Regulation - LGIC
Ontario Regulation 429/04 Amendments
Regulation Number(s):
O. Reg. 429/04
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998
Summary of Decision:
The amendments to the Regulation are aimed at providing more equitable outcomes and improve overall alignment of the Regulation with the policy intention. The regulatory amendments were made in two specific areas of the Regulation to:
1. Address ICI eligibility rules related to promoting continuity of ICI eligibility in scenarios where electricity is to be supplied by a new, grid-connected transmission line to an existing Class A facility.
2. Exempt Global Adjustment (GA) charges for power purchased from outside of the province using private transmission lines.
The amendments allow for the electricity withdrawn at a new connection point by an existing Class A facility to be fully eligible for ICI once the new connection is energized, rather than having to fulfill a full base period as a Class B customer in respect of that electricity.
The amendments also create an exemption from GA charges for customers who consume electricity supplied from outside of the province using private transmission lines. The rationale for the proposed changes is that the electricity in such cases does not give rise to the types of costs that GA is intended to recover, such as the difference between contracted supply and market price.
1. Address ICI eligibility rules related to promoting continuity of ICI eligibility in scenarios where electricity is to be supplied by a new, grid-connected transmission line to an existing Class A facility.
2. Exempt Global Adjustment (GA) charges for power purchased from outside of the province using private transmission lines.
The amendments allow for the electricity withdrawn at a new connection point by an existing Class A facility to be fully eligible for ICI once the new connection is energized, rather than having to fulfill a full base period as a Class B customer in respect of that electricity.
The amendments also create an exemption from GA charges for customers who consume electricity supplied from outside of the province using private transmission lines. The rationale for the proposed changes is that the electricity in such cases does not give rise to the types of costs that GA is intended to recover, such as the difference between contracted supply and market price.
Analysis of Regulatory Impact:
The regulatory amendments are expected to positively impact ratepayers by allowing a more equitable allocation of GA costs.
The anticipated costs to regulated entities of administering the proposal are expected to be limited.
- In the case of the amendment relating to new connection points, some additional work may be needed on the part of Independent Electricity System Operator (IESO) settlement staff to work with distributors to confirm billing information of consumers connecting to the transmission network. The amount of work needed on the part of the IESO and affected distributors would be limited and infrequent.
- With respect to the GA exemption, only the distributors that receive a portion of their electricity under contracts with generators outside of the province would be required to implement the change. The distributor or a retailer who issues electricity bills would be responsible for extending the GA exemption to their customers through a billing adjustment. As a result, implementation of the proposal would require some additional work on the part of settlement staff, that could be considered a one-time cost.
The anticipated costs to regulated entities of administering the proposal are expected to be limited.
- In the case of the amendment relating to new connection points, some additional work may be needed on the part of Independent Electricity System Operator (IESO) settlement staff to work with distributors to confirm billing information of consumers connecting to the transmission network. The amount of work needed on the part of the IESO and affected distributors would be limited and infrequent.
- With respect to the GA exemption, only the distributors that receive a portion of their electricity under contracts with generators outside of the province would be required to implement the change. The distributor or a retailer who issues electricity bills would be responsible for extending the GA exemption to their customers through a billing adjustment. As a result, implementation of the proposal would require some additional work on the part of settlement staff, that could be considered a one-time cost.
Further Information:
Proposal Number:
23-ENDM015
Posting Date:
June 17, 2024
Summary of Proposal:
The proposed regulatory amendments would be made in two specific areas of the Regulation to provide more equitable outcomes and improve overall alignment of the Regulation with the policy intention. The specific areas are:
1. Addressing ICI eligibility rules related to promoting continuity of ICI eligibility in scenarios where electricity is to be supplied by a new, grid-connected transmission line to an existing Class A facility. Proposed effective date: July 1, 2023.
2. Exempting GA charges for power purchased from outside of the province using private transmission lines. Proposed implementation date: May 1, 2024.
The first set of proposed amendments would allow for the electricity withdrawn at a new connection point by an existing Class A facility to be fully eligible for the ICI once the new connection is energized, rather than having to fulfill a full base period as a Class B customer in respect of that electricity.
The amendments would eliminate the need for a customer in such a scenario to establish their ICI eligibility for the new connection point. The proposed change would allow IESO or an LDC, as applicable, to amalgamate the demand of any customer with multiple connections at a single facility, whether transmission-connected or distribution-connected, for the purposes of determining their ICI eligibility and GA billing.
The second area of the proposed amendments would be aimed at creating an exemption from GA charges for customers who consume electricity supplied from outside of the province using private transmission lines. The rationale for the proposed changes is that the electricity in such cases does not give rise to the types of costs that GA is intended to recover, such as the difference between contracted supply and market price.
The proposed regulatory amendments may be subject to change after considering feedback from the Regulatory Registry (RR) posting and stakeholder consultations.
1. Addressing ICI eligibility rules related to promoting continuity of ICI eligibility in scenarios where electricity is to be supplied by a new, grid-connected transmission line to an existing Class A facility. Proposed effective date: July 1, 2023.
2. Exempting GA charges for power purchased from outside of the province using private transmission lines. Proposed implementation date: May 1, 2024.
The first set of proposed amendments would allow for the electricity withdrawn at a new connection point by an existing Class A facility to be fully eligible for the ICI once the new connection is energized, rather than having to fulfill a full base period as a Class B customer in respect of that electricity.
The amendments would eliminate the need for a customer in such a scenario to establish their ICI eligibility for the new connection point. The proposed change would allow IESO or an LDC, as applicable, to amalgamate the demand of any customer with multiple connections at a single facility, whether transmission-connected or distribution-connected, for the purposes of determining their ICI eligibility and GA billing.
The second area of the proposed amendments would be aimed at creating an exemption from GA charges for customers who consume electricity supplied from outside of the province using private transmission lines. The rationale for the proposed changes is that the electricity in such cases does not give rise to the types of costs that GA is intended to recover, such as the difference between contracted supply and market price.
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
Effective Date:
July 1, 2023
Decision:
Approved