Electricity Pricing

Time-of-use (TOU) Prices

The vast majority of Ontario electricity users pay time-of-use prices. If you’ve signed an electricity contract with a company, these prices will not affect you. There are three time-of-use price periods:

• Off-peak, when demand for electricity is lowest. Ontario households use the majority of their electricity – nearly two thirds of it – during off-peak hours.
• Mid-peak, when demand for electricity is moderate. These periods are during the daytime, but not the busiest times of day.
• On-peak, when demand is highest. The busiest times of day. Generally when people are cooking, firing up their computers and running heaters or air conditioners.

The chart below shows the price you pay today for electricity at different times of the day.

	Prices effective May 1, 2016
	OFF-PEAK 8.7 ¢/kWh
	MID-PEAK 13.2 ¢/kWh CURRENT PRICE
	ON-PEAK 18.0 ¢/kWh

 

Reasons for Higher and Lower Prices
Time-of-use electricity prices are like many cell phone rates, which are cheapest when demand is lowest: during the evenings, on weekends and on holidays.

In Ontario, when demand is lower, most of the power we use comes from sources like nuclear generators and large hydroelectric stations, which are designed to run all the time. This is called “baseload” power.

As daytime begins, more people turn on their lights and appliances, and businesses ramp up their operations for the workday. These are high demand times, and if all of the baseload power is used, the province turns to generally higher-cost sources. These sources, such as natural gas-fired plants, can be quickly called into action to meet rising demand. Other kinds of renewables such as solar and wind contribute to our power needs when they are available.

Two PEAK Seasons: Summer & Winter
People use electricity differently depending on the season. The Ontario Energy Board, therefore, has established two sets of peak prices. These prices only apply to weekdays. Electricity is at its cheapest price all day on weekends and holidays throughout the year.

	Summer Weekdays May 1 – October 31 In Summer, electricity use peaks during the hottest part of the afternoon, when air conditioners are running on high. On-peak hours are mid-day.
	Winter Weekdays November 1 – April 30 In Winter, less daylight means electricity use peaks twice: once in the morning when people wake up and turn on their lights and appliances, then again when people get home from work. There are two sets of on-peak hours to reflect this.

 

Smart Meters: The Key to Time-of-use Pricing
Time-of-use requires one vital piece of equipment: Smart Meters tell your utility exactly how much electricity you are using and when you use it. Old hydro meters could only measure how much power you used. Almost every household and small business in Ontario now has a smart meter.

By Saving Energy, You Save Money
Time-of-use pricing better reflects the true cost of power. That’s because you are charged more for electricity when it is more expensive to produce.
As a result, time-of-use encourages you to use power when rates are cheapest – during off-peak hours.

For example, you may now choose to run their dishwasher or do laundry after 7 p.m. Changing your behaviour this way helps:

You…	by lowering your bills
The environment…	by causing less greenhouse gas emissions
Ontario’s electricity grid…	by easing pressure during high-demand hours

Other Pricing

Tiered Pricing
About 1 in 10 Ontario electricity customers are still billed according to tiered prices. If you are a tiered price consumer, you can use a certain amount of energy each month at a lower price. When you pass that level, your rate goes up for all additional electricity. Tiers are different for home and business customers. The charts below show the current prices for each:

When	How much electricity you use	Price (¢ per kWh)
Residential (effective May 1, 2016)
Summer (May 1 – Oct 31)	Up to 600 kWh	10.3
	More than 600 kWh	12.1
Winter (Nov 1 – Apr 30)	Up to 1,000 kWh	–
	More than 1,000 kWh	–
Non-residential (effective May 1, 2016)
All seasons	Up to 750 kWh	10.3
	More than 750 kWh	12.1

 

Customers on Contracts
Fewer than 1 in 10 customers get their power from an electricity retailer. Those consumers have signed a contract and pay a fixed rate that is separate from time-of-use and tiered pricing.

Contract customers also pay an additional charge, known as the Global Adjustment. The Global Adjustment includes additional costs not accounted for in market prices. They are costs all Ontario electricity customers must pay. They include:

• Contract prices paid to many power generators
• Many conservation and demand management programs

The Global Adjustment is already blended into time-of-use and tiered prices.

Visit the Independent Electricity System Operator (IESO) website for more information on the Global Adjustment.

 

Content courtesy of Ontario Energy Board