Regulation - LGIC

Changing Ontario Energy Board's Regulated Price Plan (RPP) Rate Setting Frequency

Regulation Number(s):
95/05
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Proposal:
In 2005, the Ontario Energy Board (OEB) was provided legislative authority to set and re-set electricity rates in accordance with the Regulations. The regulation (O. Reg. 95/05 (Classes of Consumers and Determination of Rates) prescribe the classes of electricity consumers to be covered by the Board's rate-setting activities, and include (based on consumption and demand levels), residential (including those living in condominium and multi-unit complexes, as well as co-operatives), small business and farming consumers. In due course, the OEB developed the Board's Regulated Price Plan (RPP) and RPP Manuals in order to facilitate this process.

In accordance with Ontario Regulation 95/05 (Classes of Consumers and Determination of Rates) made under the Ontario Energy Board Act, 1998, RPP rates are reviewed by the OEB in the spring and fall and are reset as required to recover the expected cost of electricity supply and conservation measures. An additional adjustment is included in RPP rates to clear the expected balance in the RPP variance account (i.e., the account that holds the difference between actual RPP supply cost and RPP revenue) over a 12-month period.

The proposed regulatory amendments would, if approved, specify that the
OEB would set RPP rates once per year. Specifically, new RPP rates would take effect each November 1st, beginning on November 1, 2021. Seasonal (i.e., summer and winter) time-of-use (TOU) hours as well as the monthly consumption threshold that applies to residential RPP customers paying tiered prices would continue to change each May 1st and November 1st.

If actual RPP supply cost were to differ significantly from forecast, the RPP variance account balance could become quite large over the course of 12- months. To address this possibility, regulatory amendments could provide the OEB the authority to set RPP prices more frequently than once per year if the variance account balance were to exceed a pre-determined threshold. This threshold would be determined in consultation with the OEB to avoid the rate volatility that could occur due to the clearing of large variance account balances.

If this regulatory amendment to O. Reg. 95/05 is approved on a timely basis, the OEB would then be expected to update its RPP Code and RPP Manual, as well as other Codes, such as the Standard Supply Service Code, that may be impacted.
Analysis of Regulatory Impact:
There are expected to be no new administrative costs for business under the proposal to move to annual RPP rate setting.
Further Information:
Proposal Number:
21-ENDM016
Posting Date:
August 18, 2021
Comments Due Date:
October 2, 2021
Contact Address:
77 Grenville St, 7th floor