Ontario Electricity Support Program (OESP) Costs to be Recovered from Ratepayers

The Ontario Energy Board (OEB) has now set the costs to be recovered from Ontario electricity ratepayers for the Ontario Electricity Support Program. In a previous post, we discussed the OESP and the OEB website (www.OntarioElectricitySupport.ca ) where low-income electricity consumers can sign up for the OESP. Under the OESP, eligible low-income households can receive monthly credits ranging from $30 to $75 on their electricity bills.

In a Decision released yesterday, the OEB determined that the total OESP credits expected to be issued during 2016 will be around $145 million. There are also administration and implementation costs of around $13 million. To recover these costs, the OEB has approved a new rate to be charged to electricity distribution customers in Ontario as part of the Regulatory Charges line on their bills. This rate will be charged on a volumetric basis, staring on January 1, 2016. According to the OEB, an average consumer will pay around $.93 per month ($11 per year) for this new charge.

The Independent Electricity System Operator (IESO) will administer the OESP funds. Distributors will be invoiced by the IESO, using the same OESP rate as the Distributors will be billing to their customers. Effectively, this passes on the new revenues that will be collected from customers. Distributors will recover any OESP credits issued to their customers through a settlement process with the IESO. Unit sub-meter providers will settle directly with the IESO for OESP credits on their customer bills.