MPMA Rebate Explanation

It's now called the Ontario Non-Prescribed Assets (ONPA) rebate, and used to be called the 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 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%). This will be paid in one lump sum for the 13 month period from March 1/05 to April 1/06, and paid some time after May 1, 2006.

There is also a rebate called the Provincial Benefit that appears on electricity bills each month. That is based on the difference between the spot market price and the OPG revenue cap of 4.5 cents for OPG's nuclear and water generation (about 40% of your use). "Designated Consumers" who are on the Regulated Price Plan (RPP) receive the OPG rebate, but not the Provincial Benefit.

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 70% of Ontario electricity generation. The possibility of price abuse existed. In addition, the government wanted to protect Ontario consumers from extreme price fluctuations.

As a result of the above factors, two 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 on OPG's revenue from electricity sales.

If the spot market price is greater than 4.5 cents, electricity consumers will receive a rebate from OPG on about 70% of your consumption. The key variable in the rebate is the amount that the average spot market price exceeds the cap. This changes every hour.

Calculating the Rebate

To roughly calculate the rebate:

• Take the amount by which the average hourly spot market price exceeds the OPG cap of 4.5 cents/kWh.
• Multiply by 70% of your electricity use in kWh.

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.