Canada - Oil, Gas & Electricity (2024)

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On May 1, 2024, Ontario's Minister of Energy Todd Smith announced that he has asked the Ontario EnergyBoard (OEB) to explore options for an Electric Vehicle ChargerDiscount Electricity Rate to support the adoption of electricvehicles (EV). As stated in the announcement, the "new ratewould reduce the cost of electricity for public EV chargers inareas where demand for the service is only beginning toemerge" with the goal of making EV charging more available andaffordable.

On the same day, the OEB issued an invitation to stakeholders for ameeting on June 13, 2024, to "discuss a proposal for anelectricity delivery rate for public EV charging stations that havea low load factor, which aims to further facilitate the integrationof EV chargers with the electricity system." In itsinvitation, the OEB points to a report issued by Power Advisory in April 2023that discussed various rate options for EV charging aimed atincreasing EV adoption. One of the recommended options is a"low load factor rate." Effectively, this allows the EVcharging station owner to pay less for electricity service thanother customers with similar characteristics, presumably to passalong those savings to EV charging customers. The proposed new rateis aimed at incenting more EV charging infrastructure developmentand to expand the coverage of EV charging infrastructure. Each ofthose outcomes would be expected to encourage EV adoption. Oneapplication of the new rate structure could be for "fastcharging" EV stations, which typically exhibit high peakdemand requirements but may experience lower overall usage.

As set out in the OEB's notice, OEB staff has developed aproposal for an EV charging rate that "improves cost causalityand better supports the efficient integration of EVs inOntario." This will be a topic of discussion at the June 13,2024, meeting. The OEB staff proposal is not yet available –when ready, it will be posted here.

This project fits within the OEB's broader Electric Vehicle Integration initiative. Tasksalready completed include residential rate design to accommodateand encourage EV adoption (see our previous post titled Ultra-Low Overnight Electricity Rate SupportingEVs to Become Available in 2023) and amendments to the Distribution System Code tomake connection of EV charging infrastructure easier.

The Ontario government has announced an intention to have thenew rate for EV chargers available by January 1, 2026. It is notyet clear how the lower electricity rates would be funded.Presumably, that is among the items that will be discussed throughthe OEB consultation.

Around the same time that the Ontario government and the OEBannounced this new initiative to consider a lower EV charging ratefor some facilities, a session was held at the annual CAMPUT conference which asked the question ofwhat can regulators do to encourage public EV charginginfrastructure. Through this session, it was clear that anoverriding barrier to EV adoption is availability of publiccharging infrastructure. The provinces with higher levels of EVcharging infrastructure (and, to be fair, higher purchaseincentives) are the provinces with the highest adoption rates.Presenters at CAMPUT noted that if Canada is to meet its goal offull EV (or zero emissions vehicle) adoption for new cars by 2035,then there is a need for an immense growth in infrastructure– roughly a 16-fold increase in public EV chargers is needed.Whether there is a role for the federal government in thisevolution is an interesting question. Regardless, provincialpolicies, such as the one just announced in Ontario to encourage EVcharging infrastructure, will be important.

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