Most General Service customers with monthly demand greater than 50 kW, who do not have a contract with a retailer, pay the wholesale electricity price and Global Adjustment electricity charge. Toronto Hydro collects both charges, without mark-up, on behalf of the Independent Electricity System Operator (IESO).
Customers with interval meters are charged the Hourly Ontario Energy Price (HOEP), which is the hourly price that is charged to Toronto Hydro, for their electricity consumption. Customers without interval meters are charged a weighted average hourly price based on consumption patterns of similar consumers. Customers may also choose a contract offered by a licensed electricity retailer.
Global Adjustment (GA)
The GA accounts for the differences between the market price of electricity and the rates paid to regulated and contracted generators for the electricity they produce. It also reflects the costs of conservation and demand management programs by both the IESO and Toronto Hydro. As a result, its value may be negative, depending on the fluctuation of prices in the spot market.
For medium and large businesses, the GA appears as a separate line on your bill. For more details, please visit the OEB website or the IESO website.
The Ontario government made two announcements related to the GA: the GA Reduction and GA Deferral Recovery effective January 1, 2021.
GA Reduction
As part of the Ontario budget, starting on January 1, 2021, the Ontario government is reducing the cost of the GA for industrial and commercial customers by shifting a portion of non-hydro renewable energy contract costs to the tax base. The GA Reduction is considerably larger than the GA Deferral Recovery. For more information, please visit the Government of Ontario website.
GA Deferral Recovery
The Ontario government announced that effective January 1, 2021 and for the next 12 months, non-RPP customers will repay the deferral GA costs from April to June 2020. To provide companies with temporary immediate relief on their electricity bills, the Ontario government deferred a portion of GA charges for industrial and commercial electricity consumers that did not participate in the Regulated Price Plan (RPP) from April until end of June 2020 by limiting the Class B GA rate to $115 per megawatt-hour and providing proportionate reductions for Class A customers. For GA Deferral rate information, please refer to the IESO website.