Customers will be paying less for electricity next year as a result of changes proposed today by the Independent Electricity System Operator (IESO).
Under these proposed changes, customers will be provided with surplus funds of $57 million that accumulated under a market account relating to import and export transactions. In addition, changes to the pricing structure will result in a reduction in emissions from coal burning facilities that are often used for electricity exports.
"We recognize the cost pressures that customers are facing," said Paul Murphy, IESO President and CEO. "These actions, combined with the IESO proposals to reduce its fee by 10 per cent in 2007 and provide additional rebates once again next year demonstrate our commitment to helping customers reduce their electricity costs. Some large industrial customers could see their electricity costs reduced by almost $1 million next year as a result of these actions," said Murphy.
The rate relief would come at a time when the average Hourly Ontario Energy Price is below 5 cents a kilowatt hour for 2006 ($50 per megawatt hour) and is on track to be the lowest annual price since the market opened in 2002.
Changing the rule that governs the pricing structure for generators will result in a reduction in exports of energy from Ontario. Since these exports can be coal-based, environmental benefits will be realized through reduced emissions as the coal fired facilities in Ontario are operated less.
"This change would also help to provide better price signals to encourage generators and customers to respond appropriately to changes in power system conditions both through increased supply and demand response," said Murphy.
When these changes take effect, the IESO will be disbursing to customers $57 million of funds accumulated in the Transmission Rights Clearing Account. The funds will be paid out on a monthly basis. Future surplus funds that accumulate in this account will be used to offset customer costs.
The IESO is responsible for managing Ontario's bulk electricity system and operating the wholesale electricity market. For more information, visit www.ieso.ca.