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How is the Energy Sector Regulated?
- Who regulates?
- How regulation has evolved over the years
- Recent changes
- What and how the OEB regulates
Who regulates?
The Government of Ontario, through the Minister of Energy & Infrastructure, sets the legal and policy framework – passing legislation and regulations – that govern the energy sector.
The OEB has been given responsibility for implementing and overseeing this framework, ensuring that market participants comply with their regulatory obligations. In doing so, we balance various objectives, including protecting consumers’ interests and ensuring the viability of Ontario’s natural gas and electricity industries.
How regulation has evolved over the years
Ontario’s energy sector has been regulated in some form or another since the early 1900s.
For almost the entire 20th century, the publicly owned (Crown corporation) Ontario Hydro was the major force in Ontario’s electricity sector. Ontario Hydro dominated all aspects of the province’s electricity sector, serving as the dominant generator and transmitter of power and also had authority for setting rates. The OEB was created in 1960 with a limited mandate to set rates for the sale, distribution and storage of natural gas.
In the late 1990s, the government decided to embark on the restructuring of the electricity sector. Among the regulatory reforms were the breakup of Ontario Hydro, the creation of a wholesale electricity market and giving the OEB responsibility for regulating part of the electricity sector.
The natural gas sector has been evolving since the federal/provincial agreement in 1985 that deregulated the priced supply at the wellhead. In recent years the growth of natural gas marketers in the wholesale and retail markets has meant more choice for consumers when purchasing their natural gas commodity. The delivery of natural gas between provinces remains regulated by the National Energy Board and, within Ontario, by the OEB.
Recent changes
Ontario ’s energy sector has undergone many changes in the past decade. A series of new laws and regulations were put in place to help our province better respond to energy challenges and build a stronger, more viable and dynamic sector. These measures have meant significant changes for all involved. For example:
- We at the OEB have been given much broader powers and new responsibilities by the Government of Ontario;
- Market participants must comply with new rules and processes required by provincial legislation; and
- Consumers now have the opportunity to choose among energy commodity options.
What and how the OEB regulates
In regulating the province’s electricity and natural gas sectors, our responsibilities can be grouped into three main areas: market regulation; representing consumers’ interests; and policy initiatives. Here’s an overview:
|
Market Regulation |
Representing Consumers' Interests |
Policy Initiatives |
|
|---|---|---|---|
| What We Do | Regulate and monitor Ontario’s energy sector | Inform and safeguard consumers on energy matters | Contribute to the regulatory policy framework of the energy sector |
| Why We Do It | To promote an efficient, viable and sustainable energy sector and uphold the public interest | To help energy consumers make informed decisions and ensure their interests are protected | To meet emerging energy trends and challenges in the most effective way |
| How We Do It |
Applying codes, rules and guidelines Helping firms manage regulatory requirements Monitoring and enforcing compliance (e.g., audits, investigations) Adjudication (e.g., rate applications, facilities approvals) |
Publishing consumer information Maintaining a Consumer Relations Centre and complaint resolution process Ensuring firms meet their customer service obligations |
Advising the government on energy matters Implementing government reforms and policy initiatives Soliciting stakeholder input on significant energy issues Reporting by the Market Surveillance Panel Developing codes, rules and guidelines |