Class B is one of two mechanisms for businesses in the province of Ontario to pay their share of the Global Adjustment amount that is due each month. The Class B rate is often paid by medium to large business who have a demand of at least 50 kW. The Class B rate is paid through a basic method, charging customers against their monthly electricity consumption (kWh) through a $/kWh rate. To save on the Global Adjustment charge, Class B rate payers have the single option of reducing their monthly electricity consumption.
The IESO provides three different variations of the Class B rate for electricity customers, including a first estimate, second estimate and actual rate. Your local electric utility (local distribution company, or LDC) chooses one of the variations to consistently bill you for Class B Global Adjustment. An example of the three variations for 2019 is shown below.
You will notice above that the estimates and actual rates can be quite different over the same month, but this does not necessarily mean you will be paying more or less based on the rate your utility chooses. The IESO states that each estimate includes "true-ups" to account for the differences between the two estimates and the actual rate.
The following includes a simple Class B cost calculation using the information provided above along with the sample building information provided below. Let's consider an office building with the below details.
July 2019 Consumption: 145,000 kWh | Charged 1st estimate by their local utility
Using the above Class B rates table, we can see that the 1st estimate for July 2019 was $0.1353/kWh (note we converted rate from cents to dollars). The Class B equation is shown below:
As seen above, Class B costs have two components:
By understanding the Class B cost components, we can see that the only option to lower Class B costs is to reduce your building's electricity consumption, as the Class B rates are out of our control.
Energy efficiency is your key to lowering electricity costs as a Class B rate payer. The less kWh's consumed, the lower your Class B costs will be. Contact us via the link below to learn more about how you can make your building more energy efficient.