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Comparing the RPP with Contract Prices

It's complicated because of rebates and deficits.

The Regulated Price Plan (RPP) is not a fixed or capped rate.    Its purpose is to smooth out the impact of the volatile spot market, so it is set for 6 months at a time.   However, if electricity costs more than your utility is charging you, a deficit builds and will eventually be charged to you.

Fixed Price Contracts are fixed for the term of your contract. In addition, you will receive a rebate that is already factored into the RPP.

To compare the RPP with a Fixed Price

  • Take the fixed contract price.
  • Deduct 1 cent for the rebates you will get. (estimated over a 5 year period)
  • Compare that with what you expect the RPP to be.
What will the Rebates be? They change every month. The rebates, the ONPA Rebate and the Provincial Benefit, are based on the monthly spot market price. We have assumed that over the next 5 years, the spot market price will average 7 cents/kWh.

So, for example:

7.0 cent Fixed Price
   minus
1.0 cent Rebates
   equals a net price of
6.0 cents

Compared with

Start with an RPP average of 5.9 cents.
What will the RPP be? Estimates are that it will go up by between 10 and 25% per year.

Assuming price increases of 10% per year.


2007 - 5.9
2008 - 6.5
2009 - 7.1
2010 - 7.8
2011 - 8.6
2012 - 9.5

If spot market prices increase at a faster rate, then the RPP will also, though slightly delayed.

Note 1: The rebates are estimated at 1 cent/kWh. They will vary based on the spot market price.
Note 2: When you sign up to a contract you are opting out of the Regulated Price Plan. If there is a deficit to pay off, it will be charged as an exit fee and if there is a surplus it will be paid to you. It is calculated as your annual consumption times the exit fee. Current RPP Variance Account

More Details

As a residential customer, you are a Designated Consumer, (applies to single family or multi-res buildings. You will be paying the following until April 30, 2008:

  • 5.0¢ / kWh for the first 1,000 kWh per month, per account or multi-res suite for the months of November through March, and for the first 600 kWh for April to October;
  • 5.9¢ / kWh for remaining monthly use.
  • This price is set until April 30, 2008, but is not a fully fixed price. If the cost to your utility is more than this, the deficit created will be built into next year's price.
  • "Designated Consumers" are residential dwellings, any account under 250,000 kWh per year, municipalities, universities, schools, hospitals, special care facilities, apartments, condominiums and registered charities.

    • Rebates and Refunds - Where do you fit?

    If you are on the Regulated Price Plan (RPP), some rebates are already factored into the rate. If you are not eligible for the RPP, or you opt out of the RPP, you receive the following rebates.

    ONPA Rebate (aka BPPR, OPG or MPMA)

    Consumers not eligible for the price cap have received a rebate, now called the ONPA (Ontario Non Prescribed Assets) rebate. It is a continuation of the rebate that has been variously called the BPPR (Business Protection Plan Rebate, the MPMA rebate (Market Power Mitigation Agreement), or the OPG (Ontario Power Generation) rebate. This is payable to all consumers of electricity, except those who have specifically assigned it to a marketer.

    It is calculated as 85% of the difference between the spot price and the revenue cap of 4.7 cents on about 33% of OPG's assets. (Yeah, I know. What the heck does that mean.) Think of it as being guaranteed a price of 4.7 cents for 30% of your consumption. This will be paid quarterly through 2008.

    Provincial Benefit

    This is a monthly bill adjustment to allow Ontarians to benefit from the generating stations owned by Ontario Power Generation (OPG) that have already been built, and largely paid for. The government wants to have Ontarians pay only the production cost for that electricity, not the market price. As a result they have set a maximum for the nuclear and Niagara Falls generators for 3 years. There are also a number of other adjustments factored in. The rebate is the difference between the market price and about 5.3 cents, for about 45% of your consumption. If you want more detail on the rebates, please go to the Independent Electricity System Operator (IESO) site.

    Note: The Provincial Benefit is not ALWAYS a rebate. If the spot market rate is below the set OPG revenue level, as it has been for a couple of months in early 2006, this will in fact be a surcharge.

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