Beatrice Lang
In Ontario, electricity rates vary according to demand, with higher prices during the morning and afternoon when businesses are open and people are at work. During the night and on weekends, demand is lower, and so are electricity rates. This is called Time-of-Use pricing (TOU), and it is the fixed electricity price charged to all Regulated Price Plan (RPP) customers. TOU rates are set by the Ontario Energy Board (OEB), which also sets the Delivery rates that cover the cost of delivering electricity to residential and small business customers.
| Characteristics | Values |
|---|---|
| Time-of-Use (TOU) rates | Fixed electricity prices charged to all Regulated Price Plan customers, both residential and small business |
| Cheapest times for electricity usage | 7 pm to 7 am every day, weekends and holidays |
| Off-peak hours | When demand for electricity is generally lower |
| Mid-peak hours | When demand for electricity is moderate |
| On-peak hours | When demand for electricity is generally higher |
| Tiered pricing | Customers can use a certain amount of electricity each month at a lower price. Once the threshold is exceeded, a higher price applies |
| Ultra-Low Overnight pricing | Lowest electricity prices |
| Fixed-rate plans | A single, guaranteed electricity rate that does not change |
| Global Adjustment | The difference between the guaranteed price and the money earned in the wholesale marketplace, paid by all electricity consumers |
| Harmonized Sales Tax (HST) | 13% tax on electricity bills in Ontario |
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Time-of-Use (TOU) rates
In Ontario, electricity prices are determined by Time-of-Use (TOU) rates, which are set by the Ontario Energy Board (OEB). TOU rates are based on the demand for electricity, with three periods: off-peak, mid-peak, and on-peak. During off-peak hours, when demand is lower, electricity rates are the cheapest. This is typically during the evenings, weekends, and holidays. Mid-peak hours have moderate demand and rates, while on-peak hours have the highest demand and rates.
The TOU rates vary between summer (May 1 to October 31) and winter (November 1 to April 30). During the summer, on-peak hours are typically during the hottest part of the afternoon when air conditioners are in high use. In the winter, with less daylight, on-peak hours occur twice a day: once in the morning when people are getting ready for the day, and again in the evening when people return home from work.
Residential and small business customers in Ontario have the option to choose from three pricing options: Time-of-Use Pricing, Tiered Pricing, or Ultra-Low Overnight Pricing. Time-of-Use Pricing involves paying different rates based on the time of day and season, as previously described. Tiered Pricing allows customers to use a certain amount of electricity each month at a lower price, with a higher price applied once that threshold is exceeded. The threshold changes with the season to accommodate changing usage patterns. For example, the threshold is higher in the winter to account for increased electricity usage due to heating. Ultra-Low Overnight Pricing offers the lowest rates during the late-night and early morning hours when demand is at its lowest.
By understanding the TOU rates and their corresponding times, Ontario residents can manage their electricity costs by shifting their usage to lower-price periods. For example, it is cheaper to use high-energy appliances, such as a washing machine, during off-peak hours or over the weekend. Additionally, customers can explore options like fixed-rate plans, which provide a guaranteed rate for electricity regardless of market fluctuations, or choose to purchase electricity from a licensed retailer with a fixed-rate contract.
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Off-peak hours
In Ontario, electricity rates vary according to demand, with higher prices during the morning and afternoon when businesses are open and people are at work. During the night and over the weekend, demand is considerably lower, leading to lower energy prices.
The Ontario Energy Board (OEB) separates electricity rates into three categories: Off-peak, Mid-peak, and On-peak. Off-peak hours refer to periods when the demand for electricity is generally lower, typically between 7 pm and 7 am every day, and all day on weekends and holidays. During off-peak hours, electricity rates are at their lowest, providing an opportunity for consumers to manage their electricity costs effectively.
For example, it is more cost-efficient to use appliances such as washing machines, electric lawnmowers, and other high-energy appliances during off-peak hours. By shifting energy-intensive tasks to these lower-demand periods, consumers can take advantage of the reduced rates and potentially lower their electricity bills.
Additionally, the OEB offers different pricing plans, such as Time-of-Use (TOU) rates, which include off-peak, mid-peak, and on-peak pricing. These rates are designed to reflect the varying demands for electricity throughout the day and year, with off-peak rates being the most cost-effective for consumers.
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Hydro rates
In Ontario, hydro rates vary according to demand, with higher prices during the morning and afternoon when businesses are open and people are at work. During the night and over the weekend, demand is lower, and so are the rates.
The Ontario Energy Board (OEB) categorises time-of-use (TOU) rates into three periods: off-peak, mid-peak, and on-peak. Off-peak hours, when demand for electricity is generally lower, are the cheapest time to use electricity. In Ontario, households use most of their electricity during off-peak hours. Mid-peak hours are during the daytime, excluding the busiest times of day. On-peak hours are when demand for electricity is highest, usually when people are cooking, using personal electronics, and running heaters or air conditioners.
The cheapest rates are in effect all day on weekends and holidays, regardless of the season. During the summer, on-peak hours are in the middle of the day, when air conditioners are running at maximum capacity. In the winter, there are two sets of on-peak hours, reflecting the fact that electricity use peaks in the morning and again in the evening when people get home from work.
The OEB sets the rates that utilities charge for electricity, which appear on the Electricity line of customers' bills. Residential and small business customers can choose from three pricing options: Time-of-Use Pricing, Tiered Pricing, or Ultra-Low Overnight Pricing.
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Fixed-rate plans
In Ontario, electricity rates vary according to demand, with higher prices during the morning and afternoon when businesses are open. During the night and on weekends, demand is lower, resulting in cheaper rates.
For those seeking a consistent rate regardless of market fluctuations, a Fixed-Rate plan may be a suitable option. This plan offers a single, guaranteed rate for electricity or natural gas that remains unchanged, regardless of market conditions.
Additionally, it's worth mentioning that Fixed-Rate plans in Ontario are typically offered by electricity retailers, which means the rates are not regulated by the Ontario Energy Board (OEB). As a result, customers opting for these plans may need to pay their share of the Global Adjustment, which is the difference between the guaranteed price and the money earned by generators in the wholesale market.
When considering a Fixed-Rate plan, it's essential to carefully review the contract and understand all associated costs. While these plans can provide peace of mind with their fixed rates, they may also limit the ability to take advantage of potential cost savings during off-peak hours or weekends. For those seeking greater flexibility and the potential for cost savings, Time-of-Use (TOU) rates or other variable pricing options may be more suitable.
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Tiered pricing
In Ontario, electricity rates vary according to demand, with morning and afternoon hours being more expensive than evenings, weekends, and holidays. This is because companies, stores, industries, and businesses tend to be open during the daytime, resulting in higher electricity consumption.
The Ontario Energy Board (OEB) has implemented a system called Time-of-Use (TOU) rates, which categorizes electricity prices into three periods: Off-peak, Mid-peak, and On-peak. Off-peak hours, when demand is generally lower, include evenings, weekends, and holidays. Mid-peak hours represent moderate demand and occur during the daytime but not the busiest times. On-peak hours are when demand is at its highest, typically during the daytime when people are cooking, using electronics, and running heaters or air conditioners.
While TOU rates provide a dynamic pricing structure, another option available to residential and small business customers is Tiered Pricing. With Tiered Pricing, you are offered a certain threshold of electricity usage at a lower price for each month. Once your consumption exceeds this threshold, a higher price per unit of electricity is applied. This threshold is adjusted seasonally to account for changing usage patterns. For example, during the winter period (November 1 - April 30), the Tier threshold for residential customers is 1,000 kWh, allowing for increased power usage at a lower price during the colder months. In contrast, the summer period (May 1 - October 31) has a lower Tier threshold of 600 kWh.
By opting for Tiered Pricing, you can benefit from a more predictable pricing structure, especially if your electricity consumption remains relatively consistent each month. This option may be particularly advantageous if your usage tends to fall within the defined thresholds. However, if your electricity usage varies significantly from month to month, you may find that Time-of-Use rates offer more flexibility in optimizing your costs by shifting usage to lower-demand periods.
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Frequently asked questions
Yes, electricity rates are cheaper on weekends and holidays all day.
The peak hours for electricity rates in Ontario are during the daytime, especially during the morning and afternoon when people are cooking, using electronics, and running heaters or air conditioners.
You can check the website of the Ontario Energy Board (OEB), which is the independent energy regulator in the province. The OEB updates its website every time there are new time-of-use rates for electricity.
