the impact of the SCC decision in Hryniak

The Supreme Court of Canada released it’s decision in Hryniak v Mauldin last year and it’s impact is being felt across litigation circles and particular in complicated actions like environmental litigation.

The ability to launch a motion for summary judgment, while in most situations will increase access to justice and ensure proportionality in legal processes, can now have a chilling effect on the litigation of complex issues. Recent decisions have seen courts toss aside actions for failure to show sufficient evidence at hearing of a motion for summary judgment.

In the litigation of complicated issues requiring evidence of cause and damage related to pollution or contamination, there is almost always a reliance on expert evidence. The formulation of this evidence is usually furthered by full and fair disclosure between the parties. The ability to launch a motion for summary judgment before disclosure can handicap plaintiffs, particular where key facts necessary to show causation and damage lie in the hands of the defendant.

The Hryniak decision and the subsequent interpretation of that decision by courts have, in instances where there is a reliance on experts and particularly where key information in the hands of the defendant has not been disclosed, can actually serve to limit access to justice for those impacted by pollution or other environmental issues.

Combining this with the Inco case on damages and the bar to even get to trial has become significantly higher. Plaintiffs must be prepared to and able to present a significant portion of their case prior to any trial. In instances where judges use their fact finding powers under Rule 20, this ‘summary trial’ can put significant onus on the plaintiff to establish his/her case. It also puts significant reliance on the judge to search for and find the necessary facts and evidence that would otherwise be found through a more fulsome discovery process.

Environmental litigants need to be aware of this higher bar and many may rethink their action where the issues are overly complicated and/or where evidence lies in the hands of the defendants.  Environmental counsel will now need to be even more adept at distilling environmental issues into precise facts and combing through complicated or incomplete expert evidence to pick out the necessary elements needed to support an action through an early motion for summary judgment.

riparian rights

In the middle of such a cold winter it’s hard to think about water. But in a few months, snow and ice will be melting and rivers and streams will be overflowing. Every spring brings a new wave of people affected by the changing waterways, particularly following winters with heavy snowfalls. Heading into the fall, most of Ontario was wet. It was a wet summer in most places which kept normally dry creeks and streams, flowing strong in August and September. This meant more mosquitoes (As late as Thanksgiving on Lake Superior we had to use bug spray) and, more importantly, means that the ground was likely fairly well charged with water when everything went into deep freeze. With the ground filled with water and the significant snowfall we’ve had in most of the province this year, we can probably expect a lot of flooding this spring,  bringing with it damage and, no doubt, disputes.

So let’s do a refresher on riparian rights and how they can help us understand how we can protect our land in the face of flooding and protect our water in the face of measures taken to mitigate that flooding.

There are four relevant rights that will attach to any property that abuts a waterway.

Right to Quantity – Riparian landowners have rights to customary flows of water entering and exiting their property.

Right to Quality – Water should enter and leave a property in its natural state.

Right to Proper Drainage – Water should be properly drained onto and off of a property.

Right to Accretion/Erosion – As the waterways naturally change levels, the land exposed by natural drops in water levels become should become property of the landowner. Similarly, as shoreline is eroded this land is lost to the bed of the waterway and becomes property of the Crown. Note that for most waterways in Ontario, issues with these rights are mostly avoided based on the use of the ‘high water mark’ to determine property (vs. the use of the waters edge).

The applicability of each of these rights will depend on the jurisdiction you live in. While Ontario law recognizes, at least in part, these rights, other jurisdictions have overridden some or all of these rights with specific legislation. All these rights can be relevant when trying to protect your land or your water from flooding and/or contamination.

Disputes around flooding are based in a numbers of different causes of action. Everything from beaver dams restricting flow, to improper/negligent release of blocked water/ice dams can cause an infringement of riparian rights. It is important to know your rights as a landowner on a waterway. Not only flooding/restiction of flow but also water contamination can infringement those rights. Those with the proper understanding and advice on their rights will be able to best ensure their water-front property remains a natural and pristine piece of paradise.

microFIT 2.0 directive – launch expected soon UPDATED

UPDATE (December 6th): The MicroFIT application window will open on December 14th.

Finally, the OPA’s microFIT program is expected to start again processing applications. After a considerable hiatus, the program has been re-booted and is ready again to start issuing new conditional offers for microFIT contracts.

Ontario’s Minister of Energy released a directive to the OPA on November 23, 2012 to continue the microFIT program. The directive also touches on other issues related to ground mounted systems and constrained applicants. The entire directive can be read here.

The new program rules, discussed in an earlier post, will contain the new pricing schedule with rooftop solar priced at 55 cents per kWh.

While the new pricing is less than the initial 80.2 cents, it still represents a significant incentive. In addition, those acting quickly can take advantage of the decreased capital costs – the microFIT’s delay has caused a stockpile of equipment across the province.

Prospective proponents should always seek out a professional before engaging in a microFIT project. Call Graystone Environmental to get professional advice and ensure the success of your microFIT project. Contact Roxie Graystone at (613) 862-0551 or roxie.graystone@envconsult.ca.

Find out more about Graystone Environmental.

summary of new microFIT 2.0 rules

The new MicroFIT 2.0 rules were announced this week to the delight (and relief) of many in Ontario’s solar industry. Read all the new program documents here.

Here is a review of the new process:

1. Register

2. Submit an application

3. Application is reviewed and either ‘Terminated’ for incompleteness or, if complete, OPA will confirm caoacity under the remaining Annual Procurement Target. If there is capacity, the applicant’s status is sent to ‘Pending LDC Offer to Connect’. All applications not obtaining capacity by years end, will be terminated.

4. Applicant has 30 days to request a connection from the applicable LDC and 90 days after that must receive an offer to connect. The LDC communicates this to the OPA. After the 90 day limit is passed without an offer to connect, the application is terminated

5.  OPA will approve the application upon LDC confirmation that an offer to connect has been issued (and provided the application meets all MicroFIT requirements).

6. The applicant will have 180 days to install the project and obtain ESA approval, failing which the application will be terminated.

7. Applicant provides particulars of the project to the OPA and OPA offers a final contract if all requirements have been met.

Other than process, there are of course new prices for the various generation technologies. The prices were detailed in my March 29th post and can be found here.

For any questions or concerns with your MicroFIT project, contact Roxie Graystone at Graystone Environmental.

UPDATED – buying and selling constrained microFIT offers

On Friday, the OPA put a quick halt to the frantic rush to sell or move constrained microFIT offers before the new relocation options expire on May 31st. The OPA scratched the requirement for owners to submit option-specific forms complete with relocation/assignment details in favour of a single form. The new form is essentially just a way to reserve the option to take advantage of one of the 4 relocation options. All that is needed is the reference number, the applicant’s name, and evidence of a connection request that was made on or before August 19, 2011 and that was subsequently denied.  

 

The form will also give the OPA a better sense of how many owners will be take advantage of the ‘built project’ option. As I understand this fourth options (and details are not clear right now), the OPA will be facilitating the purchase of relocation of built solar PV systems that are not connected to the grid and that are in a capacity constrained area. How this will be done is unclear, however it may entail amassing a list of purchasers which may take time if there are a significant number of owners who need this type of relief. 

 

After owners have submitted their form, there will be no movement on the OPA’s part until the final microFIT 2.0 rules and contract are released. Given that the comment period on the draft rules ended on April 27th, I would not be surprised to the see the final rules announced in June. Once the new rules are released, constrained offer holders that submitted the necessary paperwork before the May 31st deadline will have (likely) 30 days to submit another application for the specific option they are choosing. 

 

While this change may have slowed the buy/sell market for constrained offers, once buyers are confident that any new option eligibility requirements are able to be met (or that there will not be any changes to the eligibility requirements) the frenzy will likely again pick up. With buyers willing to pay pwards of  $10k to $12K for an single offer, there will likely be no shortage of opportunities for constrained owners looking to sell or move their conditional offers. 

 

For trusted, professional advice on buying, selling, or relocating your constrained microFIT offer, contact me at roxie.graystone@envconsult.ca. 

buying and selling constrained microFIT offers

With the release of the OPA’s new policy dealing with constrained MicroFIT projects, there is a rush to find buy/sell/relocate these projects before the May 31 deadline. The offering price for conditional rooftop solar offers is quickly rising. These 80.2 cents/kWh offers are a commodity in a new world where the OPA’s pricing has been scaled back to 55 cents per. This (roughly) 30% price reduction means that annual revenues have decreased about $3,000 with the practical impact of stretching out the capital cost payback period. So, on it’s face the increasing value of these 80.2 cents offers makes sense. In fact, the total profit on a 10kW 80.2 cents contract will outpace that of a new 55 cents contract by almost $20k.

However, as the market has matured, capital costs have decreased. A system that was quoted to cost upwards of $70k at the onset of the MicroFIT program has almost been cut in half. So if a 10kW system now costs roughly $40k (for example) and annual returns have decreased to say $6k the payback period is still hovering around 7 years. Surprisingly, compared to the initial payback period, the payback now occurs slightly earlier (6-8 years versus 8-10 years).

Similar to the way these types of FIT programs have played out in Europe, the decrease in capital costs has outpaced the program price decrease, keeping the investment worthwhile and preserving the market that the initial prices created. In Ontario, the high initial program prices were needed to overcome the high capital costs and now that a provincial manufacturing base has been established and those costs have come down, the OPA’s purchasing price can now come down without harming the attractiveness of the investment.

So while the magnitude of the annual returns have gone down with the OPA’s new pricing, the payback period is actually a bit better because of the significant decrease in capital costs. This, along with difficulties in finding eligible assignees that can and will buy a constrained offer will moderate the selling price of these older offers but the difference in annual returns remains high enough to make these 80.2 cents offers very attractive.

For professional advice on buying or selling constrained MicroFIT offers, contact Graystone Environmental and we’ll put you in touch with a network of buyers/sellers and help you get the most out of your MicroFIT investment.

microFIT relocation options

Late last week, the OPA finally released its policy addressing relocation of MicroFIT projects that have been in limbo due to capacity constraints on local infrastructure. Read the policy here. The majority of these projects have been impacted by Hydro One’s TIRs, specifically its “7% rule” located in section 5.3.2 of the TIR.

The options are as follows:

1) Relocate to a new location

2) Assign the conditional offer to another constrained applicant

3) Combine an applicant’s multiple small projects under a Power Purchase Agreement

There is a fourth option addressing projects already built but those details are yet to be announced.

In order to qualify for these options, the application must have been submitted before December 8, 2010 and a condition contract must have been valid on August 19, 2011. The Applicant must also have requested authorization from the local distribution company to connect the project by August 19, 2011.

In order to access these options, applicants must submit a form to the OPA along with all supporting documentation, on or before May 31, 2012. All submissions must be accompanied by a letter from the local distribution company evidencing that the request to connect was denied.

For more information or for help exercising your options for capacity constrained projects, contact Graystone Environmental at (613) 862-0551 or roxie.graystone@envconsult.ca.

FIT review summary

The Ontario government released a two year review of the FIT program on March 22, 2012. To date, the program has contracted 4,600 MW of generation – enough to power 1.8 million homes a year. That’s almost 40% of all the houses in Ontario. Its estimated that the program has created over 2,000 direct manufacturing jobs with close to 30 solar and wind manufacturers operating or soon to be operating facilities in Ontario.

The review is undertaken pursuant to s.10.1(a) of the FIT rules and s.7(a) of the MicroFIT rules. The impact of this review is different for FIT and MicroFIT projects. Under the MicroFIT program rules, the review will not effect existing contracts or applications where a conditional contract has been issued. Under the FIT program rules, any ‘significant program amendments’ (the review’s price changes constitute a ‘significant program amendment’) that apply to applications submitted before the amendment is made will allow those applications the option to withdraw the application from the ‘Production Line’, decline to execute the offered FIT contract, or withdraw from the program all together. These options have to be taken within 30 days of the amendment. For amendments that are not ‘significant’ but represent a ‘material adverse effect’, an applicant may request to withdraw from the program.

The review in based around 6 strategic recommendations and 17 technical recommendations.

Key Strategic Recommendations

– Procurement of 10,700 MW of non-hydro renewable energy by 2015 (this would include the 4,600 MW already secured through the FIT program)

– Allocate 50MW of remaining 6,100 MW to hydro projects

– Review FIT prices annually

– Include solar PV (<500kW) in Environmental Activity and Sector Registry for self-screening as opposed to a full assessment under the Renewable Energy Approvals regulation

– Cut the commercial operation milestone for rooftop solar in half, from 36 months to 18 months

– Prioritize FIT applications based on points gained through Aboriginal, community/municipal involvement, project readiness and through some certain water/bioenergy projects

– Prohibit ground-mount solar (over 10kW) on prime agricultural land with class 1,2, or 3 soils or with organic or mixed soils

– Prohibit any size ground-mount solar in and around residential areas

– Decrease FIT pricing and set the price for a particular contract at the time of the contract offer as opposed to the time of the application:

(For Solar PV)

<10kW:  rooftop from 80.2 to 54.9 cents/kWh, ground mount from 64.2 to 44.5 cents/kWh

<100kW: rooftop from 71.3 to 54.8 cents/kWh

<500kW: rooftop from 63.5 to 53.9 cents/kWh, ground mount from 44.3 to 38.8 cents/kWh

>500kW rooftop from 53.9 to 48.7 cents/kWh

<5MW ground mount from 44.3 to 35 cents/kWh

Key Technical Recommendations

– Allow for existing contracts to withdraw from program and have security fees returned (this will help free up program space and infrastructure capacity)

– FIT projects would need to earn at least one point under the new points system to be eligible for a contract

– Under the MicroFIT program, issue an ‘application approval notice’ as opposed to a conditional contract

– Escalate a portion of the FIT price with inflation over time (but this is not applicable to solar)

– Maintain Hydo One’s technical limit for connection of micro-generation (7% rule), read a recent technical review of the issue here

– Projects with only minor transmission improvements should receive priority for contract offers

– End the ‘economic connection test‘

If you’re concerned how the FIT program changes affect you, get professional advice at www.envconsult.ca.

microfit lawsuits

People are not happy. There is a lot of uncertainty in Ontario’s renewable energy market right now, uncertainty that has been slowly manifesting into frustration for project proponents. The first and foremost reason for this uncertainty is the inability to get projects connected to the local distribution grid. The issue here, in some instances anyway, seems to be limits on the amount of micro-generation (< 10kW) that can be connected to a portion of the local distribution grid. For example, Hydro One invokes a limit of 7% of the total annual load on a line section, read more here at section 5.3.2. This limit has left countless project proponents waiting it what seems to be a never ending queue. Adding to the frustration of these proponents and Hydro One customers is the fact that other distribution companies, for example Toronto Hydro, don’t even have a limit for the amount of micro-generation that can be connected.

Another key issue causing delays in connecting projects are legitimate infrastructure deficiencies – i.e. the grid doesn’t physically have the thermal or short circuit capacity to handle all this new distributed generation that the FIT and MicroFIT programs have stirred up. This shouldn’t have been a shock to government or those in the industry. The government’s Renewable Energy Standard Offer Program identified these issues years ago, read here.

What is compounding these issues is the fact that eager salespeople have been pushing solar PV panels and grid-tied inverters, using the incitement of the MicroFIT payouts, without properly disclosing or advising their clients on the risks and uncertainties associated with getting into the MicroFIT program and obtaining a lucrative 20 year MicroFIT contract.

So what we have is a large amount of prospective project proponents that have made a significant investment in solar PV equipment and left by their salesperson, holding the bag. Waiting for a connection, in some instances that will never happen, while tens of thousands of dollars in equipment gets rusty in a field or on a roof.

From some of my other posts, I am adamant that all this wasted investment could have been avoided with a trip to a real professional before such large projects were undertaken. Installers say… “You don’t need a lawyer. Its a standard form contract!”. Well so is a mortgage. What is really frustrating here is not that investors didn’t seek legal advice, they relied on people that held themselves out as ‘experts’. No, what is frustrating is the con that has and continues to happen. Companies selling complete solar PV projects, using the MicroFIT program to lure unsuspecting investors in, and then ignoring or intentionally neglecting the fact that actually getting a MicroFIT contract is never guaranteed. From the cases I’ve seen, that is almost always the case. No disclaimers. No caveats. No discussion whatsoever on the uncertainties that exist when trying to actually make the money that these salespeople promise.

The lawsuits have begun. If you’ve been caught, if you have an investment in a renewable energy project that is wasting away because you were led to believe that a MicroFIT contract is all but inevitable, visit http://www.MicroFITlawyer.com and talk to a lawyer about your options.

hudak vows to cancel feed in tariff program

Today, Tim Hudak announced his intentions to end the lucrative (and successful) FIT programs that have been responsible for a surge in Ontario’s green economy.

Questions abound now about what this means… What will happen to all those conditional contracts? Will the Tory’s move to suspend or cancel any final contracts? Will they continue infrastructure improvements needed to fulfill existing contracts?

A vague and ambiguous announcement today that brings nothing but more uncertainty and legal problems to those trying to participate in Ontario’s green boon. Check back soon for more! And check out www.microfitlawyer.com if you’ve got legal problems with your FIT or MicroFIT project.