The Global Adjustment (GA) is a monthly adjustment that ensures the commodity price paid for electricity on the wholesale market (spot market price) more accurately reflects the cost to produce this electricity.
The GA accounts for differences between the spot market price and the rates paid to regulated and contracted generators as well as conservation and demand management programs. As a result, its value may be positive or negative, depending on whether the market price is lower or higher than the fixed rates.
All electricity consumers pay the GA.
- Small business and residential customers who pay for electricity on the Regulated Pricing Plan (RPP) have the GA costs factored into the RPP rates.
- Small business and residential customers on a retail contract who have opted out of the RPP have GA as a separate line item on their bill.
- Customers with a peak demand of over 50 kilowatts have GA as a separate line item on their bill.
All rates are posted to the Independent Electricity System Operator’s website.
COVID-19 IMPORTANT NOTICE
Emergency Order (EO) Deferral of Global Adjustment Charges
To provide companies with temporary relief on their electricity bills during the COVID-19 pandemic, the Ontario government implemented an Emergency Order (EO) on Friday, May 1, 2020 and is deferring a portion of the Global Adjustment (GA) charges for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting April 2020.
The GA rate for Class B industrial and commercial consumers has been set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Class A industrial and commercial consumers will receive the same percentage reduction in GA charges as Class B consumers.
Class A and Class B customers are defined by the Ontario Energy Board (OEB) as follows:
- Class A: Customers who participate in the Industrial Conservation Initiative (ICI), pay global adjustment (GA) based on their percentage contribution to the top five peak Ontario demand hours over a 12-month period. Customers participating in this initiative are referred to as Class A.
- Class B: Consumers with a peak demand of 50 kilowatts (kW) up to five megawatts (MW) typically pay the global adjustment (GA) through their regular billing cycle. A first estimate of GA in $/kWh is provided by the province, and applied to the customer’s bill (i.e. the $ value is multiplied by their unadjusted kWh consumption for that billing period). These customers are referred to as Class B customers.
RPP customers are not impacted by this change and are receiving relief through the RPP pricing. Most residential and small commercial customers (and some larger commercial customers) are on the RPP.
However, residential and small commercial customers who are enrolled with a retailer are impacted by this change.
IESO Rate Setting of the GA rates
The IESO calculates and sets the monthly global adjustment rate.
- The first estimate for April is published at the end of March and the second estimate for April is published at the end of April.
- Hydro Ottawa bills customers for the GA charges on first estimated rate.
Hydro Ottawa’s Class B customer’s April bill will be based on the Independent Electricity System Operator’s (IESO) first estimated GA rate will see the GA adjustment on a future bill.
The IESO will lower the GA charges to average the rate over April and May.
The government intends to keep this relief in place through the end of June 2020, subject to necessary extensions and approvals.
Please contact us if you have any questions about your bill.
Frequently Asked Questions on the Emergency Order
What is the Government of Ontario doing and why?
The Ontario government is deferring a portion of Global Adjustment (GA) charges for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting April 2020. The government intends to keep this relief in place to the end of June 2020, subject to necessary extensions and approvals to implement this initiative
The GA rate for Class B industrial and commercial consumers will be set at$115 per megawatt-hour, which is roughly in line with the March 2020 value. Class A industrial and commercial consumers will receive the same percentage reduction in GA charges as Class B consumers.
Who will benefit?
The Ontario government anticipates that more than 50,000 industrial (typically Class A) and commercial (typically Class B) electricity consumers in the province will benefit from this relief.
Subject to necessary extensions and approvals to implement this initiative, these consumers would be protected from a marked increase in GA cost caused by the low demand during the COVID-19 outbreak for the months of April, May and June 2020.
Will consumers be expected to pay back the temporary relief at a later date?
Yes, in 2021, Class A and Class B consumers would see an increase in their Global Adjustment (GA) costs over a 12-month period.
The government intends to propose regulatory amendments (together with other amendments as necessary) to O. Reg. 429/04 made under the Electricity Act, 1998 in May 2020. If approved, these proposed amendments would allow the Independent Electricity System Operator (IESO) to recover the deferred GA charges over a 12-month period beginning in January 2021. Interest costs related to the deferral would not be recovered from consumers.
Why is this relief only being provided temporarily?
These are temporary relief measures intended to provide immediate financial support for companies impacted by the COVID-19 situation and associated uncertainties.
My company has already been billed for April based on an estimated GA rate. Will I get a rebate?
Yes, you will receive an adjustment on a future bill. There is no need for you to take any action to receive this adjustment. It will automatically be reflected on your electricity bill.
Need more information?
Contact us online at hydroottawa.com/contact or by phone at 613 738-6400, Monday to Friday, from 8 a.m. to 6 p.m. (excluding statutory holidays).