Electricity and You - Overview of Your Options

Your Options for Buying Electricity
These Options Only Affect the ‘Electricity’ Portion of Your Bill
How Do I Choose?
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.

Your Options for Buying Electricity

Electricity powers our daily lives, whether it’s for lighting and heating our homes, using a computer or watching television. Using electricity is as simple as turning on a switch, but how electricity is produced, transmitted and eventually supplied to you is quite complex.

Along with most consumers in Ontario, you receive electricity from the distribution utility in your area. It charges you for delivering that electricity to your residence or business and for other costs related to operating and maintaining the hydro wires and system.

While electricity will always be delivered to you by the utility, you have the option of buying the electricity you use in one of three ways.

One way is through the Regulated Price Plan (RPP) , in which you are charged a regulated price per kWh by your utility for the electricity that you consume. Your utility does not earn a profit on the electricity it purchases for you. You pay the cost of the electricity the utility buys in the market on your behalf. The price is set by the OEB, the independent regulator of Ontario’s energy sector, and remains stable for a certain period of time. As of May 1, 2006, the price may change up to every six months since the price is estimated by the OEB based on a forecast and it may not reflect what has been paid to generators. The difference is incorporated into future prices set by the OEB if you remain on the RPP. If you leave the RPP, you will need to settle your Regulated Price Plan account with your utility, since the stable price you've been paying may not reflect the cost of electricity up to that time. You can learn more by reading the following factsheets:
- Electricity and You: The Regulated Price Plan
- Factsheet: Understanding Your Electricity Bill
Another way is through an electricity retailer, in which you pay the price per kWh as agreed upon by you and the retailer in the contract you sign. The price you pay is usually guaranteed for a number of years. Learn more in the following fact sheets:
- Electricity and You: Choosing an Electricity Retailer
A third way – only available for a limited number of consumers who have a special (interval) meter – is through spot market pricing, in which you pay actual wholesale market prices for electricity. These prices are volatile, fluctuating up and down every hour.

Along with most consumers served by local utilities, you are automatically part of the first option – the Regulated Price Plan – unless you choose one of the other options.

These Options Only Affect the 'Electricity'; Portion of Your Bill

Your electricity bill each month contains a number of charges including:

Electricity: the cost of electricity supplied to you.
Delivery: the cost of delivering electricity from generators to utilities and then to your home or business.
Regulatory: the cost of administering the wholesale electricity system and maintaining the reliability of the provincial grid.
Debt Retirement Charge: set by the Ministry of Finance to pay down the residual stranded debt of the former Ontario Hydro.

Your options for buying electricity, discussed above, only relate to the “Electricity” line of your bill – what you use for heating, lighting, air-conditioning, appliances and so on.

If you switch to an electricity retailer, there are items on your bill that are still charged to you by your local utility. Since it operates and maintains the hydro wires that deliver your electricity, the utility will continue to deliver electricity to you and charge amounts for the Delivery, Regulatory and Debt Retirement Charge lines on your bill. Your contract with the electricity retailer only affects the amount on the “Electricity” line of your bill.

How Do I Choose?

The best choice will depend on your individual needs and preferences. Take the time to understand the different options and which will suit you best.

Options for Buying Electricity	Key Features
Regulated Price Plan	Price determined by Ontario Energy Board Price may be subject to adjustment every six months Difference between price you pay and the actual cost to supply you is rolled into next RPP price if you stay. If you leave the RPP, you will need to settle your Regulated Price Plan account with your utility, since the stable price you've been paying may not reflect the cost of electricity up to that time. Provincial Benefit is included in the Electricity price on your bill
Electricity retail contract	Price stated in the contract Price usually fixed for a number of years but may change during the term of the contract Provincial Benefit is a separate line item
Spot market pricing	Price determined by market conditions Price changes every hour Requires an interval meter Provincial Benefit is a seperate line item

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.

Learn more about the OEB...