Early June is an important time for large electricity users in Ontario. Between now and June 15th, large power users face an important decision. They can register for Class A Global Adjustment rates or choose Class B rates under the Industrial Conservation Initiative (ICI).
Companies with a monthly average demand of least 500 kW are eligible to participate in the Class A program. But, they must opt-in each year to enter, or to continue, in the ICI Class A category.
Email messages will soon be arriving from local electricity providers notifying eligible consumers of the opportunity to apply for Class A rates for the coming year.
If your company currently qualifies for Class A rates, and if your consumption is sufficiently large enough to benefit for Class A rates, be prepared to act on these emails.
Class A rates can save money for companies that are proactive in managing their energy. Some large power consumers have the flexibility to curtail energy use during high demand periods. If they elect to pay Class A rates and use their flexibility to curtail peak energy use, they can avoid significant costs. As one example, their actions will minimize the coincident peak factor should they decide to continue with Class A rates in the following twelve-month period.
It is important to understand, however, that being a Class A ratepayer isn’t for everyone.
Some companies have experienced a shift in the pattern of their energy use this past year, compared to 2018 – 2019. The magnitude of change may have eliminated their Class A rate advantage. By the same token, a company should not assume Class A will be their best option if their electricity demand will change in the coming twelve-month period.
The Covid-19 pandemic situation has changed many basic assumptions. Energy use is no exception. Often, companies have had to cut back on production. Workplace shifts have changed or been eliminated altogether. Businesses everywhere are uncertain about the power they will consume in the coming months.
If your company anticipates a significant change in power consumption, make an informed decision with 360 Energy guidance about your best Global Adjustment rate class for the twelve-month period that starts in July.
Companies experiencing significant turbulence are strongly advised to undertake a detailed analysis of energy use and then determine their most likely energy demand scenario. Hundreds of thousands of dollars in avoided Global Adjustment costs hang in the balance.
A decision on Global Adjustment rates is not permanent. It only lasts for twelve months. Whether a company chooses Class A or Class B rates in 2020 – 2021, they can revert back to the more advantageous ICI rate class in the following year.
Companies that decide in June to revert back to Class B rates should still plan to curtail their peak energy use during the coming twelve-month period. Avoiding the provincial grid top 5 peak events will provide cost savings benefits in the following year.
Does your executive team need help to decide on your best ICI rate option? Contact Joe Hall, 360 Energy’s Director of Business Development. joe.hall@360energy.net
