Sandbox 2.0 Proposal for Stakeholder-Driven Innovations
Stakeholders provided feedback on Sandbox services, emphasizing the need for increased awareness, transparency, exemptions from legislation, and dedicated funding. Recommendations include enhancing communication, adding activities, and addressing legislative barriers. Stakeholder consultation involved various stakeholders such as electricity distributors, generators, intervenors, and associations. Feedback focused on guiding criteria, sandbox awareness, transparency, communication, support limitations, and additional activities. Staff proposed establishing sandbox goals for purposeful innovation, updating project-specific eligibility criteria, and aligning innovation with sector priorities.
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Sandbox Renewal Staff Proposal for Sandbox 2.0 design September 27, 2021 EB-2021-0180
Content 1. Stakeholder feedback from one-on-one and small group meetings in July and August 2021 2. Staff proposals for the OEB Innovation Sandbox 2.0 design (based on stakeholder feedback from the July and August meetings) 3. Input sought from stakeholders September 27, 2021 2
Overview Overall, stakeholders agree with the intended purpose of the Sandbox, but raised the following key issues: Lack of awareness and understanding of Sandbox services Lack of transparency and information sharing Lack of ability to provide exemptions from legislation Lack of dedicated funding Stakeholder recommendations for Sandbox 2.0 include: Enhancements to awareness, transparency and communication Additional Sandbox activities/functionality Recommendations related to legislative barriers, funding and partnerships September 27, 2021 3
Stakeholder Consultation One-on-one or small group meetings with 20 stakeholders listed in the Appendix: 8 electricity distributors One generator 4 Intervenors IESO Associations and other groups September 27, 2021 4
Stakeholder Feedback Feedback focused on the following areas: 1. Guiding Criteria/Objectives 2. Sandbox Awareness 3. Transparency and Communication 4. Sandbox Support Limitations 5. Additional Sandbox Activities Proposals for Sandbox 2.0 have been structured around these 5 areas September 27, 2021 5
1. Sandbox Guiding Criteria Description of Issues Stakeholder Recommendations Proposal for Sandbox 2.0 Other Sandboxes are guided by criteria or objectives in their provision of Sandbox support Sandbox would benefit from objectives to ensure purposeful innovation. Staff proposes the following: 1. Establish the following Sandbox Goal To facilitate purposeful innovation that provides value to consumers, including protecting against risks to the grid and focusing on emerging system needs related to the energy transition * Proponents interested in the Sandbox Information Service are required to have an innovative idea that aligns with the Sandbox Goal Need to ensure innovation supported by Sandbox is purposeful Key themes identified: 1. Decarbonization 2. Value to customers (affordability, reliability) 3. Scalability 4. Reduce grid expansion & increase efficiency 5. Future-looking 6. Failure is accepted 7. Customer choice Current Sandbox has project selection criteria, but these don t reflect sector priorities 2. Update the Project-Specific Eligibility Criteria: 1. Consumer value & protection, including enhancing the resilience and reliability of the grid and anticipating carbon pricing and net zero mandates 2. True innovation 3. Potential for scalability and economic viability 4. Regulatory barrier for which the OEB can provide assistance 5. A commitment to measure success *Pilot projects seeking Project-Specific Support must meet all of the above Eligibility Criteria Current criteria: 1. Consumer benefit & protection 2. Relevance to energy sector 3. True innovation (new product, service or business model) 4. Readiness for testing 5. True regulatory barrier September 27, 2021 6
2. Sandbox Awareness Description of Issues Stakeholder Recommendations Proposal for Sandbox 2.0 1. There is low understanding of the Sandbox; Sandbox is not doing enough to provide a good understanding of what it does, who can use it, and how it can be used 1. General Awareness Improve info about support on offer Provide actual examples of projects Improve website Actively promote and communicate Increase visibility through Sandbox Roadshow , industry training sessions, etc. 1. Improvements to website, including: Describe support on offer Provide examples of Sandbox projects Continue communicating about Sandbox at meetings, conferences, etc. Industry training sessions 2. Confusion about how Sandbox differs from Industrial Relations Enquiry process - parties unsure where to go to get advice 2. IRE vs. Sandbox No Wrong Door : Formalize internal system to refer IREs to Sandbox (and vice versa) so that there is no wrong door for stakeholders to access OEB support Communicate difference between IREs and Sandbox on Sandbox and IRE websites 2. IRE vs. Sandbox Single portal for all OEB enquiries Allow IREs to be escalated to Sandbox September 27, 2021 7
3. Transparency and Communication Description of Issues Stakeholder Recommendations Proposal for Sandbox 2.0 Lack of transparency no sharing of Sandbox activities/ projects Share as much information as often as possible Annual Sandbox reporting to include more detail, including: Common themes/issues Examples of Sandbox projects Case studies from other jurisdictions Description of support provided Share real Sandbox project details and case studies from other jurisdictions Website does not provide useful information Sandbox reporting is too high level to provide value More use of staff bulletins Greater use of staff bulletins to share information with sector Improve annual Sandbox reporting Sandbox does not make public any information about the proponents or projects seeking Sandbox support Improve Sandbox website and add dashboard Annual webinar/workshop to discuss lessons with sector Annual consultation to discuss lessons, issues, etc. Add as it happens dashboard to Sandbox website Only one public staff bulletin issued to date Introduce exit surveys and/or follow- ups Exit surveys and/or follow-ups Confidentiality Work with proponents to narrow scope of what s confidential, against a backdrop of transparency by default Confidentiality Confidentiality should not limit transparency Confidentiality Ask proponents what information can be shared and get proponents OK on materials to be shared September 27, 2021 8
4. Support Limitations Description of Issues Stakeholder Recommendations Proposal for Sandbox 2.0 Sandbox support is limited by lack of ability to provide relief from legislation and regulation Sandbox staff should report to government on legislative barriers to innovation Government could work with Sandbox staff to provide OEB with the ability to provide relief from legislation Staff will share lessons learned with Ministry of Energy to identify opportunities to facilitate innovation through legislative changes Lack of funding Create a new application process like an Incremental Capital Module (ICM) but for innovation Explore ways to allow some pilot projects to get ratepayer funding Sandbox staff should be a resource to leverage for prepping applications Work with provincial government (ministry of economic development) and NRCan on funding Explore partnership opportunities with federal and provincial government for funding September 27, 2021 9
5. New Sandbox activity Concierge service Description of Idea Stakeholder Recommendations Proposal for Sandbox 2.0 Sector needs someone to bring stakeholders together to discuss potential to collaborate on innovative projects Sandbox could include a concierge mechanism to connect stakeholders. Concierge service could include: Matchmaking utilities, energy companies, and customers Workshops for stakeholders to showcase innovations Maintaining a repository of information (e.g., funding opportunities, innovative companies, etc.) OEB staff is considering what a concierge service may include and invites stakeholders to provide input (see slide 13) September 27, 2021 10
5. New Sandbox Activity Innovation Dialogue Description of Idea Stakeholder Recommendations Proposal for Sandbox 2.0 Facilitating innovation is an objective for the OEB as a whole OEB staff is considering an innovation dialogue and invites stakeholder feedback (see slide 13) Stakeholders want one place to direct all their ideas regarding innovation and barriers to innovation Provide an ongoing way for stakeholders to share the topics of biggest concern for them Sandbox should take on a new dedicated role to lead a conversation in Ontario about innovation, goals of innovation, regulatory barriers to innovation, etc. This dialogue should focus on conversations about how to meet net zero mandates Conversations should utilities and intervenors as well as academics, private sector, municipalities, NGOs, and others don t usually participate September 27, 2021 11
5. Additional Sandbox Activities Description of Ideas Stakeholder Recommendations Proposal for Sandbox 2.0 Focus on EVs Set up a Working Group specifically to discuss EVs An EV working group is outside of the scope of the Sandbox Staff should help utilities prepare applications Staff should support smaller utilities in particular to prepare applications that include an innovative component Applications staff already offer pre- application meetings, regardless of utility size. OEB Sandbox staff could participate in the event an innovative component is a focus for discussion. Other jurisdictions include regulator-led, thematic Sandbox approaches New type of Sandbox consisting of OEB putting forward particular areas of interest and/or ideas about specific regulatory barriers Thematic areas should be agreed on with stakeholders The ongoing IESO/OEB joint targeted call focuses on the theme of DERs OEB will consider the concept of a thematic Sandbox at a later date based on lessons learned from the joint targeted call September 27, 2021 12
Stakeholder Input Sought Stakeholders are invited to provide feedback on any topic of interest In person at the September 30 stakeholder meeting In writing by October 15 OEB staff are particularly interested in stakeholder feedback on the following topics: The proposed Sandbox Goal and Project-Specific Eligibility Criteria The sufficiency of proposed awareness-raising activities The sufficiency of transparency and communications activities proposed Innovation Dialogue: Expectations for what this activity should entail (e.g., role of OEB staff, nature of dialogue, stakeholders to be involved, meeting frequency) Concierge Service: Expectations for what this service should entail (e.g., desired activities, role of OEB staff) and views on the OEB collaborating with another organization to provide this service (including suggestions related to what organization would be suitable) September 27, 2021 13
Appendix Details re. Stakeholder Feedback September 27, 2021 14
Stakeholders Consultations held with 20 stakeholders in July and August 8 electricity distributors Hydro Ottawa Hydro One Alectra Oakville Hydro InnPower THESL Festival Hydro Elexicon Energy One generator OPG September 27, 2021 15
Stakeholders, contd Four Intervenors CCC CME AMPCO Pollution Probe Associations CanREA OEA ETNO (CPC) Others Peak Power ENEL IESO Pollution Probe & QUEST September 27, 2021 16
1. Guiding Objectives/Principles Please note that numbers in brackets indicate the number of stakeholders that raised each issue/topic Stakeholders agreed the Sandbox would benefit from objectives. The most common recommendations were: Decarbonization [16/20] Providing value to the customer (especially affordability and reliability) [10/20] Focus on scalability and economic viability [7/20] Reduce grid expansion by enabling DERs and increasing efficiency [3/20] Customer choice to generate and manage own energy [3/20] Sandbox must align with govt/stakeholder goals, especially decarbonization and achieving net zero by 2050 [12/20] Sandbox needs to be clear about support for decarbonization [12/20] Should be future-looking and take long-term view of costs [4/20] Make it clear that Sandbox is a place where failure is accepted [2/20] September 27, 2021 17
2. Sandbox Awareness ISSUES Poor understanding of what Sandbox does, who it is available to, what types of projects it has assisted, how criteria are applied, support available, and advantages over traditional application process [13/20] Some felt the Sandbox focused too much on utilities [4/20] Some lack of understanding about how the Sandbox differs from IRE service [2/20] STAKEHOLDER SUGGESTIONS Improve website and communication about what Sandbox does, support on offer, examples of project themes that can be brought forward [16/20] Provide practical examples of successful Sandbox projects [15/20] Actively promote and communicate about Sandbox, including through Sandbox Roadshow , targeted publicity, industry training sessions, etc. [16/20] Do better job communicating the Sandbox isn t only for utilities [4/20] Allow OEB staff to refer IREs to Sandbox where appropriate [2/20] September 27, 2021 18
3. Transparency & Communication ISSUES Serious lack of transparency - only know what is posted on the Sandbox website, which is very little [16/20] Sharing Lessons Learned is almost completely absent from Sandbox [16/20] Confidentiality must be considered, but not limit transparency and information sharing [12/20] STAKEHOLDER RECOMMENDATIONS OEB should share as much information as often as possible: [20/20] Examples/case studies, including the innovative idea, regulatory barriers, support sought, support provided, etc. [16/20] Case studies from other jurisdictions [4/20] Regular tracking of issues, project examples, summaries of information and guidance provided [16/20] September 27, 2021 19
3. Transparency & Communication (contd) STAKEHOLDER RECOMMENDATIONS, CONT D Confidentiality Add process step to ask all proponents what information can be shared broadly vs. what is confidential [6/20] Before publishing case studies/reports, get proponents OK on drafts of material [6/20] Preferred communication approaches Staff bulletins (accompanied by a What's New) [9/20] Annual Sandbox reporting (accompanied by What s New) [11/20] Include a webinar/workshop to discuss lessons learned with sector [8/20] Website dashboard with high-level description of projects, support requested, support received [14/20] Annual consultation to discuss lessons learned [11/20] Topics with significant policy implications should be moved into an open transparent process [1/20] September 27, 2021 20
4. Support Limitations Primary limitations identified A) Funding B) No defined path from pilot to permanent change C) Inability to provide exemptions from legislation D) Other September 27, 2021 21
4A) Funding [14/20] ISSUE Lack of funding means that pilots not allowed in Ontario are being tested in other jurisdictions Other ways of getting funding (e.g. Incremental Capital Modules) are rigid and not intended for innovation Sandbox does not support innovation brought forward in rate applications STAKEHOLDER RECOMMENDATIONS Create a new application process like an ICM but for innovation Do more to encourage utilities to use DVA option - since no guarantee of recovery, need OEB leadership support for this Sandbox staff could assist in supporting innovative ideas that utilities are considering in rate applications All OEB staff need to be regularly informed of what Sandbox support has been provided Explore other ways the OEB could allow some types of pilots to use ratepayer funding e.g., innovation competitions Work with federal and/or provincial government to provide funding September 27, 2021 22
4B) Pathway to permanent change [6/20] ISSUES If OEB relief is granted (with assistance from Sandbox staff), that relief is temporary not clear how those pilots would be scalable absent a clear path to permanent regulatory change RECOMMENDATIONS Sandbox needs to do a better job of explicitly articulating what utilities and others can do under the current regulatory framework Sandbox staff should work with the sector to identify regulatory barriers, implement experimental changes, evaluate the outcomes, and determine whether the change should be permanent Staff should regularly put out position papers based on successful Sandbox projects that articulate regulatory barriers to innovation and what is needed from OEB, IESO and Ministry to move forward on innovation September 27, 2021 23
4C) Legislative barriers [8/20] ISSUE Sandbox has no ability to provide relief from legislation or regulations Often, legislation is more of a barrier to innovation than OEB regulatory requirements RECOMMENDATIONS Sandbox staff should regularly report to government on legislative barriers to innovation Government could work with Sandbox staff to provide: OEB with the ability to provide relief from legislation Its own relief from regulation and legislation Funding September 27, 2021 24
5. Partnerships & Collaboration [9/20] ISSUES The sector needs a holistic look customers just want answers, don t care who is responsible for changes STAKEHOLDER RECOMMENDATIONS Sandbox should consider additional collaboration with ENERGY and IESO Should include a feedback loop to government on barriers to innovation Raise EV challenge with government Sandbox should include educational opportunities for sector that involve IESO, OEB, Ministry and NRCan jointly providing information Sandbox should work with provincial and/or federal government on funding September 27, 2021 25
6. Additional Activity Concierge [11/20] STAKEHOLDER RECOMMENDATIONS Sandbox could include a concierge service to connect proponents with other stakeholders Concierge service could include: OEB Sandbox bringing together utilities, tech companies, and customers (e.g., municipalities, large customers, etc) to facilitate a dialogue, generate ideas for innovative projects, share lessons learned Workshops for stakeholders to showcase innovations, including international stakeholders If two proponents propose a similar project, Sandbox staff could connect those proponents Communicating what is happening and act as a collator of innovation in Ontario and how to do it by way of case studies, workshops, how to guides, explainers and FAQs Sandbox could partner with an innovation association (MaRS or EPRI), or could form something akin to a Working Group September 27, 2021 26
6. Additional Activity Innovation Dialogue [12/20] STAKEHOLDER RECOMMENDATION Because there s so much value in the conversations the Sandbox creates, Sandbox should take this on as a dedicated role i.e. lead a conversation in Ontario about innovation, goals of innovation, regulatory barriers to innovation, etc. This dialogue should include conversations about how to meet net zero Conversations should include utilities, intervenors, academics, private sector, municipalities, NGOs, and others that aren t usually involved in these discussions September 27, 2021 27
6. Additional Sandbox Activities STAKEHOLDER RECOMMENDATIONS Help utilities to prepare applications that have an innovative component [4/20] Thematic Sandbox: OEB could propose innovation themes of interest and/or regulatory requirements to test [12/20] E.g., EVs, IoT and Cybersecurity, DER aggregations Sandbox needs a dedicated stream for EV pilots [4/20] Provide more details about process and timelines and include ability to chat with OEB staff 3+ times [1/20] Use Sandbox to test out different utility remuneration and incentive models to feed into FEI [1/20] Use Sandbox to test out different pricing options [2/20] September 27, 2021 28
