OPG Rebate Explanation

This rebate ended April 30, 2009.

It was a rebate from the main Ontario electricity generator, OPG, paid when the spot market price exceeded their revenue cap as set by the government. It was paid to all electricity consumers in Ontario except those whoe signed away their rights in a contract with a marketer.

The rebate was initially 50% of the difference between the average spot market rate and the 3.8 cent OPG revenue cap. The payments were made quarterly until January 31, 2005. The rebate was changed as of March 1, 2005 and split into two rebates. The ONPA rebate was changed to be the difference between the spot market rate, and a 4.7 cent/kWh OPG revenue cap, but only on some of OPG's generation (about 30%).

There is also an adjustment called the Provincial Benefit that appears on electricity bills each month. That is based on the difference between the spot market price and a price cap that is around 5.5 cents for nuclear and water generation (about 40% of your use). "Designated Consumers" who are on the Regulated Price Plan (RPP) are also subject to the Provincial Benefit.

Why Does It Exist?

In order to guarantee an adequate supply of electricity ihn Ontario, the provincial agencies fellt it necessary to sign supply contracts with some generators. These are for nuclear, water power, or renewable energy such as windmills. The Provincial Benefit was initially envisioned as a rebate, as indicated in its title, and it has occasionally been a rebate in its history. It guarantees that Ontario consumers will pay a set price for that electricity. If the market price is over that, the difference is returned as a rebate. If the market price is les than that, there is a surcharge.