Adjust the Eligibility for the Ontario Electricity Rebate (OER)
Bill or Act:
Ontario Rebate for Electricity Consumers Act, 2016
Summary of Decision:
Regulatory amendments to Ontario Regulation 363/16: General have been made via an amending regulation that clarify the Ontario Electricity Rebate (OER) eligibility of certain consumers that were inadvertently excluded under the prior regulatory framework. These include certain common elements in multi-unit complexes that are comprised of at least 50% residential units, such as condominiums, residential mobile home parks and retirement residences that are not long-term care homes but also do not meet eligibility criteria as a residential multi-unit complex.
When the OER was introduced in November 2019, eligibility rules were put in place that differed in comparison to those in place under the previous 8% rebate. The changes were intended to clarify and narrow eligibility in the interest of fiscal responsibility and ensuring that the OER reached intended beneficiaries.
When the new eligibility rules were introduced, a legacy exemption period was put in place for consumers that were previously receiving the 8% rebate but are not eligible for the OER under the new rules. The legacy exemption period, which was extended twice due to the pandemic, is currently slated to end on October 31, 2022.
Since November 2019, Ministry of Energy (ENERGY) has become aware that certain consumers are inadvertently excluded by the OER eligibility rules. Accordingly, the regulatory amendments help to ensure that intended beneficiaries remain eligible after the end of the legacy exemption period.
The regulatory amendments also clarified the existing 50% rule for multi-unit complexes, namely amending the definition of "unit" applied to calculate the percentage of qualifying units in the building, to exclude units intended for parking, storage or other facilities and services, such as recreation.
Analysis of Regulatory Impact:
Impacts on End Users
Newly eligible consumers will be required to meet notice requirements in order to identify themselves to Local Distribution Companies (LDCs) and attest to their eligibility. While this represents a modest burden for consumers, which could include some businesses, notice requirements are the only feasible way for LDCs to identify eligible consumers and are necessary to help avoid gaming.
Impacts on Regulated Entities
LDCs will be required to ensure their billing systems reflect the inclusion of the correct consumers in advance of November 1, 2022. Newly eligible consumers not covered by the legacy exemption would be eligible to join the program as of July 1, 2022
LDCs will also be required to carry out administrative aspects of ENERGY's proposal to implement the proposed regulatory changes, including communicating with customers regarding their changes, identifying eligible consumers and ensuring billing systems reflect the inclusion of the correct numbers.
Both the anticipated LDC compliance costs related to updating billing systems and carrying out the administrative aspects of the regulatory amendments cannot be quantified. This is due to the fact that there are several LDCs and each will take a different approach to implementing the necessary changes.
ENERGY is working together with the Ontario Energy Board (OEB) to communicate with LDCs and ensure smooth implementation.
May 25, 2021
Summary of Proposal:
The OER provides eligible electricity consumers with a percentage-based reduction calculated based on the amount of their electricity bill before HST.
Currently, eligible accounts under O. Reg. 363/16 (the "Regulation") made under the Ontario Rebate for Electricity Consumers Act, 2016 (ORECA) include:
• Low-volume consumers (i.e. consumers that use 250,000 kWh of electricity a year or less or whose demand is 50 kilowatts or less);
• Farms that meet prescribed requirements under the Regulation;
• Long-term care homes licensed under the Long-Term Care Homes Act, 2007, other than where the account of the long-term care home is also in respect of a hospital; and
• Certain multi-unit complexes such as condominiums and apartments buildings that meet prescribed requirements under the Regulation.
At the time when OER was introduced, the eligibility rules were adjusted relative to the previous 8% rebate in order to narrow and bring further clarity to the eligibility requirements under the Regulation. This was intended to help ensure the rebate was targeted to intended beneficiaries (i.e., primarily residential).
Energy, Northern Development and Mines (ENDM) is consulting on eligibility requirements, particularly for consumers that are currently grandfathered under section 1.2 of the regulation, in advance of the end of the grandfathering period on October 31, 2022.
ENDM is considering proposing amendments to the Regulation that would revise the definition of "eligible account," which could include:
1) multi-unit complex common areas that have a separate account with, and are individually metered directly by, the electricity vendor (e.g., local distribution company) and that consume more than 250,000 kilowatt-hours per year or whose demand exceeds 50 kilowatts;
2) mobile home parks used as long-term residences; and
3) other multi-unit complexes that are used for residential purposes but are not currently eligible, such as certain senior citizens' residences and multi-unit complexes that do not have separate kitchens and bathrooms in the units.
As part of the transition to the OER, a grandfathering period was introduced (currently ending on October 31, 2022) for consumers that are not eligible for the OER but were previously receiving the former 8% rebate as of October 22, 2019, if they met requirements to provide notice to their electricity vendor before February 1, 2020.
Ministry of Energy, Northern Development and Mines
77 Grenville Street, 7th Floor
July 1, 2022