Global Adjustment. Overview. Christine Woon, P. Eng. Key Account Specialist Customer Care

Transcription

1 Global Adjustment Overview Christine Woon, P. Eng. Key Account Specialist Customer Care

2 Understanding Global Adjustment (GA) The GA was established by the Provincial Government in 2005 to cover the cost of providing adequate generating capacity and conservation programs for Ontario The GA is the difference between the Hourly Ontario Energy Price (HOEP) and regulated/contracted price of generation that includes Ontario Power Generation s (OPG) regulated nuclear and hydro generation Independent Electricity System Operator s (IESO) contracts with generators Contracted rates administered by the Ontario Electricity Financial Corporation (OEFC) paid to existing generators All electricity rate payers in the province pay the GA, even if it is not listed on the bill. The GA is included in Time-of-Use (TOU) and Tiered Rates for residential and small commercial customers 2

3 Understanding Global Adjustment 3

4 Understanding Global Adjustment (GA) Background: Prior to 2010, the global adjustment was recovered from all customers via a volumetric rate ($/kwh) In 2010, the provincial government introduced a mechanism whereby customers whose monthly demand during a specified base period exceeded 5,000 KW, were eligible to participate as a Class A (also known as the Industrial Conservation Initiative - ICI) All other customers are considered Class B Effective January 1, 2017, the Ontario government lowered the Class A demand threshold to 1,000 kw On March 2, 2017, the Ontario government announced the threshold for North American Industry Classification System (NAICS) customers would be further lowered to 500 kw 4

5 Understanding Global Adjustment (GA) Allocation of Costs: Most customers pay global adjustment based on the volume of electricity they consume each month (kwh) Class B Customers Eligible customers who participate in the Industrial Conservation Initiative program pay global adjustment based on their contribution to the 5 highest provincial peaks (Customer s Peak Demand Factor) during a base year Class A Customers 5

6 Understanding Global Adjustment (GA) Regulatory Changes 2010 Customers with an average monthly demand greater than 5,000 KW during a specified base period 2014 Customers with an average monthly demand greater than 3MW. Sector restrictions for customers 3,000 5,000 KW (NAICS code or commencing with the digits 21, 31, 32, 33, 518 or 1114 ) 2017 Customers with an average monthly demand > 1MW 2017 Coming Soon: Customers with an average demand greater than 500 KW and less than or equal to 1,000 KW. Sector restrictions for NAICS code starting with 31 and 32 6

7 GA Regulation Requirements to participate in the Industrial Conservation Initiative (Class A) are outlined in regulation 7

8 ICI Annual Cycle Each ICI cycle (base period) begins May 1 and ends April 30 Customers with a peak demand > 5 MW are automatically in the program and must OPT-OUT if they don t want to participate Customers with a peak demand >1 MW and <5 MW must OPT-IN if they wish to participate Customers have until June 15 to opt in/out 8

9 ICI Critical Timelines Current Base Period: May 1, 2016 to April 30, 2017 For Billing Period: July 1, 2017 to June 30, 2018 April 30, 2017: Base period ends May 31, 2017: LDCs to provide each eligible Class A consumer of its peak demand factor June 15, 2017: Customers to notify their LDCs if they elect to opt-out or opt-in to ICI July 1, 2017: Next ICI adjustment period begins and ends June 30,

10 ICI Overview Determine Eligibility to Participate - Example 10

11 Totalization of Meters Not Permitted ICI Overview Data from separate load facilities, even if they are under the same ownership, cannot be totalized for an electricity consumer to qualify for ICI. For example, Meter 1 cannot be added to Meter 2 Meter 1 Meter 2 11

12 Provincial Peaks Posted on the IESO s website 12

13 ICI Overview Calculating Peak Demand Factor Example Co-Incident Demand Customer s Peak Demand Factor (PDF) = , =

14 ICI Overview Calculating Peak Demand Factor Example Co-Incident Demand Customer s Peak Demand Factor (PDF) = , =

15 Notification Letter Example ICI Overview 15

16 Opt-In Form Once a customer opts-in/out by June 15, they are locked in during the applicable adjustment period 16

17 Consent Form The Ministry of Energy requires Class A enrolled customers to provide the address and GPS coordinates of their head office and enrolled load facilities, as well as consent for the information to be shared with the Ministry and made public 17

18 GA Rates Posted on the IESO s website Class B: Total GA: 18

19 Class B Sample Billing 19

20 Class A Sample Billing 20

21 Class A vs Class B Sample Calculation December 2016 Class B Calculation: Adjusted kwh Used = 797, Class B Actual Rate (Dec 2016) = $ /kWh Global Adjustment Class B = 797, x = $69, Class A Calculation: Peak Demand Factor = Total Provincial GA (Dec 2016) = $965.5M Global Adjustment Class A = x $965.5M = $69,

22 Class A vs Class B Sample Calculation 22

23 ICI Overview Scenario 1: Peak Demand Factor Effect of Demand Reduction Customer s Peak Demand Factor (PDF) = , =

24 ICI Overview Scenario 2: Peak Demand Factor Effect of Demand Reduction Customer s Peak Demand Factor (PDF) = , =

25 ICI Overview Bill Impact Effect of Demand Reduction Scenarios Scenario 1: 100 KW Demand Reduction Peak Demand Factor = GA = x $965.5M = $69, Peak Demand Factor = GA = x $965.5M = $65, Difference $4, Scenario 2: 300 KW Demand Reduction Peak Demand Factor = GA = x $965.5M = $151, Peak Demand Factor = GA = x $965.5M = $138, Difference $12,

26 Class A vs Class B Review 26

27 ICI Summary Key Considerations ICI requirements are outlined by the provincial government in O. Reg. 429/04 ICI Critical Timelines: After the end of a base period, April 30, Toronto Hydro provides eligible customers with their peak demand factor by May 31. Customer to opt-out or opt-in by June 15. Billing cycle starts July 1 and ends June 30, the following year Customers are generally unable to switch from Class B to Class A or viceversa during a billing period 27

28 ICI Summary References ervalmeteredcustomers.aspx 28

29 Disclaimer The information in these materials is based on information currently available to Corporation and its affiliates (together hereinafter referred to as ), and is provided for information purposes only. does not warrant the accuracy, reliability, completeness or timeliness of the information and undertakes no obligation to revise or update these materials. (including its directors, officers, employees, agents and subcontractors) hereby waives any and all liability for damages of whatever kind and nature which may occur or be suffered as a result of the use of these materials or reliance on the information therein. These materials may also contain forward-looking information within the meaning of applicable securities laws in Canada ("Forward-Looking Information"). The purpose of the Forward-Looking Information is to provide Toronto Hydro s expectations about future results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes. All Forward-Looking Information is given pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify Forward-Looking Information, although not all Forward-Looking Information contains these identifying words. The Forward- Looking Information reflects the current beliefs of, and is based on information currently available to, s management. The Forward-Looking Information in these materials includes, but is not limited to, statements regarding Toronto Hydro s future results of operations, performance, business prospects and opportunities. The statements that make up the Forward-Looking Information are based on assumptions that include, but are not limited to, the future course of the economy and financial markets, the receipt of applicable regulatory approvals and requested rate orders, the receipt of favourable judgments, the level of interest rates, s ability to borrow, and the fair market value of s investments. The Forward-Looking Information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the Forward-Looking Information. The factors which could cause results or events to differ from current expectations include, but are not limited to, the timing and amount of future cash flows generated by Toronto Hydro's investments, market liquidity and the quality of the underlying assets and financial instruments, the timing and extent of changes in prevailing interest rates, inflation levels, legislative, judicial and regulatory developments that could affect revenues, and the results of borrowing efforts. cautions that this list of factors is not exclusive. All Forward-Looking Information in these materials is qualified in its entirety by the above cautionary statements and, except as required by law, undertakes no obligation to revise or update any Forward-Looking Information as a result of new information, future events or otherwise after the date hereof. 29