ONT POWER SURGE-CP

Ontario Power Generation has made $5.5 million privately selling clean energy credits

It’s unclear how Ontario Power Generation is using the profits, and whether unregulated credits are still being sold

Ontario Power Generation made $5.5 million selling clean energy credits in a private revenue-making scheme, according to a regulatory document obtained by The Narwhal.

The $5.5 million figure was listed in documents filed with the Ontario Energy Board (OEB) in May, the day after The Narwhal disclosed the sales of the unregulated credits. At the time, the power company hadn’t publicly announced its credit sales. The energy board regulates the province’s electricity industry and is currently investigating Ontario Power Generation’s revenue-making scheme.

In the May letter, Ontario Power Generation deemed the $5.5 million sales figure “immaterial revenues.” Although it confirmed the amount to The Narwhal, the company has been secretive about its program, declining to answer questions about how it used the money, who purchased the credits and whether it was still in the business of selling the credits to customers. 

The absence of immediate answers appears to show how the company can operate without adequate oversight, and profit from province’s largely clean grid at the expense of Ontarians.

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Clean energy credits are guarantees that one megawatt-hour of electricity comes from carbon-free sources like hydro, wind, solar and nuclear. Purchasing them allows businesses and consumers to claim that a certain amount of their energy comes from green sources, thus satisfying their environmental and sustainability commitments. Previously, the company told The Narwhal that its credits are based on its production of hydroelectricity.

Ontario has no official, centralized registry to track purchases of clean energy credits for electricity. The registry Ontario Power Generation has created is similar to voluntary registries that exist in more than a half-dozen U.S. states including Ohio, Pennsylvania, Illinois, Indiana and Wisconsin.

Kent Elson — a lawyer who represents the non-governmental organization Environmental Defence at Ontario Energy Board hearings and who first asked the board to investigate the sales  — told the board that Ontario Power Generation’s private credit sales could equate to approximately 6 million megawatt hours of clean energy or almost 10 per cent of the generator’s energy output. 

Ontario’s electricity grid is 94 per cent emissions free — a fact widely publicized by the power generator and the government for years. This fact forms the basis for all the emissions accounting done by Ontario municipalities and businesses. But regulators are failing to monitor whether credits sold by Ontario Power Generation to markets outside the province represent emissions-free energy that’s also being counted towards sustainability goals by locals — whether the credits are actually offsetting pollution from the buyers, or whether these buyers are paying for hot air. 

An Ontario Power Generation executive previously told The Narwhal in an interview that there is no double-counting of these credits, noting the sales are “tracked and monitored carefully” through third-party brokerage systems. 

In its May 6 letter to the energy board, Ontario Power Generation said revenue from these sales “will either flow back to ratepayers or be used to support future clean energy projects.” No evidence has been provided to The Narwhal to show this has occurred.

“The OEB is carefully considering this matter and we will be prepared to comment further at the end of our process,” Mary Ellen Beninger, a spokesperson for the board, said in an email. Beninger did not specify what the timeline of the investigation is. 

An Ontario Power Generation facility
Ontario Power Generation is the province’s largest power generator. It is currently the subject of an investigation by provincial regulators for selling clean energy credits without public disclosure. Photo: Lars Hagberg / The Canadian Press

While the investigation continues, Ontario’s re-elected Progressive Conservative government is pushing forward with its plan to create a voluntary clean energy credit registry that would legitimize these sales and create a public accounting system for them. Ontario Power Generation has agreed to track its sales in this registry once it exists.

In August, Ontario posted the proposal for the registry for public feedback, as it is legally required to do. Its proposal outlines that the registry would require generators to register to certify their clean energy production, after which each sale would be tracked and each credit retired afterwards, so that environmental credits are not resold, or counted more than once. The province’s goal is to monetize Ontario’s existing emissions-free energy while also incentivizing new clean energy generation. 

In an email to The Narwhal, Palmer Lockridge, a spokesperson for Ontario’s energy minister, Todd Smith, said this type of registry is “a proven tool, used across North America and Europe, which would allow businesses to demonstrate that their electricity has been sourced from a non-emitting resource, while supporting the future development of new clean energy generation in the province and providing value to ratepayers.”

“Establishing a common registry to track the creation, trading, and retirement of all [clean energy credits] produced and consumed in Ontario will ensure transparency, accountability and preserve the cleanliness of Ontario’s electricity supply,” Lockridge wrote. 

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We hear it time and time again:
“These are the stories that need to be told and you are some of the only ones telling them,” John, a new member of The Narwhal, wrote in to say.

Investigating stories others aren’t. Diving deep to find solutions to the climate crisis. Sending journalists to report from remote locations for days and sometimes weeks on end. These are the core tenets of what we do here at The Narwhal. It’s also the kind of work that takes time and resources to pull off.

That might sound obvious, but it’s far from reality in many shrinking and cash-strapped Canadian newsrooms. So what’s The Narwhal’s secret sauce? Thousands of members like John who support our non-profit, ad-free journalism by giving whatever they can afford each month (or year).

But here’s the thing: just two per cent of The Narwhal’s readers step up to keep our stories free for all to read. Will you join the two per cent and become a member of The Narwhal today?

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We’re breaking news in Ontario
The Narwhal’s Ontario bureau is telling environment stories you won’t find anywhere else. Keep up with the latest scoops by signing up for a weekly dose of our independent journalism.
We’re breaking news in Ontario
The Narwhal’s Ontario bureau is telling environment stories you won’t find anywhere else. Keep up with the latest scoops by signing up for a weekly dose of our independent journalism.