The provincial government is exploring a new electricity pricing plan
The Ontario Federation of Agriculture (OFA) provided an agricultural perspective on a proposed new electricity pricing plan.
This new plan from the provincial government for Class B customers “would potentially establish a fixed (Global Adjustment) price for each period of the day (i.e., a time-varying GA charge).” the Ontario Regulatory Registry says. “This price would be set annually and would be conceptually aligned with the (time-of-use) price plan currently available to residential and small business customers.”
For clarity, the Global Adjustment covers the base costs of running Ontario’s electricity system.
Class A customers are medium and large businesses who pay the GA based on their share of total demand during peak hours.
And Class B customers, which include small businesses and farms, pay their GA based on their monthly consumption multiplied by the applicable Class B rate for that month, the Independent Electricity System Operator says.
The Ontario government hopes its proposed plan will encourage users to shift electricity use away from peak hours.
“Under an optional Class B (time-of-use) pricing plan, consumers would pay different electricity commodity prices across three defined periods: off-peak, mid-peak and peak. This approach may appeal to customers who value predictability and certainty while seeking additional tools to manage their electricity needs,” the registry says.
The government posted its proposal on Dec. 9 and gave Ontarians until Jan. 23 to comment.
From the OFA’s perspective, rural Ontario lacks some of the necessary equipment to participate in the government’s proposed idea.
Many small farm operations don’t have smart meters to record proper time of use.
“Electricity distributors in rural areas must complete installation of smart meters to all small business and residential customers, to allow all customers an option to be billed with rates related to changes in system demand,” OFA President Drew Spoeltra wrote in the organization’s response. “This will make conservation and demand management possible for more rural businesses and households.”
The government also asked for answers to six customer focused questions.
The OFA’s verbatim responses are in bold.
1. What communication or education strategies would be most effective for non-RPP customer adoption (e.g., business customers, retailers, large users)?
To leverage public communication, OFA recommends use of focused webinars conducted by the Independent Electricity System Operator (IESO), and engagement with business associations including local and provincial agricultural federations.
2. What is the ideal ratio between peak and off-peak prices (e.g., 3:1)?
OFA recommends IESO review the relationship between historic time-of-use rate components, and Global Adjustment rates to establish a relevant ratio. The time-varied Global Adjustment rates should be reconciled every six months.
3. How can we ensure customers see the link between their behavior (load shifting) and their bill savings?
OFA recommends the inclusion of a comparison of costs under the fixed GA used for the billing cycle and the actual GA total under the time-varied GA rate plan option in monthly customer bills. The inverse should be displayed for customers that are not enrolled in the time-varied GA rate plan option.
4. Would a TOU price that bundles Global Adjustment provide a stronger incentive for your business to shift consumption to off-peak hours?
Agricultural production has various energy use profiles. In addition to rural customers that do not have smart meters and cannot elect to opt into the existing TOU price plan, many aspects of agriculture cannot shift usage to mid or off peak times.
This includes livestock operations with heating, ventilation and climate control constraints that cannot be shifted, and perishable crops that also require climate control. Many of these farm operations lack the scale needed to be able to afford the investing in conservation and demand management measures.
Other types of agricultural production that can shift usage under a retail electricity contract will be extremely interested in having the option to participate in this rate structure.
5. Should the plan be made available to Class A-eligible customers that choose to remain as Class B customers on retailer contracts and/or large RPP customers such as farms and bulk residential buildings?
OFA supports this option being available to as many customers as possible including farms.
6. How often should non-RPP customers be permitted to switch between plans?
Considering administrative constraints, OFA recommends non-PRR customers be allowed to switch as frequently as RPP customers are currently allowed to switch between TOU and Tiered Rate plans.