Today the Government of Ontario, under powers provided by the Emergency Management and Civil Protection Act, announced that effective immediately the province is suspending time-of-use (TOU) electricity pricing for Regulated Price Plan (RPP) customers. This change captures the majority of residential, small business and farm customers and will be in place for at least 45 days to provide relief to Ontarians working from home, in self-isolation and those who have lost jobs.
During this period electricity rates will be set to the current off-peak TOU price of 10.1ȼ/kWh for all hours of the week. Based on this change the government estimates average households stand to save more than $20 per month, while small businesses will save $150 and farms will save more than $300. Seasonal customers and those paying tiered rates will not see their rates change.
Given that less system cost will be recovered from RPP customers over this period, the government estimates the revenue foregone to amount to $162 million. This differential will be funded by the government and will not be shifted onto other ratepayers (i.e. Class A, Class B). Under normal circumstances the Ontario Energy Board (OEB) would adjust TOU rates and times for the summer period effective May 1st; as planned, the 45-day suspension would last until May 8th. The province will also be extending the winter ban on electricity customer disconnections until July 31st.
Yesterday’s announcement designating essential workplaces and mandating closure of those deemed non-essential (i.e. most non-food retail businesses), coupled with changes in demand patterns related to many Ontarians being home more often, will likely have a corresponding impact on overall consumption as well as associated allocations of system costs across all consumers. This is something that Sussex continues to monitor closely and will update clients as more information becomes available.
Please reach out to your Sussex associate directly or to any member of the Energy and Environment Practice should you have any questions.
March 24, 2020 1:15 P.M.
Office of the Premier
TORONTO - To support Ontarians through the rapidly evolving COVID-19 situation, the Government of Ontario is providing immediate electricity rate relief for families, small businesses and farms paying time-of-use (TOU) rates.
For a 45-day period, the government is working to suspend time-of-use electricity rates, holding electricity prices to the off-peak rate of 10.1 cents-per-kilowatt-hour. This reduced price will be available 24 hours per day, seven days a week to all time-of-use customers, who make up the majority of electricity consumers in the province. By switching to a fixed off-peak rate, time-of-use customers will see rate reductions of over 50 per cent compared to on-peak rates.
To deliver savings as quickly and conveniently as possible, this discount will be applied automatically to electricity bills without the need for customers to fill out an application form.
"During this unprecedented time, we are providing much-needed relief to Ontarians, specifically helping those who are doing the right thing by staying home and small businesses that have closed or are seeing fewer customers," said Premier Doug Ford. "By adopting a fixed, 24/7 off-peak rate, we are making things a little easier during these difficult times and putting more money in people's pockets for other important priorities and necessities."
The Government of Ontario issued an Emergency Order under the Emergency Management and Civil Protection Act to apply the off-peak TOU electricity rate for residential, small businesses, and farm customers who currently pay TOU rates.
"Ontario is fortunate to have a strong electricity system we can rely on during these exceptional times, and our government is proud to provide additional relief to Ontarians who are doing their part to stay home," said Greg Rickford, Minister of Energy, Northern Development and Mines.
"We thank the Ontario Energy Board and our partners at local distribution companies across the province for taking quick action to make this change and provide immediate support for hardworking people of Ontario," said Bill Walker, Associate Minister of Energy.
Visit Ontario's website to learn more about how the province continues to protect Ontarians from COVID-19.
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