Market: Ontario Electricity
Since Class A has now been reduced to 1 MW (.5 MW manfacturing) many Class B customers now have the option to opt-in to Class A and have been receiving notices from their utilities.
There used to be only about 350 Class A customers, now there are thousands and if you factor in Class B customers that can convert to Class A via the use of battery storage, that pool of customers is even larger.
With so many new Class A customers that will partake in conservation efforts peaks are expected to flatten out. As such predicting the peaks can be very challenging and more difficult in the coming years. Example, a Class A customer can shut down on a hot summer afternoon for 1 to 2 hours. With more flattened peaks it will be very difficult to know which hours are the right hours to shut down and so those efforts could be simply a waste of production time given how flat peaks can become and the fact that there can only be one peak per day and only 5 per year.
A battery storage solution with a 2-3 hour solution that is scaleable is the best option to avoid peaks drastically reducing the Global Adjustment with absolutely no interruption to production while always remaining connected to the Grid.
Customers that do not partake in conservation efforts will bear the costs of those that do and with that pool getting larger, now more than ever it’s important to understand your status and your options.
Many do not fully understand the Class A structure and also are not sure what to do for the coming year in fear of making a decision that costs them more one way or another.
We will profile this at no cost or obligation to you and tell you what you would have paid on either structure last year to assist you in your decision.
Class A customers are assessed their Global Adjustment (GA) based on the percentage that their peak demand contributes to the top five system coincident peaks during a pre-determined base period.
For example, if a Class A customer is assessed to be responsible for 1% of Ontario’s coincident peak demand for the five highest hours of a set base period, they will be charged 1% of the total GA costs through the next adjustment, or billing period.
Class B customers, those with an average hourly peak demand less than 1 MW (.5 MW manufacturing), pay the Global Adjustment charge on a per kWh basis.
Since Class A was lowered from 5 MW to 1 MW (and 3 MW to .5 MW manufacturing) now many Class B customers under 3 MW are being asked if they want to opt-in to Class A or not. It is not necessarily true that one is better than the other all of the time but typically Class A customers even without demand reduction efforts pay less Global Adjustment than Class B.
Wholesale Price: this is the Hourly Ontario Energy Price (HOEP) which is charged to the local distribution companies (LDCs, your utility). HOEP is also paid to self-scheduling generators. HOEP becomes the basis of the commodity charges in the retail electricity market if customers receive their electricity from their LDC.
Global Adjustment (GA): this charge accounts for the differences between the market price (HOEP) and the rates paid to the regulated and contracted generators as well as for conservation and demand management programs, plus other costs such as the cost to hook up wind farms to the grid, nuclear refurbishments.
Coincident Peak Program (CP) – Class A customers. Under the CP program, applicable Class A customers only, the IESO establishes the top five Ontario demand peaks for each base period. Then the IESO and LDC’s look at each Class A customer’s demand during those five hours to calculate their corresponding portion of peak demand. This peak demand factor, determines a customer’s allocation for the next adjustment (billing) period. The five system coincident peak hours must occur on different days for this settlement calculation.
GA Charge for Class A customer = Customers 5CP demand divided by IESO 5CP demand x Total GA Charged
As such Class A customers can significantly reduce/ eliminate their GA charge by reducing their demand during the 5 CP hours.
If you want to know for sure, we can run your data and tell you what you would have paid last year on either pricing structure. We will also then tell you what you can do to reduce your CP demand and savings using battery storage which offers net savings of 25-40% of your entire bill, net, with no capital outlay or risk.
For a no cost or obligation profile, please contact us at 1-877-991-5971 x 1 or info@onterraenergy.com