June 5, 2023

If you live in Ontario, you’ll pay less for electricity today

The Ontario Energy Board announced that it will lower the price of electricity for home and small business customers starting November 1. Prices for both time-of-use and tiered plans are coming down. (Adrian Wyld/The Canadian Press – image credit)

Ontarians struggling with the rising cost of living may notice something unusual when they look at their next water bill.

The Ontario Energy Board (OEB) has announced a reduction in the price of electricity for residential and small business customers, which will take effect on Tuesday. Depending on the pricing plan, people can see a price drop of up to two cents per kilowatt hour (kWh).

The drop in prices is mainly due to changes in the market, says Joel MacDonald, founder of Energyrates.ca, a website that compares energy prices.

“Peak grid demand is in the summer … it’s usually driven by air conditioners,” MacDonald said.

“So it would be typical to see a slightly lower rate in the winter than in the summer.”

MacDonald says the drop isn’t significant compared to last winter’s drop in Ontario, but he notes that other provinces are raising their rates — Albertans, for example, are seeing increases ranging from three cents to 28 cents per kWh.

Ontario Energy Board

Ontario Energy Board

Prices for both time-of-use and tiered plans will decrease, according to the provincial electricity and natural gas authority. The change is valid until the end of April next year.

The time-of-use plan (TOU) announced by the OEB calculates, whereby customers are billed different amounts depending on when they use electricity. Customers who use electricity during weekday peak hours (7 a.m. to 11 a.m. and 5 p.m. and 7 p.m.) now pay 15.1 cents per kilowatt hour (kWh), which is lower than last winter’s 17.0 cents per kWh.

The average peak price (on weekdays from 11 a.m. to 5 p.m.) has dropped from 11.3 cents to 10.2 cents per kWh. Also during off-peak hours (weekdays from 19:00 to 07:00 and all day on weekends and holidays), prices fell to 7.4 cents from 8.2 cents per kWh.

Tiered pricing, where customers pay a fixed price for the first 1,000 kWh during the winter months and a higher price when exceeding, has also decreased by a good cent per kWh.

However, the Ontario Electricity Rebate, which provides a pre-tax discount on electricity bills, has dropped from 17.0 per cent to 11.7 per cent.

MacDonald says this is a good time for Ontarians to reassess whether they want to be on a TOU or a tiered plan.

Savings depend on the type of plan

Ontario introduced smart meters in 2005, says MacDonald, which in addition to electricity consumption, measure electricity consumption during the day.

He credits these meters for reducing the amount of electricity Ontarians use since they were introduced.

However, in the first year of the pandemic, OEB allowed home and small business customers to bill TOU or tiered plans.

MacDonald says tiered plans make more sense for most customers.

Posted by Joel MacDonald

Posted by Joel MacDonald

“For a time-of-use system to deliver cost savings over a tiered system – assuming an average household – you need to use more than 75 percent of your usage off-peak.”

He says it’s hard to hit that number because standard houses have base-load consumption that comes from having various appliances on all the time.

With the tiered system charging 8.7 cents per kWh (effective Tuesday), MacDonald says it’s easier to save because the average household won’t exceed the 1,000 kWh threshold needed to qualify for the higher payment.

“We know that the average household uses 750 kWh.”

MacDonald says the OEB says the average consumer who uses 60 percent of their electricity off-peak will save eight percent by switching to a tiered system.

Many Ontarians continue to struggle with skyrocketing costs

Although some savings are on the horizon, many Ontarians are still unable to pay their utility bills.

“A lot of people are feeling pressure right now because of rising prices, from groceries to gas,” said Neftali Bonilla of the Neighborhood Information Post, an organization that connects low-income people with support services.

“So they’re either buying groceries or paying their energy bills,” said Bonilla, who coordinates the organization’s energy assistance program.

She says her group has had many people come to it, including seniors, young adults and single-parent families, seeking help in the form of grant programs.

One of these programs, the Low-Income Energy Assistance Program (LEAP), allows people to apply for help if they are behind on their energy bill and receive up to $1,000 to pay it.

Bonilla says that the number of applicants has grown enormously.

“In 2021, we were able to help 411 households in the LEAP program,” he said.

“This year, from January to September, we’ve helped 873 so far… In October alone, we’ll probably help about 100 households.”

But MacDonald says Ontarians will never have to worry about power outages in the winter because there is a blackout between Nov. 15 and April 30.

“If you’re struggling with these unusually high bills, know that while it may hurt your credit, you won’t have anything to break until April 30.”

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