Regulation - LGIC
Industrial Conservation Initiative Peak Hiatus
Regulation Number(s):
O. Reg. 429/04
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998
Summary of Decision:
O. Reg. 429/04 addresses GA and its allocation across classes of electricity consumers. Part of the regulation establishes rules associated with the Industrial Conservation Initiative (ICI), the program which sets out electricity pricing for large, primarily industrial consumers.
Ontario amended O. Reg. 429/04 to introduce an "ICI Peak Hiatus" in which electricity consumers participating in the Industrial Conservation Initiative (ICI) do not need to take actions to avoid system peaks this year as economic recovery from COVID-19 progresses.
The amendment makes the use of the peak demand factor (PDF) of existing ICI participants, also known as Class A consumers, from the 2019-20 base period mandatory for determining Global Adjustment (GA) charges in the 2021-22 billing period (or "adjustment period").
Consumers who wish to enter ICI for the 2021-22 program year will not be impacted by the hiatus; they will be assessed on their electricity consumption during peak hours in 2020-21.
This regulatory amendment is in effect as of June 30, 2020.
Ontario amended O. Reg. 429/04 to introduce an "ICI Peak Hiatus" in which electricity consumers participating in the Industrial Conservation Initiative (ICI) do not need to take actions to avoid system peaks this year as economic recovery from COVID-19 progresses.
The amendment makes the use of the peak demand factor (PDF) of existing ICI participants, also known as Class A consumers, from the 2019-20 base period mandatory for determining Global Adjustment (GA) charges in the 2021-22 billing period (or "adjustment period").
Consumers who wish to enter ICI for the 2021-22 program year will not be impacted by the hiatus; they will be assessed on their electricity consumption during peak hours in 2020-21.
This regulatory amendment is in effect as of June 30, 2020.
Analysis of Regulatory Impact:
Under the ICI program, GA charges for participants (called Class A consumers) during each 12-month billing period from July to the following June are determined based on their contribution to the top five peak demand hours in Ontario during the previous 12-month base period from May to the following April.
The COVID-19 pandemic has impacted Ontario electricity consumers, including many participants in ICI. Some consumers have reduced or stopped operations due to the pandemic. This measure is in response to the unprecedented economic impact of COVID-19 and the importance of restarting our economy. The regulatory amendments are intended to respond to stakeholder concerns, mitigate negative impacts from the pandemic on Class A consumers and help support a smoother recovery. The changes introduce an "ICI Peak Hiatus" in which ICI participants do not need to take actions to avoid system peaks this year as economic recovery from COVID-19 progresses.
Most peak hours occur during the summer. Incenting consumers to reduce demand during potential peak hours throughout the upcoming summer would represent an additional burden at a time that many large consumers are struggling to cope and recover from the impacts of the COVID-19 pandemic. Due to COVID-19, electricity consumption in Ontario is below average and the province is forecast to not require the ICI program to maintain reliability over the next year. The Independent Electricity System Operator (IESO) is forecasting that Ontario will have an adequate supply of electricity this year. The ICI Peak Hiatus is intended to help support the recovery of Ontario's economy by easing burden for large electricity consumers, including industrial and commercial business. The mandatory approach is also intended to help ensure fairness and mitigate any potential negative impacts on Class B consumers. It is not expected that there would be significant compliance/administrative costs for businesses or other electricity consumers.
The COVID-19 pandemic has impacted Ontario electricity consumers, including many participants in ICI. Some consumers have reduced or stopped operations due to the pandemic. This measure is in response to the unprecedented economic impact of COVID-19 and the importance of restarting our economy. The regulatory amendments are intended to respond to stakeholder concerns, mitigate negative impacts from the pandemic on Class A consumers and help support a smoother recovery. The changes introduce an "ICI Peak Hiatus" in which ICI participants do not need to take actions to avoid system peaks this year as economic recovery from COVID-19 progresses.
Most peak hours occur during the summer. Incenting consumers to reduce demand during potential peak hours throughout the upcoming summer would represent an additional burden at a time that many large consumers are struggling to cope and recover from the impacts of the COVID-19 pandemic. Due to COVID-19, electricity consumption in Ontario is below average and the province is forecast to not require the ICI program to maintain reliability over the next year. The Independent Electricity System Operator (IESO) is forecasting that Ontario will have an adequate supply of electricity this year. The ICI Peak Hiatus is intended to help support the recovery of Ontario's economy by easing burden for large electricity consumers, including industrial and commercial business. The mandatory approach is also intended to help ensure fairness and mitigate any potential negative impacts on Class B consumers. It is not expected that there would be significant compliance/administrative costs for businesses or other electricity consumers.
Further Information:
O. Reg. 429/04: ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT
Proposal Number:
20-ENDM018
Posting Date:
Summary of Proposal:
Ontario amended O. Reg. 429/04 to introduce an "ICI Peak Hiatus" in which electricity consumers participating in the Industrial Conservation Initiative (ICI) do not need to take actions to avoid system peaks this year as economic recovery from COVID-19 progresses.
Contact Address:
77 Grenville St, Toronto, M7A 2C1
Effective Date:
June 30, 2020
Decision:
Approved