Need a Real ‘Global Adjustment’

The Ontario government was severely criticized by the Auditor General for what has been described in the press lately as a “deeply flawed attempt to promote green energy.”

I’m skeptical of the repeated narrative to blame higher electric prices on efforts to enlarge the renewable energy sector. The website of the Independent Electric System Operator (IESO) provides extensive information on current and historical electricity pricing. Aside from Time-of-Use (TOU) rates (winter: 8.3¢ to 17.5¢), the factor that roughly doubles a householder’s bill is the little understood “Global Adjustment” (GA).

According to the IESO, “the GA is calculated based on the difference between the Hourly Ontario Electricity Price (HOEP) and:

  • Regulated rates to Ontario Power Generation nuclear and base-load hydroelectric generating stations
  • Contracts with the Ontario Power Authority such as new gas-fired facilities, renewable facilities, and nuclear refurbishments
  • Contracted rates administered by the Ontario Electricity Financial Corporation paid to existing generators.

The Global Adjustment factor for October was 7.54¢/kwh. Add that to the TOU rates above and electricity ranges between 15.8¢ and 25¢ per kilowatt-hour depending on time and day.  Continue reading

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