Most large energy users in Ontario are familiar with the Industrial Conservation Initiative, or the ICI program. This program allows Class A facilities to significantly reduce their Global Adjustment costs by minimizing their electricity demand during the ‘Coincident Peaks’.
ICI Hiatus Announced in June 2020
As a way to help industrial companies, the government announced a hiatus to the ICI program in June 2020. The aim of the hiatus was to allow facilities to focus on production instead of ‘chasing the peaks’ and curtailing their load. This allowed Class A facilities to maintain their Peak Demand Factor from the previous Base Period for an additional year, in effect creating a free year of GA savings with no curtailments required.
This hiatus had some negative outcomes as well. The emergency dispatch of Demand Response on back-to-back days in July 2020 forced many to rethink their DR participation. The rebound in demand, caused in part by the sweltering heat, caused the provincial grid to reach its highest demand since July 17, 2013. The summer recovery in electricity demand was much higher than the Ministry of Energy or the IESO expected.
In July 2020 the provincial grid reach its highest demand since July 17, 2013.
With the hiatus experience in recent memory and with recent feedback from Class A customers, the province has announced that the ICI will return. The most recent Ontario budget outlines the need for the ICI program in maintaining cost reductions and electricity peak supply in Ontario. This was announced alongside a reduction in the total GA pool which is achieved by shifting costs to the Ontario tax-payer base.
This initiative is in addition to the benefits of other programs that are being maintained to provide electricity cost relief to eligible companies, such as the Northern Industrial Electricity Rate program and the Industrial Conservation Initiative (the latter program is also designed to provide electricity system benefits).
You can read the section on ICI and NIER in the Ontario budget here.
What does this mean for Class A facilities
Starting May 2021, Class A facilities will need to curtail their load during the Top 5 Coincident Peaks. With the economic rebound underway and many changes in the electricity demand, predicting peaks will continue to be challenging, unless advanced methods are used.
