MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF QUÉBEC AND THE GOVERNMENT OF ONTARIO REGARDING

Transcription

1 MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF QUÉBEC AND THE GOVERNMENT OF ONTARIO REGARDING CONTINUED ENERGY COLLABORATION AND POTENTIAL OPPORTUNITIES FOR ONTARIO-QUEBEC ELECTRICITY TRADE AGREEMENT TO SUPPORT GREENHOUSE GAS REDUCTIONS DURING ONTARIO S NUCLEAR REFURBISHMENTS 2015

2 Memorandum of Understanding Regarding Continued Energy Collaboration and Potential Opportunities for Ontario-Quebec Electricity Trade Agreement to Support Greenhouse Gas Reductions During Ontario s Nuclear Refurbishments BETWEEN: LE GOUVERNEMENT DU QUÉBEC Represented by Mr. Philippe Couillard, in his capacity as Premier ministre du Québec, by Mr. Jean-Marc Fournier, in his capacity as Ministre responsable des Affaires intergouvernementales canadiennes et de la Francophonie canadienne and by Mr. Pierre Arcand, in his capacity as Ministre de l Énergie et des Ressources naturelles AND: (referred to as Québec ) (referred to as Québec ) THE GOVERNMENT OF ONTARIO Represented by Mrs. Kathleen Wynne, in her capacity as Premier of Ontario, and by Mr. Bob Chiarelli, in his capacity as Minister of Energy (referred to as Ontario ) WHEREAS Quebec and Ontario (collectively, the Parties ) have significant complementarities with regards to energy needs and resources; WHEREAS on November 21, 2014, Quebec and Ontario signed a Memorandum of Understanding to collaborate on concerted climate change actions; WHEREAS Quebec and Ontario have made significant progress enhancing electricity collaboration through the establishment of a Capacity Sharing Agreement, concluded by HQ Energy Marketing Inc. (HQEM) and the Independent Electricity System Operator (IESO) on May 8, 2015; WHEREAS Québec has surplus clean, low-carbon hydroelectric electricity supply; WHEREAS Ontario anticipates, over its nuclear refurbishment period, temporary increased electricity sector carbon emissions as a result of greater electricity production from its natural gas-fired generating resources during that time; 2

3 WHEREAS Ontario wishes to mitigate any increase in electricity sector greenhouse gas emissions over the nuclear refurbishment period, in accordance with its stated greenhouse gas reduction targets and climate change policies; WHEREAS, on March 2, 2015, HQEM and the IESO jointly signed a letter of common understanding (the HQEM/IESO Letter ) indicating their mutual interest in exploring the potential for sales arrangements to provide reliable, economic and low-carbon electricity supply from HQEM to IESO in order to support Ontario s nuclear refurbishment program; WHEREAS, on April 13, 2015, Ontario announced its intention to adopt a cap and trade system, the specific design of which would have significant implications for the trade of electricity; NOW THEREFORE, the Parties hereby set out their mutual understanding as follows: 1. CONTINUING COLLABORATION Quebec and Ontario recognize the potential for mutual benefits to both Provinces, now and in the future, from maintaining open and on-going dialogue on opportunities for bilateral energy collaboration. Quebec and Ontario will mandate their ministers responsible for energy and their Deputy Ministers to undertake to meet on a quarterly basis. These meetings will serve as a forum for on-going Ontario and Québec energy collaboration and to discuss and explore opportunities for greater electricity trade. The ministers will also mandate their respective energy agencies, Hydro Québec (HQ) and the IESO and, to continue to meet on a quarterly basis to share best practices, lessons learned and identify emerging opportunities, with regards to electricity trade. 2. BENEFITS OF AN ELECTRICITY TRADE AGREEMENT Consistent with the HQEM/IESO Letter, Quebec and Ontario acknowledge that Québec s clean, reliable hydraulic resources could prove to be an economic choice to meet a portion of Ontario s needs during Ontario s nuclear refurbishment period, resulting in lower costs to Ontario ratepayers. 3

4 Quebec and Ontario recognize that: Québec s provision of electricity to Ontario could reduce greenhouse gas emissions by decreasing the amount of natural gas-fired generation during Ontario s nuclear refurbishment period. Selling Quebec s hydroelectricity to Ontario would allow Quebec to benefit from its surplus electricity. Quebec and Ontario will mandate their ministers responsible for energy to direct their respective energy agencies, HQEM and the IESO, to engage in discussions and make necessary efforts to conclude a medium-term electricity trade agreement that aligns with Ontario s nuclear refurbishment period, where such an agreement would: On the basis of HQ s commitment to deliver clean electricity, mitigate anticipated increases in electricity sector greenhouse gas emissions by structuring the delivery of electricity from Québec to Ontario to displace Ontario natural gas-fired generation; Provide savings to Ontario ratepayers, and provide value to Québec; Complement other electricity wholesale market and policy initiatives in Québec and Ontario. 3. IMPLEMENTATION i. The Parties charge their ministers responsible for energy with directing their respective energy agencies, HQEM and the IESO, to make necessary efforts to conclude a medium-term electricity trade agreement, as set forth in this Memorandum of Understanding (MOU), and present such an agreement to their respective authorities for their consideration, no later than 120 days following the finalization of the design of Ontario s cap and trade system, as it relates to or impacts Ontario s electricity sector. This process shall not limit the ability of the parties to reach agreements, where appropriate and agreed to, before the above mentioned timeline. ii. For greater clarity, regardless of the outcome of 3.i above, following the conclusion of discussions regarding a medium-term electricity trade agreement, Québec and Ontario will continue to hold the quarterly meetings for Québec and Ontario electricity collaboration and to discuss and explore, on an ongoing basis and where warranted, opportunities for greater electricity trade, as referenced in Section 1. 4

5 4. GENERAL PROVISIONS This MOU does not create legally binding obligations on the Parties. The Parties may amend this MOU by a written document signed by each Party. Either Quebec and Ontario may terminate this MOU by providing at least 6 months written notice to the other Party. Signed in Québec City, this 11 TH day of September, 2015, one in French and the other in English, both versions being regarded as equally authentic. FOR THE GOVERNMENT OF QUÉBEC FOR THE GOVERNMENT OF ONTARIO Philippe Couillard Premier ministre Kathleen Wynne Premier Pierre Arcand Ministre de l'énergie et des Ressources naturelles Bob Chiarelli Minister of Energy Jean-Marc Fournier Ministre responsable des Affaires intergouvernementales canadiennes et de la Francophonie canadienne 5