the present value of future cash flows arrived at through DCF analysis is higher than the current cost of the investment, the investment opportunity is considered attractive. The DCF model developed to calculate FIT determines a sufficient price (on a $/MWh basis) required to cover the cost of investment in renewable energy supply technologies and ongoing operating expenses as well as to earn a reasonable rate of return over the contact term of 20 years. First, annual generation output is estimated for a given project based on the size of the project (i.e. capacity) and assumed capacity factor (ratio of actual annual output to output at full capacity). Second, annual revenue is projected using preliminary capacity payment and estimated generation output. Third, applicable operating expenses are estimated. These may include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost and property tax. Annual depreciation is then calculated using an appropriate capital cost allowance rate. Operating expenses, depreciation, interests and income taxes are deducted from revenue to arrive at net income. Depreciation is added back to net income since it is not an actual cash flow (it is deducted for tax purposes only). Capital investment (negative cash flow), debt borrowing (positive cash flow) and debt repayment (negative cash flow) are also added to calculate free cash flow for each year. These free cash flows are then discounted using a reasonable rate of return. The sum of discounted cash flows is the net present value of a given project. Finally, the preliminary capacity payment is adjusted until the net present value is equal to zero. The net present value of zero means that earned revenue was sufficient to cover all costs and earn the reasonable rate of return. 4 4020 Draft for internal review only. Do not distribute. 4. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These assumptions were applied to all cases. No credit was taken for potential revenues from the participation in the Federal Government’s ecoEnergy Renewable Initiative program. Table 1. Financing Assumptions Input After Tax Return on Equity Percent Debt Cost of Debt Assumption 11% 70% 7% 5. FIT Derivation Methodology The OPA determined a Base Case of capital cost assumptions for each renewable technology based on published studies. These assumptions include capital cost, fixed O&M, variable O&M, construction lead time and capacity factor. For each technology, the Base Case represents a specific project, not a range of possible projects. To capture this range, two alternative cases are considered. “Worst Case” – capital cost 10% higher than in “Base Case”, capacity factor 2% lower than in “Base Case” “Best Case” - capital cost 10% lower than in “Base Case”, capacity factor 2% higher than in “Base Case” Capital cost and capacity factor are the only assumptions considered for the sake of simplicity. In reality, numerous other parameters, such as interest rate or ROE, might be different from a project to a project. However, capital cost and capacity factor do capture the impact on revenue requirement of variability in other parameters. For example, higher interest rate or longer lead time translate to higher interest during construction and therefore higher capital cost. The “Worst” and the “Best” cases provide a range of possible FIT rates. The proposed FIT rates are within this range. 6. Solar Photovoltaics The OPA requested Navigant to assess the costs and performance of solar photovoltaics in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic module and balance of system performance characteristics, installed system prices, supply and demand issues, key market player and job impacts. This report characterized the typical costs associated with a 5kW Residential project, a 500kW Commercial Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant determined costs in consultation with industry players from Ontario, as well as North 5 4021 Draft for internal review only. Do not distribute. America as a whole. The OPA used this report as a basis for all solar photovoltaic cost and performance assumptions. The NCI capital cost assumptions were used to develop a capital cost assumptions for each of the five solar PV FIT categories. To develop the estimates for the 5 solar PV FIT categories the following assumptions were made. The assumed capital cost for the small rooftop installations (<5kW) is the average of the high and low estimates from NCI. The capital cost for the 10-100kW rooftop installations is assumed to be the overall average of the high and low costs from NCI for both the 5kW and the 500kW installations. The remaining larger installations are assumed to be the low capital cost estimates from the NCI forecast where the 500kW+ rooftops is assumed to be the average of the low estimates for the ground mount and 500kW rooftop installations. In the report by NCI, it is stated that 50-75% of the capital costs are exposed to the US/CAN exchange rate; the exchange rate that they assumed was $1CAN = $0.806. The capital costs were then adjusted to account for the difference in assumed US/CAN exchange rate; assuming that 50% of the capital cost is exposed to the exchange rate. Finally, the capital costs were converted into real 2009$CAN. The Fixed O&M costs are not expected to change significantly over the years and have, for simplicity, been assumed to remain unchanged throughout the study period. The assumptions that were used for PV are shown in Table 2. Table 2. Solar PV Base Case Assumptions Rooftop ≤ 10kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Rooftop 10-100kW Rooftop 100-500kW Rooftop > 500kW Ground mounted Section 18(1) 7. Wind Assumptions for wind resources were derived from a number of sources, including the OPA’s Integrated Power System Plan (IPSP, 2007), the U.S. Department of Energy’s Energy Information Administration (EIA), and the Cambridge Energy Research Associates 6 4022 Draft for internal review only. Do not distribute. (CERA). The capacity factors used are consistent with the OPA’s IPSP, which have been influenced by Helimax’s wind potential estimates. The assumptions for the capital costs for Off-shore Wind are based on the EIA’s Annual Energy Outlook for 2009. The assumptions for the capital costs for On-shore Wind are based on are based on CERA’s Captial Costs Analysis Forum – Power: Market Review, November 2008. Community Based or Aboriginal Wind projects are expected to have higher capital costs due to limited buying power and smaller economies of scale. Therefore, the capital costs for Community Based or Aboriginal Wind are assumed to be approximately 10% greater than On-shore Wind. Table 3. Wind Base Case Assumptions Community Based or Aboriginal Wind (≤ 10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) On-shore Wind Off-shore Wind Section 18(1) 8. Waterpower The main source of information for capital costs assumptions for Waterpower projects is the Hatch Acres report from 2005 entitled Evaluation and Assessment of Ontario’s Water Power Potential. This Hatch Acres report was used as a reference to the IPSP filed in 2007. For general waterpower projects, the assumptions are consistent with the average cost of a Greenfield site and the redevelopment of existing dams. For Community Based and Aboriginal Waterpower, are assumed to be approximately 10% greater than On-shore Wind. Table 4. Waterpower Base Case Assumptions Community Based and Aboriginal Waterpower (≤ 2 MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Waterpower (≤ 50MW) Section 18(1) 7 4023 Draft for internal review only. Do not distribute. Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Section 18(1) 9. Bio-Energy The capital and operating cost and performance assumptions for bio-energy projects are based on a number of different sources including the EIA’s Assumptions to the Annual Energy Outlook 2009, NCI’s Renewable Energy: Costs, Performance and Markets – An Outlook to 2015 (2007) and the Suzuki Foundation Report Smart Generation - Powering Ontario with Renewables Energy (2004). The larger biogas projects were assumed to realize revenues from tipping fees associated with the disposal of bio-solids and other waste material. Table 5. Bio-Energy Base Case Assumptions Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/MWh) Fuel Revenues ($/MMBtu) Small Biogas (≤5MW) Large Biogas (>5MW) Small Landfill Gas (≤5MW) Large Landfill Gas (>5MW) Section 18(1) 8 4024 Draft for internal review only. Do not distribute. Proposed FIT Price Schedule Monday, March 30, 2009 1. Summary of the Proposed FIT Price Schedule for 2009 Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 kW ≤ 500 kW > 500 kW ≤ 10 MW Ground mounted Solar PV Community Based or Aboriginal Wind On-shore Wind Off-shore Wind Waterpower Community Based Waterpower Biomass* Biogas* FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 ≤ 10 MW 14.4 Automatic Price Adjustment None None None None 9% price reduction triggered for every 100 MW None Any size Any size ≤ 50 MW ≤ 2 MW 13.5 19.0 12.9 13.4 None None None None Any size 12.2 None ≤ 5 MW 14.7 None > 5 MW 10.4 None Landfill gas* ≤ 5 MW 11.1 None > 5 MW 10.3 None * on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours 2. Introduction The purpose of this report is to describe the Ontario Power Authority’s (OPA’s) derivation of Feed-in Tariffs (FIT) prices. This report outlines the approach for establishing contract prices for each of the renewable energy supply technologies covered under the FIT program. The FIT contract price will vary for different technologies, project sizes and proponents (e.g., recognizing the unique circumstances of community-based and Aboriginal projects) to promote broad participation in the program. This will allow for development over the full range of cost-effective project sizes and technologies. 1 4025 Draft for internal review only. Do not distribute. The proposed FIT prices are established to allow the proponent to recover project costs and earn a reasonable rate of return of the investment. Prices account for the following components: • Project capital costs; • Operating and maintenance costs; • Connection costs; • Contract term; and • Reasonable rate of return. Project cost information was developed from a range of sources using best available information. Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary. Project costs can vary significantly depending on site conditions, proponent experience and the cost and performance characteristics of the various technologies. To develop a FIT price schedule, the OPA is required to make broad assumptions about the costs and performance characteristics of a ‘typical’ project. The OPA will closely monitor market uptake of FIT contracts and will regularly assess FIT prices. The FIT is designed to provide participants and associated industries with a high measure of price stability. However, the FIT prices for each category will favour the most cost effective projects in order to manage customer rate impacts. FIT prices for new contracts will only be revised under specific conditions. The OPA will perform a price review every three years or sooner if annual contract capacity targets for specific technologies are exceeded. The OPA will modify contract prices for future years (with no impact on executed FIT Contracts) to reflect major changes in foreign exchange rates and other variables that have a dramatic impact on the cost of FIT projects. As per the draft FIT Rules (March 13, 2009) section 5.2 (a), “The Price Schedule may indicate that for certain categories of Projects, after the OPA has executed FIT Contracts for an aggregate Contract Capacity beyond a specified amount, the applicable Contract Price will automatically adjust by an amount specified in the Price Schedule (an “Automatic Price Adjustment”). For greater certainty, this shall not affect any executed FIT Contracts.” The proposed FIT price schedule includes an automatic price reduction for Ground Mounted PV prices. The price reduction for Ground Mount PV will be 9% and will occur for every 100 MW of capacity have been executed. For projects other than PV projects, twenty percent of the FIT contract price for each vintage of contracts escalates by the rate of change in the consumer price index (CPI). PV prices will no escalate over time. 2 4026 Draft for internal review only. Do not distribute. Waterpower, biomass and biogas projects will paid on the basis of a Peak Performance Factor (PPF) times the FIT. The PPF is 1.35 for all on-peak hours (five days per week, eight hours per day for all business days) and .9 for all off-peak hours (all other hours). 3. Model Used to Derive FITs The FIT prices were derived using a Discounted Cash Flow (DCF) model developed by the OPA. The DCF analysis is a valuation method widely used in investment finance to value a project, a company or an asset. This approach is based on the concept of the time value of money. In a DCF model, all future cash flows are estimated and discounted to arrive at a present value. The discount rate used is generally the weighted average cost of capital or a desired rate of return, which may incorporate judgments of the uncertainty (riskiness) of the future cash flows. If the present value of future cash flows arrived at through DCF analysis is higher than the current cost of the investment, the investment opportunity is considered attractive. The DCF model developed to calculate FIT determines a sufficient price (on a $/MWh basis) required to cover the cost of investment in renewable energy supply technologies and ongoing operating expenses as well as to earn a reasonable rate of return over the contact term of 20 years. First, annual generation output is estimated for a given project based on the size of the project (i.e. capacity) and assumed capacity factor (ratio of actual annual output to output at full capacity). Second, annual revenue is projected using preliminary capacity payment and estimated generation output. Third, applicable operating expenses are estimated. These may include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost and property tax. Annual depreciation is then calculated using an appropriate capital cost allowance rate. Operating expenses, depreciation, interests and income taxes are deducted from revenue to arrive at net income. Depreciation is added back to net income since it is not an actual cash flow (it is deducted for tax purposes only). Capital investment (negative cash flow), debt borrowing (positive cash flow) and debt repayment (negative cash flow) are also added to calculate free cash flow for each year. These free cash flows are then discounted using a reasonable rate of return. The sum of discounted cash flows is the net present value of a given project. Finally, the preliminary capacity payment is adjusted until the net present value is equal to zero. The net present value of zero means that earned revenue was sufficient to cover all costs and earn the reasonable rate of return. 3 4027 Draft for internal review only. Do not distribute. 4. Basic Financing Assumptions Financing assumptions that were made by the OPA are shown in Table 1. These assumptions were applied to all cases. No credit was taken for potential revenues from the participation in the Federal Government’s ecoEnergy Renewable Initiative program. Table 1. Financing Assumptions Input After Tax Return on Equity Percent Debt Cost of Debt Assumption 11% 70% 7% 5. FIT Derivation Methodology The OPA determined a Base Case of capital cost assumptions for each renewable technology based on published studies. These assumptions include capital cost, fixed O&M, variable O&M, construction lead time and capacity factor. For each technology, the Base Case represents a specific project, not a range of possible projects. To capture this range, two alternative cases are considered. “Worst Case” – capital cost 10% higher than in “Base Case”, capacity factor 2% lower than in “Base Case” “Best Case” - capital cost 10% lower than in “Base Case”, capacity factor 2% higher than in “Base Case” Capital cost and capacity factor are the only assumptions considered for the sake of simplicity. In reality, numerous other parameters, such as interest rate or ROE, might be different from a project to a project. However, capital cost and capacity factor do capture the impact on revenue requirement of variability in other parameters. For example, higher interest rate or longer lead time translate to higher interest during construction and therefore higher capital cost. The “Worst” and the “Best” cases provide a range of possible FIT rates. The proposed FIT rates are within this range. 6. Solar Photovoltaics The OPA requested Navigant to assess the costs and performance of solar photovoltaics in Ontario. Their January 2009 report, Photovoltaics in Ontario, describes photovoltaic module and balance of system performance characteristics, installed system prices, supply and demand issues, key market player and job impacts. This report characterized the typical costs associated with a 5kW Residential project, a 500kW Commercial Building Rooftop project, and a 20MW Central Ground Mounted project. Navigant determined costs in consultation with industry players from Ontario, as well as North 4 4028 Draft for internal review only. Do not distribute. America as a whole. The OPA used this report as a basis for all solar photovoltaic cost and performance assumptions. The NCI capital cost assumptions were used to develop a capital cost assumptions for each of the five solar PV FIT categories. To develop the estimates for the 5 solar PV FIT categories the following assumptions were made. The assumed capital cost for the small rooftop installations (<5kW) is the average of the high and low estimates from NCI. The capital cost for the 10-100kW rooftop installations is assumed to be the overall average of the high and low costs from NCI for both the 5kW and the 500kW installations. The remaining larger installations are assumed to be the low capital cost estimates from the NCI forecast where the 500kW+ rooftops is assumed to be the average of the low estimates for the ground mount and 500kW rooftop installations. In the report by NCI, it is stated that 50-75% of the capital costs are exposed to the US/CAN exchange rate; the exchange rate that they assumed was $1CAN = $0.806. The capital costs were then adjusted to account for the difference in assumed US/CAN exchange rate; assuming that 50% of the capital cost is exposed to the exchange rate. Finally, the capital costs were converted into real 2009$CAN. The Fixed O&M costs are not expected to change significantly over the years and have, for simplicity, been assumed to remain unchanged throughout the study period. The assumptions that were used for PV are shown in Table 2. Table 2. Solar PV Base Case Assumptions Rooftop ≤ 10kW Typical Size (kW) Contract year Construction Lead Time (yr) Start Year Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Rooftop 10-100kW Rooftop 100-500kW Rooftop > 500kW Ground mounted Section 18(1) 7. Wind Assumptions for wind resources were derived from a number of sources, including the OPA’s Integrated Power System Plan (IPSP, 2007), the U.S. Department of Energy’s Energy Information Administration (EIA), and the Cambridge Energy Research Associates 5 4029 Draft for internal review only. Do not distribute. (CERA). The capacity factors used are consistent with the OPA’s IPSP, which have been influenced by Helimax’s wind potential estimates. The assumptions for the capital costs for Off-shore Wind are based on the EIA’s Annual Energy Outlook for 2009. The assumptions for the capital costs for On-shore Wind are based on are based on CERA’s Captial Costs Analysis Forum – Power: Market Review, November 2008. Community Based or Aboriginal Wind projects are expected to have higher capital costs due to limited buying power and smaller economies of scale. Therefore, the capital costs for Community Based or Aboriginal Wind are assumed to be approximately 10% greater than On-shore Wind. Table 3. Wind Base Case Assumptions Community Based or Aboriginal Wind (≤ 10MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capacity Factor Capital Costs ($/kW) Fixed O&M ($/kW/yr) On-shore Wind Off-shore Wind Section 18(1) 8. Waterpower The main source of information for capital costs assumptions for Waterpower projects is the Hatch Acres report from 2005 entitled Evaluation and Assessment of Ontario’s Water Power Potential. This Hatch Acres report was used as a reference to the IPSP filed in 2007. For general waterpower projects, the assumptions are consistent with the average cost of a Greenfield site and the redevelopment of existing dams. For Community Based and Aboriginal Waterpower, are assumed to be approximately 10% greater than On-shore Wind. Table 4. Waterpower Base Case Assumptions Community Based and Aboriginal Waterpower (≤ 2 MW) Typical Size (MW) Contract year Construction Lead Time (yr) Start year Waterpower (≤ 50MW) Section 18(1) 6 4030 Draft for internal review only. Do not distribute. Capacity Factor Capital Cost ($/kW) Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Section 18(1) 9. Bio-Energy The capital and operating cost and performance assumptions for bio-energy projects are based on a number of different sources including the EIA’s Assumptions to the Annual Energy Outlook 2009, NCI’s Renewable Energy: Costs, Performance and Markets – An Outlook to 2015 (2007) and the Suzuki Foundation Report Smart Generation - Powering Ontario with Renewables Energy (2004). The larger biogas projects were assumed to realize revenues from tipping fees associated with the disposal of bio-solids and other waste material. Table 5. Bio-Energy Base Case Assumptions Biomass Typical Size (MW) Contract year Construction Lead Time (yr) Start year Capital Costs ($/kW) Capacity Factor Fixed O&M ($/kW/yr) Variable O&M ($/MWh) Heat Rate (Btu/MWh) Fuel Revenues ($/MMBtu) Small Biogas (≤5MW) Large Biogas (>5MW) Small Landfill Gas (≤5MW) Large Landfill Gas (>5MW) Section 18(1) 7 4031 Draft: March 13, 2009 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 ≤ 5 MW 14.7 > 5 MW 10.4 ≤ 50 MW 12.9 ≤ 2 MW 13.4 ≤ 5MW 11.1 > 5 MW 10.3 ≤10 kW 80.2 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 ≤ 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 Community Based or Aboriginal ≤ 10 MW 14.4 Adjustments Biomass* Biogas* Waterpower* Community Based or Aboriginal Landfill gas* Solar PV Rooftop Ground Mounted 9% price reduction triggered when 100 MW contracted Draft Wind *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 4032 September 24, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 24, 2009 Size tranches Contract Price 0/kWh Escalation Percentage <10MW 13.8 20% > 10 MW 13.0 20% On-Farm <100kW 19.5 20% On-Farm > 1 0 0 k W < 2 5 0 kW 18.5 20% < 500 kW 16.0 20% Renewable Fuel Biomass Biogas ' 1 4 1,2 2 Biogas Biogas >500 k W < 1 0 M W 14.7 20% Biogas > 10 MW 10.4 20% < 10 MW 13.1 20% > 10 M W < 5 0 MW 12.2 20% < 10MW 11.1 20% > 10MW 10.3 20% Any type <10kW 80.2 0% Rooftop > 10<250kW 71.3 0% Rooftop > 250 < 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% > 10 kW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Waterpower 1,2,3 Landfill gas ' 1 2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4033 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (ffiVkWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (0/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 R e n e w a b l e Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4034 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 24, 2009 Size tranches Contract Price c7kWh Escalation Percentage S 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm < 100 kW 19.5 20% On-Farm >100kW<250kW 18.5 20% Biogas < 500 kW 16.0 20% Biogas >500 kW<10MW 14.7 20% Biogas > 10 MW 10.4 20% <10MW 13.1 20% > 10 MW < 50 MW 12.2 20% < 10MW 11.1 20% > 10 MW 10.3 20% Rooftop <10 kW 80.2 0% Rooftop > 10<250kW 71.3 0% Rooftop > 250 < 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted <10kW 64.2 0% >10kW<10MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Biomass Biogas 5 1,2 1,2 Waterpower Landfill gas 1,2,3 1,2 Solar PV Ground Mounted Wind 2,4 2 Peak performance factor applies. Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule. In the case of an incremental waterpower project, the incremental project, together with the existing generating facility to which it is incremental, cannot exceed 50 MW. In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. The percentage escalated w i l l be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. 1 2 3 5 4035 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (0/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (0/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4036 August 13, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 24, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Rooftop ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted ≤ 10 kW 64.2 0% > 10 kW ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 5 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2, 4 2 1 Peak performance factor applies. Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule. 3 In the case of an incremental waterpower project, the incremental project, together with the existing generating facility to which it is incremental, cannot exceed 50 MW. 4 In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. 5 The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. 2 4037 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4038 July 2, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 2, 2010 Size tranches Contract Price c7kWh Escalation Percentage S 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm <100kW 19.5 20% On-Farm > 100 kW<250 kW 18.5 20% Biogas < 500 kW 16.0 20% Biogas >500 kW< 10 MW 14.7 20% > 10 MW 10.4 20% <10MW 13.1 20% > 1 0 M W S 5 0 MW 12.2 20% <;10MW 11.1 20% > 10 MW 10.3 20% Rooftop £10 kW 80.2 0% Rooftop >10<250kW 71.3 0% Rooftop > 250 < 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% SlOkW 58.8 0% >10kW<10MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Renewable Fuel Biomass 5 1,2 Biogas ' 1 2 Biogas Waterpower 1,2,3 Landfill gas ' 1 2 Solar PV Ground Mounted (proposed) Ground Mounted Wind 2,4 2 Peak performance factor applies. Aboriginal price adder and community price adder eligible as outlined in the posted FIT price schedule. In the case of an incremental waterpower project, the incremental project, together with the existing generating facility to which it is incremental, cannot exceed 50 MW. In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. The percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. 1 2 3 5 4039 Important note - Proposed Ground Mounted Price: There will be a 30-day comment period on the proposed new price category that will end on Tuesday, August 3. Please send all comments and submissions to microFIT(a),powerauthority.on.ca. While all emails will be read, not all emails will receive individual responses. Coimnents also can be mailed to the following address and must be postmarked no later than Tuesday, August 3,2010. Ontario Power Authority 120 Adelaide Street West, Suite 1600 Toronto, Ontario M5H 1T1 Attention: Ground-Mounted Solar PV Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (0/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (0/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4040 July 6, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 6, 2010 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Rooftop ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted ≤ 10 kW 58.8 0% > 10 kW ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4041 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4042 Draft: July 8, 2009 Proposed Feed-In Tariff Pricesfor Renewable Energy Projects in Ontario Base Date: July 8, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage** ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% ≤ 500 kW 16.0 20% >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Draft Wind^ *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4043 Draft Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4044 Draft: July 8, 2009 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 8, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage** ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% ≤ 500 kW 16.0 20% >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Draft Wind^ *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4045 Draft Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4046 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 ≤ 5 MW 14.7 > 5 MW 10.4 ≤ 50 MW 12.9 ≤ 2 MW 13.4 ≤ 5MW 11.1 > 5 MW 10.3 Any type ≤10 kW 80.2 Rooftop 10 – 100 kW 71.3 Rooftop 100 – 500 kW 63.5 Rooftop > 500 kW 53.9 Ground Mounted ≤ 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 Community Based or Aboriginal ≤ 10 MW 14.4 Adjustments Biomass* Biogas* Waterpower* Community Based or Aboriginal Landfill gas* Solar PV 9% price reduction triggered every 100 MW contracted Wind *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 4047 Draft: May 11, 2009 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: May 11, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage** ≤ 10 MW 13.8 20% > 10 MW 13.0 20% ≤ 500 kW 16.0 20% >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop 10 – 250 kW 71.3 0% Rooftop 250 – 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Wind^ *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4048 Appendix A: Maximum Aboriginal Price Adder and Community Price Adder: Renewable Fuel Wind Water Biogas Biomass Landfill Gas 1.5 PV (Ground Mounted) 1.5 Maximum Aboriginal Price Adder (cents / kWh) Maximum Community Price Adder (cents / kWh) 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 4049 Draft: May 11, 2009 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: May 11, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh ≤ 10 MW 13.8 > 10 MW 13.0 ≤ 500 kW 16.0 >500 kW ≤ 10 MW 14.7 > 10 MW 10.4 ≤ 10 MW 13.1 > 10 MW 12.2 ≤ 10MW 11.1 > 10 MW 10.3 Any type ≤10 kW 80.2 Rooftop 10 – 250 kW 71.3 Rooftop 250 – 500 kW 63.5 Rooftop > 500 kW 53.9 Ground Mounted^ ≤ 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Wind^ *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4050 Appendix A: Maximum Aboriginal Price Adder and Community Price Adder: Renewable Fuel Wind Water Biogas Biomass Landfill Gas 1.5 PV (Ground Mounted) 1.5 Maximum Aboriginal Price Adder (cents / kWh) Maximum Community Price Adder (cents / kWh) 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 4051 Draft: May 11, 2009 † Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: May 11, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh ≤ 10 MW 13.8 > 10 MW 13.0 ≤ 500 kW 16.0 >500 kW ≤ 10 MW 14.7 > 10 MW 10.4 ≤ 10 MW 13.1 > 10 MW 12.2 ≤ 10MW 11.1 > 10 MW 10.3 Any type ≤10 kW 80.2 Rooftop 10 – 250 kW 71.3 Rooftop 250 – 500 kW 63.5 Rooftop > 500 kW 53.9 Ground Mounted^ ≤ 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 Biomass*^ Bio-gas*^ Waterpower*^ Landfill gas*^ Solar PV Wind^ † Draft All prices increase by CPI until the earlier of the Commercial Operation Date and the Milestone Date of Commercial Operation. *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4052 Draft Appendix A: Maximum Aboriginal Price Adder and Community Price Adder: Renewable Fuel Wind Water Biogas Biomass Landfill Gas 1.5 PV (Ground Mounted) 1.5 Maximum Aboriginal Price Adder (cents / kWh) Maximum Community Price Adder (cents / kWh) 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 4053 Draft: May 15, 2009 † Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: May 15, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% ≤ 500 kW 16.0 20% >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% ≤10 kW 80.2 0% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Any type Rooftop 10 – 250 kW 71.3 0% Rooftop 250 – 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Wind^ † Draft All prices increase by CPI until the earlier of the Commercial Operation Date and the Milestone Date of Commercial Operation. *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4054 Draft Appendix A: Maximum Aboriginal Price Adder and Community Price Adder*: Renewable Fuel Wind Water Biogas Biomass Landfill Gas 1.5 PV (Ground Mounted) 1.5 Maximum Aboriginal Price Adder (cents / kWh) Maximum Community Price Adder (cents / kWh) 0.9 0.6 0.6 0.6 1.0 1.0 0.6 0.4 0.4 0.4 *The percentage of the Aboriginal Price Adder or Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT rules. 4055 Draft: May 15, 2009 † Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: May 15, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% ≤ 500 kW 16.0 20% >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% ≤10 kW 80.2 0% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Any type Rooftop 10 – 250 kW 71.3 0% Rooftop 250 – 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Wind^ † Draft All prices increase by CPI until the earlier of the Commercial Operation Date and the Milestone Date for Commercial Operation. *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4056 Draft Appendix A: Maximum Aboriginal Price Adder and Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Aboriginal Price Adder or Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4057 September 23, 2009 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 23, 2009 Renewable Fuel Proposed size tranches Proposed Contract Price ¢/kWh Escalation Percentage** ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% Biogas > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted^ ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% Biomass*^ Biogas*^ Waterpower*^ Landfill gas*^ Solar PV Wind^ *Peak Performance Factor applies. ^Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. **Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of draft FIT Contract. 4058 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4059 April 1, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Rooftop ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4060 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4061 June 2, 2010 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: June 2, 2010 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Rooftop ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% Ground Mounted ≤ 10 kW 58.8 0% > 10 kW ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4062 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4063 November 19, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: November 19, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Percentage Escalated ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4064 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4065 September 30, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Percentage Escalated ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - The Percentage Escalated will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4066 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4067 September 24, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 24, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% > 10 kW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4068 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4069 September 30, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Rooftop ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4070 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4071 September 30, 2009 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: September 30, 2009 Renewable Fuel Size tranches Contract Price ¢/kWh Escalation Percentage ≤ 10 MW 13.8 20% > 10 MW 13.0 20% On-Farm ≤ 100 kW 19.5 20% On-Farm > 100 kW ≤ 250 kW 18.5 20% Biogas ≤ 500 kW 16.0 20% Biogas >500 kW ≤ 10 MW 14.7 20% > 10 MW 10.4 20% ≤ 10 MW 13.1 20% > 10 MW ≤ 50 MW 12.2 20% ≤ 10MW 11.1 20% > 10 MW 10.3 20% Any type ≤10 kW 80.2 0% Rooftop > 10 ≤ 250 kW 71.3 0% Rooftop > 250 ≤ 500 kW 63.5 0% Rooftop > 500 kW 53.9 0% ≤ 10 MW 44.3 0% Onshore Any size 13.5 20% Offshore Any size 19.0 20% 4 1,2 Biomass Biogas 1 ,2 Biogas 1,2,3 Waterpower Landfill gas 1,2 Solar PV Ground Mounted Wind 2 2 1 - Peak Performance Factor applies. 2 - Aboriginal Price Adder and Community Price Adder eligible as outlined in Appendix A below. 3 - In the case of an incremental Waterpower project, the Incremental Project together with the Existing Generating Facility to which it is incremental cannot exceed 50 MW. 4 - Escalation Percentage will be applied to eligible Renewable Fuels as calculated in Exhibit B of FIT Contract. 4072 Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder*: Wind PV (Ground Mounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal Price Adder (¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum Community Price Adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 Renewable Fuel * The percentage of the Maximum Aboriginal Price Adder or Maximum Community Price Adder added to the Contract Price is based on the Aboriginal or Community Participation Level as defined in the FIT Rules. 4073 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 ≤ 5 MW 14.7 > 5 MW 10.4 ≤ 50 MW 12.9 ≤ 2 MW 13.4 ≤ 5MW 11.1 > 5 MW 10.3 Any type ≤10 kW 80.2 Rooftop 10 – 100 kW 71.3 Rooftop 100 – 500 kW 63.5 Rooftop > 500 kW 53.9 Ground Mounted ≤ 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 Community Based or Aboriginal ≤ 10 MW 14.4 Adjustments Biomass* Biogas * Waterpower* Community Based or Aboriginal Landfill gas* Solar PV 9% price reduction triggered every 100 MW contracted Wind *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 4074 Proposed Feed-In Tariff Prices for Renewable Energy Projects in Ontario Technology Proposed size tranches Proposed ¢/kWh Any size 12.2 5 MW 14.7 > 5 MW 10.4 50 MW 12.9 2 MW 13.4 5MW 11.1 > 5 MW 10.3 10 kW 80.2 10 – 100 kW 71.3 100 – 500 kW 63.5 > 500 kW 53.9 10 MW 44.3 Onshore Any size 13.5 Offshore Any size 19.0 10 MW 14.4 Adjustments Biomass* Biogas* Waterpower* Community Based or Aboriginal Landfill gas* Solar PV Rooftop Ground Mounted 9% price reduction triggered every 100 MW contracted Wind Community Based or Aboriginal *on/off peak pricing applies: 35% higher from 11am to 7pm on business days, and a 10% lower price during off-peak hours. 4075 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 ≤ 500 kW > 500 kW < 10 MW ≤ 10 MW Any size Any size Any size Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Waterpower Biomass Biogas Landfill gas FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 14.4 12.9 15.0 – 19.8 12.9 10.5 14.7 10.4 9.3 8.7 Adjustments TBD 1 4076 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 ≤ 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas ≤ 10 MW Any size Any size ≤ 2 MW ≤ 50 MW Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction triggered when 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1 4077 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 ≤ 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas ≤ 10 MW Any size Any size ≤ 2 MW ≤ 50 MW Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction triggered when 100 MW reached 14.4 13.5 19.0 13.4 12.9 12.2 14.7 10.4 11.1 10.3 1 4078 Proposed FIT Pricing Schedule Technology Capacity Range Rooftop Solar PV ≤ 10 kW > 10 kW ≤ 100 kW > 100 ≤ 500 kW > 500 kW < 10 MW Ground mounted Solar PV Community Based Wind On-shore Wind Off-shore Wind Community Based Waterpower Waterpower Biomass Biogas Landfill gas ≤ 10 MW Any size Any size ≤ 2 MW ≤ 50 MW Any size ≤ 5 MW > 5 MW ≤ 5 MW > 5 MW FIT (cents/kWh) 80.2 71.3 63.5 53.9 44.3 Adjustments 9% price reduction triggered when 100 MW reached 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 1 4079 Input Assumptions – Solar PV Technology Type Base Year for Costs Rooftop Solar PV ≤10kW Rooftop Rooftop Solar PV Solar PV 10-100kW 100-500kW Rooftop Solar PV >500kW Ground Solar PV <10MW 2009 2009 2009 2009 2009 20 20 20 20 20 2.25% 0% 2.25% 0% 2.25% 0% 2.25% 0% 2.25% 0% Debt % Debt Term (years) Debt Cost (%) Return on Equity (%) 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Class 43.2 Rate (%) Non-Class 43.2 Rate (%) Class 43.2 Share (%) Non-Class 43.2 Share 50% 8% 80% 20% 50% 8% 80% 20% 50% 8% 80% 20% 50% 8% 80% 20% 50% 8% 80% 20% Feed-in Tariff (c/KWh) 80.2 71.3 63.5 53.9 44.3 Section 18(1) Contract Term (years) Inflation (%) Indexing Factor (%) Section 18(1) 2 4080 Input Assumptions – Other Technologies Community Wind ≤10MW On-shore Wind Any Size Off-shore Wind Any Size Waterpower ≤2MW Waterpower >2MW ≤50MW Biomass Any Size Biogas ≤5MW Biogas >5MW Landfill Gas ≤5MW Landfill Gas >5MW 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 20 20 20 20 20 20 20 20 20 20 Debt % Debt Term (years) Debt Cost (%) Return on Equity (%) 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Class 43.2 Rate (%) Non-Class 43.2 Rate (%) Class 43.2 Share (%) Non-Class 43.2 Share 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 60% 40% 50% 8% 70% 30% 50% 8% 70% 30% Feed-in Tariff (c/KWh) 14.4 13.5 16.1 13.4 12.9 10.5 14.7 10.4 9.3 8.7 Technology Type Base Year for Costs Section 18(1) Contract Term (years) Section 18(1) 3 4081 Section 18(1) Technology Type Waterpower Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Waterpower Waterpower Biomass Biomass Biogas Biogas Biogas Lanfill Gas Lanfill Gas Section 18(1) Base Year for Costs Inflation Rate Indexing Factor % % 2009 2.25% 20% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% % years 0.52 40 13% 20 13% 20 13% 20 13% 20 14% 20 30% 20 30% 20 37% 20 52% 40 52% 40 85.0% 20 85.0% 20 75.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 % years % % 70% 40 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 40 7% 11% 70% 40 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% % 3% 50% 8% 60% 40% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 3% 50% 8% 60% 40% 3% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% 82.1 73.0 65.0 55.2 45.3 15.2 13.7 19.3 13.1 12.2 13.9 13.2 16.2 14.9 10.5 11.2 10.4 Section 18(1) ACF Project Life Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share % % Stand-Alone Entity ? IRR NPV Yes % Section 18(1) Feed-in Tarrif c/kW 11.00% ($0.00) Section 18(1) Yes Calculate No FiT Legend: Original Input Revised Input Formula - don't touch Ouput 4082 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 4083 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 4084 8 ..I .w Section 18(1) 4086 Section 18(1) Section 18(1) 4088 Section 18(1) Section 18(1) 4090 Section 18(1) Technology Type On-shore Wind Ground Solar PV Base Case Ground Solar PV Case A Ground Solar PV Case B Ground Solar PV Case C On-shore Wind Base Case On-shore Wind Case A On-shore Wind Case B On-shore Wind Case C % % 2009 2.25% 20% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% % years 0.3 20 14% 20 14% 20 14% 20 14% 20 30% 20 31% 20 28% 20 30% 20 % years % % 80% 20 6% 17% 70% 20 7% 11% 75% 20 8% 12% 80% 20 7% 15% 75% 20 6% 16% 70% 20 7% 11% 75% 20 8% 12% 80% 20 7% 11% 80% 20 6% 17% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share Incentive Stand-Alone Entity ? % 5% 50% 8% 60% 40% 0 Yes 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% IRR NPV % 44.3 44.4 44.1 44.3 13.5 13.5 13.5 13.5 Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity % % Section 18(1) Feed-in Tarrif c/kW 16.50% $0.0000 Section 18(1) Yes Calculate No FiT Legend: Original Input Revised Input Formula - don't touch Ouput Section 18(1) Section 18(1) PV 4091 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 4092 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 4093 Section 18(1) Section 18(1) 4095 Section 18(1) Section 18(1) 4097 Section 18(1) Section 18(1) 4099 Section 18(1) Section 18(1) 4101 Section 18(1) Technology Type GNDSolar PV GNDSolar PV Base Case GND Solar PV Scenario 1 Ground Solar PV Scenario 2 Ground Solar PV Scenario 3 GND Solar PV Scenario 4 Ground Solar PV Scenario 5 On-shore Wind Base Case On-shore Wind Scenario 1 On-shore Wind Scenario 2 On-shore Wind Scenario 3 On-shore Wind Scenario 4 On-shore Wind Scenario 5 On-shore Wind Scenario 6 On-shore Wind Scenario 7 % % 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% % years 0.14 20 14.0% 20 13.1% 20 14.0% 20 13.1% 20 14.0% 20 13.1% 20 30% 20 26.14% 20 27% 20 28% 20 29% 20 30% 20 26% 20 30% 20 % years % % 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 75% 15 8% 11% 75% 15 8% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 75% 15 8% 11% 75% 15 8% 11% 70% 20 7% 11% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share Incentive Stand-Alone Entity ? % 5% 50% 8% 80% 20% 0 Yes 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% IRR NPV % 44.3 47.3 46.9 50.1 44.3 44.3 13.5 15.5 13.5 13.5 13.5 13.5 17.4 13.5 Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity % % Section 18(1) Feed-in Tarrif c/kW 11.00% ($0.0000) Section 18(1) Yes Calculate No FiT Legend: Original Input Revised Input Formula - don't touch Ouput Section 18(1) Section 18(1) PV 4102 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 4103 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 4104 Section 18(1) Section 18(1) 4106 Section 18(1) Section 18(1) 4108 Section 18(1) Section 18(1) 4110 Section 18(1) Technology Type Off-shore Wind On-shore Wind Off-shore Wind Waterpower Waterpower % % 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% % years 0.37 20 30% 20 37% 20 52% 40 52% 40 % years % % 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 40 7% 11% 70% 40 7% 11% % 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 3% 50% 8% 60% 40% 3% 50% 8% 60% 40% 13.5 19.0 13.1 12.2 Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share % % Yes Stand-Alone Entity ? IRR NPV % Section 18(1) Feed-in Tarrif c/kW 11.00% ($0.00) Section 18(1) Yes Calculate No FiT Legend: Original Input Formula - don't touch Ouput 4111 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 4112 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 4113 Section 18(1) Section 18(1) 4115 Section 18(1) 4117 Section 18(1) Section 18(1) 4119 Section 18(1) Technology Type Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Waterpower Waterpower Biomass Biogas Biogas Lanfill Gas Lanfill Gas Section 18(1) Base Year for Costs Inflation Rate Indexing Factor % % 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% Section 18(1) ACF Project Life % years 0.13 20 13% 20 13% 20 13% 20 13% 20 14% 20 30% 20 30% 20 37% 20 52% 40 52% 40 85.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 % years % % 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 40 7% 11% 70% 40 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% % 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 3% 50% 8% 60% 40% 3% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% 89.55 79.65 69.19 58.79 44.84 15.78 14.76 21.03 13.96 12.61 12.25 14.80 10.46 11.16 10.30 Section 18(1) Debt:Equity Ratio Debt Term Interest Rate Return on Equity Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share IRR NPV % % % 11.00% $0.00 Section 18(1) Feed-in Tarrif c/kW Section 18(1) Calculate FiT 4120 Substantively Enacted Income Tax Rates as at December 31, 2008 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 14.0% 16.5% 30.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% General Corporation - General Corporate Income Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% Source: KPMG - Income Tax Rates for Income Earned by a General Corporation – General Corporate Income Rate Canadian-Controlled Private Corporation - Small Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% Canadian-Controlled Private Corporation - General Active Business Rate Ontario Tax Rate (%) Federal Tax Rate (%) Total Corporate Tax (%) 14.0% 19.5% 33.5% 14.0% 19.0% 33.0% 14.0% 18.0% 32.0% 14.0% 16.5% 30.5% Note: General Corporation - corporations other than Canadian-controlled private corporations. In general, this includes public companies, and their subsidiaries, that are resident in Canada, and Canadian resident private companies that are controlled by non-residents. Canadian-Controlled Private Corporation - a private Canadian corporation, provided it is not controlled by one or more nonresident persons, by a public corporation, by a corporation with a class of shares listed on a designated stock exchange, or by any combination of these, and provided it does not have a class of shares listed on a designated stock exchange. Source: KMPG 4121 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 5.5% 11.0% 16.5% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 14.0% 15.0% 29.0% 4122 Section 18(1) 4124 Section 18(1) 4125 4126 Section 18(1) Section 18(1) 4128 Section 18(1) 4129 1 8 1 FIT Derivations: Sensitivity Analysis Technology Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Waterpower Waterpower Biomass Biomass Biogas Biogas Biogas Lanfill Gas Lanfill Gas Capacity (MW) 0.005 0.5 0.5 1 20 10 100 200 5 20 10 30 0.25 5 15 5 15 Proposed FIT (¢/kWh) 80.2 71.3 63.5 53.9 44.3 15.0 13.5 19.0 13.1 12.2 13.8 13.0 16.0 14.7 10.4 11.1 10.3 Case 1 FIT Delta 69.4 -13% 61.8 -13% 55.9 -12% 47.5 -12% 39.1 -12% 13.8 -8% 12.5 -7% 17.7 -7% 11.5 -12% 10.7 -12% 13.4 -3% 12.6 -3% 14.9 -7% 13.7 -7% 9.5 -8% 10.7 -4% 10.0 -4% Case 2 FIT Delta 82.1 2% 73.0 2% 65.0 2% 55.2 2% 45.3 2% 15.2 1% 13.7 1% 19.3 1% 13.1 0% 12.2 0% 13.9 1% 13.2 1% 16.2 1% 14.9 1% 10.5 2% 11.2 1% 10.4 1% Case 3 FIT Delta 80.2 0% 71.3 0% 63.5 0% 53.9 0% 44.3 0% 14.3 -5% 12.8 -5% 17.8 -6% 12.1 -8% 11.3 -8% 13.2 -5% 12.4 -5% 15.2 -5% 14.0 -5% 9.9 -5% 10.6 -5% 9.8 -5% Note: Proposed FIT - 20% of price is escalated at inflation (except for solar). Project owner is a stand-alone entity that benefits from accelerated depreciation. Case 1 - Project owner is a subsidiary of a profitable company. Case 2 - No accelerated depreciation. Case 3 - 100% of price is escalated at inflation until COD, 20% of price is escalated at inflation post-COD. 4131 Feed-In Tariff Prices for Renewable Energy Projects in Ontario Base Date: July 2, 2010 Renewable Fuel Size Tranche Contract Price (¢/kWh) Percentage Escalated ≤ 10 MW 13.8 20 > 10 MW 13.0 20 On-Farm ≤ 100 kW 19.5 20 On-Farm > 100 kW ≤ 250 kW 18.5 20 Biogas ≤ 500 kW 16.0 20 Biogas >500 kW ≤ 10 MW 14.7 20 Biogas > 10 MW 10.4 20 ≤ 10 MW 13.1 20 > 10 MW ≤ 50 MW 12.2 20 ≤ 10MW 11.1 20 > 10 MW 10.3 20 Rooftop ≤10 kW 80.2 0 Ground-mounted* ≤10 kW 58.8 0 Rooftop > 10 ≤ 250 kW 71.3 0 Rooftop > 250 ≤ 500 kW 63.5 0 Rooftop > 500 kW 53.9 0 ≤ 10 MW 44.3 0 Onshore Any size 13.5 20 Offshore Any size 19.0 20 Biomass 1,2 1,2 Biogas 1,2,3 Waterpower 1,2 Landfill gas Solar PV 2 Ground-mounted Wind 2 * Includes all non-rooftop solar PV technologies. 1. Peak performance factor applies. 2. Aboriginal price adder and community price adder eligible as outlined in Appendix A below. 3. In the case of an incremental waterpower project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 50 MW. 1 4132 4 4. Percentage escalated will be applied to eligible renewable fuels as calculated in Exhibit B of the FIT contract. Note: In the case of an incremental solar project, the incremental project together with the existing generating facility to which it is incremental cannot exceed 10 MW. Appendix A: Maximum Aboriginal Price Adder and Maximum Community Price Adder* The following table sets out the price adders for Aboriginal and community-based projects. Renewable Fuel Wind Solar PV (groundmounted) Water Biogas Biomass Landfill Gas Maximum Aboriginal price adder(¢/kWh) 1.5 1.5 0.9 0.6 0.6 0.6 Maximum community price adder (¢/kWh) 1.0 1.0 0.6 0.4 0.4 0.4 * The percentage of the maximum Aboriginal price adder or maximum community price adder added to the FIT contract price is based on the Aboriginal or community participation level as defined in the FIT Rules. 2 4133 Technology # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Installed Capital Technology Typical Size (kW) Cost ($ / kW) Rooftop Solar PV 5 9,200 Rooftop Solar PV 150 8,160 Rooftop Solar PV 500 6,690 Rooftop Solar PV 1,000 5,650 Ground Solar PV 10,000 4,600 On-shore Wind 100,000 2,900 Community Wind 10,000 3,200 Off-shore Wind 400,000 4,800 Waterpower 5,000 5,100 Waterpower 20,000 4,700 Biomass 5,000 3,850 Biomass 15,000 3,500 Biogas 500 7,300 Biogas 5,000 6,700 Biogas 15,000 5,600 Landfill gas 5,000 2,900 Landfill gas 10,000 2,700 DRAFT FIT Price 80.2 71.3 63.5 53.9 44.3 13.5 14.5 19 13.1 12.2 13.8 13 16 14.7 10.4 11.1 10.3 4134 ONTARIO POWER AUTHORITY ONTARIO POWER AUTHORITY Overview of financial model 4135 Presentation Overview • Overview of Financial Model • Financial Assumptions • Simplified Example • Factors that impact FIT rate • Scenario Analysis 2 4136 Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – DCF models are commonly used in project finance • The DCF model calculates the prices required to – Cover the cost of investment – Cover ongoing operating expenses – Earn a reasonable rate of return over a 20-year contact term 3 4137 Financial Assumptions Variable Assumption Percent Investment 30% After Tax Return on Investment 11% Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% Inflation Rate 2.25% • These financial assumptions are held constant for all technologies. 4 4138 Simplified Example • This is a highly simplified example, for the purpose of illustrating how the financial model works. • Let’s assume that a renewable energy project has capital cost of $50,000 – 70% of the cost of the project is borrowed from the bank $50,000 x 70% = $35,000 (from bank) $50,000 x 30% = $15,000 (Investment from savings) 5 4139 Simplified Example (continued) • Payback Payments on borrowed amount are to the bank at 7% $35,000 @ 7% = approx. $270 per month (20 years) (Assumes annuity payment, i.e., constant) Return on Investment is paid to the Supplier at 11% $15,000 @ 11% = approx. $155 per month (20 years) Therefore, the annual revenue requirement is: ($270 + $155) x 12 = $5100 6 4140 Simplified Example (continued) • Electricity Output – The electricity output from the facility depends on the facility’s capacity factor. In this case, let’s assume that this renewable energy project produces 10000 kWh in one year. • The FIT rate is derived to ensure that the revenue requirements are met given the expected output from the renewable energy project. $5100 ≈ FIT x 10000 kWh * * Note: the actual calculation is much more complicated, because it includes factors such as O&M, taxes, inflation, etc. 7 4141 Factors that affect the FIT rate • Efficiency of the system (Capacity Factor) – A more efficient renewable technology will produce more electricity per year – Projects that produce more electricity per kW installed will require a lower the FIT rate – E.g., $5100 ≈ FIT x 10000 kWh ! (higher FIT) versus $5100 ≈ FIT x 20000 kWh ! (lower FIT) More electricity produced per kW installed 8 4142 Factors that affect the FIT rate (continued) • Revenue Requirement – A project with a lower revenue requirement will have a lower FIT rate – E.g., $5100 ≈ FIT x 10000 kWh ! (higher FIT) versus $3000 ≈ FIT x 10000 kWh ! (lower FIT) Lower revenue requirement per kW installed – Factors that impact the revenue requirement, include: • • • • Capital costs (Lower costs ! lower FIT) O&M costs (lower costs ! lower FIT) Debt/Equity share (More debt ! lower FIT) Cost of debt (Lower cost ! lower FIT) 9 4143 Cost per unit energy (example) • Solar PV rooftop fixed mounted – 3 kW Capacity NTD: make sure – Capital costs is $9600 per kW assumptions are – Total installed cost = $28,800 appropriate – Capacity Factor = 13% – Electricity produced per year ≈ 3400 kWh (e.g., 13% x 3kW x 8760h/year) – Cost per unit energy = $8.4 / kWh • Solar PV ground-mounted with tracking system – 10 kW Capacity – Capital costs is $9600 per kW – Total installed costs = $96,000 – Capacity Factor = 19% – Electricity produced per year ≈ 16600 kWh (e.g., 19% x 10kW x 8760h/year) – Cost per unit energy = $ 5.8 / kWh 10 4144 Data Sources • Project cost information was developed from a range of sources using best available information – Consistent with literature and industry experience – Sources clearly documented NTD: Slide from stakeholder session (April 7, 2009) • Preference was given to more recent cost estimates from reliable sources with transparent assumptions, which can be updated as appropriate and necessary The OPA used a wide rate of sources as inputs into the applicable models. The OPA necessarily applied professional judgment were applicable. 11 4145 Cost and Performance Assumptions • Project costs can vary significantly depending on site conditions, proponent experience, and the cost and performance characteristics of the various technologies • Project cost estimates are part of an integrated package – Care needs to be taken when changing just one element of the cost estimates NTD: Slide from stakeholder session (April 7, 2009) 12 4146 Scenario Analysis-Ground Mount Solar PV • Scenarios evaluated FIT price sensitivity to changes to the following key assumptions: – – – – – – – Capital Cost Capacity Factor Debt Equity ratio Cost of Debt Return on Equity Fuel Cost Tax Treatment • The following slides review the results of the scenario Analysis for Ground Mount Solar PV, and the proposed changes to the FIT price schedule. 13 4147 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 45.9 and 48.7 cents per kWh Scenario-I A B C 7000 7000 7000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 45.9 47.4 48.7 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 14 4148 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 49.1 and 52.1 cents per kWh Scenario-II A B C 7500 7500 7500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 49.1 50.7 52.1 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 15 4149 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 52.3 and 55.5 cents per kWh Scenario-III A B C 8000 8000 8000 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 52.3 54.0 55.5 Capital Cost Capacity Factor NTD: TL recommends removal of this slide 16 4150 Micro-Scale Ground Mount Solar PV-Scenario Analysis Range of Possible FIT Prices from Analysis is between 55.6 and 58.8 cents per kWh Scenario-IV A B C 8500 8500 8500 19.4 % 18.8 % 18.3 % Percent Debt 70 70 70 Interest Rate 7% 7% 7% Accelerated Depreciation YES YES YES Derived FIT Price (Cents/kWh) 55.6 57.3 58.8 Capital Cost Capacity Factor 17 4151 18 ONTARIO POWER AUTHORITY 4152 History of FIT Assumptions due to Model updates Project Number Cone Model 1 Cone Model 2 Cone Model 3 Cone Model 4 Cone Model 5 Cone Model 6 Cone Model 7 Cone Model 8 Cone Model 9 Technology Type Rooftop Solar PV Rooftop Solar PV 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 13% 20 13% 20 13% 20 13% 20 14% 20 30% 20 30% 20 37% 20 Debt:Equity Ratio Debt Term Interest Rate Return on Equity 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 63.57 53.91 44.36 14.44 Cone Model DCF V1 10 11 Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Comm Waterpower Waterpower DCF V1 12 DCF V1 13 14 DCF V1 15 DCF V1 16 Biomass Biogas Biogas Biogas Lanfill Gas Lanfill Gas 2009 2.25% 20% 2011.25 2.25 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 52% 20 52% 20 85% 20 75.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7.0% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% 13.53 19.03 13.09 12.22 14.68 10.46 11.16 10.30 Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Section 18(1) Posted Feed-in Tarrif - ¢/kWh 80.29 71.33 12.2 15.99 Notes Cone Model / DCF V1 Cone model developed by Navigant ??? DCF V1 developed by Sardar 4153 Section 18(1) Project Number 1 2 Rooftop Solar PV Rooftop Solar PV 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 0% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 13% 20 13% 20 13% 20 13% 20 14% 20 30% 20 30% 20 37% 20 Debt:Equity Ratio Debt Term Interest Rate Return on Equity 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% Depreciation Rate Class 43.2 CCA Rate Class 17 CCA Rate Class 43.2 Share Class 17 Share 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 80% 20% 5% 50% 8% 60% 40% 63.57 53.91 44.36 14.44 Technology Type 3 4 5 6 7 8 9 10 11 12 13 14 Biomass Biogas Biogas Biogas 2009 2.25% 20% 2011.25 2.25 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 2009 2.25% 20% 52% 20 52% 20 85% 20 75.0% 20 75.0% 20 75.0% 20 83.0% 20 85.0% 20 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7.0% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 70% 20 7% 11% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 60% 40% 5% 50% 8% 70% 30% 5% 50% 8% 70% 30% 13.53 19.03 13.09 12.22 14.68 10.46 11.16 10.30 Rooftop Solar PV Rooftop Solar PV Ground Solar PV Community Wind On-shore Wind Off-shore Wind Comm Waterpower Waterpower 15 16 Lanfill Gas Lanfill Gas Section 18(1) Base Year for Costs Inflation Rate Indexing Factor Section 18(1) ACF Project Life Section 18(1) Section 18(1) Posted Feed-in Tarrif - ¢/kWh 80.29 71.33 12.2 15.99 4154 April 7, 2009 August 25, 2009 Proposed Feed-in Tariff Price Schedule Review of FIT prices and assumptions Stakeholder Engagement – Session 4 4155 Presentation Overview • • • • • • FIT pricing derivation Solar and Wind assumptions FIT model Scenario Analysis Solar cost projections and FIT pricing review Conclusions 4156 FIT Price Derivation • Prices based on the following elements – Capital costs • Reasonable project development, construction, and equipment costs – Operating and maintenance costs • Reasonable project staffing and maintenance costs, including ongoing capital expenditures and property taxes 4157 FIT Price Derivation • Prices based on the following elements – Contract term • Assumed 20-year contract term – Reasonable rate of return – Efficient project financing structure given long-term power purchase agreement with a credit-worthy counterparty 4158 FIT Price Schedule – Location and Resource • Locational-based and resource-based pricing were also considered • However, these approaches are not being initially proposed due to – Complexity of methodology – Inconsistency with existing market design • IESO-administered markets do not have locational marginal pricing – Potential pricing distortions from current approach for allocating transmission facility costs – Objective of stimulating best resource locations first 4159 FIT Price Derivation – Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – DCF models are commonly used in project finance • The DCF model calculates the prices required to – Cover the cost of investment – Cover ongoing operating expenses – Earn a reasonable rate of return over a 20-year contact term 4160 FIT Price Derivation– Model Overview A seven step process was used to calculate prices (1) Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor (2) Operating expenses estimated and include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost (3) Annual depreciation calculated using an appropriate capital cost allowance rate 4161 FIT Price Derivation – Model Overview (4) Operating expenses, depreciation, interest, and income taxes deducted from revenue to arrive at net income (5) Depreciation added back to net income to estimate actual cash flow (6) Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year (7) Free cash flows are then discounted using the target return on equity 4162 FIT Price Derivation – Financing Assumptions • Financing assumptions assume that financial markets stabilize and return to conditions that are closer to historical norms − Prices are to be maintained for an extended period, so a long-term view was taken 4163 FIT Price Derivation – Financing Assumptions • Non-recourse project finance structure assumed, based on experience with RESOP • Experience indicates that this is the most efficient financing structure Variable Assumption Percent Equity 30% After Tax Return on Equity 11% Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% 4164 FIT Price Derivation – Depreciation Assumptions • The majority of project capital costs were assumed to qualify for Class 43.2 Capital Cost Allowance treatment − Ranged from 60 to 80%, with more modular technologies (e.g., solar PV) assumed to have higher proportion of capital costs covered by Class 43.2 − The remaining portion of project costs assumed to be 8% declining balance 4165 FIT Price Derivation - Solar and Wind Assumptions Solar Wind Typical Size (MW) 10 100 Construction Lead Time 2 2 Capacity Factor (%) 14 (1) 30 (2) Capital Cost ($/kW) 4540 (1) 2710 (3) 15 (1) 55 (4) Fixed O&M ($/kW/yr) Sources: 1) Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 2) Based on actual performance in Ontario. 3) OPA analysis of various sources including Cambridge Energy Research, Black and Veatch, Energy Information Administration, and Ontario based developers 4) Energy Information Administration of the US Department of Energy, Annual Energy Outlook 2009. 4166 ()nluio Hm" .\ulhnn?n 4167 Scenario Analysis - Ground Mounted Solar PV • Range of reasonable assumptions could significantly improve Return on Equity. Scenario Capital Cost Fixed O&M ($/kW/year) Capacity Factor Percent Debt Interest Rate Return on Equity Derived FIT price (cents/kWh) Base Case 4540 A B C 4300 4400 4300 15 15 15 25 14% 70% 7% 11% 14% 75% 8% 12% 14% 80% 7% 15% 14% 75% 6% 15.75% 44.3 44.4 44.1 44.2 4168 Scenario Analysis –Wind • Range of reasonable assumptions could increase or maintain Return on Equity. Scenario Capital Cost Fixed O&M ($/kW/year) Capacity Factor Percent Debt Interest Rate Return on Equity Derived FIT price (cents/kWh) Base Case 2710 A B C 2650 2600 2710 55 55 55 55 30% 70% 7% 11% 31% 75% 8% 12% 28% 80% 7% 11% 30% 80% 6% 16.5% 13.5 13.5 13.5 13.5 4169 Cost Projections for Ground Mounted Solar PV Dollars per Watt installed 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Year Source: Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 4170 Cost Trends and Pricing Review • Costs are expected to continue to fall • Ontario’s FIT does not include Solar PV price degression like Germany or Spain • FIT pricing will be updated at two year review to reflect current market prices 4171 Conclusions • FIT prices were derived to incent development of best resources first • Actual project parameters will vary and FIT pricing allows for higher returns • Pricing for both solar and wind sufficient to incent new development in Ontario 4172 April 7, 2009 August 25, 2009 Proposed Feed-in Tariff Price Schedule Review of FIT prices and assumptions Stakeholder Engagement – Session 4 4173 Presentation Overview • • • • • • FIT pricing derivation Solar and Wind assumptions FIT model Scenario Analysis Solar cost projections and FIT pricing review Conclusions 4174 FIT Price Derivation • Prices based on the following elements – Capital costs • Reasonable project development, construction, and equipment costs – Operating and maintenance costs • Reasonable project staffing and maintenance costs, including ongoing capital expenditures 4175 FIT Price Derivation • Prices based on the following elements – Contract term • Assumed 20-year contract term – Reasonable rate of return – Efficient project financing structure given long-term power purchase agreement with a credit-worthy counterparty 4176 FIT Price Derivation – Location and Resource • Locational-based and resource-based pricing were also considered • However, these approaches are not being initially proposed due to – Complexity of methodology – Inconsistency with existing market design • IESO-administered markets do not have locational marginal pricing – Potential pricing distortions from current approach for allocating transmission facility costs – Objective of stimulating best resource locations first 4177 FIT Price Derivation – Model Overview • Prices developed using a Discounted Cash Flow (DCF) model – DCF models are commonly used in project finance • The DCF model calculates the prices required to – Cover the cost of investment – Cover ongoing operating expenses – Earn a reasonable rate of return over a 20-year contact term 4178 FIT Price Derivation– Model Overview A seven step process was used to calculate prices (1) Annual generation output is estimated for a given project based on the project capacity and assumed capacity factor (2) Operating expenses estimated and include fuel cost, variable operation and maintenance cost, fixed operation and maintenance cost (3) Annual depreciation calculated using an appropriate capital cost allowance rate 4179 FIT Price Derivation – Model Overview (4) Operating expenses, depreciation, interest, and income taxes deducted from revenue to arrive at net income (5) Depreciation added back to net income to estimate actual cash flow (6) Capital investment, debt borrowing, and debt repayment added to calculate free cash flow for each year (7) Free cash flows are then discounted using the target return on equity 4180 FIT Price Derivation – Financing Assumptions • Financing assumptions assume that financial markets stabilize and return to conditions that are closer to historical norms − Prices are to be maintained for an extended period, so a long-term view was taken 4181 FIT Price Derivation – Financing Assumptions • Non-recourse project finance structure assumed, based on experience with RESOP • Experience indicates that this is the most efficient financing structure Variable Assumption Percent Equity 30% After Tax Return on Equity 11% Percent Debt 70% Cost of Debt 7% Income Tax Rate 30.5% 4182 FIT Price Derivation – Depreciation Assumptions • The majority of project capital costs were assumed to qualify for Class 43.2 Capital Cost Allowance treatment − Ranged from 60 to 80%, with more modular technologies (e.g., solar PV) assumed to have higher proportion of capital costs covered by Class 43.2 − The remaining portion of project costs assumed to be 8% declining balance 4183 FIT Price Derivation - Solar and Wind Assumptions Solar Wind Typical Size (MW) 10 100 Construction Lead Time 2 2 Capacity Factor (%) 14 (1) 30 (2) Capital Cost ($/kW) 4540 (1) 2710 (3) 15 (1) 55 (4) Fixed O&M ($/kW/yr) Sources: 1) Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 2) Based on actual performance in Ontario. 3) OPA analysis of various sources including Cambridge Energy Research, Black and Veatch, Energy Information Administration, and Ontario based developers 4) Energy Information Administration of the US Department of Energy, Annual Energy Outlook 2009. 4184 ()nluio Hm" .\ulhnn?n 4185 Scenario Analysis - Ground Mounted Solar PV • Range of reasonable assumptions could significantly improve Return on Equity. Scenario Capital Cost Fixed O&M ($/kW/year) Capacity Factor Percent Debt Interest Rate Return on Equity Derived FIT price (cents/kWh) Base Case 4540 A B C 4300 4400 4300 15 15 15 25 14% 70% 7% 11% 14% 75% 8% 12% 14% 80% 7% 15% 14% 75% 6% 15.75% 44.3 44.4 44.1 44.2 4186 Scenario Analysis –Wind • Range of reasonable assumptions could increase or maintain Return on Equity. Scenario Capital Cost Fixed O&M ($/kW/year) Capacity Factor Percent Debt Interest Rate Return on Equity Derived FIT price (cents/kWh) Base Case 2710 A B C 2650 2600 2710 55 55 55 55 30% 70% 7% 11% 31% 75% 8% 12% 28% 80% 7% 11% 30% 80% 6% 16.5% 13.5 13.5 13.5 13.5 4187 Cost Projections for Ground Mounted Solar PV Dollars per Watt installed 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Year Source: Navigant Consulting, Inc., Photovoltaics in Ontario, January 2009 4188 Cost Trends and Pricing Review • Costs are expected to continue to fall • Ontario’s FIT does not include Solar PV price degression like Germany or Spain • FIT pricing will be updated at two year review to reflect current market prices 4189 Conclusions • FIT prices were derived to incent development of best resources first • Actual project parameters will vary and FIT pricing allows for higher returns • Pricing for both solar and wind sufficient to incent new development in Ontario 4190