Ministry of Energy Releases Letter to OEB to Promote Ultra-Low Overnight Electricity Rates

By - David
02.03.22 11:17 AM

On November 16, 2021, the Ministry of Energy released a letter to the Ontario Energy Board (OEB) asking for advice on the design of an optional enhanced time of use rate to further incentivize shifting away from peak periods to lower-demand periods. Furthermore, the Ministry of Energy released this letter to OEB to promote Ultra-Low Overnight Electricity Rates.

 

This letter also mentioned that the Ministry of Energy expects the OEB to report back and provide its advice no later than April 1, 2022. Comments on the Regulatory Proposal can be provided until March 29, 2022.

 

The Regulated Price Plan (RPP)

 

As part of its Regulated Price Plan (RPP) Roadmap initiative, the OEB has developed a five-point plan to redesign the RPP to respond to policy objectives, improve system efficiency, and give consumers greater control. They have

 

As part of this plan, the Ontario Energy Board (OEB) will undertake a comprehensive revamping of the RPP that will make incremental changes over the course of the plan. This staged approach will provide consumers with an adequate amount of time to understand and adapt to any changes in the TOU pricing structure.


The Regulated Price Plan Pilot Meta Analysis FinalReport

 

In November 2021, the OEB released a report prepared by Guidehouse Canada titled Regulated Price Plan Pilot Meta-Analysis Final Report. The goal of this meta-analysis is for Guidehouse to provide evidence-based advice to the OEB regarding new or modified pricing plans and non-price tools that may be effective for furthering the renewed policy objectives of the RPP contained in the RPP Roadmap. The report and its recommendations about the TOU pilot projects were presented to stakeholders in December 2021. This included discussion and recommendations testing low overnight electricity rates (aimed at EV charging).

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The Minister of Energy’s letter to the OEB in November 2021 mentions the Guidehouse report and requests the OEB to further investigate the overnight rate structure, emphasizing that it may incent EV adoption and decarbonization. This could increase efficiency in Ontario’s electricity grid.

 

As well, a design of an optional enhanced TOU rate to incent demand-shifting to lower-demand periods has been requested by the Minister of Energy to the OEB. This report is expected to address price ratios and timing, estimates of revenue and bill impacts. Also, it should cover the demand shift, and the risks of under-recovery and options to address that risk that will result from the implementation process.

 

Final remarks


As part of the development of this design, the OEB is seeking input from stakeholders.


Stakeholder input will inform the OEB’s report back to the Ministry of Energy which the Minister has asked to be delivered by April 1, 2022.


The OEB report and the public comments will be received by April 2022. The timing for when any new TOU rate structure would be implemented is not known.

 

                                                                                            

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