Consultation on Policy for Standby Rates

This consultation has concluded.

The OEB has initiated a consultation with stakeholders to inform its approach to existing and future electricity distribution standby rates, including consideration of the approach to standby rates outlined in the OEB’s Commercial and Industrial Rate Design staff paper.[1]

  • In 2006, the OEB declared existing standby rates interim, citing uncertain costs, and an upcoming review of distribution rate design.[2]
  • In 2011, the OEB invited electricity distributors to apply to have their rates converted to final rates subject to notification of affected customers. [3] [4]

Currently, 11 electricity distributors have standby rates, seven of which are still on an interim basis. Finalizing the interim rates provides certainty to both distributors and customers.

The OEB would like to hear from participants about cost causation of standby service, incenting efficient use of the distribution system, the impacts of providing a backup service, and participant recommendations for standby rates.


[1] EB-2015-0043, Staff Report to the Board, Rate Design for Commercial and Industrial Electricity Customers, February 21, 2019

[2] EB-2005-0529, Decision with Reasons, March 21, 2006, page 11

[3] EB-2010-0219, Report of the Board – Review of Electricity Distribution Cost Allocation Policy, March 31, 2011

[4] Chapter 2 Filing Requirements, 2023 Edition for 2024 Rate Applications, December 15, 2022, page 48





The OEB has initiated a consultation with stakeholders to inform its approach to existing and future electricity distribution standby rates, including consideration of the approach to standby rates outlined in the OEB’s Commercial and Industrial Rate Design staff paper.[1]

  • In 2006, the OEB declared existing standby rates interim, citing uncertain costs, and an upcoming review of distribution rate design.[2]
  • In 2011, the OEB invited electricity distributors to apply to have their rates converted to final rates subject to notification of affected customers. [3] [4]

Currently, 11 electricity distributors have standby rates, seven of which are still on an interim basis. Finalizing the interim rates provides certainty to both distributors and customers.

The OEB would like to hear from participants about cost causation of standby service, incenting efficient use of the distribution system, the impacts of providing a backup service, and participant recommendations for standby rates.


[1] EB-2015-0043, Staff Report to the Board, Rate Design for Commercial and Industrial Electricity Customers, February 21, 2019

[2] EB-2005-0529, Decision with Reasons, March 21, 2006, page 11

[3] EB-2010-0219, Report of the Board – Review of Electricity Distribution Cost Allocation Policy, March 31, 2011

[4] Chapter 2 Filing Requirements, 2023 Edition for 2024 Rate Applications, December 15, 2022, page 48





This consultation has concluded.

  • OEB issues letter to conclude the consultation

    Today the OEB issued a letter setting out its approach to standby rates following the feedback received from stakeholders who participated in the January 11, 2024 consultation meeting, and having considered the history and outlook for behind-the-meter services.

    The letter summarizes:

    • the rationale for the review of the OEB’s standby rates
    • the January 11 consultation meeting, and
    • the OEB’s determination that based on feed back from the consultation, and on the evolving nature distributed energy resources and other behind-the-meter alternatives, it is not prepared to impose or recommend a default approach to pricing load displacement generation.


    Electricity distributors with interim standby rates should inform their standby customers of the intention to apply to make the existing interim standby rates final, and then apply for this at the time of the next rate application.


    Electricity distributors who believe a new standby rate design would be appropriate for their customers are invited to apply for one at their next cost of service or custom IR proceeding or earlier if circumstances warrant.

    This concludes the consultation on the Policy for Standby Rates.

  • Stakeholder meeting - January 11, 2024

    Stakeholders are invited to participate in a virtual meeting on January 11, 2024, from 1 p.m. to 4 p.m.

    Agenda:

    • Overview of OEB staff’s Capacity Reserve Charge proposal, detailed in the OEB staff paper on Commercial and Industrial Rate Design
    • Information on current LDC approaches to standby rates
    • Discussion
      • options for default standby rate design
      • options for transition from interim to final rates


    OEB staff and those registered participants that have confirmed their interest in making presentations on some or all of the above, will lead the discussion.

    A calendar invitation with information on how to connect to the virtual session will follow via email.


  • Stakeholder meeting

    Stakeholder meeting (date TBA)

    The OEB is interested in hearing from stakeholders about current standby rate practices and to discuss options moving forward. Consideration will be given to the interim nature of some existing rates and approaches for distributors seeking to establish new standby rates.

    The session will include discussions related to:

    • cost causation of standby service
    • what approaches incent efficient use of the distribution system
    • how these are influenced by characteristics of the backup service being provided
      • e.g., size, availability and dispatchability of a resource being backed up by the distributor


    The scope of this consultation is limited to distribution rates for standby service for customer-owned load. It will not include distributed energy resources or other facilities deployed for any other purpose other than load displacement.

    Stakeholders interested in participating in this initiative are asked to email registrar@oeb.ca by October 12, 2023. Please include "EB-2023-0278 - Standby Rates" in the subject line.

    Distributors who wish to make a presentation related to their circumstances related to standby rates are invited to contact Andrew Frank.