The Rural Voice, 2001-01, Page 56J
GREY
County Federation of Agriculture NEWSLETTER
446 10th St., Hanover, Ontario N4N 1P9
Email: grey aofa.on.ca Webster www.ofa.on.cagrey 519-364-3050 or 1-800-275-9551
The Rural Voice is provided to all Grey
County Farmers by the GCFA.
The new electricity market coming s
If you read nothing else on
electricity; read this!
When the market opens, (Spring
2001), you are automatically on
Standard Supply, unless you sign
with a reseller. Standard Supply is low
cost, but has no assured item. If the
standard supply price is set too low,
you pay an adjustment. It is low-cost
learning. Next best, for learning, is a
short-term contract with no
cancellation fee.
Do NOT be rushed.
A. The Old Power Market - The
Facts
1. Hydro produced, distributed and
sold power. It was a monopoly.
2. Hydro sold power to Hydro
Retail, PUC's and industry;
3. Hydro Retail and PUC's sold
power to consumers.
B. 3 Things That Are Not Changing
1. People with Rural Rate
Assistance will still have it;
2. Bill will still come from Hydro
One or your PUC;
3. Your PUC or Hydro One is still
responsible for line maintenance.
C. The New Market - coming in
2001
1. Ontario Power Generation
(OPG) will be the main generator.
2. PUC's are now Local
Distribution Companies which may be
bought and sold.
3. Ontario Electric Financial Corp.
(OEFC) holds $20 billion of debt and
will collect OPGI and HO profits until
the debt is paid.
4. The Independent Market
Operator (IMO) will run power
auctions and balance loads on the
transmission system.
5. Hydro One (HO) will own
transmission and distribution service
in rural Ontario and more than 100
towns.
6. There are firms competing with
OPGI to supply power. These include
Quebec & Manitoba Hydro as well as
private generators.
7. There are private resellers of
power who buy power from
generators and resell it to consumers,
52 THE RURAL VOICE
businesses, farmers, etc.
D. In the New Market - there are
three markets
I. Transmission and distribution
will still be regulated.
2. Contractor power sales -
resellers, LDC's and big industry will
contract with generators to buy all or
most of their power in advance at firm
prices.
3. Spot market sales - resellers,
industries, spot market customers will
buy power at floating auction prices.
E. Importance of the New Market
1. Farmers spend $200 million a
year on electricity.
2. Farmers and all businesses will
have to buy power with a view to
competition.
3. Good choices of where to buy
power will mean lower costs and
better incomes.
F. The Choices
I. Spot market - you need an
interval meter ($1,200), go on higher
service charges and must draw over
50 kv. The spot market makes sense if
you schedule your power use to low
demand periods when prices will be
low.
2. Resellers - resellers will provide
all you need at a fixed price for an
agreed period of time. A good reseller
agreement will be for a reasonable to
low price for a long period of time
and will have an opt out clause.
3. Standard supply - if you don't
want to use a reseller, you do not have
to. People who do not sign with a
reseller or the spot market will
automatically be on standard supply.
The standard supply price is set by the
Ontario Energy Board, (OEB). If it is
higher than the market average,
customers get a rebate. If it is lower
than the market average, customers
make up the difference. The standard
supply prices is not set for a fixed
term, but will go up or down when the
OEB changes it.
G. What Will Prices Be? - these are
estimates, not quotes
1. Power now costs 8.020 a kwh;
2. Service charges are now $480 a
pring 2001!
year and are going up;
3. Spot market prices will likely be
between 20 and 200 a kwh;
4. Reseller prices run 5.50 to 110 a
kwh, under 60 is competitive;
5. Standard supply price is 4.20
from Hydro One and 5.10 from
afilliates;
6. Taxes, IMO fees etc. will be
about 10 per kwh extra added on to
the price.
H. Your Bilis Will Show
1. Administrative charges;
2. Transmission and distribution
costs;
3. The market operator (IMO) costs
(about 0.070 per kwh);
4. The cost of Rural Rate
Assistance (about 0.25 per cent of
total bill);
5. A 'tax' (Competition Transition
Charge) to help pay the hydro debt
(0.70 per kwh).
I. What should you do?
Study resellers' offers, note
rates, cancellation clauses and if taxes
are included
2. Examine energy-saving
equipment such as different hot water
storage, heat reclaimers, compressed
air motors and storage,
3. Consider buying co-operatively
through a buying group
4. Consider the spot market if you
use more than about $3,000 per
month.
5. Use Standard Supply or a short
term contract until you find a better
offer.
J. Getting More Information
OFA 1-416-485-3333 www.ofa.on.ca
Min. of Energy 1.888.668-4636 ..www.est.gov.on.ca
Hydro One ...1.877-385.1559 ..www.hydroone.com
OEB 1-888.632.6273..www.oeb.gov.on.ca
GREY COUNTY FEDERATION OF
AGRICULTURE
DIRECTORS' MEETING
Thursday, January 25, 2001
1:00 p.m.
GREY GABLES
206 Toronto Street South, Markdale
Members are welcome to attend.
*NOTE: LOCATION CHANGE*