Rethinking the Role of Municipalities in Energy Projects

Posted on Wednesday, May 31, 2017

Author: Dave Hardy

President
Hardy Stevenson and Associates Limited

On March 20 and 21st 2017, I was pleased to attend the University of Ottawa’s, Positive Energy Ottawa Workshop titled, “Who Decides? Balancing and Bridging Local and Higher-Order Interests in Canadian Energy Decision Making”. I was impressed with the diverse range of attendees including stakeholders, regulators, First Nations representatives and environmental non-governmental organizations around the table. The format also allowed participants to share frank opinions. Hearing the views of others allowed me to think more deeply about the role of municipalities in energy projects.

Having worked for a number of municipalities on the review of energy projects, I have seen that there’s no single answer to the question: What should be the role of municipalities in energy decision making? 

Municipalities currently have varying degrees of decision-making influence and authority in energy projects. As stakeholders, proponents typically seek municipal input during an environmental assessment process. Regulatory authorities also want to hear the municipal perspective. That said, municipal, financial and technical resources for commenting and participating in a regulatory hearing are generally insufficient. Municipal staff have little experience in the science and engineering of large, complex energy projects. However, when funds are available to local municipalities for peer review, municipal input can be focused and well-informed, particularly if the hearing involves cross-examination of municipally hired experts. Once an energy project is approved, the construction and operation of the project may require permits and services under the Municipal Act or Building Code.

Municipalities may sign legal, impact/ benefits or energy project hosting agreements. The municipal ‘willing and informed host’ concept seems to be working well for complex site-specific projects having health and safety risks. When in place, the related ‘Municipal/Proponent Host Agreement’ process elevates municipal authority above being a creature of their provinces and allows peer-to-peer interactions. However, for major energy infrastructure projects, this level of municipal authority can be challenging to the process.

Local municipalities have generally embraced and played their role in implementing provincial and national energy demand management and greenhouse gas reduction programs. Here the municipal role is important.

Overall, municipalities do not have approval authority for provincial or federal energy decisions. We have seen the dominant role of the province being reconfirmed when the Wynne government removed municipal approval requirements for solar and wind projects under the Green Energy Act. 

Yet, the lingering question is whether there should be some role for municipalities in the approval of energy projects, along with provincial and federal governments. While the benefits of energy projects occur provincially and nationally, municipalities find themselves subject to positive and negative effects that occur locally. As the level of government most accessible to voters, municipal politicians and staff are pressured by citizens to speak for them about real or perceived effects.

In my opinion, Canadians need to exercise caution over expanding the municipal role. 

The first issue is that local municipal authority over linear projects does not work well. Approval of a linear project may require dozens of municipal jurisdictions to agree. The trend has been to keep the municipal role restricted. For example, in Ontario, the Planning Act has been revised to protect corridors crossing multiple municipalities. Historically, the Ontario’s Power Corporation Act restricted the ability of municipalities to ban transmission lines.

Second, energy decision-making requires the careful consideration of both broad and local public interests. Boards, Commissions and Courts do a much better job making those decisions than Municipal Councils. Indeed, we are seeing residents who are not getting the decision they want pressuring local politicians to emasculate or eliminate the role of the regulator. For example, the Ontario Municipal Board is under fire because it has had the temerity to make decisions based on facts and evidence.

Third, it is difficult for a municipality to know how to respond when provincial or national energy policy may be unclear. What is the municipal interest versus the provincial or national interest? Should the municipality focus comments on climate change? Should hydrocarbons be moved by pipeline? Or by rail? Should local governments focus on energy conservation? Or energy security? These questions often go beyond the scope and expertise of local government staff and officials.

Finally, too often, energy decisions can be driven by weak political leaders having the view that consensus means finding a compromise with the most strident and vocal energy critics. Here, ‘social license’ means energy companies and crown utilities must reach consensus with groups to whom the bar for reaching consensus is higher than theirs can ever be. As a consensus position is in reach, the bar is often set higher. Consensus has never meant one hundred percent agreement. Social license should mean a general agreement where strident opposition can be discounted if reasonable individuals can conclude that facts and evidence do not support the position. Without the ‘public interest test’ handled well by Boards, Commissions and Courts, we are left with political interest; with energy policy decisions centered on the exercise of power rather than its delivery.

In sum, though municipalities have an important role to play in energy decision making, giving them an approval role equal to provincial and national governments is problematic.

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