The Ontario government’s newly announced plans to test and compare approaches for dynamic electricity pricing should be seen as very early notification for the small and mid-sized commercial customers identified as possible beneficiaries. For now, the Ontario Energy Board (OEB) is still working on recruiting pilot project providers so the details on how consumers can enroll are unlikely to be released any time soon.
Ultimately, though, both the provincial government and the OEB are committed to exploring how Class B electricity customers who pay the global adjustment (GA) as a straightforward cost per unit of consumption can tap into a more advantageous price structure. That option has already long been available for larger commercial customers with average monthly demand of a least 1 megawatt (MW) through their eligibility for the Industrial Conservation Initiative (ICI) and to residential and small business customers who pay time-of-use pricing.
“Keeping electricity costs down for businesses helps create jobs and promote economic development,” says Todd Smith, Ontario’s Energy Minister. “That’s why we’re launching our new dynamic pricing pilot to give them more choice in how they use and are billed for electricity.”
As outlined in the call for submissions of interest the OEB issued earlier this fall, three types of pilot programs are proposed. These include:
- Time-of-use prices, which vary by an established amount on a set schedule throughout the day;
- Demand-based hourly pricing, in which the price can vary from hour-to-hour according to system-wide demand; and
- Critical peak pricing, in which prices are generally low, but can escalate for periods of up to several hours in response to peaking system demand.
“There is, within each of these models, considerable room for flexibility and innovation, and proponents are encouraged to consider how such designs may be optimized for the benefit of participating consumers and the wider electricity system,” the OEB’s call-out states.
Following the November 30 deadline for submissions of interest, the OEB is expected to invite follow-up applications from suitable candidates by year-end. Chosen proponents will be eligible for funding to cover 75 per cent of pilot project costs, to a maximum of $12 million.
