Ontario proposes new RPP price-setting regimen

Ontario proposes new RPP price-setting regimen

Tuesday, August 31, 2021

Electricity prices could become more responsive to fluctuating commodity costs if proposed regulatory amendments are adopted in Ontario. However, affected residential and small business customers won’t necessarily see a significant change in the customary billing practices since distinct rate schedules for the warm and cold weather months would still be implemented on May 1 and November 1 every year.

As proposed, the Ontario Energy Board would assess market conditions, prepare forecasts and set electricity rates for the low-volume customers covered by the provincial regulated price plan (RPP) once annually rather than on the current semi-annual timetable. To prevent any large discrepancies between the OEB’s price and the actual cost of electricity accumulating over that longer 12-month period, the proposed amendments would also authorize new price-setting if or when the variance hits a designated threshold.

“This threshold would be determined in consultation with the OEB to avoid the rate volatility that could occur due to the clearing of large variance account balances,” the summary of the proposed amendments states.

The Ontario government is accepting comments on the proposed changes until October 2, 2021. If adopted, the annual RPP price-setting regimen would be in place for the next planned rate change.

“New RPP rates would take effect each November 1st, beginning on November 1, 2021,” the amendment summary confirms. “Seasonal (i.e., summer and winter) time-of-use (TOU) hours, as well as the monthly consumption threshold that applies to residential RPP customers paying tiered prices, would continue to change each May 1st and November 1st.”

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