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The Minister of Energy asked the Ontario Energy Board (OEB) to develop an electricity price plan to:
- better reflect the price paid to generators;
- smooth the price paid by consumers over time; and
- create a 'true up' mechanism whereby any shortfalls or over payments are refunded or collected from consumers.
Since April 2004, residential, low-volume and designated consumers have been paying two different prices for electricity depending on how much you use. You pay a lower price for the first 750 kilowatt hours (kWh) of electricity you use each month and a higher price for any electricity you use over the 750 kWh threshold.
As of April 1, 2005, the price you pay for electricity has changed to better reflect the price paid to generators. The new prices are based on an OEB forecast of the price of electricity over the next 12 months. These prices are intended to stay the same for one year. Read more about which consumers are eligible for the price plan.
In the spring of 2006, and every six months after that, the prices you pay for your electricity may change based on an updated OEB forecast and any difference between the amount consumers paid for electricity and the amount paid to generators.
As a residential consumer, you will pay 5.0 cents per kWh for the first 750 kWh you use per month, and 5.8 cents per kWh you use over this threshold.
The price threshold for residential consumers will change twice a year beginning in November 2005. The threshold will be 1,000 kWh per month during a winter season (November 1 to April 30) and 600 kWh per month during a summer season (May 1 to October 31). This means consumers will be able to use more hours of electricity at the lower price in the winter when many people need more electricity for light, indoor activities and heating.
Non-residential consumers who are eligible for the price plan will pay 5.0 cents per kWh for the first 750 kWh they use per month, and 5.8 cents per kWh they use over this threshold. The price threshold for non-residential consumers will remain at 750 kWh per month for all seasons.
Read more about how the prices were set...The price plan also introduces time-of-use pricing for those consumers with smart meters. The plan outlines the specific hours for time-of-use pricing periods and sets the prices that apply to those periods.
Most Ontario consumers will not have smart meters when the price plan takes effect. Utilities will not be obligated to provide time-of-use pricing to consumers with smart meters until April 1, 2006, but may introduce it sooner if they choose.
Read more about smart meter pricing...The difference between the amount consumers have paid for electricity and the amount that has been paid to generators will be tracked in an account. If you leave the price plan you will need to settle your share of the balance of that account. You will be reimbursed if consumers have been paying more for electricity than was paid to generators, or you will need to pay your utility if consumers have been paying less than was paid to generators.
There are several ways you can leave the price plan, including if you:
- sign or renew a contract with an electricity retailer;
- move outside of Ontario; or
- have an interval meter and choose to pay spot market prices.
If you are changing utilities within Ontario you will not have to settle your share of the account.