DRC Guide 101
Published: March 2005
Content last reviewed: October 2015
DRC is a charge payable on electricity consumed in Ontario.
The DRC amounts collected are used by the Ontario Electricity Financial Corporation (OEFC) to help service and pay down its debt and other liabilities. OEFC is the legal continuation of the former Ontario Hydro. The DRC replaces a portion of debt servicing costs previously included as part of electricity bills before the restructuring of the former Ontario Hydro, but not separately identified. Additional information is available on the OEFC's website.
Unless they are exempt, most electricity users in Ontario are required to pay DRC on their electricity consumption.
The government is removing the DRC from residential electricity users' bills after December 31, 2015. See the Exemption section below for details.
The DRC will remain on all other electricity users' bills for electricity consumed before April 1, 2018.
The DRC is applied at a rate of 0.7 cents per kilowatt hour (kWh) of electricity consumed in Ontario with the exception of the reduced rate service areas listed below.
Reduced rate areas are defined as the service areas of the local utilities listed below, as they existed on October 30, 1998. For items 18 and 19, the reduced rate applies only to the specific location mentioned. Any changes to the service areas of the utilities since this date have no impact on the consumers entitled to a reduced rate. For example, consumers in any area serviced on October 30, 1998 by the Hydro‑Electric Commission of the City of Ottawa are entitled to a DRC rate of 0.69 cents per kWh Consumers in other parts of the recently amalgamated City of Ottawa are not entitled to the reduced rate.
These rates apply to users who consume electricity in the reduced rate service areas, regardless of who supplies the electricity. Collectors are required to charge the correct DRC rate to each user depending on the location of the consumption.
|SERVICE AREA OF LOCAL UTILITY AS AT OCTOBER 30, 1998||DRC RATES
|1||Cornwall Street Railway Light and Power Company Limited||0.00|
|2||Canadian Niagara Power Company Limited||0.00|
|3||Public Utilities Commission of the City of Sault Ste. Marie||0.20|
|4||Great Lakes Power Limited||0.20|
|5||Bracebridge Hydro-Electric Commission||0.46|
|6||Public Utilities Commission of the Corporation of the Town of Fort Frances||0.47|
|7||Orillia Water, Light and Power Commission||0.49|
|8||Hydro Electric Commission of the City of Pembroke||0.49|
|9||Granite Power Corporation||0.51|
|10||Public Utilities Commission of the Village of Eganville||0.60|
|11||Hydro Electric Commission of the Town of Renfrew||0.61|
|12||Public Utilities Commission of the Town of Parry Sound||0.65|
|13||Public Utilities Commission of the Town of Bancroft||0.66|
|14||Peterborough Utilities Commission||0.67|
|15||St. Catharines Hydro-Electric Commission||0.68|
|16||Elora Hydro Electric Commission||0.69|
|17||The Hydro-Electric Commission of the City of Ottawa||0.69|
|18||Town of Mississippi Mills Public Utilities Commission, only for the Ward of Almonte||0.42|
|19||Campbellford/Seymour Public Utilities Commission, only for the Town of Cambellford as it existed on December 31, 1997||0.49|
All distributors and retailers required to be licensed by the Ontario Energy Board (OEB) are required to register as DRC collectors before selling or supplying electricity. You may also be required to register if you:
Self‑generating users who will self-assess DRC are also required to register. This includes generators whose main generation function is to generate electricity for sale and also consume self‑generated electricity.
If you consume only exempt self‑generated electricity you are not required to register with the DRC program. However, you are required to retain records to prove that the self‑generated electricity is exempt.
Exempt self-generated electricity is generated and consumed:
Self‑generating users are not required to register if:
Registration packages are sent to everyone who has registered or applied for an OEB licence.
If you are not licensed by the OEB and think you should be registered with the DRC program please call 1 866 ONT‑TAXS (1 866 668‑8297) or e-mail DRCRLD@ontario.ca. There is no fee to register with the DRC program.
Distributors will collect DRC from all users they invoice under Standard Supply Service, distributor‑consolidated billing, or split billing.
Retailers will collect DRC from all users to whom they sell or supply electricity under any other scenario, including retailer‑consolidated billings.
Distributors and retailers will collect DRC on the kWh of electricity consumed by a user exclusive of line losses.
Collectors are not required to collect DRC from a user who provides the collector with an exemption certificate, or from a user who is otherwise exempt. See the Exemption section below for information about exemptions.
The Independent Electricity System Operator (IESO) must collect DRC from every user who withdraws energy from the IESO controlled grid, as determined by the IESO's Market Rules.
The IESO will collect DRC from a retailer if the retailer withdrawing energy from the IESO controlled grid is an agent for a user who is a wholesale market participant.
The IESO is not required to collect DRC from a user who provides the IESO with an exemption certificate, or from a user who is otherwise exempt. See the Exemption section below for information about exemptions.
Collectors who purchase or acquire electricity for resale exempt from DRC will self‑assess and remit DRC on all electricity they consume exclusive of electricity lost or unaccounted for in transmission or distribution. Collectors need to meter their loads to measure electricity that they consume for their own use.
Entities that generate electricity for their own use or for the use of others at no charge are referred to as self‑generating users.
Self‑generated electricity means electricity, other than exempt self‑generated electricity, consumed by the person who generates it or by another person at the expense of the person who generates it.
Self‑generating users must calculate and remit DRC on their consumption of self‑generated electricity.
Self‑generating users with an annual exemption must calculate DRC on all their consumption of self‑generated electricity that exceeds their annual exemption threshold. In addition, they may be required to self‑assess DRC on purchases of electricity settled with the IESO.
Self‑generating users must meter their consumption of self‑generated electricity.
DRC on self-generated electricity consumption is calculated as:
The following users are exempt from the DRC on electricity consumed as follows:
For more information, please see Guide 104 - Exemption Certificates, and Guide 108 - Status Indians, and Indian Bands and Band Councils.
As of January, 1, 2016, the following users are exempt from the DRC:
After December 31, 2015, the following users are eligible for an exemption from the DRC:
The start of the exemption depends on when the notice is received by the user's electricity distributor.
For more information on this exemption, including how to give a notice to a distributor, see Guide 110 - Debt Retirement Charge Exemption for Eligible Residential Units.
Generators whose main generation function is to generate electricity for sale to another user or to the spot market may be eligible for a Station Service Exemption from DRC. This exemption is limited to electricity which is generated and consumed 'behind the fence'. If you qualify for the station service exemption you cannot claim the annual exemption described below.
Self‑generating users may be eligible for an annual exemption if they:
When you register with the DRC program, you will be asked to complete a schedule to determine your annual exemption.
Distributors, retailers and self‑generating users are required to file their return and remit DRC on or before the 18th day of the month following the end of a filing period. Most registrants will file monthly. However, based on the amount of DRC remitted, filing periods could also be quarterly, semi annually or annually.
Distributors and retailers will report and remit all DRC collected during the filing period covered by a return. DRC is considered to be collected at the earliest of:
One return will be issued to each registrant for each filing period. If your operations are decentralized you may request and be authorized to file separate returns and remittances.
Returns and payments may be made at any ServiceOntario Centre or Ministry of Finance Tax Office. The Tax Offices accept returns and payments in the drop boxes provided.
DRC payments may be made by cheque, money order or electronic funds transfer (contact the ministry to make arrangements), payable to the Ontario Electricity Financial Coporation (OEFC) in Canadian funds.
There is a $35 charge for a non‑negotiable cheque.
To obtain a written interpretation on a specific situation not addressed in this guide, please send your request in writing to:
Ministry of Finance
Advisory and Compliance Branch
33 King Street West
Oshawa ON L1H 8H5
The information provided in this guide is not intended to replace the legislation.
Electricity Act, 1998, Part V.1 (Debt Retirement Charge)
Ontario Energy Board Act, 1998