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Bill 100 and the Provincial Benefit Rate

On December 9, 2004, the Ontario government passed The Electricity Restructuring Act (also known as Bill 100), which will reorganize Ontario's electricity system to more effectively address the critical need for new supply, increased conservation and price stability for consumers across the Province.

The purpose of the legislation is to:

• restructure Ontario's electricity sector
• promote the expansion of electricity supply and capacity, including supply and capacity from alternative and renewable energy sources
• facilitate load management and electricity demand management
• encourage electricity conservation and the efficient use of electricity
• regulate prices in parts of the electricity sector.

A key component of the legislation is the Provincial Benefit rate.

What this means for you

As part of this plan, electricity costs for medium and large businesses will reflect a combination of regulated, contract and competitive market prices for electricity. You will continue to pay market prices for electricity. However, the price you pay will be adjusted to include the new Provincial Benefit rate that includes:

• Ontario Power Generation's regulated baseload generation
• Non-utility generation (NUGs)
• Future generation and load reduction to be provided through the government's request for proposals (RFPs) for new supply and demand management.

Hydro One, like all Local Distribution Companies, is required to pass through the Provincial Benefit rate to all spot market customers. The Provincial Benefit rate is applied to loss adjusted consumption effective January 1, 2005.

The Provincial Benefit rate will appear as a separate line item on your bill under 'Your Electricity Charges' section. Your first bill issued with this new rate will be on or after January 20, 2005.

The Provincial Benefit rate does not apply to:

• price-protected customers (i.e., those billed at 5.0/5.8 cents per kWh)
• wholesale market participants.

Initially, the Provincial Benefit will be a credit calculated at a fixed rate of -0.01 cents per kWh. The Ontario government has extended the fixed Provincial Benefit rate at least until the end of May 2005.

The government has yet to announce when the Provincial Benefit will become a daily rate. When the Provincial Benefit rate becomes a daily rate, the Independent Electricity System Operator (IESO, formerly the Independent Electricity Market Operator, or IMO) will post the rate 10 business days after the trade day on their Web site at www.ieso.ca. The corresponding adjustment will be calculated and applied monthly to your bill as either a credit or debit amount.

Due to the implementation of the Provincial Benefit, the Business Protection Plan Rebate (BPPR) will be phased out. The final BPPR for the 11-month period from May 2004 to March 2005 will appear on your July 2005 bill.

For more information on the Provincial Benefit rate, please visit our FAQs page, or refer to "Quick Takes on Bill 100" (PDF) on the IESO's Web site at www.ieso.ca.
Note: The IESO refers to the Provincial Benefit rate as a "global adjustment."