Global Adjustment
The Global Adjustment (GA) is a monthly adjustment that ensures the commodity price paid for electricity on the wholesale market (spot market price) more accurately reflects the cost to produce this electricity.
All electricity consumers pay GA in some form:
- Small business and residential customers on the Regulated Pricing Plan (RPP) have the GA blended into the RPP rates.
- Small business and residential customers not on RPP rates (retail contract) have the GA rate as a separate line item on their bill.
- Customers with a peak demand of over 50 kilowatts have GA as a separate line item on their bill.
Updated GA rates are available on the Independent Electricity System Operator’s website.
Global Adjustment Changes Effective January 1, 2021
Early last year, to provide immediate financial support for companies when they needed it most, The Government of Ontario announced its decision to defer a portion of the Global Adjustment (GA) charges, starting April in 2020.
In, December 2020, two announcements were made related to the Global Adjustment (GA) that will change industrial and commercial electricity costs: The GA Deferral Recovery and the GA Reduction, both effective January 1, 2021.
Global Adjustment Deferral Recovery
The Ontario government has now made regulatory amendments to O. Reg. 429/04 that enables the recovery of those deferred GA costs. Effective January 1, 2021, over a 12 month-period, Class A and non-RPP Class B customers will repay the GA deferral recovery costs. RPP customers will not be affected by these changes.
Global Adjustment Reduction
The Ontario government also announced that effective January 1, 2021, a portion of non-hydro renewable energy contract costs will be paid by the government instead of electricity customers. Lowering GA costs for all Class A and Class B customers, and offsetting the impact of recovering from the GA deferral recovery. This funding is expected to be in effect beyond 2021.
Need more information about the deferral recovery and the reduction of the GA? Please check these Frequently Asked Questions:
What is the government of Ontario doing and why?
In spring of 2020, to support industrial and commercial customers impacted by the pandemic, the Ontario government deferred a portion of the GA charges in April, May and June 2020, by limiting the Class B GA rates to $115/MWh for non-RPP customers and providing reductions for Class A customers. At that time, the government also indicated that it intended to recover these deferred costs in 2021 over a 12-month period.
How will this affect electricity costs for industrial and large commercial customers?
The recovery of the deferred GA costs will put upward pressure on costs for Class A and non-RPP Class B customers in 2021. However, this will be more than offset by the government’s initiative to shift a portion of non-hydro renewable energy contract costs to the tax base. Those reductions are considerably larger than the deferral repayment costs, and the intent is for this funding to continue after the deferral recovery is complete. The result will be a significant net benefit to these customers.
Will residential customers, small businesses, and farms be affected by this?
No, the GA deferred costs will be recovered from the same customer class that benefited from this deferral.
Regulated Price Plan (RPP) customers, including residents, small businesses, and farms, will not be affected by the recovery of deferred GA costs.
For more information, on the Global Adjustment Components and Costs, you can also visit the Independent Electricity System Operator (IESO) website.
Please contact us if you have any questions about your bill.