The Independent Electricity System Operator (IESO) recently held an informational webinar on the impact of COVID-19 on Ontario’s electricity system.  Two key points were discussed during the webinar: the impacts on demand for electricity following COVID-19 stay-at-home measures and the uncertainty that the health crisis has had in forecasting demand in the future.

According to the IESO, small commercial customers saw an 8% to 12% reduction in hydro consumption during lockdown orders. These percentages were driven by the mandatory closure of non-essential businesses.

Additionally, for industrial/commercial customers and wholesale customers, hydro demand is down 17% and 16%, respectively. During the webinar, the IESO noted that government efforts to have Ontario manufacturers produce essential goods like personal protective equipment may result in temporary increased load in the near future.

For small business, farms and residential homes, the government of Ontario passed an emergency order that will provide industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP) with temporary immediate relief on their monthly electricity bills in April, May and June 2020.

With respect to forecasting demand, the IESO cites uncertainty caused by possible new waves of infection and further business closures.  During the webinar, the IESO also anticipated a global recession and mentioned that the 5-year demand forecast will depend on the length and depth of the downturn and how the economy recovers over time.

In light of the virus and its continuing developments, the IESO cautioned it is too early to determine what impact COVID-19-related measures will have on system costs. However, the IESO did note, with reduced demand to cover these costs, further increases in Global Adjustment rates are highly likely.  The Global Adjustment (GA) was added to consumer’s hydro bills as a way to help offset the costs of replacing coal generated energy and to fund conservation programs and nuclear power projects.  The price is calculated by taking the difference between market wholesale prices and the fixed price of energy.

Takeaways from the webinar are as follows: The IESO appears to be preparing for demand to remain below pre-pandemic levels for several years, and significant uncertainty remains regarding both the length and severity of the pandemic and the government’s actions in response.