July 15, 2013

1. July 15, 2013 FIT 2.1 Application Review: Common Issues for Solar PV and Wind Projects

2. Disclaimer This presentation is intended as a high level overview of common issues for failing the Completeness and Eligibility criteria for applications utilizing Solar PV and Wind Renewable Fuels. Any information provided is for information purposes only to help applicants avoid common errors in future processes and is not legally binding on the OPA. To the extent there is any conflict or inconsistency between this presentation and the FIT Rules, Standard Definitions, or Contract, the FIT Rules, Standard Definitions and Contract shall govern.

3. Introduction • The Small FIT application period ran from December 14, 2012 to January 18, 2013 • 3,938 Applications were received, of which 1,163 passed the completeness and eligibility reviews • On July 3, 2013, the OPA announced 951 Contract offers for 146.5 MW • While the procurement process was still underway, the OPA provided high-level messages regarding Application status • Detailed messages have been sent to all unsuccessful Applicants detailing the specific criterion on which their Application failed • The purpose of this webinar is to provide additional information regarding common application failure reasons in advance of future FIT Application Periods

4. Agenda • Summary of Initial Small FIT Procurement Process • Looking Forward to the 2013 Small FIT Procurement Target • General Application Errors (all areas) • Specific Application Problem Areas • Site Access, Deemed Single Property, Fees and Security, Land Use Restrictions, Third Party Forms • Conclusion and Reminders

5. Small FIT Process – Where are we? COMPLETE Offer list now posted Contract process underway COMPLETE COMPLETE *Timelines are targets

6. FIT 2 – Small FIT Applications Submitted Initial Small FIT Application Period: December 14, 2012 – January 18, 2013 * Totals may vary slightly due to rounding

7. FIT 2 – Small FIT Applications Accepted Applications determined to be complete and eligible * Totals may vary slightly due to rounding

8. FIT 2 – Small FIT Contract Offers Applications passing TAT/DAT * Totals may vary slightly due to rounding

9. FIT 2 – Small FIT Applications * Totals may vary slightly due to rounding

10. Independent Evaluation Monitor • The independent Evaluation Monitor was selected through a competitive RFP. This role was to: • Review the Small FIT project evaluation criteria for objectivity and integrity    • Review the process by which the OPA conducted the review and selection of successful applicants to ensure the process was suitable and objectively conducted • Review the process used when communicating with FIT applicants to ensure that an equitable opportunity was provided to all applicants to participate in the FIT process and to ensure adherence to the OPA process • Provide a written opinion regarding the integrity of the review and contracting process once the contracts have been issued and the process has been concluded

11. Fall 2013 Small FIT Procurement Target • As detailed in the June 12, 2013, Minister of Energy’s directive, a new 70 MW Procurement Target will be launched in the Fall of 2013 • This direction instructs the OPA to include any un-contracted capacity from the previous 200 MW Procurement Target • 53.5 MW from the previous Procurement Target will be added to the Fall Procurement Target bringing the total to 123.5 MW • The additional 15 MW pilot for Rooftop Solar PV on un-constructed buildings will run simultaneously but will be additional to this 123.5 MW Small FIT Procurement Target

12. Application Process Overview • The OPA reviewed each and every application individually • Applications were reviewed in accordance with the FIT 2.1 Rules as posted (with the exception of new land use restrictions, FIT 2.1 Rules were substantially the same as FIT 2.0 posted August 10, 2012) • Completeness • Eligibility • Status as Contract Capacity Set-aside • Priority Points • Each Applicant was notified of the status of their respective Application(s) • Application Completed: Complete and Eligible • Rejected: Unsuccessful

13. General Application Errors • FIT Reference Number not marked on all submitted documents • Section 5.1(d) of the FIT Rules • Hard copy of Application not submitted within 5 business days • Applicant Legal Name differs across submitted documents • Prescribed Forms altered • e.g. representations and warranties being changed on the form • Incomplete forms • Inaccurate forms • Non original signatures on third-party Prescribed Forms • e.g. rooftop engineering form

14. Site Access • Site Access Rules found in Section 3.1(f) and (g) of the FIT Rules • FIT is a standard offer program – the Contract is executed before a Project is developed • Important to demonstrate at Application time that a Project will have sufficient site access rights to develop, construct and operate for the entire expected term of the Contract • It is important the OPA only execute a contract with a counter-party that has sufficiently demonstrated that it has access rights to its Site • e.g. terms of too short duration, conditions in favour of the landlord

15. Site Access • An Applicant must demonstrate Site Access to all lands on which the Site is proposed to be located • Site Access may only be conditional in favour of the Applicant (but may be subject to such conditions as may be required by the Crown) • The reason being that conditions in favour of the landlord could legally remove an Applicant’s site access rights through no fault of the Applicant, and therefore invalidate Section 3.1(f) or 3.1(g) • If the Site Access agreement is an option agreement, it must be exercisable and valid from the date the Application is submitted to the date that can reasonably be expected to be the Milestone Date for Commercial Operation (MCOD)

16. Site Access: Crown Lands • For Projects proposed on Crown Land, Applicants must provide the OPA with a copy of the MNR Crown Land Site Report (CLSR) • Alternatively, an Applicant can provide documents evidencing its Applicant of Record Status • The CLSR must be submitted to the MNR prior to the submission of the hard copy FIT Application • Project “Grid Cells” must be provided in the electronic Application and on the Summary of Access Rights Prescribed Form • Applicants are responsible for confirming whether their project is situated on any provincial or federal Crown Land before submitting their FIT Application to determine if these requirements apply to their project

17. Site Access: Common Application Errors • Lease/contract, Option, Deed of Land etc. were NOT in the name of Applicant • Site Access Rights are only acceptable provided that the Applicant legal name on the Site Access evidence is the same as the electronic Application • Ensure ownership/Site Access evidence is tied legally back to the Applicant in a clear fashion • Options or similar rights had conditions that were NOT in favour of the Applicant • Site Access Rights were not accepted if the conditions within the Site Access evidence were in favour of the landlord (e.g. if the landlord could terminate the option to lease at their discretion) • Options or similar right were NOT in effect for an adequate period of time • Many Applications had options to lease or purchase, however, the option period of the agreement was for an insufficient period of time • Options must be valid from Application to a reasonably assumed MCOD • Wind projects are expected to have a longer development and construction period than Rooftop Solar

18. Site Access: Prescribed Form Examples

19. Site Access: Prescribed Form Examples • Insert examples of eligible Site Access Prescribed Form showing a perfect form.

20. Deemed Single Property • A Deemed Single Property is the Property on which the Project is to be located as well as any Abutting Properties on which the Applicant, or an Affiliate of the Applicant, has Site Access Rights • There are restrictions on how many kW of the same Renewable Fuel can be located on a Deemed Single Property • These restrictions are in place to ensure that Small FIT Application Periods are only open to Applicants developing Small FIT sized Projects (≤ 500 kW)

21. Deemed Single Property • Deemed Single Property Rules are found in Section 2.2(b) of the FIT Rules • Projects CAN be located on the same Deemed Single Property as another FIT Project owned by the same Applicant, if: • Projects are of different technologies, or • Projects are of the same technology, if: • Contract Capacities are aggregated to determine price when two or more applications are made within the same Application Period (the combined capacity must not have been greater than 500 kW on a Deemed Single Property), or • The Application for 2nd project is not submitted until after 1st project has reached commercial operation • Compliance with the Deemed Single Property Rules is confirmed via the Multiple Application Disclosure prescribed form and the representation identified in Section 3.2(k) of the Rules

22. Multiple Application Disclosure: Common Application Errors • All electronically submitted Applications were not accurately disclosed on Schedule 1 (or an equivalent document) of the Prescribed Form • An Applicant must represent and warrant in the Application that neither the Applicant, nor any Applicant Related Person, has submitted a separate Application in unless it has been disclosed in the Prescribed Form • Form needed to be provided with each Application and include all previously submitted Applications • Greater than 500 kW on a Deemed Single Property • For example: If the Applicant proposes 3 Projects on Abutting Properties and each is 250 kW, the third Project would be ineligible as it would constitute a total of 750 kW on a Deemed Single Property

23. Multiple Application Disclosure: Prescribed Form Examples

24. Fees and Security • Application Fees are intended to help recover the OPA’s costs in processing Applications • Application Security is security for the OPA in the event an Applicant fails to comply with certain requirements in the Rules • For example, failing to deliver an executed FIT Contract and Completion and Performance security within 20 business days of an offer notice, undergoing a prohibited change of control or assignment, or making a material misrepresentation

25. Fees and Securities • All Applicants must submit an Application Fee – Section 3.1(b) of the FIT V2.1 Rules • Greater of a) $0.50 per kW of proposed Contract Capacity or b) $500, subject to maximum of $5,000 • All Applicants must submit Application Security – Section 3.1 (c) and (d) of the FIT V2.1 Rules • Greater of a) $1,000 or b) $20/kW of proposed Contract Capacity for Solar (PV) Projects or $10/kW for all other Projects • Aboriginal and Community Participation Projects where Participation Level >50%, $5/kW regardless of Renewable Fuel

26. Fees and Security: Common Application Errors • Unacceptable formats: personal cheques, photocopies of cheques, letters of credit • Acceptable formats: certified cheque, bank draft, or money order payable to and in favour of the Ontario Power Authority • FIT Reference Number not marked on all submitted documents • Section 5.1(d) of the FIT Rules • Application Fee and Security were submitted using one cheque • Must be submitted separately to enable the OPA to return just the security. • Resubmitted Applications did not submit new fees and securities to replace the Application Fee/Security provided with their Pre-Existing Application. • Pre-Existing Application Fee and Security will be returned to Applicants For unsuccessful Applications, any Application Security that you delivered to the OPA for a FIT 2.1 Application will be returned to you. The Application Fee is non-refundable.

27. Agricultural Land Use Restrictions • Agricultural land use restrictions are intended to ensure that prime agricultural areas of the province, including Organic Soils and Specialty Crop Areas, are protected and maintained for present and future agricultural use • The Rules pertaining to the agricultural land use restrictions are found in Sections 2.1(c)(i) to (iv), and Sections 3.3(d)

28. Agricultural Land Use Restrictions • Non-Rooftop Projects cannot be located on CLI Class 1, 2, or 3 Lands unless the Site is entirely located on: • an airport/aerodrome • a closed landfill • a federal military installation • a Contaminated Property • a Property on which industrial uses are Lawfully Permitted Uses and the Property is being used for industrial uses, or, • Class 3 Lands that are owned by a Municipality • Non-Rooftop Projects cannot be located on Specialty Crop Areas or CLI Organic Lands • Non-Rooftop Projects can be located on mixed soil Properties provided the Site is not located on CLI Class 1, 2 or 3 Lands

29. Agricultural Land Use Restrictions • In order to evidence compliance with the agricultural land use restrictions, Applicants must: • Provide the OPA with a current map from the Canada Land Inventory showing the CLI map quadrant number(s), the Site, and the Property or Properties on which the Project is located • www.omafra.gov.on.ca/english/landuse/feed-in-tariffprogram.htm • Submit a soil study for the Property if the Project is located on a mixed soil Property • The soil study must use the prescribed methodology and be peer reviewed according to the methodology set by OMAFRA • www.energy.gov.on.ca/en/fit-and-microfit-program/fit-soilstudy

30. Agricultural Land Use Restrictions: Common Application Errors • Using incorrect CLI maps • As noted on the FIT website and in the FIT Standard Definition for “Canada Land Inventory or CLI”, the required CLI maps for the FIT Program are available on OMAFRA’s website at: www.omafra.gov.on.ca/english/landuse/feed-in-tariffprogram.htm • Not providing a CLI map • In cases where no detailed soil map was available (e.g., some “unclassified” areas in northern Ontario), a map from the above site was still required per the FIT Rules • In such cases, a copy of the overview CLI map could be provided, with relevant “quadrant number” noted • Applicant produced CLI Maps were not eligible for submission

31. Agricultural Land Use Restrictions: Acceptable Evidence CLI Map Grid Cell Numbers

32. Agricultural Land Use Restrictions: Acceptable Evidence Acceptable CLI Map from OMAFRA Website

33. Agricultural Land Use Restrictions: Common Application Errors • Soil study not completed for mixed soil properties OR, soil study confirms that the Site is located on CLI Class 1, 2, 3 or Organic Soils • When a Property contained more than one (1) type of soil Classification, the CLI Map must have been accompanied by a soil study and the Prescribed Form: Soil Study Peer Review Attestation for Non-Rooftop Solar Facility

34. Agricultural Land Use Restrictions: Common Application Errors Soil Study and Prescribed Form Required

35. Third Party Forms: Rules • All third party Prescribed Forms are required to have original signatures in order to be verifiable • Photocopied signatures were not accepted • In the case of multiple Application submissions, original signature is proof that third party signed off on prescribed form for each Application • Applicants who submitted third party Prescribed Forms with photocopied signatures were given the opportunity to submit the original form with the original signature within a required timeframe • If the OPA did not receive the original form with the original signature the Application was deemed incomplete • If the Applicant submitted a newly created form that was not the one originally submitted, even if the new form had an original signature, this form was not accepted as it represents an alteration of the Application

36. Third Party Forms – Zoning Forms + Maps • Rules pertaining to the zoning forms are found in Section 3.3(d) (iv) to (vi) • Zoning maps that accompanied the Prescribed Form must show the following elements in order to be eligible: • The zoning map mustshow the current zoning designations • The outline of the Propertyor Properties on which the Project is located (Project Property/ies) • The location of the Site on the Project Property/ies • The zoning of the Project Property/ies • The zoning of all Abutting Properties • The zoning form itself (either the opinion or the certificate) must be the original signed copy • If Zoning Opinion is used it must be signed by a registered professional planner • If Zoning Certificate is used it must be signed by an eligible municipal official

37. Third Party Forms – Zoning Forms + Maps: Acceptable Evidence Eligible Zoning Map information Required Zoning Map Information

38. Third Party Forms – Rooftop Solar PV Engineering Confirmation • Rules pertaining to the Rooftop Solar PV engineering confirmation form are found in Section 3.3(f) of the FIT Rules • Rooftop Solar Projects must submit a confirmation from a Professional Engineer which states that the Existing Building has sufficient surface area to support the Project and is suitable to support the Project, or will be suitable to support the Project once upgrades are completed • If applicable, the preliminary list of necessary upgrades must be listed on the form • The Rooftop Solar PV engineering confirmation is used by the OPA to ensure that Rooftop Projects can be constructed on their proposed Site • This gives more certainty to the OPA that the project can reach Commercial Operation

39. Third Party Forms – Rooftop Solar PV Engineering Confirmation: Common Application Errors • Prescribed Forms were altered • e.g., clauses crossed out or added • Photocopies of the Prescribed Form were submitted rather than required originals • All third party forms must be original • Exhibit “A” (the list of improvements to the building that are necessary) was not provided for Applications where the Professional Engineer indicated that the building would need improvements in order to be able to support the Project

40. Third Party Forms – Engineering Assessment: Prescribed Form Examples

41. Third Party Forms – Engineering Assessment: Prescribed Form Examples

42. Conclusion and Reminders • Applicants are reminded that their Applications may have failed on multiple items and not just the item indicated in the reason for failure on your My FIT Home Page and in OPA email communications • Applicants that were unsuccessful in the initial Small FIT 2.1 Application Period are welcomed to submit a new Application in the upcoming Fall 2013 Application Period • Please be sure to consult the updated Transmission Availability Tables when they are posted for the Fall 2013 Small FIT Application Period

43. Input for Future Small FIT Procurements • The OPA will be reviewing the FIT Rules and application process in advance of the upcoming Fall 2013 Small FIT Application Period • Stakeholders are encouraged to provide the OPA with feedback on areas where process could be improved for Applicants • Any feedback should be sent to FIT@powerauthority.on.ca by July 31, 2013 • Please include the text “Input for Future Small FIT Procurements” in the subject line of your email • Reminder that the OPA must administer the FIT Program according to the Minister of Energy’s FIT Directives

44. Questions and Resources Questions regarding FIT or microFIT, including application questions: FIT@powerauthority.on.ca microFIT@powerauthority.on.ca Questions regarding your existing FIT or microFIT contract: FIT.contract@powerauthority.on.ca microFIT.contract@powerauthority.on.ca Where to find additional information: FIT.powerauthority.on.ca microFIT.powerauthority.on.ca Questions regarding approval requirements for renewable energy projects – Ministry of Energy’s Renewable Energy Facilitation Office: www.ontario.ca/refo