OCC Rapid Policy Update
Following today’s speech from the Throne, the Ontario Government recommitted to jobs and growth as their top priority. They also confirmed that next year’s budget will be balanced, delivering on the Government’s promise to eliminate the deficit by 2017-18. Previously announced investments in childcare, tuition reduction, skills training, and healthcare, were echoed. As were investments in the Business Growth Initiative, Jobs and Prosperity Fund, and the Climate Change Action Plan.
The most important announcement in today’s speech from the Throne for Ontario’s business community is the expansion of the Industrial Conservation Initiative. As we have learned through the Ontario Energy Report, Class A industrial ratepayers have a relatively competitive rate with jurisdictions where Ontario does business. However, Class B ratepayers are much less competitive and have been falling further and further behind.
One of the reasons Class A rates are so much more competitive is because, since 2011, they have been eligible for the Industrial Conservation Initiative which incentivizes the shifting of power away from peak days.
With this Throne Speech, the government has announced that the Industrial Conservation Initiative will be expanded so that any company that consumes more than 1MW will be eligible. Presently, 300 companies are enrolled in the program which has saved the grid 800MWs through conservation – relatively the size of two gas plants.
After today’s announcement, another 1000 companies will be eligible. By simply enrolling in the program, those 1000 companies could each save 14% on their bill. Depending on their ability to reduce peak electricity consumption, they could save up to 34%.
Today’s announcement is the culmination of significant advocacy from the Ontario Chamber of Commerce, including our 2015 report Empowering Ontario. The government is listening and today’s announcement indicates that change is coming. While we are pleased with this policy change, we know that many issues are impacting rising energy bills. That’s why we need to continue to encourage a transparent dialogue around what is impacting the price of electricity in Ontario.
Further details will be announced by the government in the coming days and we will provide you with that information as it becomes available. For further information about this, please contact: Karl Baldauf.