There are 32 remote communities in Ontario with electricity generation and distribution systems that are not connected to the provincial transmission grid. Of these, 25 are recognized First Nations communities in Northwestern Ontario with a combined on-reserve population of approximately 15,000 people, and with a peak electricity demand of approximately 20 megawatts (MW). Both population and electricity demand have been growing faster than other regions of Ontario.
The communities are dispersed along an 800 km arc starting from approximately 90 km north of Red Lake to about 160 km east to Pickle Lake. None of the communities north of Red Lake and Pickle Lake have access to all-season transportation or utility corridors. The average distance separating these communities is approximately 60 km, with distances ranging between 20 km and 90 km. These communities are considered remote because most do not have all-season road access and/or they are not connected to the IESO-controlled grid.
Electricity service within these communities is supplied by diesel generation, which feeds local distribution grids. Diesel fuel can only be trucked in during the limited winter road (ice road) availability; otherwise, the fuel must be flown in, which is at least double the cost. Given the challenges of fuel delivery, significant quantities of fuel must be purchased and stored in the communities. Each year the winter road season gets shorter and shorter, adding to these challenges.
Figure - Location of the Northwest Ontario Remote Communities
According to the Ontario Power Authority (“OPA”): “Diesel generation in remote communities is in general the highest cost electricity generation resource currently supplying Ontario customers, typically costing 3 to 10 times more than the average cost of the provincial supply mix. These high supply costs occur for a number of reasons including the high cost of diesel fuel, which is compounded by the need to transport and store the fuel in the communities, as well the higher operating and capital costs of performing construction and maintenance work in these remote locations.”
The Independent Electricity System Operator (“IESO” formerly “OPA”) estimates the current cost of diesel generation in the 25 Remote Communities (both Hydro One Remote Communities Inc. – “HORCI” and Independent Power Authorities – “IPA’s”) is approximately $90 million per year. Not only is diesel fuel expensive and difficult to transport, but its use also has significant environmental and health risks.
Most remote First Nations communities are running at or near maximum power capacity. This results in load restrictions and power outages. Under a load restriction, new development cannot be added to the electrical system. New homes are built but, in many cases, cannot be inhabited due to a lack of power. Limited diesel power capacity is a major barrier to the development of sufficient, modern housing and community facilities to serve remote populations. Remote communities may encounter dramatic overcrowding and a lack of adequate community health and social services.
According to the Ontario Waterpower Association (OWA), 275 MW of developable waterpower has been identified in proximity to the remote First Nations communities. These renewable projects, that include wind, water, solar energy projects, are not feasible without grid connection. Other economic development, business and employment opportunities are constrained due to a lack of accessible power.
Connecting remote First Nations communities was identified as a priority in Ontario’s Long-Term Energy Plan (released December 2, 2013). The Wataynikaneyap Project is currently planning for the grid connection of 17 of its 22 participating communities (5 are already grid connected).
On July 20, 2016, the Lieutenant Governor of Ontario, by Order in Council:
I. designated as priority transmission projects pursuant to section 96.1 of the Ontario Energy Board Act, 1998 the construction of an electricity transmission line originating at a point between Ignace and Dryden and terminating at Pickle Lake (the “Line to Pickle Lake”) and the construction of electricity transmission lines extending north from Pickle Lake and Red Lake to connect 16 remote communities (the “Remote Communities”) (the “Remotes Connection Project”); and
II. pursuant to section 28.6.1 of the Ontario Energy Board Act, 1998 directed (the “Directive”) the Ontario Energy Board (the “OEB” or “Board”) to amend the electricity transmission license conditions of 2472883 Ontario Inc. on behalf of Wataynikaneyap Power LP (“Wataynikaneyap Power LP “) to develop and seek approvals for the Line to Pickle Lake and the Remotes Connection Project.