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Electricity & You: Choosing an Electricity Retailer
- Buying from an Electricity Retailer
- Making Sense of Your Bill
- Questions to Ask When Considering a Contract with an Electricity Retailer
- Returning to the Regulated Price Plan
- How to Learn More
- Who is the OEB?
The Ontario Energy Board (OEB) has developed a series of factsheets to help consumers – residential consumers, small businesses and others who are considered low volume users of electricity – learn more about the province’s electricity sector and their options for buying electricity. This introductory factsheet provides an overview of your options.
Buying from an Electricity Retailer
As an electricity consumer in Ontario, you don't have to remain on the Regulated Price Plan. While your electricity utility will always deliver electricity to your household - since it operates and maintains the electricity wires - you can choose to purchase your power from an electricity retailer.
There are three key things you need to know about buying from an electricity retailer:
- The price you pay is set out in your contract with the electricity retailer.
The price you pay per kilowatt hour (kWh), as shown on the "Electricity" line of your electricity bill, will be the price stated in the contract you sign. This price is determined by the electricity retailer and is not regulated by the OEB. Usually the price is fixed for a number of years, but it may change during the term of the contract.
- Your utility will continue to bill you for other items.
If you switch to an electricity retailer, there are items on your bill that are still charged to you by the utility. The utility will continue to deliver your electricity and charge amounts for the "Delivery", "Regulatory" and "Debt Retirement Charge" lines on your bill. Your contract with the electricity retailer only affects the "Electricity" line of your bill.
- You will have to settle your account if you leave the Regulated Price Plan.
If you switch to an electricity retailer, you will need to settle the Regulated Price Plan account you have with your utility. Why? With the utility, you buy and pay for electricity under the Regulated Price Plan, in which you are charged a stable price (set by the OEB) for the electricity you consume. That price may not reflect what is paid to generators. Eventually the difference needs to be settled:
- For consumers that remain on the Regulated Price Plan, the difference is tracked (in something called a variance account) and incorporated into future Regulated Price Plan prices set by the OEB.
- Consumers that switch to an electricity retailer may either receive a credit or need to pay outstanding charges related to their electricity use while they were on the Regulated Price Plan.
- You will be reimbursed if consumers on the Regulated Price Plan have been paying more for electricity than was paid to generators; or
- You will need to pay your utility if these consumers have been paying less than was paid to generators.
This is a one-time charge or credit, called the "RPP Settlement", that will appear on your final bill as a Regulated Price Plan consumer. How can you find out how much you would pay or receive if you were required to 'settle' with your utility? The OEB posts a ¢/kWh value on its Web site. You can estimate the amount you would receive or pay by multiplying this value by your consumption over the most recent 12 months. This ¢/kWh value is called the "Final RPP Variance Settlement Factor" and is updated around the 15th of each month.
- RPP Settlement Chart
Making Sense of Your Bill
When switching to an electricity retailer, the bill you receive will look a little different. Some of the charges will look exactly the same, such as the “Delivery”, “Regulatory” and “Debt Retirement Charge” lines of your bill. Other items will be different. These include:
- A Provincial Benefit line. What is the Provincial Benefit? It can be a credit or a charge to you, and is your share of the difference between government regulated and contract prices for electricity paid to certain generators and the market prices they would have received had they not been subject to government regulation or contracts.
If you buy electricity under the Regulated Price Plan, an estimate of this amount is already reflected in the stable price for electricity set by the OEB, shown on the “Electricity” line of your bill. If you buy from an electricity retailer, the Provincial Benefit is not included in the contract price offered by the retailer, so on your bill it’s shown as a separate item. By law, the Provincial Benefit applies to you and cannot be transferred to an electricity retailer or any other party.
- An OPG Rebate. The Ontario Government placed a cap on the amount paid to certain generation facilities owned by Ontario Power Generation (OPG). Consumers will receive a rebate for any revenues from those facilities exceeding an average price of 4.7 cents/kWh in 2007-08. On May 1, 2008, the revenue cap will increase to 4.8 cents/kWh for the subsequent 12 month period. An estimate of the OPG Rebate is included in the Regulated Price Plan prices. Consumers that leave the RPP and sign a retail contract will receive the OPG rebate, if any, on a quarterly basis. The total rebate amount will be calculated using only the electricity you used after you left the RPP.
You are able to transfer the OPG Rebate to an electricity retailer, so you should read the contract before signing to see if you keep any OPG Rebate or if it is transferred to the retailer. As a Regulated Price Plan consumer, you do not see the OPG Rebate on your bill because an estimate of this rebate is already reflected in the stable price for electricity set by the OEB, shown on the “Electricity” line of your bill.
Returning to the Regulated Price Plan
If you sign with an electricity retailer, you are making a commitment to purchase electricity from the retailer for a certain period of time. If you terminate your contract early, you may have to pay a charge. That charge will be specified in your contract with the retailer. If you terminate your retail contract and have not signed another retail contract, you will automatically return to the Regulated Price Plan.
Questions to Ask When Considering a Contract with an Electricity Retailer
- What is the price being offered?
- How does this compare to the RPP?
- How long is the term of the contract?
- Do you offer contracts that differ in length?
- Will implementation of time-of-use pricing have any impact on my contract?
- What other fees or charges would I be required to pay?
- Would I be transferring the “OPG Rebate” to your company if I sign?
- Would I be required to pay any charges if I leave before the contract ends?
- When would the contract take effect?
- Do you offer “green power” contracts and, if so, how does the price differ?
How to Learn More
Visit the Contact Us page.
Who is the OEB?
The OEB regulates the province’s electricity and natural gas sectors in the public interest. It envisions a healthy and efficient energy sector with informed consumers, and works towards this vision through regulatory processes that are effective, fair and transparent.