OEB Announces New Electricity Prices

    TORONTO, Oct. 15 /CNW/ - Today the Ontario Energy Board (OEB) released
electricity commodity prices that take effect November 1, 2008.

    Regulated Price Plan (RPP) prices, reviewed semi-annually, are reflected
on the "Electricity" line of residential consumer bills. They will be:
    -   5.6 cents per kilowatt hour (kWh) up to 1,000 kWh each month; and
    -   6.5 cents per kWh above that.

    For a residential consumer using 1,000 kWh per month, the new RPP prices
will result in a bill increase of approximately $2.40 per month. This takes
into account the change in the threshold to 1,000 kWh per month.

    The increase in electricity prices is due to a number of factors
    -   New renewable and natural gas generation projects coming into
    -   The expected cost of Ontario Power Authority (OPA) conservation
    -   A decrease in the variance account surplus, which reduces the amount
        of the credit included in RPP prices;
    -   The end of the OPG Rebate as of April 30, 2009;
    -   The estimated impact of the Government's directive to reduce carbon
        dioxide emissions from coal fired generation by a further 1/3 by
        2011, which equates to meeting a limit of 19.6 million tonnes in
        2009; and
    -   An allowance to reflect Ontario Power Generation's (OPG) application
        for increased payments for electricity generated by nuclear and large
        hydro plants.

    These upward price pressures are partially offset by a forecast of lower
electricity market prices primarily due to a decline in expected natural gas
prices. Natural gas is used as a fuel to generate close to 10 percent of
Ontario's electricity.
    RPP prices are based on a 12-month forecast and are designed to provide
stable and predictable electricity pricing as well as ensure the price
consumers pay better reflects the price paid to electricity generators.
    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 served by responsive regulatory processes that
are effective, fair and transparent.
    For more information, please refer to the attached backgrounder, visit
the OEB 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.

    Ce document est aussi disponible en français.


    What is the     The Regulated Price Plan (RPP) is an electricity pricing
    RPP?            structure designed to ensure consumers pay what it costs
                    to supply their electricity while smoothing the daily
                    price variations that occur in the market. When the
                    Ontario Energy Board (OEB) sets prices, it adjusts for
                    past differences between what consumers have paid and
                    what it will cost to supply them over a 12-month forecast
                    of future electricity costs. RPP prices are reviewed and
                    adjusted twice a year in the spring (May 1) and in the
                    fall (Nov. 1).

                    For residential consumers, the monthly threshold for the
                    lower price is set at 1,000 kWh per month during the
                    winter season, from November 1 to April 30 (and at
                    600 kWh per month for the summer season of May 1 to
                    October 31).

                    For non-residential consumers eligible for the price
                    plan, the threshold remains at 750 kWh per month for the
                    entire year.

                    Consumers who currently buy their electricity from a
                    retailer and are paying their contract price are not
                    affected by changes in RPP prices.

                     Factors in November 1, 2008 Prices

    Conservation    Ontario Power Authority (OPA) spending on conservation
    / Gas-fired     and contracts for gas-fired and renewable generation is
    and             forecast to increase by about $25 million per month.
    Generation      There are a number of new gas fired and renewable
                    generation projects going into service over the next
                    12 months. These include four large natural gas
                    -  the 1005 MW Greenfield Energy Centre;
                    -  the 860 MW Goreway Station;
                    -  the 570 MW St. Clair Energy Centre; and
                    -  the 538 MW Portlands Energy Centre.

                    Under the Standard Offer Program, the following amount of
                    renewable energy capacity is planned to come into service
                    during the forecast period:
                    -  524 MW of wind,
                    -  54 MW of hydroelectric and biomass, and
                    -  264 MW of photovoltaic (solar).

    Variance        The RPP variance account, managed by the OPA, tracks the
    Account         difference between what consumers have paid versus what
                    has been paid to generators. Since the last RPP price
                    adjustment in May 2008, the positive balance in the
                    variance account has declined substantially from about
                    $210 million to just over $100 million, meaning a lower
                    credit included in the RPP price.

    CO(2)           The estimated impact of the Government's directive to
    reduction       reduce carbon dioxide emissions from coal fired
                    generation by a further 1/3 by 2011, which equates to
                    meeting a limit of 19.6 million tonnes in 2009.

    Other Price     Ontario Power Generation (OPG) has applied to the OEB for
    Factors         an increase in payment amounts for its nuclear and large
                    hydro plants. However, a Board decision on OPG's
                    application has not yet been issued. The OEB believes
                    that it would be prudent to take into account some effect
                    of OPG's application for increased payment amounts.

                    The end of the OPG Rebate as of April 30, 2009. This has
                    an impact because RPP prices are based on a 12-month
                    forecast. The OPG Rebate, built into RPP prices, is paid
                    to consumers when the spot market price exceeds the
                    revenue cap set by the government on certain power
                    generation facilities. This revenue cap will no longer
                    apply in the last six months of the forecast period.


    Time-of-Use     TOU prices have been adjusted for all three periods:
    (TOU) Prices
                    -  On-peak price = 8.8 cents per kWh (down
                       from 9.3 cents/kWh)
                    -  Mid-peak price = 7.2 cents per kWh (down
                       from 7.3 cents/kWh)
                    -  Off-peak price = 4.0 cents per kWh (up from
                       2.7 cents/kWh)

                    Time-of-Use prices only apply to a small subset of
                    consumers on the Regulated Price Plan at this time. This
                    currently includes some consumers with Milton Hydro and
                    Newmarket Hydro.

    For more        Visit www.oeb.gov.on.ca.

    Ce document est aussi disponible en français.

For further information:

For further information: Paul Crawford, Ontario Energy Board, (416)

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