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Posted in: Ontario | Energy Policy

Dec 21, 2017

OEB Publishes Its Strategic Blueprint

By David Stevens

Earlier this month, the Ontario Energy Board (OEB) released its Strategic Blueprint for 2017 to 2022. This document, titled “Keeping Pace with an Evolving Energy Sector,” sets out the OEB’s updated statement of “[its] Vision, Mission and Values and of the Goals and Objectives that will guide [its] work over the next five years.” The Strategic Blueprint was promised in the OEB’s most recent Business Plan and is said to reflect “the OEB’s recognition of the significant changes underway in the energy sector, not only in Ontario but around the globe.”

At the outset of the Strategic Blueprint, the OEB identifies four “Strategic Challenges” to be met in a period of accelerating change and transformation: Sector Transformation & Consumer Value; Innovation & Consumer Choice; Consumer Confidence; and Regulation “Fit for Purpose.” According to the OEB, meeting these challenges will continue the OEB’s current approach to consumer-centric regulation with a stronger emphasis on the new and different challenges posed by sector transformation.

The Strategic Blueprint document next looks at trends and developments in the energy sector and comes to a number of interesting conclusions. Among these are the following:

  • The OEB’s approach must be grounded in an appreciation of the circumstances in Ontario and of its own mandate. It should focus on how the OEB can best address sector evolution through the use of existing regulatory powers and tools, including rate making, infrastructure approvals, licensing, codes and rules, and the issuance of policy guidance.
  • It is premature to sanction or mandate, as some regulators have, a particular new business model for utilities or a specific new “platform” to accelerate the deployment of distributed resources – picking a particular model or platform at this point would impede innovation. However, a “wait-and-see” approach is not sufficient for Ontario. Instead, the OEB has the opportunity – and the responsibility – to support and guide the sector it regulates through the evolution underway.

Taking the foregoing into account, the OEB has created a set of “Strategic Goals and Objectives” to address the Strategic Challenges that it has identified. The Strategic Goals represent the specific outcomes the OEB aims to achieve with respect to each of the four Strategic Challenges and the Strategic Objectives describe the particular areas on which the OEB will focus in order to attain each of the Strategic Goals.

As an example, the OEB indicates that the “Transformation & Consumer Value” Strategic Challenge will be met when “consumers have confidence in the oversight of the sector and in their ability to make choices about products and services.” Among the ways that the OEB aims to achieve this Strategic Goal are by continuing the reform of adjudicative and other decision-making processes to enhance opportunities for consumer participation and by working with LDCs to pilot and test consumer reaction to new services and pricing models.

In relation to the “Innovation & Consumer Choice” Challenge, the OEB states that this will be met when “utilities and other market participants are embracing innovation in their operations and the products they offer consumers.” The OEB aims to achieve this Strategic Goal by (among other things): remunerating utilities in ways that encourage them to pursue cost-effective innovation in their operations and services; modernizing the OEB’s rules to reflect the needs of an evolving sector; addressing any unwarranted regulatory barriers to innovation and new business models that benefit consumers; and working with market participants to identify and understand emerging new energy-related “value streams” and service models.

It will be interesting to see how the themes in the Strategic Blueprint align with and are implemented in harmony with the direction provided in the 2017 Long-Term Energy Plan (2017 LTEP). As discussed in an earlier post, the OEB’s “Implementation Plan” setting out the steps the regulator intends to take to implement the goals and objectives set out in the 2017 LTEP will be submitted to the Minister of Energy by January 31, 2018.

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