"Canada (ON): "Rate cuts mean big savings for smaller companies"
Mid-size energy users have historically paid more per unit energy than their higher-consuming counterparts. Now customers with as low as 500 kW of peak demand will qualify for the Industrial Conservation Initiative (ICI) to include customers, opening big opportunities for mid-sized businesses to reduce their costs. Despite the "industrial" reference in the program title, the ICI program applies to energy users in all sectors, as long as they meet this new 500 kW peak demand threshold.
A (Very) Brief Primer on Billing in Ontario
Many non-residential energy users in Ontario fit into one of two billing categories - Class A and Class B - which determine how their electricity bills are calculated. Rates for the two classes differ the most with respect to a fee called Global Adjustment which can represent over 50% of an electricity bill. Class B customers can only moderate their Global Adjustment costs by reducing overall energy consumption (kWh). This is possible and valuable, but can be tricky when balancing efficiency measures with production requirements. Class A customers have the capability to reduce their Global Adjustment costs by lowering the peak points of their consumption during key periods of the year. Since the Global Adjustment can form such a large part of an electricity bill, Class A status can have huge cost advantages. Lowering peak demand still takes some work, but it does offer more opportunity and flexibility to find savings than simply reducing consumption.
So What's the Big News?
The announcement reduced the minimum threshold to qualify down to 500 kW (halved from 1 MW in January, and 3 MW prior to that). At the 3-MW threshold, only approximately 300 business sites qualified for the program, leaving approximately 55,000 businesses in Class B. It is unclear how many more businesses will now qualify, but it is likely to number in the tens of thousands.
For more information:
360 Energy Inc.
David Arkell
1-877-431-0332
david.arkell@360energy.net
www.360energy.net