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Ask an Expert – Your Class A Global Adjustment Questions Answered!

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My colleague Natalie Manzarpour and I presented our seasonal market update webinar in early April.  We had so much information to cover, we unfortunately couldn’t make it through the many questions we were asked.

Let’s get to some of those questions from the webinar.  The vast majority of them focused on one single topic:  the Global Adjustment.  So many of you are interested in the Class A Global Adjustment program, and with good reason – qualifying companies enrolled in the Class A GA program can save up to 35% on their electricity bills.  The qualifications for Class A GA have expanded to allow more participants this year, and it is the #1 way most Ontario businesses can achieve immediate cost reductions.

So, what do you need to know?

Q:  What is Class A Global Adjustment anyway?

A:  The Industrial Conservation Initiative, or ICI, is an initiative by the Ontario government to incent large electricity consumers to lower peak demand.  The Class A program is the means of managing this incentive:  Class A consumers pay Global Adjustment based on their percentage contribution to the top 5 peak Ontario demand hours over a 12 month period, while Class B consumers pay Global Adjustment based on consumption.  In a nutshell, a Class B consumer needs to use less electricity in order to pay less GA where a Class A consumer can use the same amount of energy, but through strategic demand management and shifting the time that electricity is used can save up to 30% on total energy costs versus their Class B costs.

Q:  Who qualifies for the Class A program?

A:  As of this writing, the Class A program has been expanded to include all Ontario consumers with an average monthly peak demand of 1MW or greater for the July 1 2017 – June 30 2018 adjustment period.  On March 2, 2017 it was announced that the program will be further expanded to include all manufacturers with average peak demand greater than 500kW, however the timeline for this inclusion has not yet been confirmed.

The Class A program has 2 key timeframes.

The Base Period, or Peak Setting Period, runs from May 1 – April 30.  During this period, your company needs to have a peak demand higher than 1 MW (or 500 kW when the regulations are updated) for the Class A program.  This base period will also determine your percentage contribution to the top 5 peak demand hours, or your Peak Demand Factor, which will be used to calculate your Global Adjustment costs during the Adjustment Period.

The Adjustment Period, or Billing Period, runs from July 1 – June 30 of the year following the base period.  During this period, your GA is calculated using your Peak Demand Factor.

You must register to become a Class A participant no later than June 15 for the July 1 participation period.

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Q:  How do I calculate my Peak Demand Factor?

A:  Your Peak Demand Factor is a simple percentage calculation.

Step 1:  Determine the Top 5 Peak Demand hours in Ontario for the base period, and the total Ontario Demand for those top 5 hours.  These figures are published on the IESO webpage.  (http://www.ieso.ca/sector-participants/settlements/global-adjustment-for-class-a)

Step 2:  Determine your consumption during the top 5 peak demand hours.  This is your coincident peak demand for the hour.

Step 3:

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Q:  Will I benefit from Class A GA?

A:  Not all businesses who qualify for the Class A GA pool will benefit from participating in the program.  Once you have determined your peak demand factor, you can determine whether Class A or Class B is better for your business. Class A GA costs are determined by multiplying the monthly Ontario GA costs by the customer’s Peak Demand Factor.  Class B GA costs are determined by multiplying the customer’s total monthly usage by the class B GA rate.

Note potential benefit of Class A vs Class B will be dependent on the load profile and usage patterns of the customer.  Generally, customers whose peak usage coincides with system peaks will benefit less than customers whose peak usage happens during off-peak times.

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Q:  The Class A Global Adjustment program is something I would like to sign up for.  How do I go about doing that?

A:  Becoming a Class A participant is a great way for a business to take control of its energy costs, and proactively manage demand to lower costs throughout the year.

To sign up, make sure you reach out to your Local Distribution Company to complete the appropriate paperwork no later than June 15, 2017.  The Adjustment Period begins July 1 – don’t miss your opportunity to opt in!

Bruce Power Direct can help you to determine your qualification for Class A.  Reach out to an Energy Advisor today for a no-obligation assessment of your Class A vs Class B eligibility.