Air Pollution and Electricity Restructuring
In 1999 the ECO received an application for review that raised concerns about potential worsening of air pollution from the electricity sector as a result of the government’s restructuring of the electricity market. The applicants requested a review of the need for new limits on total electricity-related air pollution emissions for both domestic and imported electricity. The applicants proposed specific limits for sulphur dioxide (SO2), nitrogen oxides (NOx), greenhouse gases (such as CO2), arsenic, beryllium, cadmium, chromium, lead, mercury and nickel. Because limits on air emissions are regulated under the Environmental Protection Act, the ECO forwarded this application to the Ministry of the Environment.
The ECO also sent the application to the Ministry of Energy, Science and Technology, since the applicants proposed a number of mechanisms that could be used to limit electricity-related emissions that fall under the jurisdiction of MEST. MEST and several of its Crown agencies, such as the Independent Electricity Market Operator (IMO) and the Ontario Energy Board (OEB), are currently developing the rules and procedures for the operation of the new open electricity market. The applicants also raised the issue of the need for the government to encourage fuel switching (switching from coal to natural gas and renewable energy) and energy efficiency and conservation (reducing the demand for electricity) in order to reduce emissions. These policy issues are within the mandate of MEST.
Both ministries decided not to under take the requested review, saying that the issues raised in the application were already being examined through other processes. At the time of its response in August 1999, MOE said it was currently considering options for limits on emissions from the electricity sector, and working through two different processes with the federal government and other provinces. According to MOE, “under the Canada-Wide Standards process, recommendations will be made on controlling sources of mercury releases to the environment, including the electricity sector,” and “under the National Climate Change process, issue tables are examining options for meeting Canada’s potential Kyoto commitments. One issue table is devoted to the electricity sector.” The ministry also said that any environmentally significant legislation that was developed would be posted on the Environmental Registry for public review and comment.
The ECO accepts MOE’s rationale for not carrying out the requested review under the EBR, since other review processes were under way at the time of the application. But the response to the applicants was far too brief, failed to address the applicants’ concerns adequately, and ignored some concerns altogether. The ministry did not provide details on the options it was considering for limits on emissions. Nor did MOE’s response address the specific pollutants listed in the application, other than mercury. Subsequently, in January 2000, MOE provided notice on the Environmental Registry of three proposed regulations relating to electricity restructuring: new emission limits for NOx and SO2, two of the pollutants of concern in this application; and an emission trading system for these two pollutants. Although no new emission limits were proposed for any of the other greenhouse gases or toxic pollutants listed in the application, the ministry did propose mandatory monitoring and annual reporting of emissions of these substances from the largest polluters in the industry, the oil- and coal-fired electricity generation facilities. It is not clear that any of the review processes referred to by MOE will address the applicants’ concerns in a timely manner, nor did the ministry say that it would consider the applicants’ proposals or supporting reports in the other review processes under way.
MEST also decided not to carry out the review requested by the applicants, in part because MOE was at that time addressing the main request by considering options for limits on emissions from the electricity sector. MEST’s statement that aspects of the application that pertain to MEST “are addressed by the processes for implementing the Energy Competition Act (ECA),” was vague and unhelpful, since the ministry did not explain which aspects were being addressed, nor by which processes. The only example MEST provided was a regulation passed in 1999 that does not directly address the matters raised in this application for review. The ministry’s response was silent on the applicants’ request for a review of the need for fuel-switching and energy conservation, even though these are core MEST strategic directions laid out in its Statement of Environmental Values under the EBR.
MEST has carried out a significant amount of public consultation on its electricity restructuring initiative, using the Registry to solicit public comment when it developed the ECA in 1998. But both the ECO and the minister’s advisory committee, the Market Design Committee (MDC), recommended in early 1999 that much more work, as well as major policy decisions, were still needed in order to protect the environment in the open market.
Both the MDC and the ECO also recommended that further public consultation was necessary to work out the details of rules to protect the environment. But with MOE, IMO, OEB, and MEST all working on developing rules and regulations in 1999 and 2000 for different aspects of the opening of the electricity market, public consultation about these important matters has been fragmented and important environmental issues appear to have fallen through the cracks. As the ECO recommended last year, MEST should prescribe relevant portions of the Ontario Energy Board Act and the Electricity Act under the EBR, so that environmentally significant regulations passed under these laws will be posted on the Environmental Registry for public comment.
The ECO made a number of recommendations to MOE and MEST related to electricity restructuring in the 1998 annual report. Since MOE had not made its decisions on any of the proposals for regulations as of March 31, 2000, and since many regulatory aspects of electricity restructuring are still under development in preparation for the planned electricity market opening in 2001, the ECO will wait to review the ministries’ response to our past recommendations and to the concerns raised in this application before making further comments. The ECO will continue to monitor how MOE and MEST handle the environmental effects of electricity restructuring.
| Recommendation 11:
The ECO recommends that MEST prescribe relevant portions of the Ontario Energy Board Act and the Electricity Act under the EBR so that environmentally significant regulations passed under these laws will be posted on the Environmental Registry for public comment. |
| This is an article from the 1999/2000 Annual Report to the Legislature from the Environmental Commissioner of Ontario. |
Citing This Article
Environmental Commissioner of Ontario. 2000. "Electricity Restructuring." Changing Perspectives, ECO Annual Report, 1999-2000. Toronto, ON : Environmental Commissioner of Ontario. 92-94.
