Ontario Government Announces Additional COVID-19 Relief for Electricity Customers

Earlier this afternoon, Ontario Premier Doug Ford, along with Energy, Northern Development and Mines Minister Greg Rickford, Associate Energy Minister Bill Walker, and Deputy Premier and Health Minister Christine Elliott, announced new measures to support Regulated Price Plan (RPP) customers during the COVID-19 pandemic. Details on the announcement can be found here.

As we informed you on Saturday, commencing today – June 1st – residential, small business and farm customers will pay a new, fixed COVID-19 Recovery Rate of 12.8 cents/kWh. This rate is calculated based on the forecast average electricity supply cost for RPP consumers as of November 1, 2019, according to the Ontario Energy Board. The 12.8 cent/kWh rate will replace the 10.1 cent/kWh rate treatment in place since March 24th, alleviating the need for the same degree of tax-based subsidization required under the terms of the emergency order.

The COVID-19 Recovery Rate will be in effect until midnight on October 31, 2020, and represents a lower electricity rate than what the mid-peak and on-peak rates would otherwise have been.

Minister Rickford also announced that, as of November 1st, RPP TOU customers will be given a choice between the RPP TOU rate structure, or tiered rates. Tiered rates are currently applied to RPP customers without reliable access to the province’s smart metering infrastructure, where rate recovery is based on overall consumption. Under this model customers pay a lower rate up until a certain amount of electricity used each month, and when that volume of electricity is exceeded the rate increases to a higher amount.

In addition, the Premier announced the creation of two new funding initiatives related to electricity pricing:

• $9 million for the COVID-19 Energy Assistance Program (CEAP): one-time payments to consumers to help pay down any electricity bill debt incurred over the COVID‑19 period. Applications will be available through local distribution companies (LDCs) as of July 1st, and will replace the funding provided through the Low-Income Assistance Program (LEAP) in the March fiscal update.
• $8 million for the COVID-19 Energy Assistance Program for Small Business (CEAP-SB) to provide support to businesses struggling with bill payments as a result of the outbreak.

The government has also extended the winter disconnection ban for electricity and natural gas customers to July 31, 2020.

While not part of today’s announcement, it should also be noted that on Friday the province updated Ontario Regulation 429/04 (Industrial Conservation Initiative) to change the eligibility requirements for Class A customers in advance of the July 1st adjustment period. This change will help customers in maintaining their Class A-eligibility by calculating the consumer’s average annual peak demand based on either the regular 12-month base period of May 1, 2019 to April 30, 2020, or by using the shortened 10-month base period of May 1, 2019 to February 29, 2020.

Sussex appreciates that the province continues to consult and deliberate on electricity price competitiveness and Global Adjustment (GA) relief. O.Reg 429/04 has also been amended to continue the previously announced Class B GA cap of $115/MWh and proportionate reduction in GA exposure for Class A customers to the end of June 2020.

Sussex continues to monitor pandemic-related impacts and changes to Ontario’s electricity sector. Please do not hesitate to reach out to a member of the Energy and Environment Practice should you have any questions about this announcement or other policies under consideration.