This afternoon, the Honourable Greg Rickford, Minister of Energy, Northern Development & Mines (MENDM), announced that the provincial government will be imposing a cap on the Global Adjustment (GA) charges for Class A and B customers at $115/MWh, roughly equivalent to the value of GA in February. The cap will be applied retroactively for the month of April and through May, with legislative flexibility to extend the measures into June.
The cap will be paid for through the provincial Treasury in the interim and recovered from ratepayers later, with an estimated total cost of $340 million. The government plans to recover these costs over a 12-month period starting in January 2021, pending economic conditions and further program design.
As we have reported, since the first day of non-essential business closures on March 26th, provincial energy demand has decreased by an average of approximately 1,700 MW compared to the same period last year. Hourly reductions have ranged from 800 to 3,000 MW, representing a decrease of 6% to 18% of typical demand. Excluding residential consumers, demand has decreased by 10% to 25%. Given these variables and holding total assumed supply costs constant, the IESO is foregoing revenues of $5 million to $6.8 million per day compared to 2019 figures.
If you have any questions or concerns about how these measures may impact your organization, please do not hesitate to reach out to your Sussex associate.