Suspension of Time-Of-Use (TOU) Electricity Rates during COVID-19 Outbreak
Regulation - LGIC
Bill or Act:
Emergency Management and Civil Protections Act
Summary of Decision:
On March 17, 2020, the Government of Ontario made an order declaring an emergency (the "Emergency Declaration") under section 7.0.1 (1) the Emergency Management and Civil Protection Act (EMCPA) to respond to the COVID-19 outbreak.
As a result of the emergency, the government instituted social distancing policies, including school and non-essential business closures and work from home policies. The government recognized that these policies would result in increased electricity use during the day for residential customers, and that small businesses and farms, whether they are open or closed, continued to have electricity costs and needed help.
During the week of March 16, there were a steady stream of customer requests to provide prices while social distancing policies were in effect.
On March 24, the government responded by suspending TOU rates, holding electricity prices to the lowest rate, known as the off-peak rate, of 10.1 cents per kilowatt hour, available 24 hours a day, seven days a week for an electricity relief from TOU intended 45-day period. This off-peak price period was enabled by Emergency Order (O. Reg. 80/20) made under subsection 7.0.2(4) of the EMCPA.
The government worked with the Ontario Energy Board, the Independent Electricity System Operator and Local Distribution Companies (LDCs) to implement the change quickly to provide immediate electricity bill relief to families and businesses impacted by COVID-19. The off-peak rate was intended to appear on the first electricity bill TOU customers received after the Order was put in place, or retroactively on future bills if not feasible based on customer billing cycles.
On April 14 the government extended the Emergency Declaration to May 12 to continue the fight against the COVID-19 outbreak. On May 6 the government announced its intention to extend the off-peak TOU rate to the end of day on May 31 to continue to provide support to residential, farm and small business TOU customers.
Analysis of Regulatory Impact:
A typical residential TOU electricity customer with a monthly consumption of 700 kWh is expected to see a bill reduction of around $16 on their monthly bill, depending on their total consumption and consumption behaviours, as a result of this initiative.
Summary of Proposal:
77 Grenville Street, 5th Floor
March 24, 2020