DRC Guide 101
Published: March 2005
Content last reviewed: January 2012
ISBN: 978-1-4435-7077-0 (PDF), 978-1-4435-7076-3 (HTML)
This guide provides an overview of the Debt Retirement Charge (DRC) program and explains:
DRC is a charge payable on electricity consumed in Ontario. Revenues collected from the DRC are used by the Ontario Electricity Financial Corporation for the purposes of carrying out its objectives which include managing debt, of the former Ontario Hydro, including the stranded debt.
DRC is paid by most electricity users and replaces a portion of debt servicing costs previously included as part of electricity bills prior to the restructuring of the former Ontario Hydro, but not separately identified DRC will end once the residual stranded debt of the former Ontario Hydro is defeased.
Most electricity users in Ontario will pay DRC on their electricity consumption. Exemption from the DRC is available to:
The DRC is applied at a rate of 0.7 cents per kilowatt hour of electricity consumed in Ontario with the exception of the reduced rate areas listed below.
The reduced rates apply to all 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.
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 kilowatt hour. Consumers in other parts of the recently amalgamated City of Ottawa are not entitled to the reduced rate.
|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 kilowatt hours of electricity consumed by a user exclusive of line losses.
Collectors are not required to collect DRC if they receive an exemption certificate from a user or from an individual who is exempt from the charge.
The Independent Electricity System Operator (
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 if the IESO receives an exemption certificate from a market participant or from an individual who is exempt from the charge.
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 will 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 will calculate and remit DRC on their consumption of self-generated electricity.
Self-generating users with an annual exemption will 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 will be required to meter their consumption of self-generated electricity.
DRC on self-generated electricity consumption is calculated as:
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 publication, please send your request in writing to:
Ministry of Finance
Advisory Services and Program Policy Branch
33 King Street West
Oshawa ON L1H 8H5
The information contained in this publication is provided only as a guideline and is not intended to replace the legislation.
Electricity Act, 1998 ; Part V.1
Ontario Energy Board Act, 1998