What is Global Adjustment?
Global adjustment covers the cost of building new electricity infrastructure in the province, as well as delivering Ontario's conservation programs − ensuring that enough electricity supply will be available over the long term.
The global adjustment is set monthly to reflect:
- The differences between the wholesale market price for electricity, known as Hourly Ontario Energy Price (HOEP) and:
- Regulated rates for Ontario Power Generation’s nuclear and hydroelectric generating stations
- Payments for building or refurbishing infrastructure such as gas-fired and renewable facilities and other nuclear, as well as the contracted rates paid to a number of generators across the province
- The cost of delivering conservation programs
Responding to changes in the HOEP, the global adjustment varies from month to month − generally, when the HOEP is lower, the global adjustment is higher in order to cover the costs of regulated and contracted generation.
For more information and frequently asked questions, see Understanding Global Adjustment.
How is global adjustment charged to electricity consumers?
All Ontario electricity customers pay for global adjustment.
Global adjustment is incorporated into time-of-use and tiered rates and will not be seen as a line item on the electricity bills of small customers of distributors (also known as local distribution companies or utilities).
For mid-sized and large businesses, as well as residential and business consumers on retail contracts, the global adjustment will appear as a separate line on their electricity bill.
Large consumers pay the global adjustment in two ways, either as a Class A or Class B customer:
- Customers with a peak demand of 50 kilowatts (kW) and up to and including 5 MW will typically pay the global adjustment through their regular billing cycle with their local distribution company − these customers are referred to as Class B. See Global Adjustment for Mid-sized and Large Businesses.
- Many customers with an average peak demand of above 5 megawatts (MW) have the opportunity pay global adjustment based on how much their peak demand use contributes to provincial peak demand – these customers are referred to as Class A under the Industrial Conservation Initiative. See Global Adjustment Class A Eligibility for more information.
- As of January 1, 2017, Class B customers with an average peak demand of above 1 MW and up to and including 5 MW can opt to be charged as a Class A customer under the Industrial Conservation Initiative. Learn more at Global Adjustment Class A Eligibility.
- In April 2017, the ICI threshold was further reduced from 1 MW to 500 kW to make Ontario consumers/market participants in targeted manufacturing and industrial sectors, including greenhouses, (i.e., with NAICS codes commencing with the digits "31", "32", "33" or “1114”) with an average monthly peak demand of greater than 500 kW and less than 1 MW eligible to opt-in to the ICI. See Ontario Regulation 429/04.
Note: The Ontario Government has introduced an Industrial Conservation Initiative (ICI) peak hiatus for ICI participants to allow industrial and commercial businesses to focus on recovering from the impacts of COVID-19. Class A customers do not need to anticipate and reduce their electricity demand during peak hours in 2020-2021 as they work to return to full levels of operation. Instead, Class A customers will have their peak demand factor from the 2019-2020 period used to determine their global adjustment charges in 2021-2022. For additional information, refer to the Ministry’s news release.
The peak hiatus applies to Class A customers participating in ICI for the 2020-2021 period (i.e., July 1, 2020 – June 30, 2021). Accordingly, any Class B customer wishing to enter ICI in the 2021-2022 period would have their peak demand factor assessed based on their demand in peak hours during 2020-2021 (i.e., May 1, 2020 – April 30, 2021).