Global Adjustment Explained
Global Adjustment (GA) was created as a result of Ontario’s 2009 Green Energy Act, and is a fee billed to all hydro customers in the province.
The charge is included on all of consumer’s monthly electricity bill to cover the costs of providing adequate generating capacity and conservation
programs throughout Ontario.
Who pays for Global Adjustment?
Everyone in Ontario who uses electricity pays for Global Adjustment. Residential, commercial, and industrial consumers are all assessed GA, which varies each month depending on what’s happening in the real-time energy markets.
Most commercial consumers are categorized under “Class B” Global Adjustment. These consumers pay a monthly posted Global Adjustment (GA) rate that is calculated by the IESO.
Larger businesses who are eligible to participate in the Industrial Conservation Initiative (ICI) are categorized as ‘Class A’ and their monthly GA charges are based on their electricity demand during the top five hours of system peak from the previous base period.
Electricity Rates Ontario
When it comes to the price of electricity, Ontario consumers face two components: the Hourly Ontario Energy Price (HOEP) and Global Adjustment (GA).
The Global Adjustment is used to fill the gap between the price as determined in the wholesale market (HOEP) and the price necessary to cover contracted generation. If GA goes up then HOEP goes down and vice versa. The wholesale price of electricity changes hourly based on its demand and the availability of supply.
How is the Global Adjustment Calculated?
The GA is calculated each month as a total dollar amount based on the difference between market revenues and the following areas:
- Wind
- Solar
- Biomass, Landfill and Byproduct
- Hydro
- Nuclear
- Natural Gas
- Industrial Electricity Incentive (IEI) Program
- Ontario Power Generation – Regulated Nuclear and Hydro
- Ontario Electricity Financial Corporation – Non-Utility Generation
- Conservation Programs
- Funds and Financing
The time-of-use and tiered electricity rates charged by your electricity company include an estimate of the Global Adjustment.
What is the ICI Program?
The Industrial Conservation Initiative (ICI) is a government program introduced by the IESO to reduce the costs of managing Ontario’s electricity infrastructure. In exchange for reducing electricity usage during the top 5 peak hours each year, large volume consumers are able to reduce their Global Adjustment costs by approximately $500,000 per MW.
Larger businesses who are eligible to participate in the ICI program are categorized as ‘Class A’ and their monthly GA charges are based on their electricity demand during the top five hours of system peak from the previous base period.
How Active Business Services Can Help Optimize Your Global Adjustment Costs
As more and more users begin to participate in the ICI program, it is becoming more difficult to predict and curtail during the peak hours each year. If you believe your business is overpaying for the cost of energy, Active Business Services can offer a robust and accurate peak prediction service to large volume consumers to help manage their consumption and maximize their Global Adjustment cost savings each year.
Complementary Customized Assessments
Active Business Services can build a no cost customized peak notification assessment for your facility outlining the potential Global Adjustment Class A cost savings.
Global Adjustment Energy Assessment (click here to fill out company/contact details to request a complimentary assessment).
How to Lower your Electricity Costs
If you believe your business is overpaying for the cost of energy, there are ways that can strategically lower the demand during peaks which can reduce
GA charges, saving you money annually. Active Business Services delivers the guidance today’s businesses need to predict system peaks,
so they can minimize costs with minimal impact on operations.