Ontario Power FAQ

1. Future price certainty.
2. Risk mitigation / protection from the market.
3. The ability to manage price.

The Ontario electricity market is an hourly spot market

1. Hourly spot market prices rise as the gap between demand and supply shrinks and fall as the gap between demand and supply grows
2. Hourly demand is influenced predominantly by time of day and weather
3. Supply is influenced by scheduling, maintenance requirements and in the case of wind generation the presence of wind

The OEB (Ontario Energy Board) created the RPP (Regulated Price Plan) to provide residents and small businesses with a more stable price than the open hourly spot market

1. Every 6 months the OEB (Ontario Energy Board) forecasts how much it will cost to supply electricity for the next 12 months based on normal weather and generator availability
2. Prices are set to match the forecast and true up for any financial differences between previous forecasts and actual costs in the hourly spot market from the previous period; see a quick 1-minute OEB produced video regarding the RPP https://www.youtube.com/watch?v=zVdm5BI4gU8

1. Purchasing from the hourly spot market or the RPP represents future price volatility; future price risk and/or future price opportunity

Purchasing from the futures market represents the ability to buy supply for future delivery which results in future price stability and an expense that can be managed

1. Consumers can apply a futures price to all or part of their usage
2. Usage where the spot market is applied is passed through at the utilities spot market price for the billing period without markup
3. During the term of an agreement, the option to reduce the fixed price is possible