The Ministry of Energy and Infrastructure and Ontario Power Authority have done considerable work to enable the participation of the Community Power Sector. The following are key to helping the Community Power Sector participate in the FIT program:

â^s Via the Green Energy Act, MEI amended the Ontario Co-operative Act to enable the use of the co-operative corporation structure to raise community equity to capitalize projects.

â^s Via the Green Energy Act, MEI enabled the use of a Feed In Tariff for green power procurement, the best policy mechanism for empowering communities to participate in the delivery and sale of green power.

â^s Via the Green Energy Act, MEI enabled the development of Funds for Municipalities, Aboriginal and Community power projects.

â^s The OPA included a price adder for Community and Aboriginal projects in the FIT program.

â^s VIA the Green Energy Act, MEI articulated the â?oas of rightâ?? to connect to the electricity grid for green power developers. After the initiation period of the FIT program and when there is a better sense of where and how the grid will evolve in Ontario, the as of right principle will be applied to the FIT program. This is a key mechanism for the ability of communities to access the grid in the future.

X The FIT program rules around the initiation period attempt to put a process in place for designating grid access until the â?oas of rightâ?? principle kicks in. These rules, specifically the acceleration criteria, disadvantage Community Power projects with the potential result of cutting them off from grid access and the completion of their projects for the next 5-10 years.

General Comments

â?¢ We applaud MEI and OPAâ?Ts primary goal of developing the FIT rules in such a way as to get as many shovel ready projects in the ground as quickly as possible. Ontarioâ?Ts coal phase out, green job and economic strategy and transition to a green energy economy depend on it.

â?¢ Our greatest concern is that a community or aboriginal project that may be as shovel ready as a commercial project competing for the same connection point will never be able to make their case and therefore compete given the criteria for scoring points to claim acceleration days.

Proposed Amendment to the FIT Program

Issue : The following criteria for scoring points and process for acquiring a time stamp is biased toward commercial projects:

(a) proof of REA exemption â?" this criteria is relatively neutral. RES III and RESOP projects, all of which are commercial, are advantaged as some may have completed their EAs and are therefore exempt from the new REA. However, we believe some Community and Aboriginal projects are exempt from the Provincial EA process and/or the Planning Act and are therefore exempt from the REA.

(b) guaranteed price contract with supplier (major components manufacturing process in Ontario) - while this is an equally problematic criteria for community and commercial projects, it is conceivable a supplier, local or otherwise, would initially sign supply contracts with larger commercial entities who can make a significant down payment and who have an established credit history.

(c) previous experience â?" this is impossible where the project proponent is community or aboriginal power (with the exception of some Aboriginal and community power proponents such as Pic River First Nations and WindShare community wind co-op).

(d) secure financial backing â?" this is impossible for community and aboriginal project proponents who intend to raise their equity from community residents as opposed to â?odesignated equity providers who collectively have a tangible net worth of at least $1 million/MW of proposed Contract Capacity for each of the previous two yearsâ??. Community and aboriginal proponents will need a FIT contract and connection agreement BEFORE they can raise this level of community equity.

Based on the criteria score from meeting the above, a developer can claim a proportionate amount of acceleration days in order to increase their competitive advantage for an earlier time stamp.
(e) proposed COD acceleration days â?" these are based on accumulated points from the criteria above which are biased toward commercial projects.

Based on a tie, the following criteria will be used:
(f) evidence of the date that site access rights were secured â?" this is relatively neutral.

Recommendation

Under the Criteria Score, add a new criteria that is biased toward Community Participation Projects (as b,c,d are biased toward commercial projects). The Criteria could read something like:

Applicant is a Community Participation Project Proponent or Aboriginal Project Proponent that has a minimum 50+1% interest in the project.

1 bonus point for this criteria would allow some community and aboriginal projects to be more competitive, 2 or 3 bonus points for this criteria would equal the total bonus points for the 3 criteria biased toward commercial projects. It is imperative that the applicant be a Community Power proponent, as opposed to a commercial proponent who intends to include community equity.

The advantage of adding this criteria is that it aims at those projects that are the most shovel ready of the Community or Aboriginal projects thereby meeting the objectives of OPA and MEI.

The problem with this is it may require or presuppose proof that 50+1% of your equity is indeed from the community. I am not sure how one would prove that without actually securing the equity. It will be next to impossible to secure sufficient community equity without a FIT contract and connection agreement.

Perhaps a fund could be set up to provide bridge financing with the condition that the bridge financing be replaced with community equity within a certain amount of time as set out in the FIT contract.