CLASS A CONSUMERS AND THEIR ENERGY USAGE
If you are a Class A consumer, you understand the implications your energy usage has on your bottom line. If not, this short blog will help you better understand the Class A consumer.
What is a Class A consumer?
The definition of a Class A consumer in Canada is defined by the Independent Electricity System Operator (IESO) is “all consumers that use 5+ MW a day … Users between 1–5 MW can opt-in to become Class A, otherwise they are Class B. In addition, some customers can opt-in as Class A if their peak demand is 0.5 MW or greater, but the option depends on the type of business they have.”
Class A consumers, as defined above, use a lot of energy in their daily operations. Because of their energy consumption, Class A consumers are charged a Global Adjustment charge.
What is a Global Adjustment Charge?
Global Adjustment or GA for short is a charge based on the electrical demand from the consumer during the top five hours of system peaks in a 12-month period. GA can account for more than 70% of a business’s total bill. Since 2010, the GA has steadily increased.
Businesses that use a larger amount of energy during the top five system peaks are charged a greater amount for the energy they use not only during the peaks but throughout the year. The charge for a single Mega Watt (MW) of energy during a system peak can exceed $500,000. However, businesses that can reduce the amount of energy they use during system peaks, can lower their charges. Consumers that reduce their electrical load by a single MW can save greatly on GA costs during the following 12 month period.
Class A consumers – part of the community
A consumer is part of a larger community. When a business chooses to be more proactive with its energy conservation, they are demanding less from the local energy distribution centre (LDC) during time of peak activity, helping reduce the strain on the infrastructure and promoting a positive momentum. LDC can delay power generation and distribution expansions, the costs of which are passed back to consumers in the form of fees and increased taxes.
Support for Class A consumers
There are government incentives for Class A consumers to take steps to reduce their energy consumption. The Industrial Accelerator Program (IAP), provided through the IESO, includes four programs to help Class A consumers reduce the amount of power they use.
- Assistance installing new, more efficient equipment
- Assistance hiring an energy manager, who can advise consumers on how to best reduce their energy demand
- Support for consumers with multiple sites in the province
- Initiatives to encourage conservation through specific, sustained targets
The programs are available to all entities connected to the IESO transmission grid. However, the IAP won’t be around forever; the program is open through December 31, 2020. Find out more on the IAP program here.
About Arcadian Projects
Arcadian Projects is committed to providing the best energy and industrial solutions to help our customers reduce their energy consumption, meet energy conservation goals, and improve facility operations.
We continuously strive to deliver long-term service and technical support, while acting with the utmost consideration for safety in all aspects of our projects. With our passion for sustainable energy and our commitment to client satisfaction, our diverse and experienced team continues to stand out from others. We have the capability to complete all aspects of our energy projects in-house with an approach that is safe, cost-effective, and efficient. Potential partner project financing available for energy projects.