FFPC rates to drop

FORT FRANCES—Along with many other electricity users across Ontario, residential and small business customers of the Fort Frances Power Corp. will see a rate decrease beginning next month.
The announcement was made by the Ontario Energy Board last week, noted FFPC CEO Jim Kibiuk, adding the commodity price of electricity will drop an average of 5.8 percent under the new price plan.
“What will happen is the price will decrease from 5.8 cents to 5.5 cents per kilowatt hour under the first threshold amount of consumption [the first 1,000 kWh],” he explained.
“The next threshold amount will decrease from 6.7 cents to 6.4 cents per kWh.
“The calculations are showing that an average residential customer consuming 1,000 kWh a month, which is the average the OEB uses, will see a savings of approximately $6.60 per month on their power bill,” added Kibiuk.
“It’s good. It’s going in the right direction,” he added. “Every little bit helps.”
The OEB says the rate drop is due to a reduction in the Registered Price Plan prices as well as an increase in the threshold level for the lower price from 600 kWh during the summer season to 1,000 kWh during the winter months.
The reduction in RPP prices is principally due to the need to recover a lower than expected variance account balance. The other forecast costs to supply RPP consumers with electricity over the next 12 months have remained essentially the same.
The variance account balance reflects the difference between the forecast price paid by consumers and the actual cost of supplying them with electricity since the Regulated Price Plan was first introduced in April, 2005.
During 2005, the hottest and most humid summer in recent history, as well as high natural gas prices, resulted in a significant shortfall in the variance account.
Since the last RPP price adjustment back in May, progress in terms of reducing the variance account balance has exceeded the OEB’s forecast.
The shortfall in the variance account as of May 1, 2006 was almost $420 million and prices were set at that time to recover it over 12 months. By Oct. 31 of this year, the OEB anticipates the shortfall will be down to roughly $105 million.
This means that about 75 percent of the shortfall in the variance account has been recovered over the past six months.
As a result, the OEB has reduced the amount included in RPP prices to eliminate the variance account (called the “variance recovery factor”) paid by consumers from 0.5 cents per kWh to 0.15 cents per kWh, which is expected to recover the remaining variance account balance over the next 12 months.
The revised price plan will be in place for six months, at which time it will be reviewed by the OEB.
Kibiuk clarified the new price plan only applies to those under a regulated price plan, such as FFPC customers, and not to those receiving their power from electricity retailers, which have their own negotiated price plans.
(Fort Frances Times)