Customer Choice

Information Regarding Customer Choice

Effective November 1, 2020, the government intends to introduce customer choice for Regulated Price Plan (RPP) customers who pay time-of-use (TOU) prices. This page is dedicated to providing the most up to date information regarding this initiative. 

What is being done to support households and businesses with increased electricity usage during this COVID-19 outbreak?

The government of Ontario has extended emergency rate relief for time-of-use (TOU) electricity customers until May 31, 2020. Households, farms and small businesses paying TOU electricity rates will continue to be charged the lowest price, known as the off-peak electricity rate, 24 hours a day, 7 days a week until May 31, 2020.

Starting June 1, 2020, the government of Ontario has introduced a “COVID-19 Recovery Rate” of 12.8¢/kWh for TOU Regulated Price Plan (RPP) customers to provide stability and predictability for families, small businesses and farms. This rate is equal to the forecasted average RPP supply cost, calculated by the Ontario Energy Board last October, for the twelve months starting November 1, 2019. This rate, subject to approvals, is intended to be in effect until October 31, 2020.

The government of Ontario will be looking to the Ontario Energy Board to develop, in consultation with distributors and other stakeholders as appropriate, the rules under which distributors will be required to offer their TOU customers the option to choose between TOU and tiered prices by November 1, 2020, so that Ontarians would be able to pick the electricity pricing approach that works best for them.

Will customers be able to switch rate plans before November 1, 2020?

The government recognizes that some TOU customers may prefer to revert to typical TOU pricing with peak/mid-peak/off-peak rates before November 1, 2020. However, ENDM (Ministry of Energy, Northern Development & Mines) is proposing to introduce customer choice as of November 1, 2020.

What’s the difference between TOU and tiered electricity rates? 

TOU rates vary according to when electricity is used. They are cheapest when demand is lowest: during the evenings, on weekends and on holidays.

The TOU pricing periods are:

  • Off-peak, when demand for electricity is typically lowest. Ontario households and small businesses typically use the majority of their electricity – nearly two thirds of it – during off-peak hours.
  • Mid-peak, when demand for electricity is moderate. These periods are during the daytime, but not the busiest times of day.
  • On-peak, when demand is generally highest. These are the busiest times of day – generally when people are cooking, starting up their computers and running heaters or air conditioners.

One of the purposes of TOU pricing is to give customers a financial incentive to reduce their electricity use during peak times. This helps to smooth out demand peaks and lowers overall system costs by reducing the need for more generation capacity.

A small percentage of customers (less than 5 per cent) are charged tiered prices. Tiered price customer either don’t have a smart electricity meter that can track the time of day electricity is used, or live in certain areas that do not have the communications infrastructure to electronically transmit consumption data.

Tiered prices are the same regardless of time of day but become more expensive if a customer’s overall electricity use goes above a set threshold. The current threshold for residential customers is 1000 kWh per month following a decision by the Ontario Energy Board on April 14th to not implement the summer threshold, which is 600kWh.

 

 

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