Calculating Your Global Adjustment Costs

Customers need to consider that the determination of the peak hours is based on the Actual Quantity of Energy Withdrawn (AQEW), which is published 20 business days after the trade date by the IESO. The Ontario demand number is published almost instantly from the IESO and is used as a guide to determine the top peaks. During the program, there have been several years where the peaks were so close that once the AQEW numbers were published, it changed the order and days of the top five peaks or it changed the hour of the peak for the day.

The regulation defines two periods: The Base Period in which the top five provincial peaks are established, and its associated Adjustment Period, where the consumers are billed for GA.There is a two-month lag between the end of a Base Period (May 1) and the start of an Adjustment Period (July 1), so any year’s Base Period will overlap with one or two previous Adjustment Periods.



 Base Period (Peak Setting Period)
         Adjustment Period (billing period)

May 1, 2014  to April 30, 2015                       July 1, 2015  to June 30, 2016

May 1, 2015  to April 30, 2016                       July 1, 2016  to June 30, 2017

May 1, Year X to April 30, Year X+1              July 1, Year X+1 to June 30, Year X+2

 

Below is a chart showing the top five peaks for the 2015/16 Base Period.

Once the AQEW number is verrified, and the date and time of the top five peaks is published, the IESO will add the embedded generation number to establish the final peak value for that date. This is the final number that will be used to calculate the PDF. 



 

 








The consumer’s coincident demand during the top five peaks in any Base Period becomes the customer’s Peak Demand Factor (PDF) and will be used for the subsequent billing year. The PDF will be multiplied by the total GA dollar amount that is published by the IESO for that month.By reducing your coincident peak, you will reduce your PDF and thus reduce the amount of future GA costs on your energy bills.

For example, consider a Class A load that was consuming an average of 6.5MW during each of the five peak hours from May 1, 2015 to April 30, 2016.The PDF is determined first, then used in the Adjustment Period to determine their proportion of the monthly GA costs.The total province-wide GA cost for the Adjustment Period starting July 1, 2016, is forecast to be approximately $12.5B so the consumer’s costs are calculated as such;
                               PDF = 6.5MW/22,787MW

                                        = 0.0002852503 (this becomes the billing multiplier)


                             12 Month GA Cost = $12.5B x 0.0002852503

                                                              =$3.5M ($297,000/month)


Any load curtailment by either cutting load or displacing it with generation during the 5 peak hours would have lowered the consumer’s PDF

If this same consumer could reduce his net load by an average of 1 MW,or lower his coincident demand to 5.5MW instead of 6.5MW,  his new PDF and GA costs would be as such:

                               PDF (1)  =   5.5MW / 22,787MW

                                               =0.000241366 (new billing multiplier)

                         12-Month GA Cost (1) = $12.5B * 0. 0002413656

                                                               =$3.017M

    Savings

                     $3.5M  - $3.017  = $483,000 Annual

                                        

In this example, a reduction of net load by 1 MW for the five peak hours resulted in a 12-month savings of over $480,000 ($40,000/month)..