The Global Adjustment is a billing component. It was designed to reflect the difference between the Hourly Ontario Energy Price (HOEP) for electricity and the guaranteed rates paid for regulated and contracted generation.

Some important characteristics of the Global Adjustment include:

• It includes the cost to deliver conservation and demand management programs

• All electricity consumers have to pay a share of the Global Adjustment. It is either bundled within the regulated price plan, or shown as a separate line item on their bill

• The Global Adjustment varies from month to month, responding to changes in the HOEP compared to contract prices of generation

• Customers will be billed based on the 1st estimate of the GA. The latest GA is available the last business day of the preceding month on the Independent Electricity System Operator's website www.ieso.ca)

• The 1st estimate of the GA is comprised of three components:

  • An estimate of GA costs based on the one month previous

  • An estimate of Ontario's power demand for the current month

  • A true-up for the difference between the previous month's 1st Estimate and the Actual rate

• When the HOEP is high, the GA is lower, and vice versa

• The GA can also increase as new generation projects come into service, contract payments take effect, or as a result of a high demand for electricity

Most customers in the province pay for the Global Adjustment based on the amount of electricity they consume in a month (in $ per kWh). They are referred to as Class B.

The ICI, also referred to Class A, is designed to help large energy users manage their Global Adjustment costs through reducing demand during peak hours.

Customers who participate in the ICI pay for the Global Adjustment based on their percentage contribution to the top five peak demand hours in Ontario, over a year-long period. This is called the peak demand factor (PDF).

Class A customers are assessed their portion of GA costs based on the percentage that their peak demand contributes to the top five Ontario system peaks. For example, if a customer is assessed to be responsible for 1% of Ontario's peak electricity demand for the five highest hours over the evaluation period, they will be charged for one percent of the total GA.

The more accurately that a Class A customer can predict the top five peak hours and shift their demand accordingly, the more they will be able to benefit through this initiative.

Please reference the IESO's website for more information.

• At the start of the May 1, 2022 to April 30, 2023 base period, the IESO will no longer use adjusted AQEW for determining the top 5 peak hours. The top 5 peaks will be determined using the Ontario Demand (i.e. the 5 hours during the base period in which the greatest volume of electricity was dispatched through the IESO-administered markets for the purpose of supplying Ontario demand).

• The IESO is required to publish the total volume of electricity dispatched in an hour within 60 minutes after the end of that hour and must be based on the information and data available to the IESO at the time.

• This change will allow ICI participants to make more timely business decisions regarding the operation of their facilities, and to better respond to IESO system needs during times of high system demand.

• The IESO publishes tools and information to help identify the probable top five peak demand hours of the current ICI base period here: https://www.ieso.ca/peaktracker

• Peak demand is determined at the aggregate of all interval meters at the load facility level. A load facility may comprise multiple meter points and buildings as long as they are located on the same property and associated to the same consumer.

• A single load facility may straddle a property line and may have more than one municipal address. A property cannot however, be bifurcated by an alternate parcel of land or public roadway.

• The aggregate demand as measured by all interval meters at a load facility must be used to determine if the facility is eligible as well as in the calculation of the Peak Demand Factor.

• The assessment sent to eligible customers is based on the meter(s) listed at the top of the email notice. If you have any other meters at your load facility and you think you may be eligible for load facility aggregation for the purposes of ICI please contact us at CICR@HydroOne.com.

• Additional ancillary services (<50kW) which are supplied separately from the main service(s) at the load facility can be included as part of an aggregation however the existing meter(s) are required to be replaced/upgraded to Interval meters at the customer’s expense.

• Existing Class A customers that participated in one or more of the programs specified in Section 6.2 of O. Reg 257/22 (adjustments under Section 25.33 of Ontario Regulation 429/04) and dropped below the peak demand threshold during a base period for an adjustment period may be eligible to opt back into the initiative.

• Any existing Class A customer that has fallen below the eligibility threshold will be contacted to determine if they have participated in any applicable conservation programs.

Eligibility is based on:

• The average of your monthly adjusted peaks during the Base Period of May 1 to April 30

• An adjustment for line losses, according to your rate classification

• Calendar months, not billing periods

• Peak kW, not kVA (power factor consideration)

• Your facility must be active on Hydro One services by the start of the Base Period (May 1st)

• Facility must not be a net generator.

Your Peak Demand Factor (PDF) is calculated by dividing your total five coincident peaks by the total five system peaks over the base period.
 

Eligible customers are assessed based on their percentage contribution to the top five hours of peak demand in the province over the base period. The percentage contribution is also referred to as a customer's coincident peaks. The sum of a customer's coincident peaks is divided by the sum of the adjusted system peaks to determine the customer's peak demand factor (PDF).

Please visit the IESO's website to view the current Ontario System Peaks.

By the end of May, eligible customers will be notified of their Peak Demand Factor to be used if they opt in to the Class A methodology for GA.

The following information will be required when opting in:

• Name and contact details of the Primary Contact

• Hydro One Account Name

• Hydro One Account Number

• Service Address

• Service Location GPS Coordinates

• NAICS Code
   

Additionally, as part of the eligibility requirements to opt-in you will be required to consent to share the following information to the Ministry & IESO. The opt-in form will prompt you to consent to disclose this information.

1. Company name or the name under which it carries on business, the address, geographic location and NAICS code of each of the customer’s Class A load facilities.

2. The following anonymized information:

• kWh consumption during the base period

• Average monthly peak demand during the base period

• Peak Demand Factor

• NAICS code

3. New requirement for customer to promptly provide notice to Hydro One (the distributor) if any of the information provided on the opt-in form changes

Below is an example of the comparison of the calculated Global Adjustment charge as a Class B customer and as a Class A customer during the previous base period.

NOTE: The analysis below is based on historical Global Adjustment values and historical usage, the results could significantly change if usage were to fluctuate considerably.
 

Customers who meet the monthly peak demand eligibility, will be notified and provided with their Peak Demand Factor and a Class A vs B comparison using their historical data by end of May. A link to our online Opt in/Opt out form will be provided in the communication mentioned above.

• Customers who fall within the >500kW <1000kW usage threshold will be required to declare the NAICS code that best represents their service/facility.

• Customers who fall within the >1000kW <4999kW usage threshold can opt in without NAICS code restrictions.

• Customers with an average peak demand greater than 5000kW are automatically included in the program and have the option to opt-out of the ICI.
   

Class A eligibility and instructions are communicated via email each May. The deadline to communicate this information is May 31st. Please note that the email communication may be sent to multiple individuals in your organization. However, we ask that only one submission be made on behalf of your company.

Please complete and submit the form by the June 15th deadline.

Important Items for Consideration:

• Reminder: you will be billed on your assessed PDF for the entirety of the adjustment period July 1 – June 30

• Are you expecting your load requirements to decline over the adjustment period? For example:

  • as a result of implementing efficiency measures at the facilities,

  • parceling off a section of the facility for an alternate entity or,

  • an expected general decline in business activities at the location.

A Peak Tracker Tool is available on the Independent Electricity System Operator's website. The more accurately that a Class A business can predict the top five hours of peak demand and shift their demand accordingly, the more they will be able to benefit through this initiative. The top five system peak hours occur when the greatest number of MW of electricity is withdrawn from the IESO-controlled grid.

There are certain factors that drive the possibility of system peaks occurring:

1. Weather/Climate:Peaks tend to occur during “heat wave” conditions in the summer or “polar vortex” conditions in the winter

2. Time of Day/Day of Week:Peaks tend to occur on weekdays when businesses are in operations and time of day can vary by season:

• Summer: late afternoon when cooling is most required

• Winter: early evening when lighting is required

• Note: although historically rare, peaks can occur on weekends/holidays.

Per section 8 of O. Reg. 429/04, specialized notice of a Class A load facility ownership transfer is required. The following form is to be used in association with the following scenarios:

1. Transferee of existing Class A load facility requesting to be billed as Class B immediately after the transfer

2. Transferee of existing Class A load facility requesting to be billed as Class A immediately after the transfer (ie. during the current adjustment period)

3. Transferee of a load facility currently billed as Class B but will be eligible to opt-in to Class A for the next adjustment period.

Reminder: if a transferee of an existing Class A load facility requests to be billed Class B immediately after the transfer, this exempts them from opting in to Class A for the next adjustment period.

Note: Effective date of the transfer is 10 business days after notice is received (there will be no retroactive adjustments to the effective date).

Please submit one form for each account being transferred. Once submitted, you will receive an automatic email confirming receipt of your request. A member of our Commercial & Industrial Customer Relations team will be in touch upon completion of implementation or if further information is required.

www.HydroOne.com/C-I-ClassATransfer

New: Section 8 of O. Reg 257/22 (adjustments under Section 25.33 of Ontario Regulation 429/04) was amended to allow Class A consumers the ability to transfer a portion of a Class A load facility:

• Must apply to a separately metered portion of an existing Class A facility.

• In addition to the Hydro One Transfer of a Class A Load Facility Form, a copy of a formal written agreement between the transferor and the transferee is required.

• The agreement requires the following information:

• The PDF of the transferor and the transferee for each adjustment period (determined as a percentage of the PDF that would be calculated for the transferor in respect of the load facility for that adjustment period if the transfer did not occur)

• The sum of the peak demand factor of the transferor and the transferee for each such adjustment period must be equal to the peak demand factor that would be calculated for the transferor in respect of the load facility for that adjustment period if the transfer did not occur.

• Customers that move to Class A, will also be moved to Calendar Month Billing

• Regulatory Charges – Please see the following website to learn how Class A customers are charged the Capacity-Based Recovery Amount. Each Class A customer's Peak Demand Factor is used to calculate monthly Capacity-Based Recovery charges for the billing period during the adjustment period. This is done by multiplying the monthly Ontario-wide total Capacity-Based Recovery Amount costs by the customer's Peak Demand Factor.

Resources

• Regulation on ICI

• Peak Tracker

• Global Adjustment