Designing the electricity system of the future

The cost of electricity has been a constant concern for the Peterborough business community.

To start off, it's worth acknowledging that there are electricity savings programs in place through the federal and provincial governments and our local utility. And that we have a great number of businesses who have been able to access and realize cost-savings from these programs.  It is also worth acknowledging that it is the foundation of the system that is the ongoing challenge.

The provincial government recently wrapped up a two-and-a-half month online and in-person consultation (including one in Peterborough) with business and industry.  The Ontario Chamber of Commerce (OCC) also wrote a submission that was sent to government before consultations closed on June 14th.

In the OCC letter, they express how in the 2019 Business Confidence Survey 62 percent of respondents cited electricity costs as critical to their competitiveness.  Businesses also report that electricity is undermining their capacity to grow, invest in new equipment and technologies, hire new workers, and ultimately compete.   

From 2011 to 2016, Ontario’s on-peak electricity prices rose by 71 percent while off-peak prices rose by 149 percent, far outpacing economic growth.  Industrial rates within the province are now amongst the highest in Canada and higher than most jurisdictions across North America.  Much of the reasoning for the increase has been attributed to the cost of building and maintaining electricity infrastructure. 

Through the submission to government, the OCC offers feedback in three areas:

• The Industrial Conservation Initiative (ICI)
• The Northern Industrial Electricity Rate program
• Market Renewal

The OCC identifies a problem that is particularly relevant to Peterborough, in that many businesses in our community and others are not eligible for the ICI program or unable to take advantage of it by changing their consumption patterns or self-supplying power.
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The OCC offers two options to help those businesses who have not benefitted from the ICI:

• Hybrid Rate Model includes developing time-of-use based pricing for ICI customers seeking greater price stability, inactive ICI customers, and industrial class B customers.  They suggest a rate formula for this that means these customers do not pay the legacy costs of previous renewable energy projects.
• Load Growth Strategy is designed to attract new electricity customers to Ontario, which would reduce overall rates by distributing the fixed Global Adjustment (GA) cost across a larger number of consumers.

The OCC supports the direction the Independent Electricity System Operator (IESO) is taking with the proposed updates to electricity procurement under its Market Renewal Program. Moving to a more competitive capacity market has the potential to create cost savings for Ontario’s electricity system by procuring supply on a shorter term and more cost-efficient basis.  All the while ensuring a reliable supply of power.

The call from the business community has been for a principled approach to energy planning that balances affordability, transparency and flexibility.  This approach will not necessarily result in a quick win, but rather one that gives Ontario a more sustainable competitive edge.   ​

Read Full OCC Letter