Ontario Delays Global Adjustment Payments

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On Friday (May 1st), the Ontario Government announced that it will be taking action to alleviate energy costs for Commercial and Industrial (C&I) businesses due to the impacts of COVID-19.

The emergency order will allow Class A and Class B customers to defer Global Adjustment (GA) payments on their April and May 2020 bills, along with the potential for deferral of June 2020 pending subsequent regulatory amendments.

As we see electricity demand in the province plummeting due to the pandemic, Class-B customers were set to get slammed on their electricity bills with a price increase of 18% or more. Similarly, Class A is in for a rude awakening as GA charges on their bills are based on last year’s energy usage. This means that for customers now operating at a reduced capacity, their electricity bills won’t reflect this. This deferral of payments will no doubt cause a sigh of relief for C&I businesses in the province, but it is by no means a free pass.

An important piece to take away from this announcement is deferred payments will be pushed into a payment plan spread across customers’ energy bills over a 12-month period starting January 2021. This could potentially mean one of two scenarios:

The deferred GA payments are going to be spread across all Class A and Class B customers in the form of an increased GA rate next year. Think of it as taking April, May, and Junes total provincial GA charges and tacking them onto 2021 rates.
Each company’s deferred GA payments are going to be spread across their individual energy bills next year. Think of this as taking your April, May, and June GA charges and splitting it across each month of 2021.

More information as to what the payment plan will look like will hopefully arrive in the coming months. Either way, 2021 is going to be expensive.

As we approach the 2020 Peak season, Class A customers specifically need to prepare to respond to Peaks throughout the summertime. Their performance over the next few months in the ICI program is critical as it will influence their GA costs in 2021, during which they will also have to pay off deferred payments due to COVID-19.

EnPowered is currently offering free assessments to help Ontario businesses navigate these difficult times. Click below to get started and figure out the best plan of attack when it comes to managing your businesses energy usage over the coming months and into 2021.

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