The Global Adjustment

Administered by the Independent Electricity System Operator (IESO), Global Adjustment costs are charged to Ontario electricity consumers each month to ensure that the commodity price paid for electricity on the wholesale market reflects the costs to produce electricity. The majority of the Global Adjustment is driven by a disconnect between long-term contracts with power generators and current market values for electricity, as well as investments in alternative energy generation and other programs.

Although initially modest, Global Adjustment costs charged to Class A companies have risen dramatically, having surpassed $100,000 per MW consumed during the five highest demand hours of the Ontario grid (2016). As the Global Adjustment is a proportional cost allocation, Class A companies have the opportunity to reduce, or even eliminate, their allocation by minimizing electricity usage during the top five demand peaks each year.