Auditor General

Auditor General’s Renewable Energy Initiative Recommendations

December 19, 2011

in Clean Energy Dialogues,FRED SEES,Green Energy Act,Human Health

On December 5th, 2011, the Auditor General of Ontario tabled his annual report.  His recommendations regarding forest management included the following:

1. To ensure that electricity ratepayers understand why their electricity bills are rising at a much higher rate than inflation, the Ministry of Energy (Ministry) and the Ontario Power Authority (OPA) should work together to increase consumer awareness of the concept of the Global Adjustment and make more information available on the cost impact of its major components.

2.  To ensure that senior policy decision-makers are provided with sound information on which to base their decisions on renewable energy policy, the Ministry of Energy and the Ontario Power Authority should work collaboratively to conduct adequate analyses of the various renewable energy implementation alternatives so that decision-makers are able to give due consideration to cost, reliability, and sustainability

3. To ensure that the price of renewable energy achieves the government’s dual goals of cost effectiveness and encouraging a green industry, the Ministry of Energy and the Ontario Power Authority should:

  • work collaboratively to give adequate and timely consideration to the experiences of other jurisdictions and lessons learned from previous procurements in Ontario when setting and adjusting the renewable contract prices;
  • work with the Independent Electricity System Operator to assess the impact of curtailing renewables as part of its energy planning in order to identify ways to optimize the electricity market; and
  • ensure that adequate due diligence is undertaken, commensurate with the size of electricity-sector investments.

4. To avoid unintended costs arising out of changes to regulatory requirements and changes to supply and demand situations, the Ontario Power Authority and the Ministry of Energy should work collaboratively with other ministries and agencies to ensure that they are made aware on a timely basis of anticipated policy and regulatory changes.

5. To ensure that the stability and reliability of Ontario’s electricity system is not significantly affected by the substantial increase in renewable energy generation over the next few years, the Ontario Power Authority should continue to work with the Independent Electricity System Operator to assess the operational challenges and the feasibility of adding more intermittent renewable energy into the system, and advise the government to adjust the supply mix and energy plan accordingly.

6. To provide investors who have submitted applications for Feed-in Tariff (FIT) projects with timely decisions on whether their projects can be connected to the grid and to ensure that adequate transmission capacity is available for approved projects, the Ontario Power Authority should work with the Ministry of Energy and Hydro One to:

  • identify practical ways to deal on a timely basis with the FIT investors who have been put on hold; and
  • prioritize the connection of approved FIT projects to the grid.

7. To ensure that the provincially reported estimate of jobs created through the implementation of the renewable energy strategy is as objective and transparent as possible, the analysis should give adequate consideration to both job-creation and job-loss impacts, as well as job-related experiences of other jurisdictions that have implemented similar renewable energy initiatives.

8. To ensure that renewable energy initiatives are effective in protecting the environment while having minimal adverse health effects on individuals, the Ministry of Energy should:

  • develop adequate procedures for tracking and measuring the effectiveness of renewable energy initiatives, including the impact of backup generating facilities, in reducing greenhouse gases; and
  • provide the public with the results of objective research on the potential health effects of renewable wind power.

Tagged as: Auditor General, FIT Program review, human health, renewable energy

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Auditor General’s Forest Management Recommendations

December 9, 2011

in Forestry,FRED SEES

On December 5th, 2011, the Auditor General of Ontario tabled his annual report.  His recommendations regarding forest management included the following:

1.  To better ensure that the province’s Crown  forests are successfully regenerated after  harvesting, the Ministry of Natural Resources  (MNR) should

  • follow up with those forest management companies that have not regularly reported on the results of their forest management activities in meeting the province’s stocking and silviculture standards; and
  • conduct scientific studies and research into  practices in other jurisdictions to ensure that  the stocking standard is adequate to ensure  that forest management companies are held  to a regeneration standard that will successfully renew harvested areas with the desired species.

Where forest management companies opt for lower-end regeneration activities, MNR should, as part of its review of Forest Management Plans, ensure that there is                       adequate justification for these less-expensive treatments and assess whether the treatments will achieve planned  renewal objectives.

2.  In order that Forest Management Plans meet their objectives in ensuring the future sustainability of Crown forests, the Ministry of Natural Resources (MNR) should ensure that accurate and up-to-date information on forest composition and wildlife habitat and the protection of these habitats is made available at the time the plans are prepared. MNR should also update any silviculture guides used in forest management planning on a more timely basis.

3.  To improve its monitoring of forest management companies’ operations for compliance with applicable legislation, regulations, and policies, the Ministry of Natural Resources (MNR) should:

  • review its current compliance database to ensure that appropriate linkages are made to complete harvest block listings so that all harvest blocks can be identified for possible inspection; and
  • provide guidance to its district offices in adopting a risk-based approach for selecting blocks for inspection.

MNR should also ensure that its district offices are more consistent and effective in the use of appropriate remedies to encourage compliance, especially for repeat offenders.

4.  To ensure that the Silviculture Effectiveness Monitoring (SEM) program adequately assesses the effectiveness of industry-reported renewal efforts in regenerating Crown forests, the district offices of the Ministry of Natural Resources (MNR) should complete all core tasks as outlined in the program and follow up with forest management companies on sites found not to have met the free-to-grow criteria to ensure that the companies subsequently took appropriate remedial regeneration measures.

To further enhance the effectiveness of the SEM program, MNR should consider prescribing penalties that district offices can apply to encourage compliance.

5.  The Ministry of Natural Resources should ensure that action plans and status reports that address the recommendations of the Independent Forest Audits are completed on a timely basis and ensure that it assesses the extent to which previous recommendations were satisfactorily addressed.

6.  To help ensure that forests are being managed on a sustainable basis and that harvest operations are carried out in accordance with approved plans, the Ministry of Northern Development, Mines and Forestry should:

  • enhance its ability to monitor on an ongoing basis the excess supply of Crown wood that can be reallocated to new companies that can use or market the wood; and
  • conduct research into successful practices used in other jurisdictions to address significant variances between planned and actual harvests

7.  To ensure that the province receives the proper amount of revenue for the use of Crown forest resources, the Ministry of Northern Development, Mines and Forestry (MNDMF) should:

  • develop overall provincial guidance for establishing wood measurement factors to ensure consistency and accuracy among the regions when determining stumpage fees;
  • increase the number of scaling audits performed each year to ensure that all mills are subject to the required audit every five to seven years in accordance with MNDMF guidelines; and
  • design and implement system controls in the stumpage fee information system so that invalid licence holders, and mills and haulers that are not authorized to receive and transport wood, are identified for appropriate follow-up.

MNDMF should also formally assess the implications of renewing harvest licences where significant stumpage fees are outstanding.

8.  To ensure that the Forest Renewal Trust and the Forestry Futures Trust are sufficiently funded for their intended purposes, the Ministry of Natural Resources should:

  • review the significant variances in renewal rates calculated by district offices for the same species of trees to ensure that such variances are justified;
  • review the overall minimum balance that is to be maintained in the Forest Renewal Trust to ensure that the amount is a true reflection of the actual annual forest renewal obligation and ensure that licensees annually maintain their portion of the minimum balance;
  • review the Forestry Futures Trust charge to ensure that it is sufficient to fund the initiatives that the trust is intended to fund; and
  • consider requiring SFL holders to provide some form of financial assurance that can be used to cover potential silviculture liabilities if a licensee becomes insolvent or surrenders its licence.

9.  To enhance the value of its annual report on forest management, the Ministry of Natural Resources should compare actual levels of key forest management activities—such as harvest and regeneration (that is, natural, planting, seeding, site preparation, and tending)—to planned or target levels and should provide explanations for any significant variances.

10.  The Ministry of Northern Development, Mines and Forestry should ensure that forest resource processing facility licences are granted only to those forest resource processing facilities that demonstrate that they have sufficient financial resources to operate, and ensure that forest resource processing facilities submit the required annual returns on a timely basis.

Tagged as: Auditor General, forest management, forest trust, independent forest audits, Ministry of Natural Resources, Ministry of Northern Development Mines and Forestry, silviculture effectiveness monitoring

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