Ontario’s Industrial Conservation Initiative program, which rewards large “Class A” consumers for lower consumption during periods of high demand from the system operator’s supplier, cost others $1.27 billion in past 12 months. I won’t review the history of the program today as I did 3 years ago in “Stakeholders” destroying the viability of Ontario’s electricity market, but I will note that since last March a Variance Account under the [un]Fair Hydro Plan – which shifts costs from ratepayers today to rubes sometime in the future – a debt of $1.2 billion accumulated with April’s total still to be posted.
Today the system operator (IESO) posted the top 5 peak hours for the adjustment period that ended April 30th, 2018 (it started May 1, 2017) – and Monday the IESO posted the final Global Adjustment figures for April. This post will contain:
- a quick demonstration of cost shift calculations,
- review of the ICI value proposition, and
- another jab at the province’s time-of-use (TOU) billing experiment performed on residential consumers.
For the 12 months of the ICI adjustment period the cost shift can be calculated as the difference between what Class A (larger consumers and ICI participants) did pay and what they would have paid were there not a separate class:
- The total global adjustment charge for the period was $11.821 billion dollars, and total consumption (both classes) 138.194 terawatt-hours (million MWh), so the average global adjustment rate was $85.54/MWh.
- Class A consumers were allocated a $1.8529 billion of the global adjustment total on 36.503 TWh of consumption which works out to an average global adjustment rate of $50.76/MWh
- The $35.78/MWh difference in that rate, on 36.503 million MWh, means $1.27 billion was avoided