Wonder what “Global Adjustment” is? [electricity charges]

Hi all,

In terms of electricity costs, I was wondering what the “Global Adjustment” (GA) is and how much the Feed-in-tariff (FIT) program is responsible for in overall GA costs. So, I wrote the good folks at the Ministry of Energy and received the response below (eventually ;-). I found the response helpful.


Response from the Ministry of Energy:

All consumers in Ontario pay the blended (or commodity) cost of electricity. This is comprised of two components, the market price for electricity and the Global Adjustment. The Global Adjustment pays contracted and regulated generators the difference between their rates and the market rate for electricity. The Global Adjustment also covers the cost of conservation programs.

The Global Adjustment was introduced in 2005 to ensure that new generators had sufficient revenue certainty to warrant investment in Ontario’s electricity system.  Since that time Global Adjustment has been successful in delivering stable prices as well as ensuring that capacity is in place to deliver a reliable supply of energy.

Global Adjustment costs for most consumers have increased significantly in recent years; however this increase has been accompanied by a decrease in the market price for electricity. The net effect is that the increase in the blended electricity price has been limited.  Electricity bills are increasing in nearly every province, even those that rely predominantly on coal and hydroelectricity.

The Global Adjustment reflects the non-market costs associated with contracted and regulated generation such as nuclear, natural gas, and renewables, as well as the cost of conservation programs.

In 2011, non-hydro renewables accounted for about 10 per cent of global adjustment, and the Feed-in-Tariff program made up about 1 per cent of a typical consumers bill.

I hope this information is helpful. Should you have any further questions of a general nature, please call the ministry’s information line at 1-888-668-4636, TTY 1-800-387-5559.

2 Responses to Wonder what “Global Adjustment” is? [electricity charges]

  • Any idea if this has changed in the last few years? I’ve heard about problems with taxpayers paying wind generators high generation fees only to have to pay Americans to take unwanted power during windy nights. Also, I’ve heard that some countries (Spain?) abandoning such programs due to high cost combined with austerity. Are we setting ourselves up for a similar future?

    • Thanks for the comment Bob. According to some sources, the FIT rate for wind generation is still lower than nuclear with all factors included (stranded debt, new construction, waste disposal, etc.). Yes, we pay Americans sometimes to take our electricity during low peak periods – we can blame all forms of generation for this – it’s hard to manage all the various types of generation. Folks blame wind because it’s not easy to predict when the wind blows and it’s even harder to dial down nuclear in a reasonably fast way. What we really need, and what will no doubt eventually happen, is electricity storage means for renewables. Spain has experienced collapse of their economy – for lots of reasons that have little to do with their renewable subsidies. Look at Germany that started this wave of renewable subsidy programs over a decade ago and has just recently committed even more funding into the future due to it’s success. Interesting note: Australia just announced that renewables are cheaper than building new fossil fuel and nuclear plants. The Ontario Green Energy Act is far from perfect, but it’s absolutely the way of the future and one I am glad to see us investing in.

Leave a Reply

Your email address will not be published. Required fields are marked *