Report to: General Committee Report Date: April 16, 2007

SUBJECT: Status Report on the Ontario Power Authority’s Integrated Power System Plan (IPSP)

PREPARED BY: Viive Sawler, Manager, Markham Energy Conservation

Office - x 7523

RECOMMENDATION:

THAT the Report titled, “Status Report on the Ontario Power Authority’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;

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 Report to the Ontario Power Authority, the Ontario Energy Board, Hydro One, PowerStream, Region of York, and the Ministry of Energy;

AND THAT Staff be authorized and directed to do all things necessary to give effect to this resolution.

EXECUTIVE SUMMARY:

Not applicable

FINANCIAL CONSIDERATIONS:

Not applicable

1. Purpose 2. Background 3. Discussion 4. Financial

5. Others (Environmental, Accessibility, Engage 21st, Affected Units) 6. Attachment(s)

PURPOSE:

The purpose of this Report is to provide Committee with an update on the status of the Ontario Power Authority’s Integrated Power System Plan (IPSP) and outline the Town of Markham’s position in terms of supporting Conservation Demand Management, distributed generation and district energy technologies and a lessened dependence on the high voltage transmission system.

BACKGROUND:

Ontario’s electricity sector has reached a challenging point in history. The system has less capacity today than it had 12 years ago while demand has increased due to population and economic growth. The Ontario Power Authority was established in 2004 with a mandate to address the Province’s electricity conservation and supply challenges.

In December 2005, the OPA delivered the Supply Mix Advice Report (SMA) recommending options for the future development of Ontario’s electricity system. In June 2006, the Ontario Ministry of Energy issued its Directive specifying the relative contributions to be made from Conservation Demand Management (CDM), renewable generation and conventional sources of supply. Between June 2006 and January 2007, the OPA held various stakeholder workshops and teleconferences to solicit feedback on the eight Discussion Papers that were published to inform the IPSP. The Preliminary IPSP was released in February 2007 and represents a mechanism by which key electricity system, sustainability and government policy requirements are met. With the input from the stakeholder consultation process, the OPA will refine the Preliminary Plan into a recommended plan that the OPA will file with the OEB in the spring/summer of 2007.

OPTIONS/ DISCUSSION:

The IPSP is intended to present a vision of Ontario’s electricity future and the steps that must be taken today to make it a reality in the near and longer term future. It will map out changes to how electricity is made as well as consumed and will include newer, cleaner and more efficient technologies while providing a greater role for conservation and renewable energy resources. The Plan will cover the next 20 years through to 2027 and will be renewed every three years to adapt to changing conditions, new information and emerging technologies.

Below is a summary of the key initiatives of the OPA’s Preliminary Plan that will be put into place in the near, mid and longer term.

Near Term – 2008 – 2010

· More conservation programs

· Hydro electric resource development around the province

· Increased interconnection capability with Quebec

· More combined heat and power facilities

· Coal phase-out plan put into action

· Urgently needed natural gas generators, including those in northern York Region and around Kitchener

· Transmission reinforcements in the GTA and Windsor-Essex

· Also need to make decision about what’s required in medium term – i.e., refurbishing nuclear units at Pickering B, whether to buy power from other provinces under long-term contracts

Mid-Term – 2011 – 2015

· Complete coal phase-out

· Add more renewables

· Pursue Pickering B refurbishment or alternative

· Decide on refurbishment of Darlington

· Decide on transmission upgrades for west of Sudbury, south of Barrie and Sudbury to GTA

· Decide on a third supply line to Toronto

· Decide on wind developments for eastern Lake Superior, eastern Lake Nipigon, Manitoulin Island and the Bruce Peninsula

· Decide on renewable energy imports from neighbouring provinces

Long-Term – 2016 – 2027

· Refurbish or retire active nuclear units

· Develop hydroelectric projects in northern Ontario as transmission permits

· Continue to evaluate changes in demand, technology and socio/economic contexts

As summarized in an earlier Report to General Committee, General Comments on Ontario’s Future Energy Supply Mix, April 3, 2006, the Town of Markham has actively pursued and demonstrated a leadership role in Conservation Demand Management by establishing the Markham Energy Conservation Office (MECO) in partnership with PowerStream in 2005 and by investing in distributed generation and district energy technologies through Markham District Energy Inc., a wholly owned company of the Corporation of the Town of Markham that was created in 1999.

With respect to high voltage transmission lines, the Town of Markham continues to strongly oppose a transmission solution as demonstrated with the Markham-Aurora Hydro One Task Force experience. 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. There are two main options for addressing this problem: the construction of local generation, or the upgrade of transmission capability to the Region to bring in system generation that must be installed elsewhere. On September 27, 2005, Council resolved that the Town of Markham continues to strongly support the preferred “integrated solution” recommended by the OPA in their report, Northern York Region Electricity Study, submitted to the Ontario Energy Board in September 2005 which was comprised of: demand reduction across York Region; new transformer station capacity in northern York Region; and, local generation in Northern York Region.

In the OPA’s Discussion Paper #5: Transmission (November 13, 2006), the recommended plan consists of the 3-pronged integrated solution. However, the document also indicates that: “In the event that a successful procurement contract for local generation cannot be concluded, the alternative option is to upgrade the line from the Buttonville Station to Gormley with a double-circuit 230 kV line and build a transformer station at Gormley” (page 99). The Town of Markham does not support this alternative. A transmission solution does not need to be pursued at this time, and should not be pursued given the extensive public opposition and the detrimental social, economic and environmental impacts. There are many technical and public policy reasons to favour a solution encompassing local generation rather than transmission using generation elsewhere.

FINANCIAL TEMPLATE: (external link)

There are no direct financial implications for the Town of Markham. However, the final IPSP approved by the Province will have an impact on rates for the generation, transmission and distribution of electricity.

RECOMMENDED

BY: ________________________ ________________________

Viive Sawler, Manager, MECO Jim Sales, Commissioner,

Community & Fire Services

ATTACHMENTS:

Minister of Energy’s Directive on Integrated Power System Plan, June 13, 2006.

Ontario’s Integrated Power System Plan – The Road Map for Ontario’s Electricity Future, Preliminary, February 2007, OPA.

Ontario’s Integrated Power System Plan – Discussion Paper 5: Transmission, November 13, 2006, OPA. (Please refer to link: http://www.powerauthority.on.ca/ipsp/Storage/32/2716_DP5_Transmission.pdf)