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OPGI Rebate Explanation
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What is the Ontario Power Generation (OPG) Rebate?
Also called Market Power Mitigation Rebate (MPMR) and the Business Protection Plan Rebate (BPPR) |
| It's a rebate from the main Ontario electricity generator, OPG, that is paid when the spot market price exceeds their revenue cap as set by the government. It is paid to all electricity consumers in Ontario except those who have signed away their rights in a contract with a marketer. |
| The rebate was modified this year and is now set at 50% of the difference between the average spot market rate and the 3.8 cent OPG revenue cap. The payments are made quarterly until May 1, 2006. |
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Why does it exist? |
| Ontario Power Generation (OPG), the generation company that emerged from the break-up of Ontario Hydro, was thought to have too much market control in a deregulated market because they control about 90% of Ontario electricity generation. The possibility of price abuse existed. In addition the government wanted to protect Ontario consumers from extreme price flucuations. |
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How does the Ontario Power Generation Rebate Affects You |
| As a result of the above factors, 2 actions were taken. The first was a requirement that OPG sell or lease some generating facilities to reduce their market clout. This stipulation is in some doubt with the recent change in government. The second action was a cap of 3.8 cents/kwh on OPG's revenue from electricity sales. |
| If the spot market price is greater than 3.8 cents, electricity consumers will receive a rebate from OPG of 50% of that amount.
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| The key variable in the rebate is the amount that the average spot market price exceeds 3.8 cents/kWh. This changes every hour. To April 2003, the average was about 6.2 cents. |
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Calculating the Rebate |
| To roughly calculate the rebate. |
| Take the amount by which the average hourly spot market price exceeds the OPG cap of 3.8 cents/kwh. You can find the hourly price, (called the HOEP - Hourly Ontario Electricity Price) on the Independent Market Operator (IMO) web site |
| Multiply by. |
| 50 % |
| Multiply by |
| Your electricity use in kwh. |
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Summary |
| The bottom line is that if you are on Standard Supply Service, you will receive this rebate. If you sign with an energy marketer, read their contract terms and conditions to see if you are signing away your rights to that rebate. Virtually none of the marketers require this any more, but keep checking. |