- IESO Discusses Feedback and Timeline of Large Renewable Energy Procurement I
- April 7, 2015 | Author: Christopher J. Perez
- Law Firm: McCarthy Tétrault LLP - Toronto Office
Yesterday, the Independent Electricity System Operator (IESO) held an ‘industry dialogue’ meeting in Toronto, during which it discussed the feedback and comments it received on the draft contract and request for proposals (RFP) for the Large Renewable Procurement I (LRP). The IESO shared some of the ‘key issues/common themes’ that it received during the comment period and also revealed that, due to the large number of comments received and to administrative issues related to the recent IESO/OPA merger, the timeline for releasing the final documentation for the LRP would be postponed for at least one month until February.
During the LRP comment period, we had shared our ‘top ten’ issues with the draft documents. Some of these were echoed by the industry and, along with some other issues, were highlighted by the IESO at the meeting, including:
- Connection Availability Information - commenters requested more information regarding connection availability in order to make informed project decisions. The IESO commented that they are developing a process to convey such information to applicants shortly.
- Public Community Meetings - commenters noted that requiring 2 meetings in each affected community was too onerous; many suggested that only 1 community meeting should be required.
- Adjacent Landowner Agreements - commenters noted that the 100% threshold was too onerous. While there is no consensus on what threshold would be appropriate, the IESO stated that they are considering different options. One of the attendees of the meeting suggested that, instead of requiring agreement from all landowners adjacent to the parcel of real property on which the project is located, the requirement could be revised to only require agreement from landowners whose property is within a certain distance from the actual project structures (and thereby focus the requirement on the most proximate neighboring landowners). The IESO is taking the comment under advisement.
- Permitted Purposes / Non-collusion Requirements - commenters requested clarity regarding what communications were prohibited. Further, commenters requested that the restrictions accommodate partnerships between applicants and joint community meetings. The IESO noted that the relevant definitions would likely be evolving and that it was not their intent to stifle community involvement.
- Site Access Option Agreements - commenters suggested that the required length of option agreements to acquire necessary real estate could be shortened to 1-2 years following submission of the application, rather than until commercial operation.
- Termination for Convenience - commenters objected to this and noted concerns as to whether equity or debt financiers would accept such risks given the divergence from previous OPA contracts, and recommending that any voluntary termination right of the IESO be limited to the pre-construction period.
- Permitted Site Amendments - commenters raised concern over the sole and absolute discretion of the IESO on these matters.
- REA Appeals as Force Majeure - commenters suggested that REA appeals should be considered force majeure.
- Key Development Milestones - commenters noted that financial close does not necessarily occur prior to the commencement of construction and suggested that these milestones be revised to reflect that possibility.
The IESO noted that its presented list was not a comprehensive list of all comments that were received or that are being considered, but only the ‘high volume’ comments that multiple commenters made. They further clarified that the items discussed were merely under consideration by the IESO, and that no decision had yet been made as to whether such comments would be accepted or whether any other accommodating changes would be made.
In respect of the timeline postponement, the IESO stated that all relevant timelines would be adjusted as a result of the delay in releasing the final LRP contract and RFP (including the proposal submission deadline). The IESO intends to release interim updates and/or FAQs prior to the release of the final LRP documents.