LUI seeks OEB approval to charge Standby Rate

In 2021, Lakefront Utilities Inc. (LUI) plans to apply to the Ontario Energy Board (OEB) to request approval for a proposed electricity distribution standby rate which will be charged to customers who have installed load displacement generation projects such as combined heat and power systems or other load displacement projects.

Customers install load displacement generation (LDG) systems to effectively offset their facility’s monthly peak demand. Customers moving off-grid may choose not to sever their connection from the grid entirely. Rather, they may elect to preserve grid connection as a secondary source of electricity in the case that their primary source fails. This allows the customer to simultaneously minimize electricity costs in favour of their own load displacement generation, while having the security of being connected to the local grid for backup.

Under the current distribution rate structure, this shift in how some customers use their connection to the local distribution system prevents LUI from recovering their costs while requiring LUI to maintain a distribution system capable of keeping such customers connected. This current structure can lead to customers without LDG subsidizing customers with LDG systems. The purpose of the proposed standby rate is to ensure that the local distribution system remains whole and that customers without LDG or behind the meter generation are not subsidizing customers with LDG or other behind the meter generation.

Customers who have or are considering installing a load displacement project to offset their monthly peak demand and wish to continue to utilize LUI’s distribution system to provide back-up electricity services, may be required to pay a standby rate should the rate be approved during LUI’s rate approval process.

A workbook that reviews the standby rate in greater detail is available on this site under “Documents”. Find it here.

Lakefront Utilities Inc. is interested in hearing customer comments on this proposed rate. Any feedback provided will be carefully considered by LUI and incorporated into LUI’s application to the OEB in April 2021.