Late Friday, June 26th, 2020, the Ontario government announced that Ontario electricity customers on Class A will have their Peak Demand Factors (PDF) frozen until 2022.
This policy change means that for current customers participating in the Industrial Conservative Initiative (ICI), any curtailment action made between May 1, 2020 and April 30, 2021 will have no impact on a company’s PDF for next year. The Base Period to establish a new PDF for the 2022-2023 Adjustment Period will begin on May, 2021 as usual.
The intent of this announcement is to allow Ontario companies to increase production and get employees back to work without a fear of high electricity prices. The justification is that provincial demand has been below average because of COVID-19 and forecasted Ontario electricity demand will still be less than available supply.
Although this may ease the burden of some of the 1300 customers that opted-in to the ICI program, many of the participating companies have made large investments in equipment such as batteries or generators. The mandatory change will delay the return on investment for these pro-active companies.
A more prudent change would have been to give class A companies the option of freezing their PDF for a year, or continuing to actively manage the Ontario demand peaks to lower their electricity costs in the future.
Ontario news release:
