Industrial Conservation Initiative (ICI)

The Industrial Conservation Initiative (ICI) is an Ontario-wide, demand-response program aimed at shifting large electricity users’ consumption to off-peak hours, when the Ontario system is at its highest demand. This allows customers to manage their Global Adjustment (GA) costs by reducing demand during peak usage periods.

Customers who participate in the ICI program, referred to as Class A customers, pay GA based on their percentage contribution to the top five Ontario peak demand hours during the Base Period as described below.

Who Is Eligible?

Eligible customers fall into one of two categories: 

  1. Any customer with an average monthly peak demand above 1 MW  and less than 5 MW during the applicable Base Period (see below for an explanation on Base Period).
  2. Customers in the manufacturing and industrial sectors, including greenhouses that have an average monthly peak demand of 500 kW and less than 1 MW during the applicable Base Period (see below for an explanation on Base Period). Customers in this category must have an North American Industry Classification System (NAICS) code that in "31", "32", "33" or “ends 1114."

Note:  Customers with an average monthly peak demand above 5 MW are automatically considered Class A and must opt-out through the ICI declaration form by June 14 of each year if they choose not to participate in ICI.  

What Is a Base Period and Adjustment Period?

The Base Period

The Base Period is the period in which customers both qualify to participate in the ICI program and their coincident peaks are used to determine the Peak Demand Factor (PDF). The Base Period runs from May 1st of the current year to April 30th of the following year. The Base period is the green shaded area shown in Figure 1 below.

Figure 1

Adjustment Period

Adjustment Period 

Customers that qualify for the ICI program and choose Class A have their Global Adjustment charges calculated using the Peak Demand Factor (PDF) determined in the previous Base Period. Charges using that PDF are applied during the Adjustment Period. The Adjustment Period runs from July 1st of the current year to June 30th of the following year. The Adjustment Period is represented by the blue shaded area in Figure 1.

How has COVID-19 impacted Global Adjustment and the Industrial Conservation Initiative?

The government imposed two changes in 2020 in an effort to help businesses during the start of the pandemic. 

First, a portion of the GA was deferred for the months of March, April and May. This is commonly known as the GA Deferral. The deferral lowered the GA dollars for both Class A and Class B customers for these three months. The amount deferred is being collected monthly between January and  December, 2021. This is currently included in the GA line item on your invoice. 

Second, the government froze the Peak Demand Factors for Class A customers. This is commonly known as the Peak Demand Hiatus. 

The intent was to allow businesses to get back up and running at normal production levels without having to worry about curtailment strategies or high electricity costs. The hiatus means that any customer that participated in the ICI program as a Class A consumer during the July 1, 2020 to June 30, 2021 Adjustment Period would be assigned the exact same PDF value for the July 1, 2021 to June 2022 Adjustment period should they qualify.

This effectively cancelled the May 1, 2020 to April 30, 2021 Base Period for Class A customers as is shown in Figure 2 below:

Figure 2
 

Base Period for Class A

Hiatus Impact on Class B Customers

The Peak Demand Factor (PDF) Hiatus does not impact customers that are eligible to participate in the ICI program andr chose Class B for the July 1, 2020 to June 30 2021 Adjustment period.

Customers in this scenario follow normal ICI practices. Your peaks, coinciding with the top five provincial peaks during the May 1, 2020, to April 30, 2021 Base Period will be used to calculate your PDF for the July 1, 2021 to June 30, 2022 Adjustment Period.

How Do I Opt-In to the ICI?

London Hydro will notify eligible customers by email before the end of May. Eligible customers will receive a detailed, site-specific information package that includes:

  • A Base Period Report that highlights your peak demands during the top five Provincial Peaks and calculates the Peak Demand Factor that will be used in the next Adjustment Period should you choose Class A. This report compares estimated Class A and Class B costs for the next adjustment period. 
  • An Adjustment Period Report that will show you the actual costs paid during the adjustment period ending June 30th of the current year. Additionally, this report provides you with what you would have paid if the other Class had been selected.

Combined, these reports are powerful tools that can be used to assist in the decision-making process. 

To opt-in or opt-out of the ICI, eligible customers must send in their complete form by June 14.

Please note: Only eligible customers’ forms will be processed.

How Has COVID-19 Impacted the Global Adjustment and the Industrial Conservation Initiative?

The government imposed two changes in 2020 in an effort to help businesses during the start of the pandemic. 

First, a portion of the GA was deferred for the months of March, April and May. This is commonly known as the GA Deferral. The deferral lowered the GA dollars for both Class A and Class B customers for these three months. The amount deferred is being collected monthly between January and December 2021. This is currently included in the GA line item on your invoice. 

Second, the government froze the Peak Demand Factors for Class A customers. This is commonly known as the Peak Demand Hiatus. 

The intent was to allow businesses to get back up and running at normal production levels without having to worry about curtailment strategies or high electricity costs. The hiatus means that any customer that participated in the ICI program as a Class A consumer during the July 1, 2020 to June 30, 2021 Adjustment Period would be assigned the exact same PDF value for the July 1, 2021 to June 2022 Adjustment period should they qualify.

This effectively cancelled the May 1, 2020, to April 30, 2021, Base Period for Class A customers as is shown in Figure 2 below:

Figure 2

Base Period for Class A

Hiatus Impact On Class B Consumers

The Peak Demand Factor (PDF) Hiatus does not impact customers that are eligible to participate in the ICI program and chose Class B for the July 1, 2020, to June 30 2021, Adjustment period.

Customers in this scenario follow normal ICI practices. Your peaks, coinciding with the top five provincial peaks during the May 1, 2020, to April 30, 2021, Base Period will be used to calculate your PDF for the July 1, 2021, to June 30, 2022, Adjustment Period. 

Will COVID-19 Affect My Eligibility?

Some businesses that only slightly exceeded the load threshold requirements to participate in the ICI program as Class A Consumers, (average 500 kW monthly leak load for manufacturers and 1000 kW for others) but whose facilities were shut down in response to provincial states of emergency, may be at risk of not meeting the load threshold requirement for the current base period.

Why is COVID-19 Causing the Global Adjustment to Increase?

A significant decrease in provincial electrical load resulted when multiple businesses closed their doors and employees worked from home during Government-invoked states of emergency. As a result, the amount of provincial power generation exceeded the provincial demand and power had to be sold to neighbouring states/provinces at a loss. Those losses will need to be recovered.

How Is My Peak Demand Factor Determined?

Eligible customers are assessed on their percentage contribution to the top five hours of peak demand in the province over a base period. The percentage contribution is also referred to as a customer’s coincident peaks. The sum of a customer’s coincident peaks is divided by the sum of the adjusted system peaks to determine the customer’s peak demand factor (PDF).

Sample Peak Demand Factor

In this example, the customer’s peak demand factor is 0.00016430.

This factor is used to calculate the customer’s global adjustment charge each month over the following annual adjustment period, which runs from July 1 to June 30. This is done by multiplying the monthly, Ontario-wide total GA costs by the customer’s PDF. For example, the system-wide GA costs for November 2020 were $1,065.83 million. Multiplying this amount by the PDF calculated above would mean that the customer in this example would have paid $175,115.56 in global adjustment costs for that month. 

The more you are able to reduce your peaks during the top five provincial peaks, the lower your PDF will be and the less your Global Adjustment charges will be.

Eligibility Checklist
  1. You will be eligible if:
  • Your business’s average annual peak load exceeds 1,000 kW throughout the base period
  • Your industrial business has a NAICS code in the 31, 32, or 33-series and an average peak load greater than 500 kW throughout the base period
  • Your greenhouse operation has a NAICS code in the 1114 series and an average peak load greater than 500 kW throughout the base period

If your business meets these requirements, you will be invited by London Hydro to participate in our annual ICI workshop. If you meet the criteria outlined in the second and third bullets, you will need to ensure that your business meets the NAICS code requirements for ICI program eligibility.

  1. Educate your team.
    Take advantage of an opportunity to save money for your business. Although the ICI program is complex, it can also be financially rewarding to your business. London Hydro provides coaching in the ICI program through its annual workshop, email communications, and Commerce.
  2. Review your Peak Demand Factor (PDF) report.
    The PDF report is a customer-specific report provided to businesses that meet the load requirements for eligibility within the Opt-in/Opt-out period. This report is also available for London Hydro customers on Commerce.
  3. Contact London Hydro if there are any issues with meeting the deadline. The deadline is established by the Province and government regulations. Contact us at ici@londonhydro.com as soon as possible if you are having difficulty meeting the deadline.
  4. Submit the online election forms to London Hydro by the June 14th deadline:
     
Stay Informed With Commerce

As an additional resource, London Hydro’s Commerce, an energy management application for commercial and industrial customers, provides a Global Adjustment Tracker feature for all ICI eligible customers. 

Here you are able to review your costs and compare how you rank as a Class A customer vs a Class B customer. You are able to view your current top five peaks coinciding with the top five provincial peaks and assess the effectiveness of your curtailment strategies. 

Log into or register for Commerce

For more information on the GA Tracker, please contact Paul Kilbourne, Customer Relationship Manager at kilbourp@londonhydro.com

Additional Resources
  • The Independent Electricity System Operator (IESO) has a library of information pertaining to the ICI program including Peak Tracking, Frequently Asked Questions and more information on eligibility. Those resources are available at IESO GA Information Page

For questions on the ICI Program, please email kilbourp@londonhydro.com.