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The Regulated Price Plan FAQs
- How has the Ontario Energy Board determined the prices for the new price plan?
- Consumers with smart meters?
- Who is eligible for the price plan?
- Do large commercial or industrial consumers pay more or less for electricity than eligible price plan consumers?
- Some people need to run air conditioning and medical equipment in the summer for health reasons. Doesn't the seasonal approach to pricing fail to recognize this?
- Why do prices look so different for customers who have smart meters than for those with conventional meters?
- What is the benefit of having smart meter pricing?
- Won't the increased demand in the off-peak period turn it into a peak period?
- My rent/condo fees include electricity. How does the price plan apply to me?
How has the Ontario Energy Board determined the prices for the new price plan?
The new prices have been calculated by the Ontario Energy Board using the following components:
- Any accumulated difference between the amount consumers paid for electricity and the amounts paid to generators in the previous period.
- The Board’s forecast of the price of electricity in the spot market over the next twelve months.
- Prices set by the Government for Ontario Power Generation’s (OPG) regulated nuclear and hydroelectric generation facilities for the next 12 months.
- Prices that the Ontario government will pay under long-term power supply contracts with private generators over the next 12 months. Prices that the Ontario government will pay under any future contracts for electricity generation supply from renewable and other resources, and for demand management, will also be included in future price calculations.
- The estimated value of the difference that is expected to result from the Government’s revenue limit on most of the output from OPG’s unregulated assets.
It is important to remember that the plan is limited to prices for the electricity commodity itself. This is shown on the “Electricity” line on your bill, and is only one of a number of factors that contribute to the total price that you pay for electricity that is delivered to you.
Read more about the development of the price plan...
Consumers with smart meters?
Some Ontario consumers began to get smart meters in 2006, however, most will not get a smart meter until 2008 – 2010.
The RPP also sets out "time-of-use" (TOU) prices for those few utilities that have both systems and meters capable of tracking and reporting hourly electricity use and have implemented TOU pricing. While TOU pricing is not yet mandatory, it is expected to increase in use as the government's smart meter initiative is rolled out over the next several years.
- On-peak price = 9.3 cents per kWh
- Mid-peak price = 7.3 cents per kWh
- Off-peak price = 2.7 cents per kWh
Under the price plan for smart meters, the price that consumers will pay for electricity will vary based on the period during the day when electricity is used.
The periods are:
- On-peak (when demand for electricity is highest);
- Mid-peak (when demand for electricity is moderate); and
- Off-peak (when demand for electricity is lowest).
These periods will be different in the summer than they are in the winter.
Smart meter pricing chart:
| Day of the Week | Time | Time-of-Use | Price (cents/kWh) |
|---|---|---|---|
|
Weekends & holidays |
All day |
Off-peak |
2.7 |
|
Summer Weekdays |
7:00 a.m. to 11:00 a.m. |
Mid-peak |
7.3 |
|
11:00 a.m. to 5:00 p.m. |
On-peak |
9.3 |
|
|
5:00 p.m. to 10:00 p.m. |
Mid-peak |
7.3 |
|
|
10:00 p.m. to 7:00 a.m. |
Off-peak |
2.7 |
|
|
Winter Weekdays |
7:00 a.m. to 11:00 a.m. |
On-peak |
9.3 |
|
11:00 a.m. to 5:00 p.m. |
Mid-peak |
7.3 |
|
|
5:00 p.m. to 8:00 p.m. |
On-peak |
9.3 |
|
|
8:00 p.m. to 10:00 p.m. |
Mid-peak |
7.3 |
|
|
10:00 p.m. to 7:00 a.m. |
Off-peak |
2.7 |
Who is eligible for the price plan?
Low-volume consumers, such as residential consumers and small business customers, and “designated consumers” such as municipalities, hospitals, schools, colleges and universities. This is expected to remain the case until May 1, 2009, when eligibility will be limited to residential consumers and consumers that are classified by their utility as general service with consumption of less than 250,000 kWh per year. Read the Energy Minister's letter about eligibility...
Consumers that are eligible for the plan may choose not to participate. They may instead choose to enter into a contract with an electricity retailer.
Another choice open to all eligible consumers who have an interval meter that records hourly electricity use is to pay the “spot market” price.
Consumers, such as large industrial consumers, that are not eligible for the price plan will continue to have all of the options and flexibility to make supply arrangements that they have currently.
Do large commercial or industrial consumers pay more or less for electricity than eligible price plan consumers?
The electricity prices paid by both eligible price plan consumers and large commercial and industrial consumers will reflect prices paid to generators. The difference is that prices under the price plan are smoothed over the course of a year but prices for the larger consumers are not.
Prices for eligible consumers under the price plan will be set based on the Board's forecast of the prices and quantities for the various sources of supply and recovery or credit of any balance in the variance account. Differences between the Board's forecast and actual amounts paid to generators will be built into the price for the next term.
Prices paid each month by large consumers that are not covered by the price plan will be based on actual prices during the month, not on forecasts by the Board.
Some people need to run air conditioning and medical equipment in the summer for health reasons. Doesn't the seasonal approach to pricing fail to recognize this?
The Ontario Energy Board understands that different consumers have different electricity needs during the year. However, for most consumers there is a greater opportunity to conserve electricity in the summer months than in the winter.
Why do prices look so different for customers who have smart meters than for those with conventional meters?
The price plan for smart meters is designed to recover the same average costs of supply as the price plan for conventional meters. The way in which it does that is, however, different.
What is the benefit of having smart meter pricing?
Currently, consumers have little financial incentive to manage their use of electricity over the day. Smart meter pricing sets a higher price at peak periods when prices are highest in the wholesale market. This gives consumers an incentive to reduce or shift their use to periods of lower demand (e.g. weekends or later in the evening) and away from times when electricity is most expensive.
Consumers will not be able to shift all of their electricity use away from peak demand periods, but the more they are able to do so, the more they can manage their costs and contribute to lower overall peak electricity prices for everyone.
Won't the increased demand in the off-peak period turn it into a peak period?
This has not happened in other jurisdictions where time of use pricing is in place and we don’t expect this to happen in Ontario. If consumers shift more of their use of electricity to periods when demand is lower, that can eventually reduce the prices during peak periods.
My rent/condo fees include electricity. How does the price plan apply to me?
Special rules are in place to allow consumers who pay for electricity through rent or condo fees to have the benefit of the price plan. The rules require that your landlord or condominium corporation sign a declaration with the local utility identifying the number of units in your building. If that is done, the price plan will apply to electricity consumption within the building as a whole. Whether or not the new prices are then ultimately passed on to you depends on your arrangements with your landlord or condominium corporation.