Effective January 1, 2016, all electricity users with a residential‑rate class account will be exempt from the Debt Retirement Charge (DRC).
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.
For more information about these exemptions, see the Exemptions section in Guide 101 – Debt Retirement Charge - General Information, and in the Guide 110 - Debt Retirement Charge Exemption for Eligible Residential Units.
The Debt Retirement Charge (DRC) is provided for under the Electricity Act, 1998, and is payable to the Ontario Electricity Financial Corporation (OEFC) on electricity consumed in Ontario. An overview of the DRC is available in our Guide 101 - Debt Retirement Charge - General Information.
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 stranded debt 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.
For more information about this initiative, see the Exemptions section in Guide 101 – Debt Retirement Charge - General Information, and the Guide 110 - Debt Retirement Charge Exemption for Eligible Residential Units.
The DRC will remain on all other electricity users' bills until the residual stranded debt is retired.
As required under the Electricity Act, 1998, the Minister of Finance annually determines the remaining amount of residual stranded debt. Information on the status of the residual stranded debt is available online on the OEFC's website.