The final global adjustment estimate of the year is now on the IESO’s site, and it’s not good.
I wrote on the Global Adjustment/Ontario Roulette earlier this month;
Currently, a customer who escaped November’s record rates by getting the benefit of the $62.28 rate for most of the month will be looking at a December Global Adjustment rate of $78.55 – even though that’s not a sane estimate for what would actually be reflective of costs incurred in December.
The second estimate for December is much lower than the first – from $78.55/MWh to $42.69 (46%).
I call that bad not only because different consumers may be paying far different prices for the same electricity depending on their billing date, but because the total dollar value of the December global adjustment is now estimated to be $603 million (which is about what I expected). If you divide $603 million by the estimate, $42.69, you would get 14,125,088 – which is for more electricity than Ontario will consume in December.
So it’s a bad estimate because it doesn’t make any sense.
My estimates are more complicated than that – accounting for class A customers I’d expect the final global adjustment for the month to be closer to $52/MWh – with a monthly HOEP averaging $31.15, that would be about the same Class B commodity rate as experienced in the summer, and as recently as October – but steeply down from November’s inexplicably high rate.
On the other hand, December 2012 also finished with an inexplicably low global adjustment.
Maybe the rate is dependent only on somebody’s mood, and in December they feel like knocking off some of the price.