Burlington, Ontario, 2-September-2010 - The Ontario Ministry of Energy has proposed a new regulation, which changes how the Global Adjustment, currently labeled “Provincial Benefit”, will be applied to electricity customers in Ontario.

The regulation proposes to identify two classes of customers, class A – customers who consume greater than 5 MW peak electricity (primarily industrial customers), class B - all other customers in the province of Ontario (commercial, retail, residential, MUSH).

For class A customers the new rate will be calculated based on their contribution to the province’s peak demand. The total Global Adjustment cost would then be allocated based on their contribution. The remaining Global Adjustment would be charged to class B customers. For example, thus far in 2010 the average monthly Global Adjustment has been 304 million, if a class A customer makes up 0.5% of the peak demand, they would be required to pay 1.5 million towards the Global Adjustment, the remainder would be paid by the class B customers.

Generally, most industrial customers have a relatively uniform electricity profile and therefore their contribution to the total peak demand would be less than their contribution of the total provincial electricity consumption. Therefore class A customers will see a reduced Global Adjustment charge on their electricity bill and based on the proposed regulation, class B customers will be responsible to pay the difference. Our preliminary analysis indicates that this increase will be 0.3 ¢/kWh to 0.6 ¢/kWh.

Energy Advantage will continue to monitor this proposed program and advise when updates are made.

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