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(ON) Challenge to Changes in the Feed-in Tariff Program Dismissed by Divisional Court

Osler, Hoskin & Harcourt LLP — JDSupra — September 12, 2012


In its recent decision in SkyPower CL I LP et al v Minister of Energy issued on September 10, 2012,the Divisional Court dismissed the Applicants’ assertions that the Minister of Energy and the Ontario Power Authority (the OPA) had acted unreasonably in failing to process applications in accordance with the Feed-in Tariff (the FIT) rules and that the changes to the FIT rules were unfair, discriminatory, and ultra vires the enabling legislation.2 The application for judicial review, brought by 118 affiliated limited partnerships (the Applicants) that had submitted applications under the FIT program, was dismissed in its entirety.


In May 2009, the Ontario government brought into force the Green Energy Act, 2009 (GEA) and amendments to the Electricity Act, 1998 to allow for the development of a Feed-in Tariff (FIT) program for the streamlined approval and contracting of renewable energy projects such as wind and solar farms. Under the amendedElectricity Act, 1998, the Minister was given a broad discretion to direct the OPA as to the goals and content of the FIT program.

In September 2009, the OPA, acting on directions from the Minister that set out specific public policy goals to be included by the OPA in the design of the FIT program, issued FIT Rules 1.0.  These rules set out the specific procedures and criteria according to which FIT program applications would be received and processed for FIT contracts.

The FIT program created significant interest.  There were over 2,300 applications submitted between September 24, 2009 and June 4, 2010.  Nearly 250 FIT contracts were offered for large projects (i.e. Capacity Allocation Required projects) and 1,675 FIT contracts were offered for small projects (i.e. Capacity Allocation Exempt projects).

A scheduled review of the FIT program began in October 2011.  At that time, the OPA announced that FIT applications would not be processed during the review, and that any amendments to the FIT program would apply to all applications that had not received a FIT contract.  A new version of the rules, the FIT Rules 2.0, was posted on August 10, 2012. Applications developed under the FIT Rules 1.0 could be resubmitted under the FIT Rules 2.0, but would not be automatically eligible to participate.

The Applicants brought an application for judicial review claiming that significant time and investment had been wasted in putting together applications under FIT Rules 1.0, and that the new rules governing the eligibility restrictions on ground mounted solar projects based on municipal zoning, coupled with transition provisions which prohibited changing project lands on resubmission, effectively meant that even with withdrawal and resubmission under FIT Rules 2.0, none of their outstanding applications would be eligible under the new rules.

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