Hydro One Denied Offer to Connect

[Rob Brunet]

This story is all over the news yesterday and today, but Hydro One has apparently sent out notices to 1000 customers that "system upgrades" will be required in order for them to connect their projects. Here is the relevant excerpt of the email that was sent.

"Based on our analysis, we have determined that your project is impacted by system constraints. We regret to inform you that we are unable to provide you with an offer to connect your microFIT project at this time."

My own project was not affected, but I know several people who have received this email message. Is there any indication of what these supposed "system constraints" are, what the plan is to address them and what the time line is for connection?

I find the sudden occurrence of "system constraints" across the Province disingenuous. From a technical perspective, I find it hard to believe that the small amount of power produced by a 10 kW system could have any impact on the system; this was the original rationale behind selecting this size, since it is small enough not to need a connection impact assessment. In fact, providing distributed generation relieves system constraints on the grid and reduces transmission losses.

It seems more likely that this is merely a political ploy to indefinitely delay payment on standard offer contracts that have been let by OPA, who can't break the contracts without legal repercussions. This way, they don't have to pay out the funds and don't have to break the contract.

I am concerned that the solar component of the microFIT and FIT programs is turning out to be a political football fraught with unquantifiable risk over the next 20 years. The intent of the program was to attract foreign and domestic direct investment in the manufacturing and construction industries for job creation. Uncertainty is a killer for investment, so even if they do resolve this issue, I foresee challenges in meeting the job creation objectives.

I will descend from my soapbox now.

[Rob Beckers]

Hi Rob,

Yeah, at the face of it this looks pretty outrageous! I don't know the full reasons behind it, maybe these people are all neighbors with 10kW trackers backfeeding the same single-phase line? In general though, as an electrical engineer I cannot think of any reason why one or a few MicroFIT generators (ie. all under 10kW) would have any impact on the grid, even single-phase. It's a tiny amount of power by any measure. New houses are now installing 400A service; while that is not used "all at once" that is a potential load of about 100kW. Feeding back 10kW is in fact beneficial since it off-loads the grid (the local loads, houses etc. will gobble up what's being produced).

On a larger scale the utilities can have problems with PV backfeeding the grid. For example, some places in California have so much PV installed that the loads are not sufficient to absorb that production during peak-sun hours in summer (their peak-loads actually occur later in the afternoon as people get home and switch the AC on), and they lack the transmission capacity to move it elsewhere. That can cause instability, and is something the utility has to take into account. However, here in Ontario we are a long, long way away from that situation.

It is a real shame that the OPA modified the MicroFIT rules to allow the LDC to block a MicroFIT connection to the the grid. It takes away from the original intent, where the LDC had no say in the implementation; they previously had to connect, and their fees were set.

By the way, I do not believe this is a ploy by the politicians to do away with MicroFIT. It looks to me that the LDCs complained to the OPA that they were footing the bill for system modifications to accommodate MicroFIT, and the OPA in their infinite incompetence acquiesced by changing the rules so the LDCs are once again in control (with no mechanism for the customer to object). I have a strong feeling that those modifications done in the past by the LDCs for MicroFIT were very few and far between, and nowhere at the scale of the current batch of rejections. But they now have this stick, and they're wielding it.

A sad day for renewable energy.

-RoB-

[Dayton Johnson]

Was this story in a newspaper? I'd like to read through it. What's next?

[Dale Sheler]

That seems an awful lot like putting the fox in charge of the hen house, nothing ever changes and nothing ever stays the same.

[Paul Martin]

Does anybody know at what stage they send out these "Denied Offer to Connect" notices?

I filed the C-form back in October and we recently received the request for banking info, etc. and connection fee invoice which we immediately sent to them. It has now been almost 3 weeks with no acknowledgment at all. After hearing about the 1000 being denied offers to connect, I am really worried, especially since I am close to Belleville where I read at least 2 have been denied.

Also have they always stated to make sure Hydro One can connect you before installing or has this just been recently, specifically post October 2010?

[Rob Brunet]

It is my understanding of the process that, once you fill out the form C, you receive back from Hydro One an "Offer to Connect". Once you sign that and send it back with the cheque for $1356, you have accepted the offer and should be moved to the scheduling department. A neighbor of mine sent his response to the Offer to Connect in with payment this past January. Although they have not cashed his cheque, he did receive a generic email from OPA (not Hydro One) saying, basically, that they hoped he would accept the Offer to Connect. It was strange to me that this email came from OPA, rather than Hydro One.

In contrast, I received a different email from OPA saying "Congratulations on connecting your microFIT project and providing more clean energy for the benefit of all Ontarians." My cheque for $1356 has been cashed by Hydro One, but the meter has not yet been installed by them nor have they officially "connected" the project.

My original post concerning "system constraints" relates to an email received by my father on one of his microFIT projects from Hydro One (not OPA). This email references his microFIT project number and cites the need for system upgrades. Although he sent in his Form C back in November, he has not yet received the Offer to Connect, nor paid his $1356.

It would therefore seem that there are at least three different emails being sent out, depending on the stage your project is at. My interpretation is that, if your cheque has been cashed, you are likely OK and into the scheduling phase of the project. If you have sent in your cheque, you are probably OK, but there could still be some uncertainty. If you have not sent in your cheque, you are probably one of the ones who received the "system constraints" email. Given that you haven't received the "system constraints" email, it seems to support my interpretation that you are probably OK. However, if you are on the verge of making additional expenditures, I would certainly call Hydro One and try to get a confirmation from them that you are good to go.

I agree that I haven't seen any rhetoric prior to December of last year concerning waiting for an Offer to Connect before installing equipment. It seems to me that the rhetoric was always that the LDC was obliged to connect an approved microFIT project of less than 10 kW in size and this was the whole rationale behind selecting the size limit, to prevent the occurrence of "system constraints". Nevertheless, in reading through my father's old emails from OPA, I did notice one in December that said something about not installing equipment until receiving an Offer to Connect.

If you are affected by this, I don't know what you can practically do to get past the LDC's objections and get your project connected. I think you are at their mercy. There has been some discussion here in Southern Ontario of a class action suit, since there are real monetary damages involved probably totaling in the tens of millions. I am not a lawyer, nor have I read the contract and supporting documentation at the time the program was announced in sufficient detail to know whether this language about waiting for an Offer to Connect was always there or a new addition. That seems to me to be a pretty important point for any future suit.

Just for interest sake, if you have received the "system constraints" email or know of others who have, please post the number of systems affected in this thread so that we can begin to get an idea of the size of the problem and establish a way of communicating next steps to one another.

[Dave Farrell]

Just a reminder;
LDC will not connect until after they have recieved your payment and the ESA have issued a connection order to the LDC.
If you feel you have waited long enough call the LDC to confirm the ESA has issued the connection order (should happen within 10 days of inspection), be prepared to give them the ESA inspection date and permit #. They will then check with the ESA and should call you back to schedule connection.

[Paul Martin]

I sent the $1356 cheque requested but it has not been cashed yet. I know no one who has been rejected personally. Everyone who has installed a system in my area has been connected as far as I know.

If it isn't connected by May, through no fault of our own, doesn't that mean we won't pass the Canadian content rule? What are all these people who have already installed their panels and then refused connection, going to do?

[Rob Beckers]

The change in the MicroFIT rules, adding the part where the LDC can refuse connection (http://microfit.powerauthority.on.ca/Program-updates/2010-December-8-microFIT-Connection-Rule.php), became effective December 8th. In good OPA-style, it was done without prior discussion, in fact they first made it effective, then said there was a comment period until January 7th.

If you applied to MicroFIT before December 8th the LDC cannot refuse connection. The old rules apply. What is interesting to see, is that Hydro-One is the only LDC named in the change notice. Looks like they're the ones that pushed this through.

-RoB-

[Dave Turpin]

Is it possible that they are just now discovering the additional cost for producing power when a large number of 1.0 PF installations are hooked up to their grid? 1.0 PF inverters are great, but they also drive the network PF down further into the lagging side, therefore creating more reactive load and driving up the cost of production?

[Peter Mistel]

The change in the MicroFIT rules, adding the part where the LDC can refuse connection (http://microfit.powerauthority.on.ca/Program-updates/2010-December-8-microFIT-Connection-Rule.php), became effective December 8th. In good OPA-style, it was done without prior discussion, in fact they first made it effective, then said there was a comment period until January 7th.

If you applied to MicroFIT before December 8th the LDC cannot refuse connection. The old rules apply. What is interesting to see, is that Hydro-One is the only LDC named in the change notice. Looks like they're the ones that pushed this through.

-RoB-

Not true

I made an application to the OPA in October, installed my system, applied to Hydro One on Nov 8th, and was denied a connection in the mass emails that were sent out mid February.

Hydro One is the LDC dening connections because they run the transmission system in Ontario and all LDC's have to answer to them

[Rob Beckers]

Hi Peter,

That is odd. Here is the literal text from the OPA Web site: "The OPA is proposing that all new microFIT applications submitted on or after December 8, 2010, would need an offer to connect from their local distribution company before the OPA issues a microFIT conditional offer of contract."

The way I read it is that those who filled out a MicroFIT application and submitted it to the OPA before December 8th would fall under the old rules, where the LCD has to accommodate the connection even if it costs them money to make changes to their network.

Have you contacted the OPA regarding your case? On the face of it Hydro-One seems to be overreaching and applying the new rules where they cannot. Any world from Hydro-One why you can't be connected? I really wonder what's behind this; 10kW is such a minuscule amount of power for the grid that it would take a great many people backfeeding within a local area before it had any impact.

-RoB-

[Ralph Day]

Rob,
Within 5km of home here there are 8 microfit installs. I roughly figured that the houses down my road (the line dead ends about 3kms away) the 6 houses could be using most or all of the 10kw I'm feeding in right now. That's not including the village of 50 or so homes that feeds the line down my road. Distributed generation at it's best.

H1 is saying that the Demorestville substation can't handle any more microFITs. BS?

Ralph

[Peter Mistel]

Hi Peter,

That is odd. Here is the literal text from the OPA Web site: "The OPA is proposing that all new microFIT applications submitted on or after December 8, 2010, would need an offer to connect from their local distribution company before the OPA issues a microFIT conditional offer of contract."

The way I read it is that those who filled out a MicroFIT application and submitted it to the OPA before December 8th would fall under the old rules, where the LCD has to accommodate the connection even if it costs them money to make changes to their network.

Have you contacted the OPA regarding your case? On the face of it Hydro-One seems to be overreaching and applying the new rules where they cannot. Any world from Hydro-One why you can't be connected? I really wonder what's behind this; 10kW is such a minuscule amount of power for the grid that it would take a great many people backfeeding within a local area before it had any impact.

-RoB-

That is exactly what all the outrage is about. People filled out all the forms correctly, submitted them in the proper order, built systems with the proper approvals, and are now being told by Hydro One that they can't connect. The OPA has extended the contracts for another year to give Hydro One a chance to upgrade thier system.

This is exactly what happened to me. My system is much smaller then 10kw, and they say they don't have capacity? I can pretty much guarantee that none of the power makes it off my property as I have an electric stove, dryer and water heater. Something else is going on here.

[Rob Brunet]

Rob, I agree with you that the passage you cited states that, after December 8, the LDC can refuse a connection and thereby prevent issuance of an OPA microFIT contract. The corollary is that, prior to December 8, the LDC approval was not required prior to issuance of a microFIT contract. It is not clear to me from the passage you cited that the LDC is unable to refuse connection for microFIT contracts issued prior to December 8. It also doesn't say that the LDC cannot indefinitely delay the connection.

Peter, I know of at least three systems that, like yours, received microFIT approval, began construction, submitted the Form C in October or, in one case, November, and still received the "system constraints" email. This is probably no comfort to you, but there are several people in the same boat.

Paul, my understanding from several communications with Hydro One is that, once you've paid the connection fee, you are good to go. You should have received an email from them last week stating that "we hope you accept the offer to connect". Once they have cashed your cheque, you advance in status to the scheduling queue.

Finally, I agree with all posters who can't understand what possible infrastructure issue could exist. The power factor comment is legitimate, if there was sufficient power being generated to actually have any impact. The power factor might have an impact on my household meter, but not the grid in general.

The only one system constraint I can see that is a real issue is human resources. However, that doesn't require infrastructure investment to fix or approval from the OEB, as stated in the original system constraints email. I think this is about Hydro One securing additional government funding.

[Rob Brunet]

Here is the text of a letter I thought was worth sharing. It was addressed to Hydro One and microFIT, with CC to all the relevant MPP's, Ministers, Dalton McGuinty and Tim Hudak.

********

Further to email messages received from Hydro One on February 11, 2011, we are writing to again request an extension of time on the above noted Conditional Offers under the microFIT program. We have previously corresponded with microFIT@powerauthority.on.ca on this issue via email dated February 12, 2011, and request the courtesy of a response.

We also wish to notify both Hydro One and OPA of our disappointment in the way communication concerning this decision has been handled. It is unconscionable that applicants were made to wait for months concerning the status of their Form C applications and then advised en masse of the supposed system constraints that prevent their connection requests from being approved. We note that our Form C application was submitted in November, prior to the December 8 change to the microFIT rules requiring applicants to receive approval from their LDC prior to issuance of a Conditional Offer from microFIT.

We have invested over $50,000 to date in equipment for three microFIT projects and are incurring monthly interest charges in connection with this outlay of capital. We have received no information from you about a proposed timeline for connection so that we can begin to recoup our investment. We participated in the program in good faith and only after receiving a Conditional Offer from OPA. This course of action was based on information from OPA that a Conditional Offer of a microFIT contract was all that was required prior to making investments; never was there any mention made prior to December 8 that Hydro One could refuse the connection request, nor indefinitely delay connection.

In addition, in order to meet the reduced Ontario content standard, we need to have our equipment connected prior to May 31, 2011, which necessitated that we begin construction this winter. OPA and Hydro One clearly knew that a large number of applicants were working under this time constraint, yet nevertheless delayed on communicating the alleged system constraints until three months before the deadline. This exacerbated the situation by allowing those with Conditional Offers to make investments over the winter months under the false belief that they would receive an Offer to Connect, when the decision had clearly already been made not to issue those Offers to all participants.

We believe that the uncertainty created by your poor communication and unclear program rules is detrimental to further investment in clean energy in Ontario. Your actions tarnish the reputation of OPA, Hydro One and the Government of Ontario and run counter to the aims of the Green Energy Act, which is to promote investment and job creation in Ontario. Although we continue to believe that this program is providing an economic benefit to Ontario, the climate of insecurity you have created in the Province will no doubt dampen enthusiasm for further investment, which is a disservice to all Ontarians.

We request that you prioritize relieving system constraints in the xxxx area, provide a timeline for connection, respond to our request for an extension of the Conditional Offer, and extend the deadline for application of reduced Ontario content rules for all program participants affected by system constraints.

Sincerely,

[Peter Mistel]

^Much too friendly!^

[Rob Beckers]

Honey catches more flies than vinegar... :)

[Paul Martin]

Just thought I would update, we are scheduled to be connected on March 18th. Big relief.

[Brian Spilsbury]

Just thought I would update, we are scheduled to be connected on March 18th. Big relief.


I hope they get it done for you.
I have been "supposed" to be connected for 3 weeks now.
All 3 of the involved entities (LDC, Microfit and OPA) seems to think I have been but there is still no meter in the hole.

[Paul Martin]

You had me worried all week especially when hydro was about 2 hours late. But all hooked up and running now. Meter read 100 (3 on Friday) at the end of the day yesterday and 35 so far today. Does it sound like it is working correctly?

[Ralph Day]

Paul,
When installed your revenue meter was 0 and 1? It is a bi-directional meter...mine accumulates 1 per month delivered and whatever produced.

When you say 35 today do you mean 35 more? It better not reset or there's no accumulation of your production.

Ralph

[Paul Martin]

Yes when I posted it read 135 and then it clouded over so 162 as of this posting.

[Brian Spilsbury]

congratulations on the connection!

[Brian Spilsbury]

I should buy a lottery ticket. I got home an hour ago and my system was connected. It's the cloudiest day of the year so far but I don't care lol.
now, if I can figure out how to get my SUNNY BEAM to read properly, I can come in from the cold and sit at my desk and watch the numbers tick over.

[Rob Beckers]

Congratulations Brian!
Mine got connected at the end of November. I had to wait until February before seeing any real PV production. Hopefully your wait won't be quite that long...

-RoB-

[Brian Spilsbury]

Congratulations Brian!
Mine got connected at the end of November. I had to wait until February before seeing any real PV production. Hopefully your wait won't be quite that long...

-RoB-

We had one of the cloudiest winters I can remember...maybe 10 sunny days in 90. It was grim!
my next project will be to fashion some kind of reflector. Not sure how yet though.

[Dayton Johnson]

Interested to learn more about"Sunny Beam" Is that similar to an Enphase readout?

[Brian Spilsbury]

It must be similar to the enphase setup.
It's a bluetooth connected monitor of the inverter functions, allowing remote programming as well as othe options from my office instead of running outside.