Ontario Global Adjustment
Immediate and affordable Class A vs. B business case analysis to choose the lowest
electricity rate for your organization.
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What does a kWh cost during Class A peaks?

The cost per kWh (or kW) during a Class A Global Adjustment peak event is governed by the total Global Adjustment amount for a specific month/year and the total Ontario demand set after a peak setting season (May to April) is complete. The following outlines the estimated cost per kWh calculation.

Note: a kWh or kW measured over the period of 1-hour typically mean the same thing. When a kWh is divided by an hour, the units [h] cancel out, and leave us with only a kW.

First, we outline the two (2) key equations used for Class A cost analysis:

Equation to Calculate your Peak Demand Factor (PDF):

PDF = [Sum of Your Demand (kW)] / [Sum of Ontario's Demand (MW) x 1,000]

Equation to Calculate Estimated Annual Class A GA Cost:

Class A Cost (annual) = [PDF x Last 12-months Total GA]

The process starts with determining Class A annual costs for a facility using example peak performance results. Let's assume the facility peaked at 800 kW during each peak event, resulting in total peak setting season of 4,000 kW (800 kW x 5 peak events).

Using the summer of 2018 as an example, the sum of the provincial peaks was around 110,112 MW (multiply by 1,000 gives 110,112,000 kW).

Now, the PDF can be calculated for the example facility:

PDF = [4,000 kW] / [110,112 MW x 1,000]

PDF = 0.00003633

The second step involves using the PDF to calculate estimated annual Class A Global Adjustment Costs, using recent 2018 Global Adjustment totals:

Class A Cost (annual) = [0.00003633 x $11.2 Billion]

Class A Cost (annual) = $406,896

The final step involves determining the cost per kWh (or kW) during the 1-hour Class A peak events. This is done by dividing the estimated annual Class A Global Adjustment cost by the total peak consumption, which was chosen to be 4,000 kW:

Cost per kWh = [$406,896 / 4,000 kW]

Cost per kWh = $100/kWh

To put this into perspective, as a Class A rate payer, you are normally paying around $0.04/kWh all-in, but during these peak events, prices increase to 2,500 times the normal rate, making it crucial to lower consumtpion during these hours.

Now that you know the rate for electricity during a Class A peak event, you can determine how much money was saved or lost during each peak day event.

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