On July 18, 2016, the Ontario Energy Board (OEB) released a
letter inviting electricity distributors to participate in
developing and implementing priority electricity price pilot
projects that have been identified by the OEB. Along with the
letter, the OEB also issued its
Regulated Price Plan Roadmap: Guideline for Pilot Projects on RPP
Pricing (the Guideline). This document sets out the OEB's
objectives, identifies priority treatments for price (and
non-price) pilot projects, and lays out a framework for electricity
distributors to design, implement and evaluate these pilot
The OEB's invitation is the next step in its process to
"renew" the Regulated Price Plan (RPP) through the
"RPP Roadmap" process. As we described in an earlier
post, the OEB's December 2015
Report on the Regulated Price Plan Roadmap (the Report)
highlighted several issues related to the current approach to the
RPP, including a significant concern that the 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. The
Report set out a number of initiatives to improve and change
the RPP over the next three to five years. This multi-year
plan "ensures that the Regulated Price Plan can meet the
challenges of the future."
The proposed RPP pilot projects set out in the
Guideline are intended to test different approaches to TOU
pricing to see whether they better meet the updated RPP objectives
that were described in the
Report. The chart below (reproduced from the
Guideline) sets out examples (as Scenarios) of the types of
pilot projects that the OEB intends to implement in Ontario.
The pilot projects will be executed by electricity distributors
that will be responsible for implementation and for evaluation of
impacts on peak demand, total demand and consumer acceptance. The
OEB expects that the pilots will be operating in the field no later
than May 1, 2017 and will be completed by December 1, 2018. 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.
Guideline set out the application process for electricity
distributors to follow in order to apply for approval and funding
for pilot projects. This will be a two-step process where
distributors must first provide a project overview application for
OEB review. The deadline for submitting these applications is
August 19, 2016. The application will then be assessed by the OEB
and its experts who will decide whether to invite the distributor
to file a full proposal.
As we discussed in our earlier
post, the OEB's RPP Roadmap process, now including the
endorsed forms of pilot projects, seems 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 provide
fair, stable and predictable commodity prices.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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