Submission: Clean Electricity Regulations Canadian Gazette, Part 1 Summary of

With the release of the Canadian Gazette Part 1 of the Clean Electricity Regulations (CER), the government has provided the details for one of the keystone policies that will be required.2 Overall, we strongly agree with the development of a policy framework for the CER that does not deliver net zero emissions from the electricity sector on its own. [...] As currently drafted, the regulations would require the unit to eventually cease operation —removing the possibility of recovering the costs of the carbon capture investment. [...] In order to mitigate the risk of gas units simply being run to themaximum capacity factor permitted regardless of actual grid needs for peaker services, the government should rely on a reformed carbon price to incentivize use of peakers gas only when their value to the grid is highest.13As discussed in greater detail below, setting a threshold value of zero for the OBPS treatment of the sector or. [...] The government could remove the electricity sector from the OBPS and apply the full price of carbon to electricity, or it could reform how the OBPS applies to the electricity sector, removing the benchmarks that shield emitting generation from paying the full cost.17 There are pros and cons to each approach, but regardless of which is taken, a critical design feature will be that associated revenu. [...] Currently, the government is required to conduct an interim review of the OBPS by 2026, which will inform the benchmark criteria for 2027-2030 and beyond 2030.18While the proposed changesmay not be possible prior to this timeline, it is essential that the Government of Canada signal in advance its intention to reform the OBPS treatment of the electricity sector, making clear that its intention is.