LAS Electricity Program Cost Review for 2018

Posted: April 23, 2019

LAS recently completed the yearly 2018 cost summaries for the Electricity Program, which currently includes 143 enrolled municipalities.

For 2018, we updated the report with a summary page containing graphs to show the most relevant information. The charts are included at the end of this post.
LAS Electricity Commodity Cost Review - Calendar Year 2018
The LAS program hedge cost was $21.41/MW (2.141¢/kWh), including fees. The Average Weighted Hourly Price ($/kWh) for 2018 was $23.94 (2.394 ¢/kWh).
The average Global Adjustment (GA) (with modifier included) charge over the past 12-months was 5.243¢/kWh
The GA Modifier is only applicable to Regulated Price Plan (RPP) eligible accounts, including streetlight accounts, consuming less than 250,000 kWh annually.  Your municipality may also have non-RPP eligible accounts enrolled in the program, in which case the GA Modifier will not be applicable.

The following chart illustrates the average total commodity cost in 2018 based on the 2018 LAS hedge price at 65% (most common hedge selection) and similar market pricing over the last 12-months.
  Price (c/kWh) Ratio Total (c/kWh)
 LAS 2018 Hedge Price (Including program fee) 2.141  65%  1.392 
 Average Spot Market* 3.394  35%  0.838 
 Global Adjustment with Modifier** 5.243  100%  5.243 
 Total LAS Commodity Rate (2018 Average)     7.473 
 Total TOU/RPP Rate (2018 Average)     8.660 
 Difference     14% 

  • *Average weighted Hourly Ontario Energy Price (HOEP) from January to December 2018.
  • **Average Global Adjustment charge from January to December 2018
  • Based on November 2018 rates and assuming a usage pattern of 55% off-peak, 22.5% mid-peak, and 22.5% on-peak (representative of a typical municipal account) the TOU rate is 8.66¢/kWh.
There were points during the term when the spot market cost was both higher and lower than the LAS hedge price. The hedge portion safeguards against large swings in the spot market during peak heating and cooling seasons, whereas exposure to the spot market can lower your commodity cost during low-market rate periods.
Streetlight Accounts
All enrolled streetlight accounts were billed at the prevailing spot market rates in 2018.  As mentioned above, the Global Adjustment Modifier applied to these accounts as well, so long as they were RPP eligible and fell under the 250,000 kWh threshold.
Electricity costs are typically lower for streetlight accounts because they primarily operate when demand for electricity is lowest, and with lower demand comes lower spot market rates. Over the past 12 months, the average streetlight LAS commodity price was 1.600 ¢/kWh
  Total (c/kWh)
 Average Streetlight Spot Market - HOEP 1.600 
 Global Adjustment Charge with Modifier 5.243 
 LAS Total Commodity Rate (2018) 6.843 
 Total Commodity Rate RPP/TOU (2018) 8.900 
 Difference 23% 
  • Average spot market cost based on the streetlight profile of an Ontario Local Distribution Company (LDC) - January to December 2018. Costs within different LDC service areas may vary slightly.
  • The Global Adjustment charge is an average of January to December 2018
  • Rate is the higher of the two-tier RPP rates as many municipal streetlight accounts are charged the majority of usage at the upper tier.     
Current Time-of-Use (TOU) and RPP Rates

Effective November 1, 2018, Time of Use (TOU) electricity rates remained static, as follows:
  • On-Peak - 13.2 ¢/kWh (7-11am and 5-7pm M-F)
  • Mid-Peak - 9.4 ¢/kWh (11am-5pm M-F)
  • Off-Peak - 6.5 ¢/kWh (7pm-7am M-F, plus weekends and holidays)
 The RPP rates for eligible municipal accounts, effective November 1, 2018 are:
  • Up to 750 kWh – 7.7 ¢/kWh
  • All Additional Usage – 8.9 ¢/kWh
The RPP ended in 2009 for municipal accounts with annual consumption of >250,000kWh; accounts that exceed this threshold, and which are not enrolled with a retailer (such as LAS) are billed at the weighted average spot market rate.

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