Ontario launches programs to encourage community and aboriginal renewable power development

The Ontario government, through the Ontario Power Authority, recently launched the long-awaited Aboriginal Energy Partnerships Program ("AEPP") and the Community Energy Partnerships Program ("CEPP"). While the two initiatives were first announced as part of the Ministry of Energy and Infrastructure's 10-step countdown to renewable energy last September, their details were only recently made public.

As detailed below, AEPP is intended to promote and facilitate aboriginal participation in renewable energy projects. The CEPP has a similar goal for community participation. The programs are in addition to the rate adders available under the Feed-in Tariff ("FIT") program, which increase the price payable for power from qualifying aboriginal and community renewable energy projects.

AEPP

At the core of the AEPP is the Aboriginal Renewable Energy Fund (the "Fund"). The Fund will assist aboriginal groups in developing renewable power projects by providing grants of up to $500,000 per project. The grants are available to support pre-development work up to the point where the project receives a Notice to Proceed ("NTP") from the OPA under the FIT. Grants are available for pre-development work as follows:

• 80% of expenditures up to a maximum of $20,000 for pre-feasibility work, including initial resource identification, preliminary connection availability, identification of sites and developing a basic business plan and economic assessment;
• 60% of expenditures up to a maximum of $250,000 (in aggregate) for design and development work, including the completion of an environmental constraint analysis and the development of an outline of the regulatory approvals required for the project, as well as certain engineering work, the development of a business plan and economic analysis, and the obtaining of site/resource control;
• 40% of expenditures up to a maximum of $500,000 (in aggregate) for regulatory approvals, including studies required for a Renewable Energy Approval or other regulatory approvals.

The Fund will consider applications for projects over 10 kW in Ontario that have received the support of an aboriginal community falling into one of the following categories:

• a First Nation that is a "band" as defined by the Indian Act (Canada)
• the Métis Nation of Ontario or any of its active Chartered Community Councils
• a person, other than a natural person, that is determined by the Government of Ontario for the purposes of the FIT Program to represent the collective interests of a community that is comprised of Aboriginal individuals
• a corporation that is wholly owned by one or more Aboriginal Communities as described above.

Full program rules for the Fund are available online from the OPA.

In addition to the Fund, the AEPP also includes:

• the Aboriginal Renewable Energy Network, a web-based resource that is intended to help Aboriginal communities learn about developing renewable energy generation facilities and share knowledge and best practices; and
• a Aboriginal Community Energy Plan program, which is still under development, that will help aboriginal communities develop conservation and demand management plans.

The AEPP is managed by an Aboriginal Advisory Committee comprising eight members: five Ontario First Nations representatives, two Ontario Métis representatives, and one OPA representative. The Committee's role is to provide advice and guidance on various aspects of the AEPP, including sharing feedback received from the First Nation and Métis communities.

CEPP

The CEPP is predominantly (if not exclusively) a source of grants of up to $200,000 for community-based renewable power projects.

Unlike the AEPP Fund, CEPP grants are not available for pre-feasibility work. However, AEPP grants are available for both:

• design and development work; and
• regulatory approvals (as described in the context of the AEPP, above).

The maximum amount of grants available for a given project depends on its size and its renewable power source. Only certain design and development and regulatory approvals activities qualify for funding. CEPP grants will cover up to 90% of the actual costs of each eligible activity.

CEPP funding is only available to "communities" in Ontario, where a "community" is an entity that falls into one of the following categories:

• one or more individuals resident in Ontario;
• a registered charity with its head office in Ontario;
• a not-for-profit organization with its head office in Ontario;
• a "co-operative corporation", as defined in the Co-operative Corporations Act (Ontario), all of whose members are resident in Ontario;
• a private corporation whose shareholders all fall into the first four categories above, and for whom commercial electricity generation is not their primary business or employment;
• a partnership or limited partnership whose partners all fall into the first four categories above, and for whom commercial electricity generation is not their primary business or employment; or
• any legal entity that would be considered to have a 100% Community Participation Level under the FIT rules.

Additionally, CEPP grants are available only for renewable projects over 10 kW and under 10 MW located in Ontario that are not already funded by the OPA and that would be eligible for a FIT contract. Proponents must also be able to demonstrate the their projects are "economically viable," meaning that the project has a positive internal rate of return, inclusive of any benefits to the Applicant's community. This last requirement underscores the need for proponents to have completed pre-feasibility work before applying for CEPP funding.

Full CEPP program rules are available online.

CEPP will be holding a series of webinars to inform potential applicants about the grant process. The first webinar will be held on May 19.