In my very first blog post on March 20, 2017, I, Sensei Bruce, discussed how I’m going to help you become an Energy Waste Ninja. I’m here today to start your conditioning! Our first move is to understand what your organization is faced with. Only then are we able to strategize, put the right moves in action, and do so swiftly!
Global Adjustment (GA) is where we start! Global Adjustment? Yes, there is significant loss from how we manage strategy on GA today. Most organizations look at their electrical bill and simply pay it. However, what they don’t know is that there is a way to strategize, which can lead to big $aving$.
Global Adjustment in Brief
So, what is GA? In its simplest explanation, it is a sort of TAX to help pay for a variety of adjustments. The GA is made up of various adjustment components, such as new projects, long-term generation contract payments, Ontario’s conservation programs — so if you’re not taking advantage of the saveONenergy programs, you’re paying for them through GA charges!
To understand Global Adjustment in detail click here!
Total Global Adjustment by Components (Source: IESO website, 2017)
You must be wondering now, “Am I paying this and how much?”. The short answer is yes, we are all paying, but the follow-up question is this: “How are you being charged?”.
Two Categories of Global Adjustment & Their Pricing Structures
GA is divided under two basic categories: Class A (kW demand driven) and Class B (kWh consumption driven).
A Class A customer is potentially one with a peak demand higher than 1 megawatt (0.5MW if you are industrial as of March 2, 2017). This customer is charged based on the five highest demand peaks in the Ontario grid from the previous year and its contribution to those peaks! Rule of thumb: 5 peak days of summer 2016 establish your rate for 12 months starting July 2017.
Class B customers consume less power. Specifically, they have a peak demand that is 50 kilowatts or higher, but lower than the potential to opt into Class A. Alternatively, if they tend to have a peak demand above 1 megawatt (0.5 MW if industrial) they have the option to opt into Class A and be charged per that structure. Class B customers are billed GA charges per a $/MWh rate as calculated each month by the IESO based on their measured consumption for the billing period.
So now that you understand how you’re being billed, how can you use this information to lower your monthly electrical expenses?
Lowering Your Global Adjustment Cost Strategically
There are two billing categories and therefore we need to employ at least two strategies. Our overall strategy is always going to be about shifting and reducing energy. Like a Ninja, you must preserve and use when the time is right.
If you are a Class B customer, you must first understand your electrical peak behavior. You then need to reduce those peaks and this is where we come in to show you how! Now, remember the option for Class B customers to opt-in to the Class A category? So, if your annual average peak demand is still eligible once reduced, you can opt in to become a Class A customer in the following year. This means you would be charged based on your peak and voilà – now that your peak is lower, your overall charges are lower.
If your peak demand as a Class B customer doesn’t warrant opting into Class A, Sensei Bruce will let you know and will still help you reduce kWh consumption using our energy management solutions.
As a Class A customer you will benefit the most from employing our strategy. Following the same approach as Class B and leveraging our technology you will benefit from up to 30% peak reduction on your 5 high days!
For 1-on-1 advice to better understand your ninja moves contact your Sensei at CoEng Advisors Inc.
Next on Sensei Bruce’s BLOG: Understanding your energy profile, what your data is telling you, and what you should do next.