Ontario government provides hydro relief to businesses hit hard by pandemic

As part of Ontario Premier Doug Ford’s new provincial COVID-19 measure, Ontario ratepayers will experience more stability on their hydro bills this summer.  Under the plan, instead of being charged between 10 to 20 cents per kilowatt hour, depending on the time of day electricity is used, hydro customers will be now charged a blanket rate of 12.8 cents per kWh.

The province also introduced two new assistance programs to help customers struggling to pay their bills including the COVID-19 Energy Assistance Program for household customers, and another $8 million relief plan to assist small businesses affected by the pandemic.

Relief on energy prices had also been extended into June for Class A and Class B customers, the largest industrial consumers in Ontario.  Typically, Class A consumers pay a Global Adjustment charge based on their proportion of energy use during the highest hour of the five highest peak days of the previous year. Class B consumers usually pay a Global Adjustment charge on a volumetric basis. During April and May, the Global Adjustment price was set at $115/MWh.

In 2006, the government introduced Global Adjustment (GA) to help Ontario cover the difference between electricity market rates and the rates provincial leadership agreed to pay for new generators as a way to provide adequate generating capacity and conservation programs throughout Ontario.

Global Adjustment is used to fill the gap between the price as determined in the wholesale market (HOEP) and the price necessary to cover contracted generation, and is a fee billed to all hydro customers in Ontario.

Meanwhile, as Ontario businesses attempt to get back to normal while still navigating the threat of COVID-19, the provincial government continues to offer financial assistance in various forms. For one, Ontario has been supporting struggling business owners directly impacted by the health pandemic by providing tax deferrals and commercial rent relief, and by removing regulatory roadblocks.

Ontario Premier Ford commented, “The COVID-19 pandemic has had a devastating impact on people’s lives and livelihoods, but thanks to the incredible efforts of our frontline health care workers and all individuals and families, we can finally see the light at the end of the tunnel.”

In a recent webinar conducted by the Independent Electricity System Operator (IESO), small commercial customers saw an 8% to 12% reduction in hydro consumption during lockdown orders. These percentages were driven by the mandatory closure of non-essential businesses.

Additionally, for industrial/commercial customers and wholesale customers, hydro demand is down 17% and 16%, respectively.