The Debt Retirement Charge (DRC) will end for all electricity users on March 31, 2018. No user should be charged the DRC on electricity consumed beginning April 1, 2018. The Debt Retirement Charge is provided for under the Electricity Act, 1998, and is payable to the Ontario Electricity Financial Corporation (OEFC) on electricity consumed in Ontario.
Effective January 1, 2016, all electricity users with a residential‑rate class account are exempt from the Debt Retirement Charge.
Users with a general service‑rate class account that provides electricity to one or more ‘eligible residential units’ will also be eligible for a DRC exemption up to 1,500 kilowatt hours (kWh) per month multiplied by the number of eligible residential units included in the account. To claim this DRC exemption, users with a general service‑rate class account must provide their electricity distributor with notice of the number of eligible residential units included in the account. The start of the exemption for these users depends on when the notice is received by the electricity distributor.
Why am I paying DRC?
When the former Ontario Hydro was restructured on April 1, 1999, the OEFC was established with the mandate to manage and retire the former Ontario Hydro’s debt and certain other liabilities, totalling $38.1 billion. The $38.1 billion was accumulated to build Ontario’s electricity generation and transmission infrastructure that consumers are and have been using.
A portion of the $38.1 billion could be supported by the value of the assets of Ontario Hydro successor companies and other assets; however, the OEFC was left with $19.4 billion in unfunded liabilities (often referred to as stranded debt). The OEFC receives dedicated revenues to service and retire the unfunded liability from a number of sources, including the DRC. All the OEFC revenues are used by OEFC to meet its mandate, which includes servicing and retiring the OEFC’s debt and other liabilities. This includes payment of principal amounts as well as interest costs.
When is the DRC going to end?
As part of its commitment to reduce electricity cost pressures, the government is removing the DRC from residential electricity users’ bills after December 31, 2015.
The DRC will remain on all other electricity users’ bills for electricity consumed before April 1, 2018.
The DRC will not be payable on electricity consumed after March 31, 2018.
TEXT FROM THE MINISTRY OF FINANCE – See Original text