DRC Guide 102
Published: March 2005
Content last reviewed: October 2015
Self-generating users are persons who generate electricity:
Self-generating users who sell or supply electricity to another user are also collectors and have responsibilities as both a collector and self-generating user. For more information, see Guide 103 - Rights and Responsibilities of Collectors.
Self-generated electricity is electricity that is:
Exempt self-generated electricity is electricity that is:
Temporary basis means the self-generated electricity will be consumed over a limited period of time. Examples include:
Occasional basis means self-generated electricity which is consumed on an infrequent basis and may include uses such as testing generation units.
Emergency basis means self-generated electricity which is consumed when electricity is not available from your normal supplier.
Starting May 1, 2002, all self-generating users must register with the Debt Retirement Charge program before consuming or supplying 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 maintain records to substantiate your consumption of exempt self-generated electricity.
Self-generating users are required to meter their consumption of self-generated electricity. The meter must meet the standards required for the purposes of obtaining the basis for a charge for electricity under the Electricity and Gas Inspection Act (Canada) and the regulations made under that act.
There may be circumstances where installing a meter to measure electricity consumption is not feasible. The Ministry of Finance (ministry) may allow you to estimate consumption rather than install a meter.
To calculate DRC payable on the consumption of self-generated electricity you should:
When calculating the amount of DRC payable, the amount should be rounded to the nearest cent.
If your main generation function is to generate electricity for own consumption, calculate your consumption of self-generated electricity for the period as follows:
If your main generation function is to generate electricity for own consumption you may be entitled to an Annual Exemption if you:
This exemption only applies to self-generating users whose main generation function is to generate electricity for own consumption. When your consumption of self-generated electricity in a calendar year exceeds your Annual Exemption threshold, you are required to remit DRC on your consumption of self-generated electricity.
You may only apply this exemption to the consumption of self-generated electricity within each calendar year. The exemption cannot be applied to prior or future years or to electricity purchased or acquired from another person.
Your registration package will contain instructions on how to calculate your annual exemption. The exemption is based on your average annual consumption of self-generated electricity over the 10 year period January 1, 1989 to December 31, 1998.
The exemption is calculated as follows:
For example, if you consumed self-generated electricity for 3 years and 1 month, divide your total consumption during the period by 4. This calculation will give you your annual exemption.
When calculating your annual exemption, use accurate metered data. Where metered data is not available, you may use reasonable estimates.
You are not entitled to an Annual Exemption if you are entitled to the Station Service Exemption described later in this guide.
Self-generating users may transfer all or part of their annual exemption to another person to whom they are transferring ownership of generation units or facilities. The maximum amount of the annual exemption that may be transferred is the portion that is reasonably attributable to the generation units or facilities being transferred.
In the year a transfer takes place, only the unused portion of your annual exemption may be transferred.
A transfer of an annual exemption may only take place if:
The ministry will specify the effective date of the transfer of the annual exemption when providing written approval. A sample Annual Exemption Transfer Form [PDF - 425 KB] is provided in the pdf version of this guide. For more information contact the ministry at the numbers listed at the end of this guide.
If your main generation function is to generate electricity for sale to another person or through the IESO-administered markets, calculate your consumption of self-generated electricity for the period as follows:
The Station Service Exemption only applies to electricity generated and consumed 'behind the fence' to power the on-site operation of the generation facility or unit. 'Behind the fence' refers to electricity consumed directly in the facility where it is generated. Such electricity is conveyed through a distribution or transmission system that is owned by the generator.
Any withdrawal of electricity for station service made through a transmission or distribution system which is not owned by the generator is subject to DRC.
Electricity generated and consumed for activities which could be ceased or moved to other locations without affecting the normal and safe operation of the generation facility or unit is excluded from the station service exemption. For example, DRC would apply to electricity consumed in a visitor centre or an accounting department at a generation facility.
You are not entitled to the Station Service Exemption if you are entitled to claim an Annual Exemption.
Complete DRC returns for the period covered by the return. Calculate DRC payable on:
You are required to file completed returns and remit payment by cheque, electronic funds transfer, or money order, payable to the Ontario Electricity Financial Corporation (OEFC) in Canadian funds by the due date shown on the return.
Returns must be filed even where there is no activity or DRC to report. If you do not receive a return, you are still required to provide the return information to the ministry, with payment, by the regular due date.
You should notify the Ministry of Finance of any changes such as:
Directors of a corporation may be held jointly and severally liable for DRC owing if the corporation:
You must keep books and records with enough information to support the amount of DRC charged, collected, payable and remitted.
You can keep records manually or electronically. Electronic records must be in a format that will provide an exact copy of the original.
Books and records should include the following information:
If you consume exempt self-generated electricity, you are required to maintain records to substantiate that the electricity is exempt self-generated electricity.
If you refund DRC, you may adjust your next DRC remittance or apply for a refund from the ministry. Adjustments to your remittance or applications for refunds from the ministry must be made within four years from the date you refunded DRC to your customer.
Application for Refund of the Debt Retirement Charge form [PDF - 111 KB] is available for download.
You may refund DRC collected from a customer if:
If you disagree with a DRC assessment, or a disallowance of a DRC refund, you may file a Notice of Objection with the Advisory, Objections, Appeals and Services Branch within 180 days from the mailing date of the Notice of Assessment or Statement of Disallowance. A Notice of Objection form can also be obtained by calling the ministry at 1 866 668-8297.
If you are not satisfied with the ministry's decision on the Notice of Objection, you may file a Notice of Appeal. The Notice of Appeal must be filed with the Superior Court of Justice and a copy of the Notice of Appeal served on the Minister of Finance within 90 days from the date the ministry's decision on the Notice of Objection was mailed.
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, Objections, Appeals and Services 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
Ontario Energy Board Act, 1998