TORONTO, June 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
website on or around the 15th of each month.
The factor posted today, -0.2867 cents per kWh, is based on the
difference between the amount RPP consumers paid for electricity (for the
period from April 1, 2005 to May 31, 2008) 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 $34.40 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 $25.80.
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 RPP prices that were announced by the
Board on April 11th and will be in effect from May 1, 2008 to October 31, 2008
for consumers who remain on the RPP. For consumers who leave the plan, the
difference will be settled upon leaving.
The updated factor posted today was calculated using the positive net
balance in the variance account (as of May 31st) of about $186.4 million,
which is about $0.8 million lower than the positive balance at the end of
April. 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.
The principal contributing factor for the decrease in the positive net
balance was that the Board included a credit of about 0.3 cents per kWh
included in the RPP prices that went into effect on May 1st due to the need to
draw down the variance account balance over the next 12 months which was a
surplus at that time. Electricity prices in the wholesale spot market during
this period were lower than the prices forecast by the Board.
The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a viable 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: Vanda Wall, (416) 440-8149