Post: New option proposed for Ontario’s ICI program

New option proposed for Ontario’s ICI program

Large electricity consumers in Ontario could have a new option to decrease the peak demand costs that dictate their portion of the overall electricity system expenses, commonly known as the Global Adjustment (GA).

Under the proposal to amend the Industrial Conservation Initiative (ICI) program, which was tabled on November 2, participants in the ICI program would be able to use clean energy power purchase agreements (PPAs) to offset their electricity consumption during the five hours of annual highest system-wide demand.

All energy users in Ontario pay a Global Adjustment fee. It covers the cost of: 

• building new electricity infrastructure 
• maintaining existing resources 
• providing conservation and demand management programs  

Global Adjustment (GA) fees can add up to 40%-60% of a business’ electricity bill. To encourage large electricity users to shift their consumption the government introduced the Industrial Conservation Initiative (ICI).

Under the current ICI program, commercial account holders with an average monthly demand of at least 1MW and manufacturers with an average monthly demand of at least 500kW are categorized as Class A consumers. The factor used to determine their share of total GA costs is based on their energy usage during the five hours of highest system-wide demand in the 12 months from May 1 to April 30. Class B consumers, including all commercial account holders with an average monthly demand less than 1 MW, collectively cover the remaining GA costs after the Class A allotment is subtracted. Their apportionment is based on a per kilowatt-hour basis.

The proposal, currently open for public comment until December 17 on Ontario’s regulatory registry, draws a parallel to virtual net metering. By using contracted electricity from qualifying clean energy producers, participants would treat this supply as if it were on-site generation for the purpose of calculating global adjustment costs. The proposal suggests that PPAs with specific types of clean energy facilities, such as wind, solar, small hydroelectric (with less than 10MW of capacity), biofuel, or battery storage, would be eligible for this arrangement.

The Ministry will review public feedback and stakeholder insights before finalizing the regulation, which is proposed to come into effect on May 1, 2024. This would align with the commencement of the new base period, determining peak demand factors for Class A consumers for the subsequent 12 months from July 1, 2025 to June 30, 2026.

GridBeyond Business Development Director Kareem Nakhla said: