ONT GOVT: NEWS RELEASE Ontario Reducing Costs for Future Homeowners

Province prioritizing affordability for families by unveiling plan to fix “last mile” barriers

October 21, 2024
Ministry of Energy and Electrification

TORONTO –The Ontario government is removing barriers that slow the construction of new homes and businesses by making it easier and more affordable to connect to the province’s world-class clean electricity grid.

According to Ontario’s Independent Electricity System Operator, the province’s demand for electricity is forecast to increase by 75 per cent by 2050. That includes growing demand from new homes and industry, each of which will need to be connected to the province’s growing grid. Under existing rules, the process can be slow and burden homebuyers and new businesses with unreasonable costs.

“Too many families face barriers to homeownership, and that is why we are acting on all fronts to reduce the cost for future homeowners and investors,” said Stephen Lecce, Minister of Energy and Electrification. “We are taking a generational lens to fixing a long-standing barrier for young Canadians to enter the housing market. As our population increases, our government will act decisively to implement our plan to connect the “last mile” so that ultimately, we cut costs for prospective homeowners and end the barriers to job-creating investment.”

The government intends to introduce legislation that will, if passed, support the construction of new homes and businesses by making it easier and more affordable to make those “last mile” connections. The legislation would amend the Ontario Energy Board Act, 1998 to enable regulation making authority to protect existing ratepayers while reducing upfront capital costs of new lines that would otherwise increase the costs to new homes and businesses.

Minister Lecce has also asked the Ontario Energy Board (OEB) to implement all recommendations from its Housing Connections Report, to dramatically reduce barriers to home building, job-creating investment, and agricultural expansion. Ontario’s plan to reduce costs for families and businesses owners includes:

• Amending the Distribution System Code (DSC) to extend the revenue horizon for connecting residential developments from 25 years up to 40 years, allowing the costs of new infrastructure that will serve this province for generations to be spread over a longer period.
• Amending the DSC to provide clarity regarding the conditions under which a local distribution company should extend the connection horizon for new developments.
• Establishing a new capacity allocation model that considers multi customer, multi-year projects.
• Establishing a Housing Electricity Growth Forum to bring together designated municipalities with housing targets, impacted local utilities, industry and construction leaders, and the OEB to discuss ways to accelerate connections while reducing costs.
• Minister Lecce also asked the OEB to consider further amendments to the DSC to extend the connection horizon for new electricity lines to housing development projects to 15 years.

“Our government knows that we need all hands-on deck when it comes to addressing the province’s growth and housing supply challenges,’’ said Paul Calandra, Minister of Municipal Affairs and Housing. “We owe it to the hardworking people of Ontario to help deliver the fully functioning infrastructure that supports the homes they need.”

These moves to reduce the costs of connecting to the grid will form a key part of the government’s vision for the future of the energy sector, which will be released in the coming days, and build on Powering Ontario’s Growth, the government’s pragmatic plan to meet growing energy demand and reduce emissions by expanding Ontario’s reliable, affordable and clean grid, including:

• Ontario’s Largest Competitive Energy Procurement – Advancing competitive procurement for new energy resources to Ontario’s growing energy needs.
• Nuclear Energy – Advancing reliable, affordable and clean nuclear power through pre-development work at Bruce Power, four small modular reactors at Darlington and supporting Ontario Power Generation’s plan for refurbishing the Pickering Nuclear Generation Station.
• New Transmission Infrastructure – Designating and prioritizing transmissions lines in Southwestern, Northeastern and Eastern Ontario that will power job creators including EV and EV battery manufacturing and clean steel production.
• Keeping Costs Down – Launching new energy efficiency programs on January 1, 2025, building on the government’s $342 million expansion of existing energy efficiency programs which are helping families and businesses reduce their electricity use so they can save money on their energy bills.
• Additional Competitive Procurements – A successful re-contracting of existing resources at about a 30 per cent discount and planning more competitive procurements for non-emitting electricity resources including wind, solar, hydroelectric, and bioenergy.

Quick Facts

• New regulatory making authority could allow the government to reduce costs for first-mover customers by allowing costs of new infrastructure to be allocated as additional customers in high-growth areas connect to the line, rather than all costs being paid by the “first mover.”
• The Housing Electricity Growth Forum will be chaired by the Deputy Minister of Energy and Electrification and the Deputy Minister of Municipal Affairs and Housing. The first meeting will take place before the end of the year.
• Ontario’s electricity system is among the cleanest in the world, powered by a diverse supply mix including nuclear, hydroelectric, renewables, natural gas and biomass.

• New regulatory making authority could allow the government to reduce costs for first-mover customers by allowing costs of new infrastructure to be allocated as additional customers in high-growth areas connect to the line, rather than all costs being paid by the “first mover.”
• The Housing Electricity Growth Forum will be chaired by the Deputy Minister of Energy and Electrification and the Deputy Minister of Municipal Affairs and Housing. The first meeting will take place before the end of the year.
• Ontario’s electricity system is among the cleanest in the world, powered by a diverse supply mix including nuclear, hydroelectric, renewables, natural gas and biomass.

Quotes

“We are actively listening to job creators in every industry across Ontario, addressing the barriers they’ve identified around connecting to the energy grid quickly and cost-effectively. By providing tools to get faster, more responsive, and more affordable last-mile connections to the grid, we’re ensuring industries can continue to invest and grow in our province, creating good, high-paying jobs for families now and into the future. We have also heard from Local Distribution Companies across the province about the need to continue efforts to build out the last mile connection and will continue working with them to ensure economic growth in every community in Ontario.”

– Sam Oosterhoff
Associate Minister of Energy-Intensive Industries

“As our province continues to attract record numbers of new investments by both domestic and international companies, these businesses will require clean, affordable and reliable sources of energy as they expand and grow their operations in Ontario. Reducing electricity cost burdens on businesses will help to ensure a competitive business climate that will spur economic growth and the creation of new, good-paying jobs for our highly skilled workforce.”

– Vic Fedeli
Minister of Economic Development, Job Creation and Trade

“We thank the Minister of Energy and Electrification for his endorsement of our recommendations. We are grateful to our stakeholders for their participation as we developed our advice, and we look forward to working with them to implement this important work.”

– Susanna Zagar
Chief Executive Officer, Ontario Energy Board

“We recognize the importance of making it more affordable to connect new homes and businesses to Ontario’s electricity grid. The government’s initiative to reduce upfront costs will help ensure that our growing communities have access to reliable and affordable power and will continue to make Ontario a destination of choice for families and economic investment.”

– Teresa Sarkesian
President and CEO, Electricity Distributors Association

“Facilitating supportive infrastructure like last mile connections is precisely the type of leadership we need from the Minister of Energy and Electrification to build more homes in Ontario. I’m very happy to see the Ministry continue to reduce regulatory barriers and help make housing more attainable for Ontarians.”

– Scott Andison
CEO, Ontario Home Builders’ Association

Additional Resources

Powering Ontario’s Growth

Learn about Ontario’s plan to provide families and industries with reliable, low-cost and clean power.

Building More Homes

Learn about the progress Ontario is making towards reaching its housing goals