In retrospect, the Ontario Sustainable Energy Association erred in adopting the language of its client, the Ministry of Energy, in writing its report Powering Ontario Communities.
Language has power and OSEA had chosen its preferred description, Advanced Renewable Tariffs, with care. Renewable Tariffs had been used in Europe and were commonly called feed laws. Later, more sophisticated versions of feed laws were implemented in Germany, France, and elsewhere. These were no longer simple feed laws and were more accurately described as Advanced Renewable Tariffs with the emphasis on “Advanced”. It was OSEA’s intent to bring these “advanced” feed laws to Ontario.
Ministry of energy staffers were not familiar with European renewable tariffs and resorted to terms they were familiar with from the 1980s: Standard Offer Contracts.
OSEA campaigned for Advanced Renewable Tariffs. Farmers and NGOs wrote letters of support for Advanced Renewable Tariffs.
The ministry staff responded to OSEA’s campaign by discussing Standard Offer Contracts in part because they objected to the term “tariff”. To Canadian ears, they argued, “tariff” conjures images of trade battles with their big neighbor to the south. OSEA countered that “tariff” is a commonly used term in electricity policy.
Ontario’s ruling party itself used the term “Advanced Renewable Tariff” in its endorsement of the policy concept. Nevertheless, in preparing its report for the Ministry of Energy, OSEA used the term demanded by its client. This was a strategic mistake.
Use of the term “Standard Offer Contracts” conveyed two messages unintended by OSEA: that the contracts may include more than renewable energy, and that the contracts would be “standardized” across the differing technologies.
Initially, the Ontario Power Authority wanted to include gas-fired cogeneration in the program. This was never OSEA’s intent. Further, the literal interpretation of the term “standard” implied that all technologies would be treated identically. It was always OSEA’s intent that each technology would be treated as unique and that prices and program elements would be determined by the nature of the technology.
For example, the price for solar energy would be significantly higher than that for wind energy. Prices for hydro and biomass could also differ but OSEA had little experience with these technologies. OSEA also proposed tiered prices for wind energy to reflect differing wind resources across the province. However, for hydro, biomass, and solar, OSEA suggested a flat price for the entire contract period.
As an illustration of the conceptual differences, one Ministry staffer exclaimed in frustration that “this is the most non-standard, standard offer contract he’d ever seen.” Indeed, responded OSEA, the program was never intended to standardize the treatment of each technology and OSEA was only using the term “Standard Offer Contract” to cooperate with the ministry.
Unfortunately, OSEA could not carry the day, the difference in terminology and outlook resulted in a simpler program than originally proposed. The tariff or price paid for each kilowatt-hour was the same across all technologies except for solar PV.
OPA added provisions for paying a bonus to hydro and biomass for generation during peak periods, but this is unlikely to have any significant effect on renewable development. Hydro plants that will be developed under the OSEA program will be run-of-the-river without any appreciable storage and thus will not generate substantial amounts of electricity during peak periods. Similarly, small, on-farm biogas plants will have little spare generating capacity available for peak generation because they will typically run their engines at near full capacity as much as possible.
Ontario’s final policy more closely resembles an older feed law than it does the Advanced Renewable Tariffs used in Germany and France.
Language, as political consultants know, has a powerful influence on policy.
