TORONTO, April 16 /CNW/ - The Ontario Energy Board (the Board) released
today an updated variance settlement factor that is to be used by electricity
distributors to calculate a one-time credit for consumers who choose to stop
purchasing electricity through the Regulated Price Plan (RPP). This factor,
called the "Final RPP Variance Settlement Factor" is updated on the OEB Web
site on or around the 15th of each month.
The factor posted today, -0.0627 cents per kWh, is based on the
difference between the amount RPP consumers paid for electricity (for the
period from April 1 2005 to March 31, 2007) and the actual amounts paid to
generators to supply that electricity.
This factor is to be used by electricity distributors to calculate the
final payment or credit for consumers who: (1) cancel their utility account
and move outside of the Province of Ontario; (2) switch to a retailer; (3)
have an interval meter and elect the spot market pricing option; or (4) cease
to remain eligible for the RPP.
A consumer who uses 12,000 kWh per year (1,000 kWh per month), and who
chooses to leave the RPP, would receive a one-time credit of $7.52 based on
the updated factor posted today. For a consumer who uses less electricity,
such as 750 kWh per month, the one-time credit would be $5.64.
Under the RPP, consumers are charged a regulated stable price for the
electricity they consume. That price was set by the Board based on a forecast
of the expected cost to supply RPP consumers. When the RPP price differs from
the amount actually paid to generators, the difference is tracked by the
Ontario Power Authority (OPA) in a variance account. A forecast of that
difference was incorporated into the new RPP prices that were announced by the
Board on October 11th and went into effect on November 1, 2006 for consumers
that remain on the RPP. For consumers who leave the plan, the difference needs
to be settled upon leaving.
The updated factor posted today was calculated using the positive net
balance in the variance account (as of March 31st) of about $44.8 million,
which is $28.5 million higher than the positive balance at the end of
February. The net variance balance incorporates estimates of the rebate from
Ontario Power Generation (OPG) - the difference between the revenue limit for
some OPG generation facilities and the price they would have received in the
wholesale spot market.
An additional 0.15 cents per kWh was included in the RPP prices that went
into effect on November 1st due to the need to draw down the variance account
balance over the next 12 months, which was previously a deficit. This is one
reason for the $28.5 million increase in the net variance balance surplus
discussed above. The principal contributing factor was that electricity prices
in the wholesale spot market during were lower than prices forecast by the
The new RPP prices announced on April 12th will go into effect on
May 1st. As a result, this update does not reflect those lower RPP prices.
The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a healthy and efficient
energy sector with informed consumers, and works towards this vision through
regulatory processes that are effective, fair and transparent.
For more information on the Board, please visit our website at
www.oeb.gov.on.ca or contact the Consumer Relations Centre at 416-314-2455 or
toll-free at 1-877-632-2727.
For further information:
For further information: Paul Crawford, (416) 440-7607