Recently, the Ontario Energy Board released its Regulated Price
Plan (RPP) Roadmap, setting out a multi-year plan "that
ensures that the Regulated Price Plan can meet the challenges of
the future." The OEB's RPP Roadmap Report notes several concerns related to the
current approach to the RPP, and sets out a number of initiatives
to improve and change the RPP over the next three to five years.
The OEB's RPP Roadmap Report is the culmination of the lengthy
review process, which involved the commissioning and review of a
number of consultant reports about the impacts of the RPP, consumer
awareness, approaches in other jurisdictions and possible future
options. The OEB has determined that the costs of this process will
be recoverable from all distributors.
A central finding in the Report is that the RPP is not meeting some of
its current objectives. These objectives include setting prices
that give consumers an incentive and opportunity to reduce
electricity bills by shifting their time of use and creating a
price structure that is easily understood by consumers. The most
significant concern is that current Time of Use (TOU) pricing is
not providing sufficient incentives for consumers to shift and/or
reduce their electricity consumption. This means that TOU pricing
is not as effective as planned in reducing peak consumption and
achieving the goal of reducing the need for new and renewed
generation, transmission and distribution infrastructure to meet
peak demand. A second important concern is that consumers do not
understand TOU pricing and this contributes to a failure to react
to the TOU pricing incentives to shift consumption.
Having found that the RPP is not meeting current objectives, the
OEB has decided to "renew" the RPP over the next three to
five years through a five-point plan. This is referred to as the
As a first step, the OEB has updated the RPP objectives. The
objectives now include setting a TOU price structure "to
support the achievement of efficient electricity system operation
and investment," setting a TOU price structure that will give
consumers incentives and opportunities to reduce their electricity
bills by "reducing their peak demand" and providing
"fair, stable and predictable commodity prices to
The OEB's Report indicates that various initiatives will
be undertaken to better communicate TOU pricing to consumers, and
to more broadly increase consumers' energy literacy. Some
examples are provided, such as changes to electricity bills and the
introduction of new technology to give consumers greater control
over their energy usage.
Perhaps most significantly, the OEB indicates that it plans to
undertake a number of pricing pilot projects over the coming years.
These pilot projects will test different approaches to TOU pricing
to see whether they better meet the RPP objectives. The pilot
projects will be implemented by electricity distributors who will
be responsible for implementation and for evaluation of impacts on
peak demand, total demand and consumer acceptance. The OEB will
evaluate the overall results of the pilot projects and may make
successful options available to all RPP consumers. This may require
some changes to regulations that currently fix TOU time periods and
recovery of the global adjustment.
Taking all of the above into account, the OEB's RPP
Framework appears to set the stage for more aggressive TOU pricing.
It will be interesting to see the magnitude of changes that result,
given the apparently competing priorities of incenting consumers to
reduce peak consumption and providing fair, stable and predictable
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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