Attention all Multi-Unit Residential building owners/managers that manage buildings billed under a Regulated Rate Plan Structure (RRP), your electricity rates are about to go up SIGNIFICANTLY.
Here’s How:
Starting November 1, 2019, the built-in reduction and the previous rebate of 8% are being replaced by the Ontario Electricity Rebate (OER). This will show a line item and clarify what the actual cost to the consumer is paying with a separate rebate line showing your discount.
Who can Apply?
This rebate is intended for hospitals, universities, colleges and any MURB complexes that have fewer than 50% residential units need to report to their LDC to receive this OER until November 1, 2020.
Larger MURBs that use more than 250, 000 kWh per year and whose demand is over 50kW are required to submit this application by Jan 31st 2020.
https://www.ontario.ca/page/changes-your-electricity-bill
Why is this a BIG deal??? (The fine print…)
This new OER line is a total of 31.8% on your electricity bill, and for those that apply, this rebate will be active until November 1st, 2020. After which, you guessed it, your electricity rate will increase by 31.8%.
What does that mean for RRP customers?
Exhibit A: https://www.oeb.ca/rates-and-your-bill/electricity-rates/historical-electricity-rates
Owners and managers of MURBs have benefited from phenomenal rate structures as shown on the OEB Tiered rates index. The introduction of the OER after Nov 1, 2020 means the net effect on your Bill considering the rate increase from May 1st, 2019 to Nov 1st, 2019, will be 39.05% without OER. With OER, you will still see a 7.25% increase on your bill
Plan into your budgets:
The simplest way to prepare for this is to apply for the OER here: https://www.oeb.ca/sites/default/files/Template-OER-Eligibility-Form.pdf
This will allow REITS to prepare until November 1st, 2020 to plan these additional costs in your budget. At which point the rebate will be removed and REITS can expect a net increase of 39.05%.
The Unfortunate Truth:
Ontario power customers have benefited from artificially low electricity prices for well over a decade. The unfortunate truth here is that the OER is the first step in the OEB removing these rebates. These rebates have created a large disparity in the market, since the low prices need to be paid by someone (the taxpayers). This is an inevitable move that will leave many building owners / managers to reassess their portfolio strategies.
While this is inevitable, SensorSuite has been working with REITs over the last five years to better manage electrically heated buildings. With results as with energy savings as high as 30% and can also help better manage peak usage and participate in utility level programs to help offset these future increases.
Reach out to SensorSuite (sales@sensorsuite.com) if you want to learn more about how to better understand these changes and how best to protect against these price risks.