With the economic reductions due to the fight against COVID-19 Ontario's system operator (IESO) is already seeing, "a 5-17% reduction in all hours of demand (1,000-2,000 MW)." That's one big unexpected change from a month ago.

OPG has now acknowledged the unit 3 shut-down for refurbishment won't happen in April, but the fall. As I read the IESO's adequacy reporting that is only one of two large reactor planned outages cancelled for the spring as generators cut back in on-site personnel as much as possible. This is a second big unexpected change from a month ago, adding roughly another 1,700 MW of supply.

Spring is always a time of excess supply in Ontario. Over the past 5 years demand has averaged less than 15,000 MW while supply dumped on export markets for minimal revenue, or curtailed altogether, has averaged over 3,400 MW.

Recent unexpected changes in both demand (down) and supply (up) will push the average excess up towards 6,750 MW as demand drops to average about 13,500 MW over the next couple of months.

For every 2 kWh consumed, Ontario ratepayers will be charged for 3. For Class A consumers this may not raise rates. Commodity rates are comprised of the Hourly Ontario Energy Price (HOEP) and a "global adjustment" that balances recoveries in the market with contracted costs of supply. The increasing excess in supply will make the HOEP approach zero, and the Industrial Conservation Initiative transfers global adjustment costs from class A consumers to class B consumers.

The impact of purchasing 50% more supply than needed will be borne by the 70% of Ontario consumption that occurs in "Class B" consumers, resulting in their commodity rates rising 70% above the average cost of procuring electricity. I estimate the average supply rate is a little under $100/MWh, so I'd not be surprised to see class B commodity rates around $170/MWh in coming months.

Many Class B consumers are charged under Regulated Price Plan (RPP) rates - and heavily subsidized by the taxpayer. Not all are; many small and medium enterprises (SMEs) with consumption over 50 MW are fully exposed to relentless global adjustment monster.

That monster is now working with another in COVID-19.