Ontario Businesses To See Full Impact of 2021 Electricity Rate ReductionsPublished on January 21, 2022
After a year of deferred Global Adjustment payments, full savings of Comprehensive Electricity Plan will be realized in 2022
TORONTO – As of January 1, 2022, industrial and commercial electricity customers will benefit from the full savings introduced through the Ontario government’s Comprehensive Electricity Plan, announced in Budget 2020, and first implemented in January 2021. This year customers could see an additional four percent savings compared to their bills last year, bringing the full savings from the Comprehensive Electricity Plan to between 15 and 17 per cent, making Ontario a more competitive place to do business.
“Our Comprehensive Electricity Plan has helped reverse the trend of skyrocketing electricity prices that drove jobs out of Ontario,” said Todd Smith, Minister of Energy. “Over 50,000 customers are benefiting from our government’s plan which has reduced electricity rates on clean and reliable power, allowing them to focus on reinvesting in their operations and creating jobs here at home.”
Starting on January 1, 2021, the Comprehensive Electricity Plan reduced overall Global Adjustment (GA) costs for industrial and commercial customers who do not participate in the Regulated Price Plan (RPP) by shifting the forecast above-market costs of non-hydro renewable energy, such as wind, solar and bioenergy, from the rate base to the Province.
“Since taking office, our government has listened to job creators and worked to lower the costs of doing business in the province. Through these significant reductions in electricity prices through the Comprehensive Electricity Plan, customers all across Ontario will benefit from significant savings in their business operations in 2022,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “By continuing to reduce electricity costs, lowering taxes, and cutting red tape our government has reduced the cost of doing business in Ontario by nearly $7 billion annually to ensure that we remain competitive, innovative and poised for economic recovery.”
As part of its COVID response, Ontario had deferred a portion of GA between April and June 2020 for industrial and non-RPP commercial customers, with more than 50,000 customers benefiting. Those same businesses paid back these deferred GA costs over 12 months, between January 2021 and December 2021.
Now that the GA deferral repayment period is over, industrial and non-RPP commercial customers will benefit from the full cost reductions provided to them by the Comprehensive Electricity Plan. This means that, beginning January 1, 2022, these businesses could see an additional four per cent savings on their bills compared to 2021, depending on their location and consumption.
- The Comprehensive Electricity Plan has lowered electricity bills for ratepayers that are not already benefitting from the Ontario Electricity Rebate, including industrial and commercial consumers.
- For example, a manufacturer with an average maximum monthly electricity demand of five megawatts could see electricity savings of about 15 per cent, or about $30,000 per month, in 2022. Actual savings for consumers would vary depending on consumption and location.
- Through the Comprehensive Electricity Plan, since January 1, 2021, approximately 85 per cent of the costs from non-hydro renewable contracts, such as wind, solar and bioenergy, have been funded by the Province instead of ratepayers.
- As part of its COVID response, Ontario deferred Global Adjustment costs for industrial and non-RPP commercial customers between April and June 2020, providing immediate financial relief for companies at the onset of the COVID-19 pandemic.
- The Ontario Electricity Rebate continues to keep bills low for eligible customers, including residential consumers, small businesses and farms.