Ministry of Energy Provides Explanation of Deferred Global Adjustment Recovery
Starting January 1, 2021, a portion of renewable energy contract costs will be funded by the Ontario government instead of electricity customers. This will lower electricity bills for large and mid-sized commercial and industrial consumers who do not participate in the Regulated Price Plan (RPP) or receive the Ontario Electricity Rebate (OER) by reducing Global Adjustment (GA) costs.
Class A consumers could see savings of about 15 per cent on their bills, while non-RPP Class B consumers could see savings of about 16 per cent on their bills*. Actual savings will vary depending on customers’ location and electricity consumption.
RPP customers who receive the OER, such as residential, small business and farm consumers, will receive an adjusted rebate percentage starting January 1, 2021, to keep the average residential bill flat compared to November 2020. For a temporary period of 28 days starting January 1, 2021, all RPP customers, including those paying both time-of-use and tiered rates, will also benefit from being billed at the off-peak rate for 24 hours a day, seven days a week.
*In 2021, Class A and Class B consumers could see savings of about 11% and 12%, respectively, due to the Global Adjustment (GA) deferral repayment in effect for 12 months starting January 2021.
Emergency Order to Defer Global Adjustment (GA)
The Ontario government is deferring a portion of Global Adjustment (GA) charges for Industrial and Commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting from April 2020. The GA rate for smaller Industrial and Commercial consumers (i.e., Class B) has been set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Large Industrial and Commercial consumers (i.e., Class A) will receive the same percentage reduction in GA charges as Class B consumers.
The government intends to keep this relief in place through the end of June 2020, subject to necessary extensions and approvals to implement this initiative.
Industrial and Commercial electricity consumers will automatically see this relief reflected on their bills.
Questions and Answers
Q1. What is the Government of Ontario doing and why?
Ontario is deferring a portion of Global Adjustment (GA) charges for Industrial and Commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting from April 2020. The government intends to keep this relief in place to the end of June 2020, subject to necessary extensions and approvals to implement this initiative.
The GA rate for smaller industrial and commercial consumers (i.e., Class B) will be set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Large Industrial and Commercial consumers (i.e., Class A) will receive the same percentage reduction in GA charges as Class B consumers.
This will provide immediate financial support for companies when they need it most: as they do their part to contain COVID-19 and as they prepare to help get our economy moving again.
Q2. Who will benefit?
Ontario anticipates that more than 50,000 Industrial (typically Class A) and Commercial (typically Class B) electricity consumers will benefit from this relief.
Subject to necessary extensions and approvals to implement this initiative, these consumers would be protected from a marked increase in GA cost caused by the low demand during the COVID-19 outbreak for the months of April, May and June 2020.
Q3. Will consumers be expected to pay back the temporary relief at a later date?
Yes, in 2021, Class A and Class B consumers would see an increase in their Global Adjustment (GA) costs over a 12-month period.
The government intends to propose regulatory amendments (together with other amendments as necessary) to O. Reg. 429/04 made under the Electricity Act, 1998 in May 2020. If approved, these proposed amendments would allow the Independent Electricity System Operator (IESO) to recover the deferred GA charges over a 12-month period beginning in January 2021. Interest costs related to the deferral would not be recovered from consumers.
Q4. Why is this relief only being provided temporarily?
These are temporary relief measures intended to provide immediate financial support for companies when they need it most: as they do their part to contain COVID-19 and as they prepare to help get our economy moving again.
What is Global Adjustment?
The Global Adjustment rate is set and adjusted each month by the IESO to support Ontario’s generating capacity and to cover the cost of conservation programs in Ontario. Its value varies month-to-month, and may be positive or negative depending on the fluctuation of prices in the spot market. If the market price for electricity falls, the Global adjustment generally goes up (and vice-versa).
The rate is set to reflect the differences between the market price and:
- The regulated rate paid to Ontario Power Generation’s baseload generating stations (nuclear, hydroelectric, thermal)
- Payments made to suppliers contracted by the Ontario Power Authority (“OPA”); which include new gas-fired facilities, renewable facilities (wind, solar, etc.) and demand response programs; and
- Contracted rates paid to non-utility generators
- The cost of delivering conservation programs in the province.
For more information please refer to the IESO website.
Who is affected?
If customers buy electricity under the Regulated Price Plan (RPP), an estimate of the Global Adjustment is factored into the electricity prices set by the Ontario Energy Board (OEB). As an RPP customer, you will not see an additional itemized Global Adjustment charge on your bill. You are an RPP customer if you pay the OEB’s Time-of-Use (TOU) or Tiered electricity prices. The majority of Westario Power customers (Residential and General Service<50kW) pay their electricity bills based on the RPP.
If you have entered into a contract to buy electricity from an Electricity Retailer, you are classified as a non-RPP customer, and in accordance with regulation, are subject to the Global Adjustment price in addition to the energy contract price offered by your retailer.
When a customer enters into a contract with a retailer, it is only on the basis of the retailer’s energy price. The Global Adjustment price is not fixed in the retailer contract, it is set monthly by the province’s Independent Electricity System Operator (”IESO”) and applied as a separate line item on your bill.
The IESO classifies larger commercial customers into the following categories for the purposes of calculating the Global Adjustment:
- Class B: customers with an average monthly peak demand over 50 kW and under 5 MW. See the IESO website for more information on how Global Adjustment affects Class B customers
- Class A: customers with an average hourly peak demand of 500 kW to 5 MW (or higher) have the option to participate in the IESO’s Industrial Conservation Initiative (ICI). These customers receive an allocation of Global Adjustment based on their percentage of peak demand as a proportion of the total provincial demand used. More information regarding Class A customers is available on the IESO’s website.
Unsafe wiring can be hazardous to the health and safety of you and your family by causing shocks, fires, and other electrical hazards. The Ontario Electrical Safety Code exists to minimize the dangers caused by unsafe wiring and unsafe electrical products. An electrical inspection must be conducted by a qualified Electrical Inspector to ensure that your wiring complies with the requirements of the Ontario Electrical Safety Code.
When Should Electrical Inspections Be Performed?
An electrical inspection must be conducted anytime you do anything within your business concerning the electrical wiring.
For more information, call the Electrical Safety Authority at 1-877-372-7233 or visit their website at www.esasafe.com
Dispute resolution is a process required by the Ontario Energy Board of each licensed electric distributor, the goal of which is to resolve complaints by consumers and other market participants regarding services provided by the electrical distributor under the terms of its Distribution Licence. Westario Power Inc. is committed to resolving such complaints promptly. If you have been unable to reach an amicable resolution with your party, please contact us at firstname.lastname@example.org or by telephone at 519-507-6937 or toll free 1-866-978-2746.
When Can I Expect my Next Bill?
Westario Power mails the bills by the Town/Village in which you live. Customers can expect to receive their bills at approximately the same time each month. For new customers, your first bill could take up to 60 days before it is received. The same applies to customers that have moved out of a property serviced by Westario Power.
What Should I do if I am Moving?
Please complete the appropriate form under our “Forms and Applications” Tab, allowing a lead time of 5 business days to complete.
If you are enrolled with an energy retailer, you must give your retailer at least 60 days notice of your move date and new address information; as well as notify Westario Power. If you move to an area where your retailer can supply you with electricity, then your retailer will inform you about their current offers available to you at your new address.
Does Westario Power do Tree Trimming?
When customers request Westario Power to trim trees, we will review each request, on a case-by-case basis, to look for potential risks to system reliability.
Trees that interfere with or have the potential for interfering with existing utility lines, or trees that obstruct the route of new lines, will be trimmed, or sometimes removed. There are two exceptions:
- Trees near the distribution lines that pose no immediate risk to Westario Power’s distribution system will not be trimmed or removed. The customer should hire a fully qualified arborist with electrical awareness training. This training allows the arborist to encroach up to 3 feet of energize primary conductors. Since this tree poses no risk to Westario we will not participate in its removal.
- Trees that interfere with secondary service wires (wires from utility poles to the customer’s house or building) will not normally be trimmed or removed. Arrangements can be made to have these wires temporarily disconnected and removed to permit the property owner or contractor to trim or remove the tree. If a customer wants service wires temporarily disconnected to trim or remove a tree, contact Westario Power two weeks in advance to ensure the availability of a utility crew at the desired time. This service is available at no charge during normal working hours.
If Westario Power determines that a tree should be trimmed or removed, Westario Power will remove all branches and wood cut from the tree from the property. The property owner may keep any portion of the wood desired. However, Westario Power will not cut wood to uniform length nor stack the wood. Trees to be removed will be cut as close to ground level as possible.
Fallen trees or limbs that have fallen from standing trees are the responsibility of the property owner. The property owner is also responsible for the disposal of all limbs and wood resulting from the trimming of storm-damaged trees for Westario Power service restoration effort.
What’s yours? What’s ours?
Customers often ask us what equipment they are responsible for when it comes to their home’s electrical system.
In general, you are responsible for:
- Meter Base – the metal box that houses the meter
- Service Panel or Fuse Box – the circuit breakers or fuses and all of the wiring in your home
In general, Westario Power is responsible for:
- Power lines, poles and other electrical equipment that supplies homes other than yours
- Meter – the meter that measures electricity use.
Call us if you are uncertain what electrical equipment you own on your property. If you plan to repair, replace or upgrade your electrical equipment, please ensure you hire a licensed electrician.