Ontario Energy Board begins consultation on new energy pricing pilot

The Ontario Energy Board (OEB) is beginning to consult on a pilot which will experiment with new ways of pricing energy for retail and restaurant businesses (as well as every other business of comparable consumption – this class of ratepayer is more accurately known as “Class B, non-RPP”).

Click here for the OEB’s pilot consultation materials.

Ontario is in a unique position relative to the other Canadian jurisdictions. Energy costs are high, mostly owing to long-term debt payments for grid infrastructure costs. Further, because of the transition away from coal, Ontario has relatively emissions-free power, with natural gas making up roughly 6% of the annual load. That said, because of aging nuclear facilities and rising demand, the Independent Electricity Systems Operator (IESO) has estimated that Ontario will be facing an energy shortfall in the next few years.

According to mathematical modeling by the OEB, by changing how we price the system’s fixed costs, there may be a sweet spot where; (1) Ontario can lower energy rates for businesses, (2) Ontario can lower energy rates for residential users by shifting when businesses consume power, thereby reducing the number of expensive demand peaks, and (3) because peak demand is when we consume natural gas in Ontario, avoiding peaks could contribute to reducing Greenhouse Gas Emissions (or, at least supporting maintaining the emissions level, in an environment with an increasing generation gap).

RCC is interested in making a submission to the OEB, in line with the August 25, 2022 deadline. If you or your company is interested in getting more involved in the submission and subsequent pilot process, we encourage you to email Sebastian Prins.