Ontario’s Global Adjustment Fee

Anyone who uses power in their home or business is aware of all the extra charges that normally appear on the bills they receive each month. However, often, those charges are not specifically explained, and many people only look at the amount of power they used. They just accept the extra charges without asking too many questions. The power companies implement these charges because of arrangements made with the direct providers of that energy, and therefore must divide a share of that expense among their customers.

Ontario is no exception in that regard. In fact, many Ontarians have likely noticed an increase in the price of their energy bills, even when they try to cut back on their energy use and reduce the amount they pay. That is because of something called the Ontario Global Adjustment Fee.

What Is Ontario’s Global Adjustment Fee?

The Ontario Global Adjustment Fee is a charge that is applied to residential, industrial and commercial energy customers. This fee helps energy companies cover the amount of money they promised to the owners and/or leaders of energy production companies for the energy the provide to them, for them to provide to their customers.

Allow us to clarify. The companies to which you pay your electric bill have to get the energy with which they provide you from somewhere, right? Those are the larger energy industries of which we speak. Energy service providers make agreements with these large energy production companies that involve a minimum amount of revenue they can promise to give said companies. Your energy providers provide a percentage of this money to the industry leaders with whom they made the deals; however, a percentage of YOUR money is also used to provide the rest of that “minimum revenue” amount.

For example, if your power bill is about $100, the percentage would be divided at roughly 75%-25% (maybe a little more, maybe a little less, depending on the specific company through which company you get your power, or depending on the minimum amount of money your company has promised the people from whom they get the power they distribute to you. That means that only about 25% (again, give or take) of your total electric bill is what you and your family actually used in regard to power wattage in a given billing period, and the rest goes to this fee.

Would Conservation Reduce My Electric Bill?

No. What happens when a person (or people, or company) starts conserving the energy is that they end up making up the difference in their bill by getting a higher global adjustment fee charge. Basically, whatever you save in personal (or business) usage, you end up paying in fees. So, your bill will likely not go down much (if at all), no matter how reserved you try to be with your energy use.

Will I Know What My Adjustment Fee is?

Depends. Often, residential customers have their fee incorporated in their average kw usage. So, unless you know exactly what you are reading, and you happen to know exactly how much power wattage you used, you likely won’t know the difference between your actual power payment and the fee. However, many businesses and industrial proprietors get a separate charge on their bills, and they can see roughly what their “share” of the Ontario Global Adjustment fee is.

However, it is important to note that this charge is not done out of malice. Your power company, no matter how many dependable customers they have, they cannot foot the entirety of the adjustment fee bill alone. Furthermore, even though they are distributing the power supply they receive, they cannot regulate every individual person’s or company’s use of the power they’re distributing. Therefore, the idea behind the Ontario Global Adjustment Fee is to ensure that everyone, from energy companies to their consumers, helps pay this fee, to continue ensuring plentiful power supply for everyone.

Is There Anything I Can Do to Minimize My Bill if I’m Struggling to Pay it?

As we said, power conservation isn’t the answer. That just means that you will pay more toward the adjustment fee to make up the difference. However, there is something, for certain customers (certain businesses and industries) called “peak shaving.” What that means is that there are ways to keep power usage at a minimum during what power companies and providers call “peak hours” at a minimum. Peak hours are the hours during which everyone (or a vast majority of people and/or companies) use power at the same time or use a great deal of power all at once. Companies, and even residential addresses, can do things like buying generators to use during these peak hours, which will “shave off” some of the expenses you would normally pay, which of course would rise during the peak hours.

If you need more information about the Ontario Global Adjustment Fee, or about how you can regain a little control of your electricity bill, consult your power company, or a website experienced with how this adjustment fee works.