Duane Hicks
Thanks to a lengthy advocacy campaign involving Fort Frances Power Corporation (FFPC) staff, board of directors, and legal counsel, FFPC customers will receive a sizeable rebate over the next two months.
FFPC has successfully advocated that the provincial global adjustment charge should not be applied to the volume of electricity associated with the 1905 historic power agreement between the town and owner of the local hydro dam.
FFPC is now allowed to recover $1.9 million in charges, return that money to eligible customers, and see that they are exempted from this charge in the future.
The rebate is calculated on a customer’s proportionate share of the total electricity consumed during the period that the charges were incurred.
The average FFPC customer will get a $288 credit over two billing periods this June and July. As well, the FFPC will be able to apply the global adjustment charge associated with the historic power agreement to the overall value of the historic power agreement. This will boost the annual historic power rebate from $1.1 million to an estimated $1.9 million, meaning FFPC customer will receive a larger overall rebate. FFPC board chair Doug McCaig explained the provincial government has been adding a global adjustment charge on to hydro bills to support sustainable energy programs, such as solar, wind, and biomass power generation.
The commodity price for electricity is 3.5 cents per kilowatt hour, but the global adjustment charge hydro customers pay is being used to allow the province to pay those who generate electricity from more expensive renewable fuel types such as rooftop solar for example, which pays generators 80.2 cents per kilowatt hour.
“The fact is, it’s the ratepayer that’s carrying the load for sustainable energy,” noted McCaig.
The FFPC discovered that under the framework of the old regulation the province was charging ratepayers a global adjustment charge for the 2.984 megawatts of power the town gets under the historic power agreement.
“Due to the due diligence of our staff, they found this issue, a proposition was given to the government, and as a result we’re getting that $1.9 million back that we paid. And this will happen as long as that global adjustment charge . . . is in effect,” said McCaig.
“The board of directors also understand the historic power agreement very well, and they demonstrated their necessary due diligence. When it was presented to us, we knew what was happening,” he added.
“We’re reclaiming it and giving it back to the customer,” noted
McCaig.
FFPC president and CEO Joerg Ruppenstein said the FFPC as the custodian of the historic power agreement was able to influence the new global adjustment regulation that came into effect in 2011, to address the proper treatment of the agreement.
In 2010, the FFPC worked with the Ministry of Energy and Infrastructure and the Ontario Electrical Financial Corp. to formulate the framework as to how the global adjustment should be treated in the new regulation to reflect the spirit of the historic power agreement, a Supreme Court of Canada ruling.
FFPC went to all stakeholders, including the Ministry of Energy and Infrastructure, Ontario Electrical Financial Corporation, Ontario Energy Board, Independent Electricity System Operator and the Ontario Power Authority, to get their approval to get global adjustment money back and to be allowed to apply it as a credit to the historic power agreement, explained Ruppenstein.
“This has been an iron in our fire for a couple of years now, but it’s finally to a point where we’ve satisfied the needs of all stakeholders and we can now proceed with this recovery,” he said. “A lot of effort and hard work went into this and I would like to thank our team for making this happen.”
Ruppenstein explained that the FFPC is the collection agency for all components of billing. In addition to the rebate in the next two months, the new regulation empowers the FFPC to direct the global adjustment credit associated with the historic power agreement to the value of the agreement.
“Going forward on a monthly basis, when we settle with the IESO (Independent Electrical System Operator), we can apply the global adjustment charge as a credit to the value of the agreement. So at the end of the day, at the current rates, the value of the agreement is worth $800,000 more per year,” he added.
This increases the annual rebate from about $1.1 million to $1.9 million. These savings are applied to FFPC customers on a monthly basis and on a “true up” basis at the end of the financial year.
