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FAQ: Time-of-use Pricing for Smart Meters

  1. What are time-of-use (TOU) prices ?
  2. Why are there different prices and time periods?
  3. What are the holidays for time-of-use prices?
  4. When will time-of-use (TOU) prices be effective?
  5. What is the benefit of having time-of-use (TOU) pricing?
  6. Will the Ontario Energy Board (OEB) take into account special consumer circumstances?
  7. What can consumers do?
  8. Are there other options for those who don’t want to pay time-of-use prices?
1. What are time-of-use (TOU) prices?

time-of-use prices take into account when, as well as how much, electricity is used by each of us. These prices were developed as part of the Regulated Price Plan (RPP) for those with smart meters.

2. Why are there different prices and time periods?

At the request of the Minister of Energy and Infrastructure, the Ontario Energy Board developed an electricity price plan to provide stable and predictable electricity pricing, which ensures the price consumers, like you, pay for electricity better reflects the actual cost of producing the electricity.

Electricity prices charged per “kilowatt-hour” change throughout the day, like long distance telephone rates, to better reflect the changes in the costs to produce electricity at different times of the day.

One of the Ontario Energy Board’s goals through time-of-use pricing is to provide an incentive for you to shift some of your consumption away from periods of high total consumption (called “on-peak”) to periods of low demand (called “off-peak”). By doing that, you can save money on your bill.

Shifting electricity use will mean the higher cost electricity generators will be needed less. Some of those higher cost generators also create more air pollution, so relying on them less can also help benefit the environment. In the long run, lower peak demand will mean the province needs to build less new generation to serve that peak, lowering costs for all Ontarians.

3. What are the holidays for time-of-use prices?
4. When will time-of-use (TOU) prices be effective?

Utilities across Ontario are at different stages of installing smart meters. As of August 31, 2011, there were about 3.1 million (66%) residential and small business customers on time-of-use billing. The remaining customers are expected to be switched to TOU from tiered prices by mid 2012.  Your utility will notify you at least 30 days in advance of when you can start to take advantage of time-of-use prices. 

Electricity distributors also file quarterly reports to the Board on smart meter deployment and the application of time-of-use pricing.

5. What is the benefit of having time-of-use (TOU) pricing?

Currently, there’s little personal benefit for you to manage your electricity use throughout the day. Smart meter pricing sets a higher price at peak periods when prices are highest in the wholesale market. This encourages you to reduce or shift your use to periods of lower demand (e.g. weekends or later in the evening) and away from times when electricity is most expensive.

You won’t be able to shift all of your electricity use away from peak demand periods, but the more you are able to shift, the more you can manage your costs and contribute to lower overall peak electricity prices for everyone.

6. Will the Ontario Energy Board (OEB) take into account special consumer circumstances?

The OEB is aware there are circumstances where you may find it difficult to shift your consumption patterns. Since provincial legislation requires Ontarians pay the true cost of the electricity we consume, the OEB designed time-of-use electricity prices to meet government requirements.

7. What can consumers do?

Examples of some changes you can make include turning on the dishwasher at 9 pm on weekdays before going to bed instead of right after dinner as most of us tend to do, or doing more laundry (especially hot water washes) on weekends when electricity prices are lowest (off-peak) all day.

8. Are there other options for those who don’t want to pay time-of-use prices?

You can sign a contract to switch to an electricity retailer. Most contracts, which are not regulated by the OEB, currently offer a fixed electricity price all day. If you’re considering a contract, we can help you with questions you should ask before signing.  Check out the Retail Energy Contracts section of our website for more information.

 

 

 

Page last updated 2013-04-05

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