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Non-Utility Generators (NUGs)

On November 23, 2010, the Ontario Power Authority (OPA) received a directive from the Ministry of Energy instructing the OPA to enter into negotiations to sign new contracts with non-utility generators (“NUGs”) listed in Appendix A of the directive. In accordance with the terms of the directive, the OPA is not obligated to enter into a new contract with any NUG that does not meet the requirements outlined in the directive. As a result, the OPA does not expect to enter into any contracts that are not on terms that reflect a reasonable cost to Ontario electricity customers and the value of the NUG facility output.

To ensure the goals of the directive are achieved, the OPA is currently designing the procurement and evaluation process, and is committed to engaging with NUGs in a timely manner.   The OPA plans on dividing this procurement process into two streams; the key characteristics of each stream are outlined below:

STREAM A - FAST TRACK
(standarized contract structure)		 STREAM B - NEGOTIATED TRACK
(negotiated contract structure)
  • ≤20 MW capacity threshold
  • No restriction on capacity
  • For most NUGs, contract type will be based on Clean Energy Supply (CES)/Combined Heat and Power Standard Offer Program (CHPSOP) hybrid; for certain facilities, contract type will be based on Energy Recovery Standard Offer Program
  • Contract will be based on existing OPA forms of contract and will utilize the principle of “deemed dispatch”
  • Financial terms are individually negotiated
  • Financial and commercial terms are individually negotiated
  • All cost and benefits associated with behind-the-meter projects will be taken into account (Global Adjustment (GA), uplift, etc.)
  • All cost and benefits associated with behind-the-meter projects will be taken into account (Global Adjustment (GA), uplift, etc.)
  • NUGs  ≤20 MW will be given the option to identify, subject to the OPA’s approval, which stream they prefer, either A or B.  NUGs > 20MW will only have the option to enter Stream B.
    • The NUGs in Stream A with contracts expiring in the near-term will be prioritized based on the expiry date of their OEFC contract.  Process for addressing NUGs with already expired contracts will be determined on a case by case basis.
    • NUGs with contracts expiring in the next 2-3 years who are willing to engage and negotiate a replacement contract with the OPA may choose to enter Stream B. 

The OPA will notify NUGs via email and web postings of the process for engagement and will request that each NUG complete a questionnaire.

The OPA intends to host a stakeholder engagement session in the second quarter of 2011 to seek input into the proposed procurement process.  Following the stakeholder session and the finalization of the procurement process, the OPA will request each NUG to identify which stream they wish to be considered under. 

If you wish to provide any comments, or have any questions please direct them to: NUGs@powerauthority.on.ca