As one can see the HOEP is below the Global Adjustment (GA) charges. Every Class “A” and Class “B” end use pays the actual amount of hydro used as per the HOEP. However, Class “A” and “B” end users pay the GA charges based on different calculations. Class “A” pay their share of Class “A” costs based on thier peak load factor(PLF) in a capacity allocation model. Class “B” end users pay based on total demand on Class “B” pooled costs. The net effect is that Class “B” end users end up paying a disproportment share of total costs. This has resulted in several court cases where the courts found that yes Class “B” did pay a disproprotate share , this was Givernment policy and not subject to review by the them.
Demand Charges
With respect to distribution, delivery, demand and transmission connection charges there is no standard pricing in Ontario and they vary greatly from local hydro company to local hydro company. (There are 89 separate local hydro entities in Ontario). The Ontario Energy Board (OEB) approves rate increases and sets these charges based on the costs incurred for these upgrades at the level of the local hydro company . These costs can/are significant but any solution really depends on the particular pricing structure of each individual local hydro company.
Please note that these demand and connection transmission charges are based on the peak demand during any fifteen (15) minute period for the month.
Historically, 50% of the total demand for hydro was for residential end users and 50% for Industrial end users. At that time all users paid the same proportionate share of total system costs and the same price. (This is in contrast to the USA where residential, commercial and transportation sector end users’ pay more and large Industrial users pay less).