How Electricity Prices are Set
WHO WE ARE
The Ontario Energy Board is an independent and impartial public agency. We make decisions that serve the public interest. Our goal is to promote a sustainable and efficient energy sector that provides you with reliable energy services at a reasonable cost.
PRICES ON YOUR BILL
Electricity prices account for about half the total value of your utility bill. The others are Delivery, Regulatory and Debt Retirement (note: The Debt Retirement Charge was removed for certain residential consumption after Dec. 31, 2015. Learn more at Ontario.ca/DRC.)
HOW WE SET ELECTRICITY PRICES
As the regulator in the province, the Ontario Energy Board sets electricity prices. This happens twice each year, on May 1 and November 1.
The Board bases rates on an estimate of how much it will cost to supply the province with electricity for the next year. Many factors go into this estimate, including:
- The amount of power we expect consumers to use.
- The price of different sources of electricity over that time.
- The types of power that will be available (like nuclear, hydroelectric, natural gas, renewable), and at what cost.
- The accuracy of previous projections. For example, if we overestimated the cost of electricity over the past six months, households and small businesses paid more than the actual cost of electricity for that period. We would respond by lowering prices for the following period. That way, customers pay the right amount in the long run.
KEEPING PRICES STABLE ... HELPS CONSUMERS
By keeping rates constant for six-month stretches, the Ontario Energy Board allows consumers to rely on stable prices. This shields you from the daily swings of Ontario’s open electricity market, where prices change every five minutes.
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Page last updated 2015-12-31