It took awhile to read, but gave me some insight into what is at stake, whose on the list, and who is not, when there is talk about the electrification of Ontario's remote Northern First Nations......A lot can be interpreted from what is said in the following dialogue between these MPPs....

Link: http://www.ontla.on.ca/web/committee-proceedings/committee_transcripts_details.do?locale=en&Date=2015-10-20&ParlCommID=8996&BillID=&Business=Ministry+of+Energy&DocumentID=29613

Ms. Sophie Kiwala: I’m delighted to be here today—it’s an historic day, I might add—particularly to chat about connecting First Nations to power. As I understand, there are currently a number of First Nations communities that still rely on diesel to generate their power. There has been significant conversation around the possibility of connecting these First Nations communities to the electricity grid.

As you know, I do have a First Nations reserve right next door to my riding of Kingston and the Islands—Tyendinaga—and we do have a number of issues there that we focus on. I am concerned and I’m also very encouraged by the conversation that this government has had around quite a number of aboriginal issues. It has reverberated in my community of Kingston and the Islands. It’s also a topic of conversation in the neighbouring areas to Kingston.

I was recently at a Sisters in Spirit Vigil in Belleville. There were quite a few comments there about how much they appreciate what the provincial government is doing for them.

I’m wondering if you can inform us as to what steps the government has undertaken to connect the remote First Nations communities in northern Ontario to the grid.

Hon. Bob Chiarelli: Certainly. Thank you, MPP Kiwala, for the question and for the interest in First Nation communities. It’s something that I think we all share around the table. It certainly is a priority issue for this government.

We’ve made the connection of remote First Nation communities a priority in our long-term energy plan, and we’ve been implementing that priority over the course of the last three years. The government recognizes that there are unique challenges associated with supplying remote communities with clean and affordable electricity.

In 2014, the Independent Electricity System Operator’s updated analysis shows up to 21 of the 25 remote First Nation communities in northwestern Ontario are economical to connect to the provincial electricity grid, reducing their reliance on dirty diesel generation. Grid access will enable growth and lower costs over the long run.

The IESO’s analysis indicates that transmission connection of up to 21 First Nation communities would result in savings relative to continued use of diesel generation in these remote communities over the next 40 years. Savings would accrue to the federal government and provincial ratepayers, who currently subsidize the cost of diesel. This is approximately a billion dollars in avoided costs for the federal government and the province, compared to the status quo of continued diesel over the planning period.

The province is working with the remaining four First Nation communities, those that will not be connected to the grid, to explore alternatives to reduce their dependency on diesel fuel. We’ll work also with the federal government and energy partners to support innovative solutions to supply electricity to these more remote communities, if I can put it that way.

The Remote Electrification Readiness Program, or RERP, is a provincial government funding program designed to support remote First Nation communities in developing community readiness plans to benefit from future transmission grid connection projects identified in the long-term energy plan. The 2014-15 budget allocated $1 million per year for three years toward the program, and it will be administered by the Ministry of Aboriginal Affairs.

The governments of Manitoba, Quebec, Newfoundland and Labrador, the Northwest Territories, the Yukon and Ontario have established a pan-Canadian task force to reduce the use of diesel fuel to generate electricity in remote communities. In addition, Watay Power, which is owned by a group of 20 First Nation communities, recently signed a partnership agreement—basically a public-private partnership—with Fortis-RES, an electricity transmitter. Watay Power can now take the next major step towards connecting remote First Nation communities in Ontario. This was really a transformational event, where we had 20 First Nations entering into a public-private partnership for commercial purposes in order to serve their communities.

Responsibility for electricity service in remote First Nation communities is shared between the province and the federal government. A fair cost-sharing agreement is critical to implementing the grid connection project. We are committed to working with our federal counterparts to make this project a reality. I might add that, given the fact that the federal government will be saving approximately $500 million, we still have no commitment—or we’ve had no commitment from the outgoing government, at least—to participate in any investments whatever towards bringing these remote communities into the grid.

At this point, I’d like to ask Deputy Minister Imbrogno and ADM Michael Reid from the strategic, network and agency policy division to expand further on these points.

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Mr. Serge Imbrogno: Thank you, Minister. I just would add a bit to what the minister said in terms of the remote First Nation connections.

There are 25 remote First Nations; 21 of them we believe we can connect economically through the grid. There are also four that we think aren’t economic to connect through the grid, but we’re working on on-site solutions for the other four First Nations. We think there are environmental benefits, economic benefits and social benefits to moving forward with this initiative.

Just a bit of expansion on working with the federal government: We’ve set up a deputy ministers’ committee with aboriginal affairs from the federal government, and NRCAN as well. We have a deputies’ working group that’s been trying to work through the economics of what it means to the federal government, what cost savings are in place for them, what cost savings are in place for Ontario, and how we can move forward together to make this initiative work.

Michael is part of an ADMs’ working group that has been really digging deeper into the numbers and trying to get the feds to provide some commitments, so maybe I’ll let Michael give you a bit more detail on the report that was done on the connecting and a bit of an update on where we are with the federal government.

Mr. Michael Reid: Thank you. Good morning. I’m Michael Reid from the strategic, network and agency policy division at the Ministry of Energy.

Remote connections is something that the government and the ministry care deeply about and have put a lot of time and effort into over the last couple of years. I’d just like to expand on some of the points that the minister and the deputy made, by way of a bit of background.

The 2010 LTAP, or long-term energy plan, declared remote community connections a priority, and that led to the government asking the then-Ontario Power Authority, which is now the Independent Electricity System Operator, to undertake a business case, essentially, of remote community connections. The IESO/OPA did that business case, unpacked that a little bit. It’s what led to the 2013 LTAP commitment to moving forward with the transmission connection of 21 remote communities.

Just by way of a bit of facts as well about the remote communities in Ontario: As the minister and the deputy have mentioned, there are 25 remote communities in Ontario. These are communities that aren’t connected up to the provincial transmission system and that rely on local diesel generation for their electricity production. There’s a total combined on-reserve population of about 15,000 in these 25 communities, and their peak electricity demand is about 20 megawatts, just to give you a sense of the size.

In terms of diesel consumption, these communities use about 30 million litres of diesel per year to generate electricity. There are all sorts of issues associated with that diesel, from the environmental issues through emissions as well as spills. Just getting the diesel into these remote locations as well is complex and costly, in that these communities are largely only accessible either through winter roads or by air. About 70% of the diesel, for example, has to be flown in. So again, it’s complex and costly to get the fuel up to these communities. And just by way of the cost of generating the electricity, it’s about 10 times the cost in these communities that it is in the rest of the province.

As I mentioned, following the 2010 long-term energy plan, the government asked the Ontario Power Authority to undertake a business case of what was possible with respect to the connection of these remote communities. The IESO did that business case and they found that in 21 of the 25 remote communities it made economic sense to connect them up via the transmission grid, which I’ll talk about in a little bit more detail. With the other four communities, although transmission connection was not deemed to be economic, the IESO recommended pursuing microgrids and alternative options to help reduce diesel use in these communities as well. Again, I can talk a little bit more about that.

In terms of undertaking this business case analysis, the IESO did consider a variety of options, and that included renewables and local microgrids as well as transmission connection. They posted their initial report in 2012, and it was shared with communities and engaged in consultation with communities as well. It was updated with the final report in August 2014, which solidified the conclusion that there were significant savings associated with the transmission connection of the 21 communities.

In terms of some of the high-level details or interesting points of the IESO’s analysis—transmission versus diesel—I’ve already mentioned some of the high costs and complicated factors of getting diesel into communities. Transmission takes away all of that. It’s just a lot more certain over a longer time period. They looked at a business case over a 40-year period, in terms of being able to supply power through the grid, and not subject to factors such as global oil prices, which do drive the cost of diesel around, as well as weather and other things that make it complicated to get diesel in there.

As well, grid connection would enable these communities to unlock some of their economic and also social potential. For example, a lot of the diesel systems are very constrained. You do hear stories about new housing stock being built in these communities and that you can’t actually connect up to the existing—there’s just not enough power to hook up new houses. Transmission connection will allow communities to take advantage of things like the new housing stock as well as local economic development opportunities. It will also, as a co-benefit, help unlock, in the Far North, natural resources, which could lead to private investment as well as other opportunities for the local First Nation communities.

The deputy and the minister have also mentioned the fact that this business case is a positive business case and does lead to significant savings for both the province and the federal government over this 40-year time frame. It’s roughly a billion-dollar savings that the IESO has calculated. That is shared between the province and the federal government. In these remote communities, the federal government is responsible for a lot of the direct diesel costs.

Just by way of a bit more detail, there are two different types of rural communities as well. It’s roughly a 50-50 split with the 25 communities. Roughly half of them are currently served by Hydro One remotes, so they are subject to OEB regulation, and it looks very similar to what things would look like in any other local distribution company across the province. The other half are what are called independent power authorities, or IPAs. It’s roughly 10 communities. These communities are the direct responsibility of the federal government. Not only are they not grid-connected, but there are also no regulatory or other touch points with these communities in terms of the delivery of power.

This cost-sharing, as the deputy has mentioned—there has been significant work done with the federal government over the last couple of years to make sure they’re well aware of this positive business case that the IESO has developed and also to try to get them to the table to recognize these costs and become co-sponsors of this project and contribute their fair share in accordance to the cost savings that would accrue to them. It has been a long time talking with them, and it has been difficult to get actual costs out of them, but we are continuing on with that work.

The Chair (Ms. Cheri DiNovo): Mr. Reid, you have about five minutes left.

Mr. Michael Reid: Okay.

In terms of just a little bit about the remote community connection project, it’s an about $1.3-billion total transmission build-out, which would be a very significant new build-out for the province, and there are a couple of different components of that. The first component is some reinforcement of the existing transmission system, so, roughly, from the Dryden to Pickle Lake area. There are other local reinforcements that would need to be done in the Dryden and Red Lake area, and then there is the significant build-out of taking from the current transmission grid up to remote communities to build both new transmission and distribution infrastructure for those projects.

The minister has mentioned that Watay Power is a consortium of 20 First Nations, as well as a recently announced transmission partner in Fortis-RES, who are making significant progress in terms of moving this project forward. They have an improved environmental terms of reference, for example, and they’re applying for a transmission licence right now with the Ontario Energy Board. So it’s definitely continuing to move the markers and a very-good-news story, we think, in terms of very significant First Nations ownership and stake in that particular partnership.

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In terms of some of the work with the federal government that we’ve mentioned, we’re also working with our colleagues in other provinces, because remote communities are not a uniquely Ontario problem. In fact, there are nearly 300 off-grid communities across the country, with roughly 200,000 people living in these communities—largely aboriginal, but it’s a mixture of both aboriginal and non-aboriginal.

We realize that there are lessons to be learned in terms of some of the specific projects that are under way in other provinces. That has led to the establishment of what is called a pan-Canadian task force on remote communities. The task force will be chaired by Manitoba, but we’ve been keenly involved with them in terms of spearheading this particular effort. They have recently sent out a letter to all provinces and territories, asking them to become part of this pan-Canadian task force.

The key things that this task force would do are largely sharing of information across the country and working together to develop consistent approaches to getting off-grid communities connected, as well as consistent approaches with the federal government, because all other provinces and territories, I think it’s fair to say, are experiencing the same difficulties that we have in terms of engagement with the federal government.

This task force will aim to prepare a joint report amongst all participants that will outline some of these experiences and maybe some of the things that worked, and look into communities, as well, to understand what works in communities in terms of moving these projects forward and identifying other opportunities for collaboration.

The last thing that I would mention is focused a lot on the transmission connection. It is a very significant project that we’re devoting a lot of time and resources to, but, as I mentioned, there are four remote communities for which transmission connection wasn’t identified as a viable economic opportunity. Those communities are Whitesand, Gull Bay, Fort Severn and Weenusk. The ministry’s and province’s remote strategy is also making sure that we are working with those four communities to identify what makes sense in their areas to help displace diesel use. That’s both the ministry as well as the IESO doing that work.

For example, with Whitesand, the ministry has been working with them over the past year or so on a fairly interesting biomass project that could have significant benefits for the community, both in the sense of displacing diesel power but also the potential for a lot of economic development and job opportunities—a lot of social co-benefits. I think that’s one example where we’re trying to move forward with these four communities.

Some of the other things that are going on with these four communities: For example, for the Fort Severn First Nation, there has been a recent announcement through the Northern Ontario Heritage Fund Corporation—

The Chair (Ms. Cheri DiNovo): I’m sorry, Mr. Reid. Your time is up. Thank you.

We now move to the official opposition: Mr. Smith.

There is more....but only for those who like to read and read and read....

GLTA,

TM.