Ontario Energy Association Recommends Load Growth Policies to Alleviate Electricity Rate pressure on Current Customers

TORONTO, Aug. 25, 2020 /CNW/ - Today, the Ontario Energy Association (OEA) released a report produced by Power Advisory LLC that shows Ontario could reduce rate pressure on existing customers by introducing policies to increase electricity load. This study, titled Policies to Incent Load Growth to Reduce Electricity Costs for Existing Ontario Customers, found that a 5 TWh increase in overall demand could have reduced the per unit cost for all customers by 3% in 2019.

The paper recommends that the province should consider programs and/or policies that increase demand to help alleviate cost pressures facing Ontario's electricity customers. By doing so, the per-unit cost of electricity for all customers can be reduced and the need for taxpayer-backed subsidies can be lessened.

The suggestions in the report include:

• A program that provides a duration-limited (e.g. 1-3 years) rate incentive for customers that create either new demand through investments in new facilities in Ontario or increase current levels of electricity consumption through investments in existing facilities.
• A reduced demand charge that generates new demand in Ontario or increase current levels of electricity consumption.
• Low-cost allocations of energy that better utilize the province's surplus generation.

"COVID-19 presents a good opportunity for Ontario to examine its current electricity policies related to load growth. During this time, our province has a chance to reflect on whether it has the tools it needs to optimize load growth for the benefit of existing ratepayers," said Vince Brescia, CEO of the Ontario Energy Association.

The study highlights that between 2005 and 2009, Ontario saw a significant reduction in load as a result of a decline in Ontario's manufacturing base.  This decrease in demand resulted in rate increases for remaining ratepayers.

Ontario is once again facing a situation where load has declined significantly. This will result in electricity rates increasing and costs for taxpayers.

"The recommendations in the report would make our province more attractive in the locational decision-making process for prospective businesses, while at the same time reducing rate pressure for existing  residents and businesses." added Mr. Brescia.

The OEA report examining current load growth policies and recommendations on reducing costs for electricity customers can be found by visiting www.energyontario.ca.

About the Ontario Energy Association:

The Ontario Energy Association (OEA) is the credible and trusted voice of the energy sector. We earn our reputation by being an integral and influential part of energy policy development and decision making in Ontario. We represent Ontario's energy leaders that span the full diversity of the energy industry. Learn more at www.energyontario.ca.

SOURCE Ontario Energy Association (OEA)

Media Contact: Irisa Chan, 647.989.3298, [e-mail]; Vince Brescia, President & CEO, Ontario Energy Association, 416.961.8874, [e-mail]