October 17, 2014
Engaging the Ontario Public on Energy Issues
This report looks at how the public and small consumers can be effectively engaged and represented in the policy, regulatory, and siting areas of energy policy debates to help secure social licence. We conclude that there is need for coordinated, informed, and literate engagement on energy policy in Ontario. This engagement should be designed to respond to the single most pressing policy problem in energy planning: insufficient public dialogue and understanding of the real trade-offs inherent in energy policy as decision-makers try to balance environmental, economic, and reliability considerations.
Social licence—that is, the public’s acceptance or approval of a policy or project—is crucial for the successful implementation of energy policy and projects. This can be achieved through open dialogue, meaningful engagement, and information sharing with the public in a timely and transparent way.
Despite the need for social licence and its obvious benefits to proponents of energy projects, Ontario has not developed a good process for engaging the public in energy policy discussions. Ontario is not alone in this regard, as many jurisdictions struggle to secure social licence for their energy projects. A lack of social licence creates uncertainty, causes delays, and drives up costs.
Problems associated with securing social licence on energy issues are long-standing. Since the break-up of Ontario Hydro in 1998, the role of the public in energy planning has been poorly defined. This stands in stark contrast to some other jurisdictions, which have been proactive in clarifying the role of the public in energy planning. As a result, these jurisdictions have been more successful in securing social licence.
Moreover, securing social licence has become a crucial step for major infrastructure projects of all kinds. Our survey of comparative practice suggests that more structured public engagement in Ontario will lead to better outcomes.
The need for securing social licence through better forms of public engagement has been recognized by the Ontario government. In the summer of 2013, for example, there were four public consultations on aspects of future provincial energy policy. In 2014 the Ontario Energy Board has stated that it is moving towards a “consumer-centric” model of governance and initiated a number of public consultations.
This report builds upon Mowat Energy’s Getting the Green Light: The Path to Public Support for Ontario’s Power Plans. It looks at how the public and small consumers—in most cases the same people—can be effectively engaged and represented in three crucial areas of energy policy debates to help secure social licence:
- Policy: When the government develops new energy policies;
- Regulatory: When regulators decide how policies will be implemented, how rates will be designed and how costs will be allocated; and
- Siting: When decisions about the local siting of new energy infrastructure are made.
Energy literacy is one of the foundations for effective engagement in all three of these areas. Without a full understanding of the facts, or access to the required information when needed, the public cannot make informed choices about their own energy use, let alone the policies that affect the community more broadly.
Meaningful engagement needs to be included in a cohesive framework in all three areas. While there is effective consumer representation in regulatory hearings at the Ontario Energy Board (OEB), the province’s energy regulator, there is a lack of coordinated engagement throughout the energy policy process.
As the Ontario government explores options to realize its commitment to better public engagement, it could learn from other jurisdictions that have had more success. This report looks at six jurisdictions to see how they engage the public on the policy and regulatory questions at the provincial or national levels: Alberta, New Brunswick, Nova Scotia, Ohio, California, and the United Kingdom. In addition, and because infrastructure siting is even more controversial, we sought examples of jurisdictions that have been successful at securing social licence around siting at the local level: British Columbia, New South Wales, the City of Burlington, and two infrastructure agencies in the Greater Toronto Area: Metrolinx and Waterfront Toronto.
Based on these experiences, we conclude that Ontario can improve energy policy engagement. There is need for coordinated, informed, and literate engagement on energy policy in Ontario. This engagement should be designed to respond to the single most pressing policy problem in energy planning: insufficient public dialogue and understanding of the real trade-offs inherent in energy policy as decision-makers try to balance environmental, economic, and reliability considerations. When the public does not understand the reality of the choices that the community faces, energy policy and planning are exceptionally difficult.
In practice, our research leads to three recommendations:
Establish a public energy consumer advocate to engage the public and advocate on its behalf in policy and regulatory areas
An independent, arms-length energy consumer advocate would engage and inform small consumers (residential and small business), and advocate for the public in regulatory and policy forums. It should follow best practices from other jurisdictions that have similar bodies to engage with and advocate on behalf of the public and protect consumer interests. It will also communicate with the public, using plain language to explain complex policy issues. Although it will advocate for consumers, the Ontario energy consumer advocate will not displace the successful funded intervenor system that is currently in place in regulatory hearings, but complement it and make it more cost-efficient.
Create a charter of citizens’ rights for energy infrastructure siting
Siting of new energy infrastructure is possibly the most contentious aspect of energy policy. When the public is insufficiently engaged, public opposition is often directed towards siting decisions. At the same time, the benefits of strong and concerted public engagement can have long-lasting benefits. Of course, the effectiveness of public engagement on siting varies widely depending upon the project and the project’s proponent, whether that be a public sector body or a private developer. Some ensure that best practices are followed; others just do the minimum required. A charter of citizens’ rights for energy infrastructure siting would ensure that a project proponent’s public consultation plan could be consistently evaluated against a descriptive set of principles for effective public engagement. It would also clarify what can be expected in the process for both the public and the proponent, and require that the decision demonstrate how public concerns were considered.
Formalize the roles of intervenors in the regulatory process
The current funded intervenor model at the Ontario Energy Board, in which independent intervenors can receive payment to cover the costs of appearing before the regulator, has provided good value for consumers’ money, when measured from a strictly short-term financial perspective. However, there is significant room for improvement, primarily in formalizing the collaboration and accountability of these independent intervenors. Formalizing the independent intervenor system will ensure that a diversity of opinions are included in the regulatory process and that resources are allocated efficiently, while also examining long-term concerns.
The challenges in Ontario are long-standing but we can learn from other jurisdictions. Clarifying the role of the public, politicians, and expert planners is crucial since they all play important roles in the energy planning process. But it is imperative to define clearly where and when each exercises its power.
Like all areas of public policy, energy policy choices involve trade-offs. It is not usually possible to have inexpensive, reliable, and clean energy. Choices must be made to privilege some of these objectives over others. When consumers and the public do not understand the consequences of their choices—and, importantly, do not have to immediately or directly pay for their choices—energy policy becomes all the more challenging. By allowing the public to understand and grapple with complexity and make informed choices, public agencies can secure the social licence needed to carry out energy policy choices. By implementing the three recommendations in this report, Ontario can benefit from a better informed public more able to deliberate on and support the trade-offs inherent in energy policy.
Taken together, these three recommendations could lead to securing social licence through a more transparent and trusted public engagement process as well as a more energy-literate public in Ontario. Although some of these recommendations will have financial implications, the experience of other jurisdictions suggests that attaining social licence will lead to long-term savings.
We cannot underestimate the challenge in Ontario, where the debate has become highly charged and frequently distorted, but a more open, transparent, and deliberate process that coordinates all the areas—policy, regulatory, and siting—is necessary. Such a process would put the public at the centre of decision-making.
October 17, 2014