ArticlesWhat is the ‘ICI Hiatus’ announced by the Ontario government and how does it impact large power consumers in Ontario?
By: Workbench Energy
June 29, 2020
On Friday June 26th, 2020, the Ontario government announced a temporary policy change to the Industrial Conservation Initiative (ICI). See here for more information: https://news.ontario.ca/mndmf/en/2020/06/ontario-provides-stable-electricity-pricing-for-industrial-and-commercial-companies.html
The policy decision fixes the rate of Global Adjustment that large power consumers will pay until July 2022 based on how much power they were consuming during the 5 peak demand hours between May 2019 and April 2020 when the provincial power grid experienced its highest system-wide demand. Typically, there is an annual re-setting of the peak demand factor (PDF) each year but that resetting process has been paused for a year.
For current participants in the ICI program, also known as Class A customers, this means their PDF can no longer be changed based on responding to system peaks this year. Curtailing to avoid peaks for the remainder of this Base Period will not impact next year’s PDF as it will be frozen at current levels. However, with a greatly diminished ICI response this year, Hourly Ontario Energy Prices may reach unusually high levels that could justify curtailment activities for some customers.
The ICI Hiatus does not apply to Class B customer who are planning to participate in the ICI program beginning May 2021. These customers will still have their PDF calculated as normal, based on the current year’s 5 peaks and should prepare to respond to system peaks.
The ICI Hiatus will be welcome news to many Class A customers, particularly those who have established low PDFs based on prior year’s curtailment activity. Those businesses will now benefit from less interruptions this year and hopefully experience greater levels of productivity. Class A businesses who had hoped to lower their PDF based on curtailing this year will not have the opportunity to do so.
Following the current ICI Hiatus, the ICI Program is expected to resume as per normal beginning May 1, 2021.
