Condition Variation – Engagement and Consultation with Indigenous Peoples -Reassessing Prior Decisions
Application
On June 26, 2017, the NEB issued Certificate EC-056 (the “Certificate”) in respect of an approximately 117-kilometer, 1,000 megawatts ±320 kilovolt high-voltage direct current bi-directional electric transmission interconnection, and associated facilities. The facilities are intended to transfer electricity between Nanticoke, Haldimand County, Ontario (Canada) and Erie County, Pennsylvania (USA), crossing Lake Erie (the “Project”). The Certificate was issued subject to 42 conditions. Conditions two, five, and six of the Certificate are relevant to this variance application (“2021 Variance Application”). The relevant conditions provide:
2. Certificate Expiration Clause: Unless the [NEB] otherwise directs prior to [three years from the date of the grant of the Certificate], this Certificate shall expire on [same date as noted before in this condition] unless construction in respect of the Project has commenced by that date (“Condition 2”).
5. Ownership and Operator: The international power line and its associated facilities to be constructed and operated pursuant to this Certificate (the Power Line) shall be owned and operated by ITC Lake Erie LLC (“Condition 5”).
6. Change of Ownership or Operator: ITC Lake Erie shall not sell, convey, lease or otherwise transfer the Power Line to any person, in whole or in part, without leave of the Board.
In the 2021 Variance Application, ITC Lake Erie Connector LLC (“ITC”) applied to:
-
extend the expiration clause in Condition 2 of the Certificate by two years to June 26, 2024.
-
replace “ITC Lake Erie LLC” with “LEC GP Inc.” in Condition 5.
Decision
The CER varied Conditions 2 and 5 of the Certificate as requested.
Pertinent Issues
Notice and Opportunity to Provide Comments and Engagement and Consultation with Indigenous Peoples
The Commission found that all potentially impacted parties, including Indigenous peoples, have been notified of the 2021 Variance Application, that they had a fair and meaningful opportunity to provide any comments, and that the Crown’s duty to consult Indigenous peoples, including Mississaugas of the Credit First Nation (“MCFN”) and Haudenosaunee Development Institute, was met. Having determined the consultation was adequate, the Commission found that the requested variances were in the public interest and approved the 2021 Variance Application, pursuant to subsection 280(1) of the Canadian Energy Regulator Act.
Variation to Condition 2:
Condition 2 of the Certificate was varied previously by the CER on March 5, 2021, extending the expiry date to June 26, 2022.
In the 2021 Variance Application, the ITC stated that it would not be able to commence construction by June 26, 2022, identifying June 15, 2023, as its revised start date for construction. While ITC confirmed its intention to commence construction as per the revised Project schedule, ITC requested a two-year extension to provide flexibility if the necessary arrangements are not in place by the 2023 construction season. ITC highlighted significant developments related to its commercial arrangements for financing and transmission service agreements, including an agreement in principle with the Canada Infrastructure Bank; a request from the Ontario Minister of Energy, Northern Development and Mines asking the Independent Electricity System Operator to enter into negotiations with ITC for a transmission procurement agreement; and an executed term sheet between ITC and MCFN. The CER noted that no party challenged that additional time is needed by ITC to conclude the necessary pre-construction agreements. The CER also accepted that while ITC currently suspended work on the Project, ITC still required the requested variances in the event the work recommences in the future. The CER, therefore, granted the requested variance to Condition 2.
Variation to Condition 5:
ITC stated that a corporate reorganization of the owner and operator of the Project was desirable to facilitate project financing, to allow for participation by MCFN and potentially other Indigenous communities, and to optimize tax efficiency. The CER, therefore, granted the requested variance to Condition 5.
Applicable Legislation
Canadian Energy Regulator Act, SC 2019, c. 28, s. 10, s 280(1).
