Circa early 1900’s, the Government of Ontario entered into electrical generation and distribution. The perception was that a central agency should be created to generate power and assure a supply of energy at cost to municipalities. In 1906, Ontario Hydro was established.
As demand grew, Ontario Hydro continued to supply the necessary electricity to municipalities and industrial customers. The people and businesses gained secure supply at cost. The Government insisted electricity to be supplied at cost, and the people insisted equitable charges for all regardless of municipality – and it worked.
Today, nuclear is expensive and runs nearly full out to be efficient; less expensive coal which is able to ramp up and fluctuate on demand is being phased out; wind and solar are stable in a shaky and wobbly sort of way as they are not dependable, predictable or consistent.
The Ontario government is now privatizing electricity stripping the people of their Crown Corporation. The old intent of at cost electricity – to lower the cost of living and of doing business, is being replaced with private ownership whose intent is to maximize profit.
Thus, with big incentive to conserve energy, and less means to regulate supply, energy is often dumped in the USA – given to business competitors for a fee that is charged back to Ontario citizens and businesses – known as Global Adjustment (GA) Tax based on 5CP demand days. This tax is intended to pay for wind and solar contracts, imported power, and to cover power generation produced at a loss.
3MW (or greater) industries may base their GA tax rate on 5CP days (Top 5 Ontario peak days) rather than their annual average. Thus, reducing demand on peak days can greatly reduce your GA tax rate. Upgrading inefficient equipment reduces annual operating costs which also lowers GA tax. GA tax can cost as much as the electricity itself. Less than 3MW plants may only reduce energy demand and not the GA tax rate.
QSR offers a wide-range of electrical engineering services and is able to review your energy demand profile; find ways to reduce demand on and off peak times – with and without capital investment; better control electricity costs; perform energy, lifecycle and ROI analysis for efficiency upgrades and end-of-life equipment.
5CP Energy Demand Study: