Time-of-Use rates and other electricity charges

Here’s an explanation of the items you may see on your electricity bill.

Electricity:

The majority of Ontario's electricity consumers are residential and small business consumers billed for electricity usage by their local hydro company. These customers generally pay Time-of-Use rates, with a small minority paying tiered rates. Consumers may also choose to enter into retail contracts to purchase electricity.

With Time-of-Use prices, the price of electricity depends on when you use it. Don’t need to run the dishwasher right away? Shifting your electricity use from an on-peak period to a mid- or off-peak period means you’ll save money.

These are the current Time-of-Use rates as of May 1, 2017:

6.5 cents/kWh for off-peak
9.5 cents/kWh for mid-peak
13.2 cents/kWh for on-peak

Chart of Time of Use periods Chart of Time of Use periods

The Ontario Energy Board (OEB) sets electricity prices for consumers and licenses and oversees electricity retailers. These prices are reviewed every six months, May 1 and November 1, and adjusted if necessary.

Tip:

Consider installing a programmable thermostat for your home to help you conserve electricity. Your thermostat will automatically adjust the temperature of your house according to your settings, so you won’t be unnecessarily cooling or heating your home while you’re not there.

Thermostat


Delivery:

This covers the cost of delivering electricity from generating stations, along the high-voltage transmission system, your local hydro companies distribution system, and then to homes and businesses. These rates are set by the Ontario Energy Board.

Every local hydro company company’s delivery charges are different. Kilowatt Way uses an Ontario average.

Within the category of delivery charge, these items are included:

  • Customer Service Charge: A fixed monthly charge to allow your utility to recover the costs associated with providing services such as meter reading, billing, and customer service.
  • Distribution Charge: A variable per kilowatt-hour (kWh) charge to allow your utility to recover the cost of building and maintaining its distribution system.
  • Transmission Charge: A variable per kWh charge for your utility to recover costs of operation and maintenance of the high-voltage transmission system that carries electricity from generating stations to your utility.

Line Loss Adjustment

When electricity is delivered over a power line, a small amount of power is lost as heat. In calculating your electricity costs for the billing period, your utility adjusts your consumption to account for those losses, using an adjustment factor that is approved by the OEB.


Regulatory Charges:

These rates are also approved by the Ontario Electricity Board (OEB). They include the Wholesale Market Services Charge that covers the cost of services required to operate the electricity system and run the wholesale market. These costs include:

  • Physical Limitations and Losses
    These are losses that occur as electricity flows across transmission lines. The IESO also collects for other costs incurred in operating the high voltage power grid.
  • Energy Reliability
    Sometimes when the balance between generation and demand is affected by an unanticipated event, such as equipment failure or a surge in consumption. The IESO purchases a certain amount of spare capacity or reserve that is available on short notice to restore the balance.
  • IESO Administration Service
    The IESO charges an administration fee to manage the power system and operate the wholesale electricity market in Ontario.

In addition, there is a Standard Supply Service Charge to cover administrative costs incurred by your utility in order to service customers who buy their electricity from the utility rather than a licensed electricity retailer.

Ontario Electricity Support Program

The Ontario Electricity Support Program (OESP) provides financial assistance to eligible low-income electricity consumers. The OESP is a ratepayer-funded program. For more information, please visit ontarioelectricitysupport.ca