Types of Consumer
The draft regulation proposes to identify two separate classes of electricity consumers:
• Class A consumer is defined as a consumer with an average monthly peak demand in excess of 5 Megawatts over specified periods and is registered as a market participant with the IESO or a customer of a distributor in Ontario for the entire reporting period.
• Remaining consumers would be classified as Class B consumers and billed global adjustment on a volumetric basis.
• All new consumers would initially be classified as Class B consumers until sufficient evidence is available to warrant a Class A designation.
Consumers would be evaluated each year to establish if they qualify as a Class A or a Class B consumer.
Identification of the Peak Hours and Reporting Periods
Using market data, as well as information provided by Local Distribution Companies (LDCs), the IESO will identify and publish the five (5) peak hours for the reporting period:
• A transitional reporting period from May 1, to October 31, 2010 would be used for billing purposes starting January 1, 2011 to June 30, 2011.
• Starting on July 1, 2011 the annual reporting period would be established as May 1, 2010 through to April 30, 2011, and continue on this May 1 to April 30 basis for all subsequent years.
The peak hours are the five hours, occurring on different days, in which the greatest number of Megawatts (MW) of electricity were withdrawn by all market participants in Ontario from the IESO-controlled grid.
LDCs would be required to submit the following information to the IESO in respect of the five peak hours:
(i) quantity of embedded generation, and
(ii) volume of electricity distributed to Class A consumers by the distributor and its embedded distributors.
The IESO would publish the total system demand during the peak hours.
Establishing a Peak Demand Factor
The peak demand factor for each Class A consumer will be calculated according to that consumer’s percentage contribution to overall system demand during the five peak hours identified by the IESO. This factor will be determined in order to identify a proportionate share of the total global adjustment cost to be allocated to each Class A consumer. For example, if a Class A consumer is assessed to be responsible for 1% of peak demand during the reporting period, that consumer will be allocated 1% of the total system-wide global adjustment cost throughout the subsequent billing period.
Class B consumers will be charged (or credited) a global adjustment rate calculated by dividing the remaining total global adjustment cost (i.e. after removing the portion to be paid by class A consumers) by the total volume of consumption from Class B consumers. That is, Class B consumers will continue to be charged (or credited) Global Adjustment on a flat rate basis.
Amendments to Existing Regulation
As previously stated, it is proposed that the current methodology for allocating GA continue until January 1, 2011. However, several amendments to the existing regulation are proposed to update the existing provisions, without imposing substantive changes.
LDC Billing of Global Adjustment to Class B Consumers
It is proposed that distributors be given greater operational flexibility to ensure the global adjustment rate applied to Class B consumers is as accurate as possible. Specifically, an LDC would have the option of billing a customer on an estimated global adjustment rate, or the actual global adjustment rate, subject to certain conditions.
The draft regulation proposes that the global adjustment line which appears on consumers’ bills be consistent on all bills effective January 1, 2011 as 'Global Adjustment’.
Proposed Amendments to Other Regulations
Ontario Regulation 431/04 (Payments Re Section 25.34 of the Act) made under the Electricity Act, 1998 governs certain payments relating to electricity retailers with respect to retail contracts with certain consumers that were entered into on or before November 11, 2002 but does not include a retail contract renewed after December 9, 2002. These retail contracts were overridden by the Electricity Pricing, Conservation and Supply Act, 2002 (Bill 210) that capped the price of electricity, and in 2005, these consumers began paying the Regulated Price Plan rates set by the Ontario Energy Board. O. Reg. 431/04 ensures that retailers continue to receive the contract prices for these consumers during the contract period.
As all contracts are scheduled to expire by the end of 2010, it is proposed that the application of O. Reg. 431/04 would end on January 1, 2011 and the regulation would be revoked on July 1, 2011. Consequential amendments would also be made to Ontario Regulation 430/04 (Payments Re Section 25.33 of the Act) to revoke the provisions of this regulation that deal with these contracts as of July 1, 2011.
Ontario Regulation 48/05 made under the Ontario Energy Board Act, 1998 governed the payment of the Ontario Electricity Financial Corporation’s surplus in 2004-2005 to low volume and designated consumers. It is proposed that O. Reg. 48/05 be revoked on January 1, 2011 as all of the payments under the regulation have been completed.