Background

The Global Adjustment (GA) is a line item charge on your monthly electricity bill and is used to cover the difference between the market price and rates paid to regulated and contracted generators, and to pay for conservation and demand management programs. The GA was designed to assist the government in eliminating coal-based generation and greening the power system through conservation, demand response and cleaner generation sources.


When GA was first introduced in 2005, it included the existing Power Mitigation Rebate which was paid by Ontario Power Generation back into the electricity market, and resulted in a net credit to consumers. However, this credit disappeared the following year and the GA became a minor charge. In 2009, the GA charge increased significantly as several new natural gas plants came online. In addition, with the introduction of the Green Energy Act, Feed-In Tariffs (FIT) and Micro-FIT programs in 2009, the GA continued to grow unabated to the point where it now replaces the net energy settlement charge as the single largest line item on the monthly bill. During those same years, the Ontario Spot Market price for electricity dropped significantly, primarily due to the lower cost of Natural Gas which tends to set the hourly market price. However, the GA forecast is expected to increase further over the next several years as those companies with contracts to upgrade or build new generation will finish their construction and begin to produce new energy at their contracted rates.  


Prior to January 2011, all major Ontario consumers paid Global Adjustment on a volumetric basis, with the monthly cost spread equally across the total energy consumed by the loads in the province. However, with the passing of Ontario Regulation 398/10 amending Regulation 429/04, two separate classes of consumers were created:

  1. Class A consumers are defined as customers who pay for their Global Adjustment charges based on their          coincident peaks to the top five provincial grid peaks having a monthly average peak over 3,000kW
  2. Class B consumers who are the rest of the market including the residential an small business lass. they pay for global adjustment based on their volumetric consumption ( based on their kWh consumption).


As of January 1, 2017, Ontario Regulations for this program are changing and will include qualifying customers with an annual average demand  of electricity between 1 and 5 megawatts to be able to opt into this program. The decision to opt in to the program must be made prior to June 15, 2017. Once they opt in they will qualify to be billed as a Class A consumer for all future Adjustment Periods until they explicitly opt out. 


Global Adjustment Cost Forecast

Costs for GA are continuously rising. The Global Adjustment is forecast to be over $500,000/MW in 2016, and calculated on your average load during the top 5 peak periods within a Base Period. That means for every peak that you hit or miss of the top five it is worth about $100,000/ MW. That is an opportunity to reduce your electrical bills that is unmatched by any other program in the market today.


Through the NRG Matters Peak Advisory Notification Service “PANS”, we will advise you when the top 5 peaks will likely occur and give you the tools to monitor and  detect changes in the forecast demand. Find your peace of mind knowing that you will not miss the top peaks, while not overly reacting or unnecessarily impacting your operations.

Global Adjustment

What is it and how much  can I expect to pay