microFIT for Local Distribution Companies 101 Guide

An Introduction to microFIT Contracts

Applications for new microFIT Projects have not been accepted since December 1, 2017. The information on this site only applies to the issues that need to be taken into account when advising clients on the potential purchase or sale of a property with an existing microFIT Facility.

Local Distribution Companies (LDC) play an important role in the microFIT Program.

LDCs connect the Facilities of microFIT Suppliers to the grid through their electricity system infrastructure. This is done only after completion of a Connection Agreement with the Supplier. The LDC then measures the amount of electricity injected into the grid by a microFIT Facility using a generation meter owned and operated by the LDC.

LDCs also make Generation Payments to Suppliers in accordance with the microFIT Contracts between the Independent Electricity System Operator (IESO) and the Suppliers. As a result, LDCs must open Generator Accounts for customers with a microFIT Facility, and use the readings from the generation meter to calculate the Supplier's Generation Payments.

Beacon

Beacon is a tool that enables LDCs to manage their active microFIT Contracts online. LDC users are able to view and manage all of the active microFIT Contracts and assigned tasks associated with the LDC. LDCs should regularly monitor the status of microFIT Contracts by visiting Beacon. This includes responding to review tasks and acknowledgement tasks from the IESO related to amendments and assignments.

LDCs must notify the IESO immediately of any changes to Beacon access that are required as a result of staffing or any other changes at the company or organization. Examples include staff who no longer require access to Beacon due to a change in roles, staff on a leave of absence, and staff who have left the organization. LDCs can send Beacon access requests and notice of changes to microFIT.LDC@ieso.ca.

microFIT Contract Assignments

To transfer a microFIT Contract to a new person or entity, the current Supplier (assignor) must “assign” the Contract to the prospective Supplier (assignee) via the IESO’s online contract management tool, Beacon.

The rules governing the assignment depend on the version number of the Contract:

  1. If the Contract version number is 1.5 or higher, the Supplier must be the same as the owner of the property on which the microFIT Facility is located (this is usually referred to as the “Eligible Participant requirement”). Thus, when these properties are sold, the property owner must assign the microFIT Contract to the new property owner to avoid a breach and the potential termination of the microFIT Contract; and
  2. If the Contract version number is 1.3 or 1.4, there is no requirement for the Supplier to be the same as the property owner. For these Contracts, the Supplier may not intend to assign the microFIT Contract to the purchaser upon a change of ownership of the property, or at any other time during its term.

LDC Role in microFIT Contract Assignments

Because the LDC maintains the physical connection to properties with microFIT Facilities and is also responsible for settling the Generator Account for these Facilities, LDCs have an important role to play when the Contract for a microFIT Facility is assigned. This includes:

  1. Directing LDC customers to the IESO microFIT webpage and appropriate resources: LDCs are usually made aware of real estate transactions involving properties upon which microFIT Facilities are located well before the IESO finds out about them. As such, the IESO encourages LDCs to communicate the following microFIT webpages and resources to the relevant parities:
  2. Processing Contract and account changes: As part of the microFIT Contract assignment process, the LDC will:
    • Establish a Generator Account in the assignee’s name and provide the assignee with the Generator Account Number associated with the new Generator Account;
    • Provide confirmation of the assignee’s Generator Account details to the IESO via Beacon;
    • Cease to be a party to a Connection Agreement with the previous microFIT Supplier, and become a party to the Agreement with the new Supplier, and
    • Acknowledge the completion of microFIT Contract Assignments via the acknowledgement task communicated through Beacon.
  3. Continuing to make Generation Payments pending notification of a successful assignment:
    • The sale of a property with a microFIT Facility on it does not mean that the microFIT Contract and, with it, the Generation Payments will automatically be assigned. Therefore, LDCs should continue to make Generation Payments as per the payment provisions in the microFIT Contract and Retail Settlement Code until they receive notice from the IESO that the microFIT Contract has been assigned.

LDC Role in Connection Agreements

The termination of a Connection Agreement automatically results in the termination of the microFIT Contract. If a Connection Agreement is terminated by the LDC or the Supplier, the LDC should notify the IESO at microFIT.LDC@ieso.ca with the date the Connection Agreement was terminated.

LDC Role in microFIT Contract Terminations

There are three scenarios where a microFIT Contract may be terminated before the end of the term:

  1. where a Supplier opens and completes a request to voluntarily terminate the microFIT Contract via Beacon;
  2. due to a breach of the Contract by the Supplier that is not cured within the prescribed remediation period resulting in the termination of the Contract by the IESO; or
  3. automatically when the Connection Agreement between the Supplier and the LDC is terminated by the LDC or the Supplier.

LDCs are notified via Beacon on or before the effective date of all microFIT Contract terminations. Once notified, LDCs are expected to update their settlement system and cease Generation Payments as of the effective date of the termination.

To maintain Contract confidentiality, the IESO cannot disclose detailed reasons for the termination to the LDC.