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Distribution-connected Companies

Bill 100 and the Provincial Benefit Rate - FAQs

Why is the government introducing The Electricity Restructuring Act?
What is the Provincial Benefit rate?
What is the new rate for the Provincial Benefit?
Will the Provincial Benefit rate always be a credit?
How does the Provincial Benefit work?
Will the new line item for the Provincial Benefit display the rate?
Is the Provincial Benefit rate applied to the loss-adjusted consumption?
Does the Provincial Benefit rate include GST and/or LPC?
Where can I find the daily posted Provincial Benefit rate?
Why is the Provincial Benefit rate fixed until May 1, 2005?
Will I still get the Business Protection Plan Rebate?
What Generator costs are included in the Provincial Benefit rate?
When will the costs of new supply contracts and demand management be factored into the Provincial Benefit rate?
What assets are included in OPG's regulated baseload generation?
What are NUGs?
What is the Ontario Power Authority?

Why is the government introducing The Electricity Restructuring Act?
The intent of the legislation is to stabilize prices, address the need for additional supply, facilitate demand management and encourage conservation.

What is the Provincial Benefit rate?
The price of generation in Ontario is set by a competitive market. Certain generators receive payments through regulation or contract that differ from the market price. Your portion of the net adjustment arising from these different payments is now included on your bill as the Provincial Benefit rate.

What is the new rate for the Provincial Benefit?
It will be a credit calculated at a fixed rate of -0.01 cents per kWh until May 31, 2005. The government has yet to announce when the Provincial Benefit rate will become a daily rate.

Will the Provincial Benefit rate always be a credit?
The Provincial Benefit rate has been set by the government at -0.01 cents per kWh until May 31, 2005. The government has yet to announce when the Provincial Benefit will become a daily rate. Once the Provincial Benefit becomes a daily rate as calculated by the Independent Electricity System Operator (IESO) it can be either negative or positive depending on prevailing market prices for electricity and the mix of regulated and contract prices included in the Provincial Benefit rate calculations. The charges on your electricity bill will reflect the average rate over your billing period and may be either a net credit or debit.

The monthly rate used to bill the Provincial Benefit to applicable embedded LDCs is expected to vary month to month, and can be either negative or positive.

How does the Provincial Benefit rate work?
Once the Provincial Benefit becomes a daily rate, it is calculated each day by the province's Independent Electricity System Operator (IESO), taking into account the amount of each type of regulated or contracted generation supplied to the IESO, the regulated price or contract costs for that generation, and any offsetting market revenues. For more information, refer to the IESO's Web site at www.ieso.ca (PDF).
Note: The Provincial Benefit rate is referred to as the "global adjustment" on the IESO's Web site.

Will the new line item for the Provincial Benefit display the rate?
Yes, we will display the rate in cents per kWh on your bill. As well, the consumption in kWh will also be displayed.
Note: Initially the rate will be fixed until May 31, 2005. The government has yet to announce when the Provincial Benefit rate will become a daily rate. At that time, the line item on your bill for Provincial Benefit will reflect the average rate over your billing period.

Is the Provincial Benefit applied to the loss-adjusted consumption?
Yes, it is treated in the same manner as electricity and is calculated on a loss adjusted kWh basis.

Does the Provincial Benefit rate include GST and/or LPC?
The Provincial Benefit rate is eligible for GST and late payment charges (LPC), where applicable.

Where can I find the daily posted Provincial Benefit rate?
Once the Provincial Benefit becomes a daily rate, it will be published on the Market Summaries page of the Independent Electricity System Operator's (IESO) Web site at www.ieso.ca. Please note the Provincial Benefit rate will be a fixed credit of -0.01 cents per kWh until May 31, 2005.
Note: The Provincial Benefit rate is referred to as the "global adjustment" by the IESO.

Why is the Provincial Benefit rate fixed until May 31, 2005?
The rate is fixed to accommodate some local distribution companies that need time to make the appropriate settlement changes to handle a daily rate.

Will I still get the Business Protection Plan Rebate?
With the implementation of Bill 100, the impact of set prices for OPG's regulated generators will be factored into the Provincial Benefit rate. The Business Protection Plan Rebate (BPPR) will be phased out. You'll see the final BPPR for the 11-month period from May 2004 to March 2005 on your July 2005 bill.

What Generator costs are included in the Provincial Benefit rate?
The Provincial Benefit rate adjusts for the difference between the spot market price of electricity and prices paid by the Ontario Power Authority (OPA) for power purchased under other arrangements including contracts for new supply from alternative energy sources or renewable energy sources, regulated prices paid to OPG for power supplied from their baseload plants (including nuclear and some hydro-electric plants) and power purchased from non-utility generators (NUGs) covered by existing contracts with the Ontario government.

When will the costs of new supply contracts and demand management be factored into the Provincial Benefit rate?
The Provincial Benefit rate will adjusted in future years for the costs of new supply and demand management contracts entered into by the Ontario Power Authority (OPA). More information about the government's requests for proposal for new supply and demand management can be obtained from the Independent Electricity System Operator's (IESO) Web site at www.ieso.ca (PDF).
Note: The Provincial Benefit rate is referred to as the "global adjustment" by the IESO.

What assets are included in OPG's regulated baseload generation?
OPG's baseload generation includes their nuclear generating stations (Pickering and Darlington) and some hydroelectric generating stations (Sir Adam Beck, R.H. Saunders and De Cew Falls).

What are NUGs?
Generation provided by non-utility generators (NUGs) is covered under existing contracts with the Ontario Electricity Finance Corporation (OEFC). NUGs are generators that were not owned by the former Ontario Hydro.

What is the Ontario Power Authority?
The Ontario Power Authority (OPA) is a new agency established by Bill 100. One of its functions is to manage the contracts for future generation and demand management procured through the Request for Proposal (RFP) process.