Ontario's Industrial Electricity Programs
Ontario is expanding eligibility for two industrial electricity rate mitigation programs to support a dynamic and innovative business climate, in which companies can thrive, grow and create jobs.
Industrial Electricity Incentive (IEI) Program
This program assists in the management of electricity demand by encouraging increased industrial production and expansion to make use of the province's strong supply of electricity.
Originally offered in two streams, qualified participants receive reduced electricity rates for incremental consumption over a specified term. Previously, eligibility was limited to the manufacturing and resource extraction (mining, quarrying, oil and gas) sectors.
The Ontario Power Authority has been directed to open a new application window for IEI, Stream 3, to encourage broader participation in the program, as committed to in the 2013 Long-Term Energy Plan.
IEI Stream 3 will:
- Offer contracts up to the lesser of 10 years or an end date of Dec. 31, 2024
- Extend eligibility to other energy-intensive sectors, such as greenhouses, data processing and refrigerated warehousing
- Extend the requirement to bring incremental load online from two to three years from the date the contract is effective.
Companies that receive contracts will be provided offsetting payments for Global Adjustment, the Debt Retirement Charge, regulatory uplifts and transmission charges (other than transmission costs associated with upgrades to service the load) on eligible consumption.
Industrial Conservation Initiative (ICI) Program
This program encourages the province's largest energy users to reduce their electricity costs by lowering their electricity consumption during peak periods.
There are two classes of consumers under ICI:
- Class A" consumers are those with monthly peak demand exceeding five megawatts. They are charged Global Adjustment on the basis of their share of the total system demand during the highest five peak hours of the year. Currently there are about 200 Class A consumers.
- "Class B" consumers are all other consumers. They continue to be charged the Global Adjustment as a flat rate applied to their total consumption.
As a result, ICI incents Ontario's largest consumers to shift their consumption away from peak periods, thereby improving reliability and lowering total system costs.
Ontario is proposing to expand Class A to include consumers with average monthly peak demand greater than three megawatts in the manufacturing, mining, quarrying, oil/gas extraction, greenhouse, refrigerated warehousing and data processing sectors. The new Class A entrants would have the opportunity to opt-in to the ICI program at their discretion.
New Class A consumers would be expected to provide a substantial reduction in peak demand in response to being included in ICI, reducing the need for new generation.