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Annual Reduction Target

The Annual Reduction Target (ART) is a licensee’s required spend on closure activities that reduce inactive liability in a calendar year. It is calculated by multiplying the sum of inactive liabilities by the Liability Reduction Percentage (LRP) for the year.

If, in a given year, a licensee has exceeded their ART, then the excess is carried forward to be used toward the annual retirement obligations for subsequent years. This excess is called carryover and there is no limit for its accumulation.

The Inactive Liability Reduction Program (ILRP) details can be viewed in IRIS. On the home screen hover over 'Support' and click 'My Business Associate.' On the right side, click LLR Details. This should take you to the main tab for LLR 'Main' tab. Next to that tab is the 'Inactive Liability Reduction' tab. The top Summary is the current snapshot of the ILRP program, and the bottom Detail is the Year-Over-Year look at the program.

If a licensee’s prescribed spend would result in having to abandon or decommission infrastructure that is intended to be reactivated or used for a future purpose, the licensee may apply to the Ministry of Energy and Resources to have their ART reduced. The ‘Decrease in ART’ application can be submitted in IRIS with all relevant information attached in a single pdf file. If approved, the ministry will set a timeline in which the reactivation or use of the infrastructure must commence and/or be completed. This will be tracked through compliance plan and milestone obligations in IRIS. The licensee will be notified of these obligations in IRIS, provided they have set up to receive these notifications. The ministry may also authorize a reduction in the prescribed spend or percentage on application for licensees in extenuating financial circumstances.

If, in a given year, a licensee fails to meet their ART and does not have sufficient carryover to cover the shortfall, the ministry may require the submission of a security deposit.

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