Regulation - LGIC

Interruptible Rate Pilot and Administrative Review of Ontario Regulation 429/04

Regulation Number(s):
O. Reg. 429/04: Adjustments under Section 25.33 of the Act
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998
Summary of Decision:
On April 1, 2022, the government filed amendments to Ontario Regulation 429/04 made under the Electricity Act, 1998 (the Regulation) associated with the proposal to make administrative changes to ICI. The proposal was posted on Ontario's Regulatory Registry for 45 days with a proposal to facilitate an interruptible rate pilot. The amendments will take effect May 1, 2022.

With respect to the proposed interruptible rate pilot, ENERGY is working with IESO to develop a high-level design. Following this initial developmental work, ENERGY intends to consult with stakeholders later this year to determine design details for a 2023 roll out of a pilot, subject to the approval of any potential regulatory amendments.

The amendments to the Regulation are aimed at reducing the regulatory burden and preserving the policy intent of ICI. The most notable change is related to the determination of peak demand hours. Once the amendments come into effect, the Regulation will use real-time Ontario demand as the basis for determining the five peak hours under ICI for the base period commencing May 1, 2022 and for subsequent base periods, which will improve cost visibility for ICI participants. Other changes to the Regulation include:

- Subject to the prescribed conditions, allowing ICI participation (i.e., Class A status) to be transferred in the event of a partial transfer of ownership, where a portion of an ICI facility is transferred to a new owner.

- Updating the ICI eligibility provision related to Conservation and Demand Management (CDM) programs to remove outdated references and replace them with updated references to CDM programs.

- Requiring ICI participants, as part of the ICI eligibility requirements, to provide additional information related to their load facilities and to provide consent to the IESO or local distribution company (LDC), as applicable, to share that facility information with ENERGY (some of which is to be in an anonymized format).

- Allowing IESO or LDCs to administer transfers of ownership of ICI facilities for their customers.

- Changing the notification deadline for IESO to provide peak demand factors to LDCs.

- Clarifying the reference to total system demand throughout the Regulation to remove potential ambiguity in the Regulation.

Several of the changes that were included in the proposal posted on the Regulatory Registry were not pursued as part of the regulatory amendments. ENERGY intends to further consider whether some of the proposed changes that were not included in the current amendments should be pursued in future amendments.

Analysis of Regulatory Impact:
The regulatory amendments are expected to positively impact ICI participants, as well as IESO and LDCs.

- ICI participants would benefit from greater transparency in billing due to the change in the determination of peak demand hours.

- Customers would continue to be able to participate in CDM programs and remain eligible for ICI if their demand falls below the program eligibility threshold, provided that the requirements under the Regulation are met.

- Changes that clarify aspects of the Regulation would reduce the risk that LDCs interpret the regulation differently, improving overall fairness for consumers.

The proposal is not expected to materially impact electricity costs for ICI participants or other ratepayers.

The IESO and LDCs would be required to administer transfers of ownership of ICI facilities. This is expected to streamline the transfer process for both IESO/LDC and the customer. The IESO/LDC would not be expected to require additional resources to administer such transfers.
Further Information:
Proposal Number:
Posting Date:
November 5, 2021
Summary of Proposal:
The proposed regulatory amendments would facilitate an interruptible rate pilot to be developed in conjunction with the Independent Electricity System Operator (IESO). The pilot would address stakeholder feedback received during the 2019 Industrial Consultation specific to the challenges of identifying and responding to peak demand events while participating in the Industrial Conservation Initiative (ICI). The pilot would be targeted towards large electricity consumers, where participants are charged GA at a reduced rate in exchange for agreeing to reduce consumption during system or local reliability events, as identified by IESO.

Offering an interruptible rate pilot would allow ENERGY to gauge consumer interest and to study the design and potential for a broader offering. Elements of the pilot including eligibility, size of offering, design of competitive selection process, GA rate offering and activation process will be informed through consultation with stakeholders.

ENERGY is also considering a number of administrative changes to O. Reg. 429/04. Administrative changes that are proposed are described in the following:

Adjustments to peak demand factors (PDFs) to correct errors: Would allow IESO to make retrospective adjustments to a customer's peak demand factor to correct errors, if made within a specified limitation period.

Billing adjustments: Would require IESO and local distribution companies (LDCs) to make billing adjustments that correspond with the timing of a customer's permitted switch from Class A to Class B due to an extraordinary event

Determination of peak demand hours: Would have the top five peak hours identified based on Ontario demand values. The calculation of PDFs would continue to be based on adjusted values which reflect impacts such as embedded generation.
Requirement to provide new load facility information: Would require that ICI participants give consent for their electricity service provider to share with the Ministry the following load facility information:

1. North American Industry Classification System (NAICS) code;
2. Annual consumption;
3. Monthly peak demand; and
4. Peak demand factors.

Definition of "load facility": Would add more detailed language to clarify the definition of a load facility for the purpose of determining ICI eligibility, including in cases where multiple meters or connection points exist.

Other Proposed Changes:
• Transfer of market participant load to different transformer station
• Clarifying the eligibility criteria for facilities within specific NAICS codes.
• Extending the notification deadline for IESO to provide peak demand factors to LDCs.
• Clarifying storage injections under s. 11(4.1).
• Clarifying the definition of total system demand.
• Including storage injections in the peak demand calculation under ss. 9 (1) (b).
• Clarifying the exemption from GA charges for Class B facilities providing ancillary services.
• Updating the Conservation Demand Management eligibility provision under s. 6.2 (3) and 7.2 (3).
• Streamlining the administration of transfers of ownership.
• Providing for the administration of transfers of ownership for part of a facility.

The proposed regulatory amendments may be subject to change after considering feedback from the Regulatory Registry (RR) posting and stakeholder consultations.
Contact Address:
77 Grenville St, 7th floor,
Toronto, ON M6S 5B7
Effective Date:
May 1, 2022