M E M O R A N D U M

TO: Chair and Members of Development Services Committee

FROM: Viive Sawler, Manager, Markham Energy Conservation Office

DATE: November 20, 2007

SUBJECT: Update on OPA’s Integrated Power System Plan (IPSP)

RECOMMENDATION:

THAT the Memorandum titled, “Update on OPA’s Integrated Power System Plan (IPSP)” be received;

THAT Council supports the position that efforts on Conservation Demand Management (CDM) should be given priority and emphasized within the Province’s IPSP;

THAT Council supports the position that a greater system planning emphasis and dependence on distributed generation and district energy technologies in communities be included within the Province’s IPSP;

THAT Council supports an “integrated solution” for supply to Northern York Region comprised of: Demand Reduction; New Transformer Station capacity; and Local Generation as adopted by Council on September 27, 2005 and further endorsed by Council on April 24, 2007.

THAT The Town of Markham is strongly opposed to a transmission contingency solution for Northern York Region and requests the OPA to expedite supply options to Northern York Region that do not include transmission solutions;

THAT Council supports submission of this Memorandum to the Ontario Power Authority, the Ontario Energy Board, Hydro One, PowerStream, Region of York, and the Ministry of Energy;

THAT this Memorandum be forwarded to the Honourable M. Chan, M.P.P. Markham, the Honourable M. Racco, M.P.P. Thornhill, the Honourable Gerry Phillips, Provincial Minister of Energy, and to all Members of the Aurora-Markham Hydro One Task Force;

And that Staff be authorized and directed to do all things necessary to give effect to this resolution.

OVERVIEW:

On August 29, 2007, the Ontario Power Authority (OPA) filed an application for approval of the Integrated Power System Plan (IPSP) and certain procurement processes with the Ontario Energy Board (OEB). The IPSP is a plan for the management of Ontario’s electricity system and identifies investments in conservation, generation and transmission that will be required to ensure the adequacy and reliability of electricity supply and demand in Ontario for the future. The procurement processes are designed to manage electricity supply, capacity and demand in accordance with the IPSP.

On October 22, 2007, the OPA received a Notice of Application from the OEB instructing the OPA to develop a proposed issues list for the review of the IPSP and the proposed procurement processes. This is the first phase of a two step process. The issues identified will be considered as part of the review by the OEB of the system plan. Phase 2 is the review of the evidence filed by the OPA and any other parties and will be considered at a later date. The issues list is derived from the Ministry of Energy’s directives related to conservation, renewable supply, nuclear for baseload, replacement for coal fired generation and, natural gas generation to meet peak and intermediate requirements and the proposed procurement processes required to meet these directives. The OEB also outlines direction on how to participate in the development of the issues list. Comments are required to be submitted to the OEB by November 26, 2007 (30 days from the date of the Notice which was October 27, 2007).

Issues Related to Electricity Supply in Northern York Region

As a rapidly growing area in Ontario, York Region has experienced an electricity supply infrastructure shortage which has posed a long standing and contentious challenge, especially in Northern York Region (NYR). The Town of Markham continues to strongly oppose a transmission contingency solution for NYR and supports the OPA’s ‘integrated solution’ that is recommended in the IPSP as the preferred option to address the electricity supply infrastructure shortage in Northern York Region (NYR). The integrated solution is comprised of demand reduction across York Region, new transformer station capacity in NYR and local generation.

Demand Response is well underway in York Region being undertaken by the LDC’s (Powerstream, Newmarket Hydro and Hydro One). To-date DR has resulted in a 15 MW reduction in the area. DR programs are well underway and will be continuing providing even more reductions in the future.

Holland Transformer Station proposal received Environmental Assessment approval in 2007. Anticipated date for HTS being operational is summer 2009. This new transformer station capacity will solve capacity problems at Armitage TS.

Local Generation, the third component of the OPA’s recommended integrated solution, includes the siting of new gas-fired peaking generation plant in NYR to address a capacity need that will arise in 2013 and a security need that is present today. The recommendation is for 350 MW of natural gas fired peaking capacity. The OPA is not responsible for siting new generation plants as they are expected to be privately owned and operated. OPA is responsible for specifying electrical interconnection and launching a targeted procurement for a generation facility planned to be in service for the end of 2011. Projects will be evaluated for technical specifications, financial strength and participant experience.

The tentative schedule for the procurement process is:

RFQ Posted – December, 2007

RFQ Submissions due – March, 2008

RFP Posted – April, 2008

RFP Submissions due – October, 2008

Contract Award Announcement – December, 2008

Operational – 2011

This Memorandum reiterates the position supported by Council in September 2005 and further endorsed in April 2007.

ATTACHMENTS:

Staff Report - Status Report on the OPA’s IPSP, April 2007, V. Sawler

Extract from the Minutes of the Council Meeting April 24, 2007 – Status Report on the OPA’s IPSP.