Ontario hydro customers have a choice to make by the end of the month.
The flat rate residential electricity price that has been in place since June — 12.8 cents/kWh — comes to an end on Oct. 31.
If hydro customers do nothing, they will revert back to time-of-use (TOU) pricing with its peak, mid-peak and off-peak rates on Nov. 1.
A critic of mandatory TOU rates, Premier Doug Ford is now giving hydro customers the option of switching to tiered rates.
To move to tiered pricing, customers must notify their local electricity provider by completing what’s called an “election form” available on the company’s website or by direct contact.
The Ontario Energy Board (OEB) is expected to announce the new TOU and tiered prices on Tuesday as well.
Alex Puddifant, a spokesperson for Energy Minister Greg Rickford, said the government spent $175 million to hold TOU prices to a flat low-peak rate to help individuals and small businesses during the height of the pandemic lockdown.
The big question is can customers save on their hydro bills by switching to tiered pricing from TOU?
The TOU plan divides the 24-hour day into three pricing segments — on-peak (most expensive), off-peak (least expensive) and mid-peak (somewhere in the middle of the other two prices). The peaks differ in the summer and winter periods.
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Advantage: Allows customers to shift intense electricity use to cheapest off-peak hours, so turning on dishwashers and dryers after 7 p.m. or on weekends reduces costs. This might help customers who work different shifts or who want to recharge electric cars at night when prices are lowest.
Disadvantage: If a customer can’t shift their electricity use — if they work from home or need to use a heavy duty appliance all day, for example, then the peak price paid for power will mean higher bills.
A customer is allowed a set amount of electricity at a lower price each month, and once that limit or threshold is exceeded must pay a higher price for the remainder of power used during that month.
Customers are generally allowed up to 1,000 kWh per month in the winter and up to 600 kWh per month in the summer before the higher price kicks in, although those thresholds can change.
Advantage: Customers aren’t tied to TOU schedules in their electricity use — it’s how much you use in total, not when, that counts more on the bill. So if customers want to do their laundry at any time of the day or night, and their overall use of electricity in the month is routinely under the threshold, they might benefit from tiered pricing.
Disadvantage: Unlike with TOU pricing, customers can’t take advantage of off-peak periods to run electricity-guzzling appliances.
Big Disadvantage: Even now, not everyone can access tiered prices. Some customers in a condominium or apartment building would only be able to switch if the whole building did so. Customers who buy their electricity from an energy retailer will have to wait until that contract runs out to switch.
MAKING A CHOICE
The OEB recommends customers look at a few recent hydro bills — keeping in mind that COVID-19 measures might have changed their electricity use temporarily — to determine whether TOU or tiered pricing is best.