Ontario Global Adjustment: Class A vs B and the ICI

If you run a large facility in Ontario, the Global Adjustment (GA) is probably the single largest and least understood component of your electricity bill. It is not a tax and it is not a delivery fee. It is the mechanism that reconciles the wholesale market price with what generators are actually contracted to receive, and it can be several times the size of the raw commodity charge.

The Independent Electricity System Operator (IESO) describes it this way: all electricity customers in Ontario pay a Global Adjustment, which covers the cost of building new electricity infrastructure in the province, regulated rates paid to electricity suppliers under contract, and the costs of delivering the province's energy efficiency and conservation programs. A related IESO and Save on Energy fact sheet frames it as the cost difference between the market price of electricity and contracted payments to Ontario generators.

The crucial part for a business is how the GA is billed, because that depends entirely on whether you are a Class A or Class B customer, and the difference between the two can be worth tens of thousands of dollars a year. This guide explains both classes, the Industrial Conservation Initiative that Class A is built on, who qualifies, and what is at stake.

Class A versus Class B: two ways to be billed for the same charge

Ontario splits commercial and industrial customers into two GA billing classes. The IESO explains that Class A customers are medium and large businesses able to participate in the Industrial Conservation Initiative, and their GA is based on their share of total demand during Ontario's top five peak demand hours, while most electricity customers in Ontario are Class B and pay on a volumetric basis.

The two billing formulas make the difference concrete. Per the IESO and Save on Energy fact sheet, a Class A customer's monthly GA charge equals the system-wide GA costs for the month multiplied by their Peak Demand Factor, while a Class B customer's charge equals their monthly consumption in MWh multiplied by the actual GA rate in dollars per MWh. In short, Class B pays on how much you use; Class A pays on when you use it.

The Industrial Conservation Initiative

Class A exists because of a policy tool called the Industrial Conservation Initiative (ICI). The IESO's ICI Backgrounder states that the program was designed to incentivize eligible industrial and commercial customers to reduce their demand during peak periods in order to help the province defer the need for investments in new electricity infrastructure, and that customers who participate, referred to as Class A, pay GA based on their percentage contribution to the top five peak hours over a 12-month period.

Those five hours are not scheduled in advance. They are the five highest-demand hours across the whole province during a base period, and they typically fall on the hottest summer afternoons. The IESO now determines them using Ontario demand, meaning the five hours during the base period in which the greatest volume of electricity was dispatched through the IESO-administered markets. Your job as a Class A customer is to predict those peaks and cut your load during them.

The Peak Demand Factor, and why it is so powerful

Your Peak Demand Factor (PDF) is your percentage contribution to those five peak hours. The IESO defines it as a Class A customer's percentage contribution to the top five peak hours over a 12-month base period. It is calculated as your total consumption during the five peak hours divided by the province-wide consumption across those same hours.

The proportionality is direct and unforgiving in both directions. The IESO states that if a Class A consumer is assessed to be responsible for one per cent of Ontario's peak demand for the five highest hours of the base period, they will be charged for one per cent of the total GA costs through the subsequent billing period. Halve your contribution during those five hours and you halve your GA charge for a year. The fact sheet's plain-language summary: Class A customers are rewarded for reducing peak demand, Class B customers are billed based on total usage.

Who qualifies for Class A

Eligibility is tiered by average monthly peak demand and, for the lower tier, by industry. Per the IESO ICI Backgrounder, based on demand during the base period:

• Facilities in targeted manufacturing and industrial sectors, including greenhouses (NAICS codes starting 31, 32, 33, or 1114), qualify if average monthly maximum hourly demand is greater than 500 kW and up to 1 MW.
• Any facility greater than 1 MW and up to 5 MW is eligible but must opt in.
• Any facility greater than 5 MW is automatically entered into the ICI and must opt out to be Class B.

The IESO confirms these tiers on its Class A eligibility page. Enrollment runs on a fixed calendar: local distributors notify eligible customers before May 31, and the opt-in or opt-out deadline is June 15 each year. Missing that window means waiting another full cycle.

What is at stake

Because GA is often the largest part of a large user's bill, moving from Class B to a well-managed Class A position is one of the highest-value energy decisions a facility can make. Hydro One publishes a worked example in which a Class A customer saves $41,501.85 including HST versus Class B billing in a base period. The exact figure depends on your load and your PDF, but the structure is the same for everyone: the reward scales with how much peak demand you can shift.

Class A is not automatically cheaper. A facility that cannot shift load during summer peaks may see little benefit, and a poorly predicted season can leave a high PDF locked in for a year. The decision needs real load data, not a rule of thumb, which is where clean historical bill and interval data earns its keep.

How MartinAI helps

A Class A strategy lives or dies on data quality. You need to know your consumption during the five peak hours, your PDF, your GA charges by month, and how those compare across sites. MartinAI reads utility bills across every commodity and layout, separating Global Adjustment from energy and delivery and validating each figure into a clean whole-building record. That gives you the GA history and demand picture the eligibility and peak-shaving decisions require.

From there the questions become answerable with evidence. Which sites are near the 500 kW, 1 MW, or 5 MW thresholds? What is each facility's GA cost per unit of output? How did last summer's peaks land against your load? MartinAI produces the clean cost and demand records that support that analysis, benchmarking, and reporting, so the Class A conversation is grounded in your own numbers.

Conclusion

The Global Adjustment rewards Ontario businesses that can predict and cut load during a handful of provincial peak hours. Class B pays on volume; Class A pays on timing. For facilities with the flexibility to shift load, the savings are proportional and real, but they depend on knowing your demand and GA history precisely. Start by getting that data clean and comparable, then decide whether Class A fits.