Role of Local Distribution

The Role of the Local Distribution Company (LDC)

In 1998, the Ontario government introduced Bill 35, the Energy Competition Act. This act changed the way the system in Ontario works.

For Algoma Power Inc. this meant that a split had to occur between Algoma Power Inc. - Generation and Algoma Power Inc.  Transmission and Distribution. The company had to physically separate each business unit into two separate self-sustained entities who each maintain independent accounting and other services and follows a rigorous code of conduct around market rules to meet license and code requirements.

ELECTRICITY TRANSMISSION

Bringing Electricity from the Generator to the Local Distributor The electricity travels along a network of high-voltage "transmission" lines and through a series of transformers before it reaches its destination, the utility or local distribution company (LDC).

ELECTRICITY DISTRIBUTION

Delivering Electricity to the Customer
The distribution of electricity to the customer is carried out by Ontario's local distribution companies (LDC's). These utilities are responsible for maintaining their community's network of distribution wires. They also "step down" the voltage of electricity to make it safe for use by customers and provide electricity to end-users at market rates.

ELECTRICITY RETAILING

Selling Electricity to the Customer
The Act also opens the retailing, or selling of the commodity of electricity to competition. So, while utilities (now called local distribution companies or LDCs) still have a monopoly on the delivery of electricity at market rates - to customers who do not wish to switch to a retailer - any number of licensed electricity at market rates to customers who do not wish to switch to a retailer), any number of licensed electricity retailing companies may also sell electricity. Great Lakes Power is not a retailer. THE INDEPENDENT OPERATOR.

A New Element
The Independent Electricity System Operator (IESO) - is responsible for operating the power system and running the wholesale electricity market. It operates the hourly spot market where wholesale sales and purchases of electricity take place and controls the flow of electricity throughout the province to ensure fairness to all the players.

ELECTRICITY GENERATION

Creating Electricity
One of Ontario's Hydro's "successor companies", called Ontario Power Generation Inc. (OPG), generates almost all of the electricity in Ontario. To encourage competition, there is a formal plan to reduce OPG's dominant hold on the electricity generation business to less than 35 per cent of the market within 10 years. The government is also encouraging other generation companies to develop power stations in the province to compete with OPG so that there will be a variety of sources of generation in the future.

WHAT CUSTOMERS NEED TO KNOW ABOUT THE CHANGES TO THE ELECTRICITY SYSTEM.

Algoma Power Inc. is your local distribution company or LDC.

Meters: Algoma Power Inc. will continue to own the meter serving your home or business. We will also continue reading this meter and will service any concerns you may have pertaining to it.

Wires to Your House or Business:  Algoma Power Inc. will continue to provide service to your home or business. We will service concerns over power quality or the deliver of your electricity. We still own the distribution wires and poles and will still be responsible for fixing hydro lines if they fall due to storm damage or accidents. For power outages, we will be the one you will contact. You will not risk a power outage by switching to a retailer.

Safety and Reliability: The safety and reliability of our electricity system will not change in a competitive market. The transmission and distribution of electricity will continue to be provided by regulated utilities, regardless of whether you change suppliers or not. The same wires will be used to get electricity to your home, and utilities will continue to be responsible for the maintenance of the distribution system in your area.

As your LDC, Algoma Power Inc. is responsible for delivering electricity to you on our lines, but you are now able to purchase your supply of electricity from many different competing sources. Think of the analogy of purchasing some clothing from a mail order catalogue. You buy the clothing from one company, but Canada Post delivers the package to your door. In the same way, you will be able to purchase your electricity supply from any number of retailers but we will still deliver that electricity to your home or business. We will be delivering the electricity that another company is supplying.