Final RPP Variance Settlement Amount

Case number
EB-2004-0205
Launched
Sector
Electricity
Status
Active
Details

On April 1, 2005 in accordance with section 79.16 of the Ontario Energy Board Act, 1998 the OEB’s Regulated Price Plan (RPP) came into effect. A consumer who leaves the RPP will either pay or receive a "final RPP variance settlement amount". 

This amount will reflect the consumer’s share of any accumulated variance between the actual price paid to generators and the forecast price paid by RPP consumers. If consumers have been paying more for electricity than was paid to generators, this amount will be a credit. If consumers have been paying less, it will be a charge. The variance account that tracks the difference is held by the Independent Electricity System Operator (IESO).

The "final RPP variance settlement amount" applies to an RPP consumer who:

  1. cancels their account and moves outside of the Province of Ontario;
  2. switches to a retailer;
  3. elects the spot market pricing option; or
  4. no longer remains eligible for the Regulated Price Plan.

This amount will be referred to as "RPP settlement" on the electricity bills of applicable consumers and will be calculated by the consumer’s distributor. If the consumer was on RPP prices for a continuous 12-month period prior to exiting the RPP, to calculate the "final RPP variance settlement amount", the distributor will multiply the applicable "final RPP variance settlement factor" (calculated by the OEB) by the individual consumer’s consumption over the most recent 12 months. If the consumer was on RPP pricing for less than 12 months prior to exiting RPP, they will receive a pro-rated settlement based on their consumption for that less-than-12-month period multiplied by the applicable “final RPP variance settlement factor”.

In calculating the “final RPP variance settlement amount” for consumers leaving the RPP, distributors will use the “final RPP variance settlement factor” that is in effect (posted on this web page) on the date of the consumer’s final meter read. Therefore, due to the time lag between a meter read and billing, the factor used in the calculation may be different from the value that appears on this web page when the consumer receives their bill. An Information Bulletin discusses this matter in further detail.

The table below shows the current "final RPP variance settlement factor" calculated by the OEB. The information on this web page will be updated by the OEB on a monthly basis. It will be used for billing purposes by electricity distributors and retailers (if using retailer-consolidated billing) for consumers who left the RPP. When the IESO has paid more to generators than has been paid by consumers, the “final RPP variance settlement amount” is a charge and these values will be shown as a positive in the table below. It will be a credit to consumers when these values are shown with a negative sign in front.

The OEB has calculated the "final RPP variance settlement factor" by dividing the balance in the IESO’s variance account by the total consumption of all RPP consumers over the preceding 12 months.

What does the current “Final RPP Variance Settlement Factor” mean to a residential consumer that leaves the Regulated Price Plan and is eligible for a full-year settlement?

An RPP consumer using an average of 700 kWh per month would be owed $1.36 if they leave the RPP. [700 (kWh/month) x 12 (months) = 8,400 kWh x -$0.000162 per kWh = -$1.36]

An RPP consumer using an average of 1,000 kWh per month would be owed $1.94 if they leave the RPP. [1,000 (kWh/month) x 12 (months) = 12,000 kWh x -$0.000162 per kWh = -$1.94]

 

Final RPP Variance Settlement Factor

posted on January 21, 2020

Net Variance Account Balance (accumulated IESO variance account balance)

 

  • -$9,760,547

Total RPP consumption for the preceding 12 months

 

  • 60,236,247,400 kWh

Final RPP Variance Settlement Factor 1, 2

 

 

(To see previous Settlement Factors, click here. While the OEB was setting RPP prices under the Ontario Fair Hydro Plan Act, 2017, the "final RPP variance settlement amount" was no longer required to serve the purpose for which it was designed. The OEB therefore suspended the operation of the "final RPP variance settlement amount" mechanism for customers that left the RPP on or after July 1, 2017. The OEB resumed setting RPP prices under section 79.16 of the Ontario Energy Board Act, 1998 effective November 1, 2019, and has therefore resumed the operation of that mechanism. For customers that have left the RPP on or after November 1, 2019, the final RPP variance settlement factor was $0.00/kWh until January 21, 2020.)

Notes:
(1) The "final RPP variance settlement factor" is shown in both cents/kWh and $/kWh to accommodate different billing systems. Both are links to an XLSX file that distributors and retailers can automatically download into their billing systems. This data is also available as an XML file.  The current variance file can be accessed through the XML link above, and the folder directory can be accessed from the following location: https://www.oeb.ca/documents/rpp_variance
(2) When values are shown with a negative sign in front, the RPP settlement is a credit.

 

 

Frequently Asked Questions

Where is information related to the Final RPP Variance Settlement posted?

Information regarding the Final RPP Variance Settlement will be posted on this webpage.

Electricity distributors are required by section 3.7 of the OEB’s Standard Supply Service Code to charge or credit (as applicable) a consumer that leaves the Regulated Price Plan (RPP) with a Final RPP Variance Settlement Amount, and to do so using the methodology set out in the OEB’s Regulated Price Plan Manual. These requirements are the same as they were before the OEB began to set RPP prices under the Ontario Fair Hydro Plan Act, 2017.  
 
Who does the Final RPP Variance Settlement apply to?

The Final RPP Variance Settlement applies to a RPP consumer who leaves the RPP for any of the following reasons:

  • They cancel their account and move outside of the Province of Ontario;
  • They switch to a retailer;
  • They elect the spot market pricing option; or
  • They no longer remain eligible for the RPP.

How is the Final RPP Variance Settlement Amount calculated for a consumer who leaves the RPP?

The Final RPP Variance Settlement Amount for a consumer is calculated by multiplying (i) the Final RPP Variance Settlement Factor ($/kWh) as calculated by the OEB by (ii) the consumer’s historical consumption.

  • If the consumer was on RPP prices for a continuous 12-month period prior to exiting the RPP, the consumer’s consumption over the most recent 12 months is to be used, measured back from the consumer’s final meter read. 
  • If the consumer was on RPP pricing for less than 12 months prior to exiting RPP, the consumer’s consumption for the actual period during which the consumer was continuously on RPP supply is to be used, measured back from the consumer’s final meter read.

What Final RPP Variance Settlement Factor should be used in calculating a consumer’s Final RPP Variance Settlement Amount?

The OEB posts the $/kWh value of the Final RPP Variance Settlement Factor each month, on or about the 15th of the month.

In calculating the Final RPP Variance Settlement Amount for a consumer leaving the RPP, distributors are to use the Final RPP Variance Settlement Factor that is in effect on the date of the consumer’s final meter read. Therefore, due to the time lag between a meter read and billing, the Final RPP Variance Settlement Factor used in the calculation may be different from the value that appears on the OEB’s website when the consumer receives their bill.

For example:

  • If the final meter read for a consumer that departed the RPP on or after November 1, 2019 took place on January 17, 2020, the Final RPP Variance Settlement Factor to be used is $0.00/kWh even if the consumer’s bill is issued on or after January 21, 2020
  • If the final meter read for a consumer that departed the RPP on or after November 1, 2019 takes place on January 25, 2020, the Final RPP Variance Settlement Factor to be used is -$0.000162/kWh   

Are distributors expected to retroactively bill consumers that left the RPP since November 1, 2019 using the Final RPP Variance Settlement Factor posted on January 21, 2020?

No. As noted above, distributors are to use the Final RPP Variance Settlement Factor that is in effect on the date of the consumer’s final meter read. This means that a distributor is to use a Final RPP Variance Settlement Factor of $0.00/kWh for the purposes of billing any consumers that left the RPP since November 1, 2019 and that had their final meter read before January 21, 2020. If the final meter read for a consumer that departed the RPP since November 1, 2019 takes place on or after January 21, 2020, the Final RPP Variance Settlement Factor to be used is  $0.000162/kWh.       

How is the Final RPP Variance Settlement Amount to be shown on a consumer’s bill?

The dollar value of the Final RPP Variance Settlement Amount is to be shown as a separate line item:

  • Labelled as “RPP settlement”; and
  • Shown directly below the electricity commodity price line items.