Global Adjustment Deferral Recovery

Deferral of Global Adjustment for Business Customers

In 2020, the Ontario Government deferred a portion of the Global Adjustment (GA) charges for residential, commercial, and industrial customers that do not participate in the Regulated Price Plan (RPP). The GA rate for residential, commercial and industrial customers (Class B) was set at $115 per megawatt-hour, for April, May, and June. The other commercial and industrial customers (Class A) received the same percentage reduction in GA charges as non-RPP Class B customers for the same three-month period.

The deferral led to a shortfall in the amount of GA collected from Class A and non-RPP Class B customers. The total deferred GA amount was approximately $333 million – approximately $127 million for Class A customers and $206 million for non-RPP Class B customers  

The Government of Ontario has made regulatory amendments to O.Reg.429/04 under the Electricity Act, 1998, that enables the recovery of deferred GA charges for Class A customers and non-RPP Class B customers starting January 1, 2021.

What is the Global Adjustment Recovery?

Beginning in January 2021, the Ontario Government will begin the recovery of the deferred GA costs through a monthly charge on the electricity bills of commercial and industrial electricity customers that do not participate in the Regulated Price Plan.  The GA Deferral Recovery Charge will be spread over 12 months, and will be combined with the regular monthly GA charge as one line item on the electricity invoices of impacted customers.

For Class A consumers, the rate impact under this approach is based on their peak demand factor (PDF), and for non-RPP Class B consumers, the rate impact will vary each month based on the amount of consumption. At the end of 2021, the two classes of electricity consumers that benefited from the deferral will have paid their respective shares.

What is the impact to Class A and non-RPP Class B Electricity Bills?

While Class A and Class B Customers will be paying both the regular GA amount, and the GA recovery rate, the Ontario Government is also reducing the cost of electricity for commercial and industrial customers by shifting a portion of non-hydro renewable energy contract costs to the tax base. These reductions are considerably larger than the deferral repayment costs, and the intent is for this funding to continue after the deferral recovery is complete.

The result is expected to be a net benefit to these customers in 2021. Class A and non-RPP Class B customers could see savings about 11 per cent and 12 per cent respectively. After 2021, savings are expected to increase as the recovery of deferred GA costs would be complete and the funding of a portion of non-hydro renewable energy contract costs is expected to continue. Actual savings will depend on location and consumption.

Where can I Find the Global Adjustment Deferral Recovery Rate?

The Independent Electricity System Operator (IESO) will be posting the monthly GA recovery rates applicable to non-RPP Class B customers, and will be providing Waterloo North Hydro with settlement information, including the allocated deferred GA recovery amounts, for Class A customers.

For updated Global Adjustment rates, including the recovery rate, please click here.

If you have any questions regarding your account, please contact us at billing@wnhydro.com or at 519-886-5090. We would be happy to assist you in any way we can.


 

Frequently Asked Questions

Q1: How will these changes affect electricity costs for Class A and Class B customers that do not participate in the Regulated Price Plan?

 The recovery of the deferred GA costs will put upward pressure on costs for Class A and non-RPP Class B customers in 2021. However, this will be more than offset by the government's initiative to shift a portion of non-hydro renewable energy contract costs to the tax base. Those reductions are considerably larger than the deferral repayment costs, and the intent is for this funding to continue after the deferral recovery is complete. The result will be a significant net benefit to these customers.

Q2: What kind of savings can Class A and non-RPP Class B customers expect to see on their bill?

Class A and non-RPP Class B customers could see savings about 11 per cent and 12 per cent respectively. After 2021, savings are expected to increase as the recovery of deferred GA costs would be complete and the funding of a portion of non-hydro renewable energy contract costs is expected to continue. Actual savings will depend on location and consumption.

Q3: How will the Global Adjustment be presented on the bill?

 

For customers who will be paying both the regular GA amount, and the recovery GA amount, the amounts will be combined and displayed as one GA line item on the bill.

Q4:Will households, small businesses and farms be affected? Will these customers' bills go up because of this?

Regulated Price Plan (RPP) customers, including residential, small business and farm customers, will not be affected by the recovery of deferred GA costs. However, residential, small business, and farm customers currently enrolled with a retailer will be impacted by the recovery of the GA deferral.

Q5: Why were GA costs deferred in 2020?

This Provincial initiative was intended to provide companies with temporary immediate relief on commercial and industrial customers monthly electricity bills, by holding GA rates in line with pre-COVID-19 levels. Without this emergency relief, non-RPP Class B customers could have seen bills increase by 15 per cent or more. 

The GA rate for non-RPP Class B customers was set at $115 per megawatt-hour, which was roughly in line with the March 2020 value. Class A customers received the same percentage reduction in Global Adjustment charges as Class B customers. 

The deferred costs were intended to be recovered by the Independent Electricity System Operator (IESO) over a 12-month period, starting January 1, 2021.

More on Ontario's temporary deferral of Global Adjustment (GA) charges

Q6: I am a non-RPP Class B Customer and I was billed more than the deferral amount of $115 in April 2020. Will my business receive a refund?

You will not receive a rebate. WNH bills on the first estimated GA rate. To compensate for this, you would have been billed an adjusted GA rate in May 2020. When you combine the two rates, the average GA for those two months will equal the deferral rate of $115 per megawatt-hour.

See below for an example:

GA ($/MWh)

April

May

Actual Rate 

137.07

92.93

Average

115.00

If you have any questions regarding your account, please contact us at billing@wnhydro.com or at 519-886-5090. We would be happy to assist you in any way we can.

>