Electricity Price Savings and Predictability Options
The Ontario electricity market is very volatile. Over the past 5 years the Regulated Price Program costs for both the Time of Use program and 2-Tier program have increased by approximately 40%. This type of volatility can create significant challenges to those housing providers that operate on tight budgets. In this uncertain market, having a pricing strategy in place is key to controlling operating costs and budgets over time.
To assist our FRPO members with better management of energy costs, we entered into a partnership with ECNG Energy L.P. over 20 years ago and have been providing stable and predictable natural gas pricing to members for the last two decades. We have now embarked on an electricity program with ECNG to assist members in saving energy dollars and stabilizing costs by using competitive tenders and aggregation of member volumes when approaching the energy supply community. FRPO is pleased to be able to offer its members additional tools to help improve their bottom line on energy costs.
Since 1987, ECNG has grown into Canada’s largest national full service energy management consulting firm managing over a billion dollars of natural gas and electricity purchases annually. ECNG is the largest energy manager in eastern Canada, other than the major gas/electricity utilities clients, with over 21,000 end-use locations under administration. With this scale of operation, ECNG receives very attractive pricing proposals from the supply and transportation communities.
- To give members an alternative to the current Regulated Price Programs (RPP), the 2 Tier or Time of Use programs, by moving them to the Hourly Ontario Electricity Price (market) program.
- To provide the program only to members that will achieve ongoing savings.
- To offer a more beneficial alternative to both the utility price program and “retailer” programs.
- To provide flexible price hedging options to members with larger consumption volumes.
Why would I move my buildings off of the Regulated Price Plan now?
- The new RPP pricing effective May 1, 2015 has increase by approx. $.02/kWh for the On Peak Time of Use pricing and approx. $.01/kWh for the 2 Tier program
- The average Hourly Ontario Electricity Price (HOEP) combined with the Global Adjustment is averaging approx. $.098/kWh representing a savings of approx. $.01/kWh over RPP pricing.
- There is currently a onetime credit available to members that choose to leave the RPP program
What would change with my current billing?
- Members moving off of the RPP pricing programs will be moved to the Hourly Ontario Electricity price (H.O.E.P.)
- The H.O.E.P is calculated every hour based upon total Ontario demand and cost of available supply
- The monthly price on the utility invoice is based upon the hourly costs and hourly consumption for each month.
- This price will vary month to month
- Members will see the Global Adjustment (GA) for the first time when they move off of the RPP
- Member will be invoiced by the utility, as you do today, and the cost for the electricity supply will appear as a single line item on the invoice.
What is the Global Adjustment?
- The Global Adjustment (GA) is charged to all users in Ontario (even those on the RPP, it is just buried in the rate).
- GA recovers the cost of contracted generation that is paid a different rate than the Hourly Ontario Electricity Price (HOEP) and all other contract costs incurred by the Ontario Power Authority for demand response and conservation programs (solar, wind and green energy initiatives).
- As a member of the FRPO natural gas program you have the added advantage of the group buying power within the program.
- The consumption volumes for each member are aggregated together providing a higher volume when purchasing the electricity fixed price hedges supply resulting in better pricing.
- As part of the FRPO electricity program the price on your bill is what you pay, there are no additional costs associated with the program.
Large Member Opportunities:
- Members that consume over 1,000,000kW per year have the opportunity to have a customized purchase program designed for their specific needs.
- This program provides all the benefits of being part of a larger group while providing more price flexibility.
- An individual strategy will be developed based upon the information provided.
- Members will have the opportunity to adjust their strategies as market conditions change.
The Power of the RFP:
- ECNG is an expert at putting the supply community in competition for clients’ needs.
- When ECNG purchases on behalf of FRPO members, volumes are aggregated together with other members so that Tier 1 electricity hedge suppliers are attracted to offer wholesale and institutional level pricing in a competitive setting.
- ECNG then purchases from the supplier that provides the best price at or below the authorized price.
- This approach has proven to be a major driver of measurable benefits to FRPO members.
Energy Savings Opportunities:
- Members of the FRPO electricity program have the opportunity to access the FRPO Energy Efficiency Program.
- To assist members in achieving energy reductions and provide ongoing savings through the ECNG Alliance Partner program.
- Provide members with timely information regarding current energy rebates and program incentives.
- Offer members the opportunity for customized solutions utilizing a network of preferred partners.
- Identify savings potential for each project.
- Provide a single point of contact for all energy savings programs and solutions.
How does the enrollment process work?
- ECNG to obtain current electricity invoices for each meter from the interested member
- ECNG to complete cost analysis for each meter to determine eligibility
- Identify all meters that would benefit from the program
- Provide member with the Electricity Program Application and Agreement
- Once the agreement is signed by the member, meters that qualify are enrolled into the program
- Profile all required consumption date from FRPO member locations
- Supply ongoing strategy review
- Identify potential hedge opportunities
Where can I get more information?
- For more information or to have your meter analysis completed, please contact Matt Honchar at ECNG Energy L.P. at 905-635-3274 or firstname.lastname@example.org. The deadline to enrol is November 1st, 2015.
For Frequently Asked Questions and Case Studies showing analysis and savings projections, please click here.