I hastily posted some nasty thoughts on X today after looking up an obscure “Final RPP Variance Settlement Amount”. It will take some work to explain what that is, and why it affirmed my worst thoughts of some people in current government and the formerly public service areas of the energy regulator (OEB), and perhaps the electricity system operator (IESO).
Here’s the OEB’s description of the RPP Variance Settlement amount (the amount):
This amount will reflect the consumer’s share of any accumulated variance between the actual price paid to generators and the forecast price paid by RPP consumers. If consumers have been paying more for electricity than was paid to generators, this amount will be a credit. If consumers have been paying less, it will be a charge.
The best I can do to estimate and evaluate the amount posted on February 18, 2026 is to use figures for January. To use the OEB’s method: If the $128/MWh regulated price plan is more than the average of approximately $98/MWh class B commodity rate for the month, there is a credit.
There is not a credit: there is an increase of $343 million.
The timeframes don’t line up and it’s only one month: but applying my estimation method and the OEP’s reported amounts back to 2000, it is a month that is exceptional in a way my most cynical self anticipated. For the statistically inclined, the average difference between my method’s estimates and the OEB’s reported variance change was a little under $6 million prior to yesterday, but the standard deviation was about $75 million – which indicates the expected inability to line up timeframes but most months the moves are directionally the same, and larger deviations correct in the following months. This monthly the difference in my estimate is $545 million, breaking the previous record of $211 million in what is a 4-sigma event; probability of which is 1 in 15,787.
But I expected something like this.
