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Who We Are The Power System Demand & Price Conservation Electricity Pricing in Ontario

FREQUENTLY ASKED QUESTIONS

Are electricity prices changing for residential consumers?

As of May 1, the price of electricity for residential and other low-volume consumers is 8.3 cents per kilowatt hour (¢/kWh) for the first 1,000 kWh they use each month, and 9.7¢/kWh for electricity used over this amount in a month. The Ontario Energy Board (OEB), which regulates electricity prices for these consumers, have also set the rates for time-of-use smart meter customers as follows, On-Peak: 12.9 ¢/kWh, Mid-Peak: 10.9 ¢/kWh, and Off-Peak: 7.2 ¢/kWh. The Electricity Pricing page offers more information on the pricing structure for low-volume users.

Who pays the wholesale price for electricity?

Large volume users of electricity (those who consume more than 250,000 kWh a year) pay the wholesale price of electricity. These are industrial facilities, large retail operations such as supermarkets or department stores and other medium- and large-sized businesses. These consumers account for just under half of all electricity used in the province.

What's being done to ensure that there is enough electricity over the next decade?

The Ontario government is restructuring Ontario's electricity sector to ensure adequate supplies of electricity as well as stable prices. Under the Electricity Restructuring Act, 2004, a new wholesale pricing structure has been established that incorporates both regulated and market prices. In addition, the Ontario Power Authority has been created to oversee long-term supply adequacy and the development of a Conservation Culture in Ontario.

How does the IESO ensure that there is enough electricity to meet demand?

Managing the power system is a 24-hour-a-day, 7-day-a-week responsibility. On a continual basis, the IESO forecasts how much power is needed throughout the province and takes in offers from generators and other suppliers to meet that demand. See How the Wholesale Price is Determined for more information about how the IESO balances supply and demand.

Over the long term, the IESO issues assessments of the reliability of the system and the adequacy of the existing and planned transmission and generation facilities to meet growing demand. The quarterly Power Outlooks provide three-month overviews of power demand and system reliability. The Ontario Reliability Outlook reports on the progress of interrelated generation, transmission and demand-management projects underway to meet future reliability requirements.

Why is what time I use electricity just as important as how much I use?

Moving non-essential electricity consumption to lower-demand periods, (late in the evening and all day during the weekend) helps reduce consumption in high-demand periods that can stretch the system and raise the wholesale price of electricity. Typically, demand peaks in the early evening as people arrive home and start using appliances. As a result, the power system needs to be able to provide enough energy to meet that demand. Soon, homeowners will be able to take advantage of lower off-peak prices with the introduction of smart meters that track when electricity is used, in all Ontario homes by the end of 2010.

Having facilities that stand ready to meet peak demand and only operate infrequently is expensive. By smoothing out the peaks in demand, we can reduce the need for additional power generation facilities, which will make the system less expensive to operate and benefit the environment.

How do time-of-use prices compare to wholesale rates?

Time-of-use prices are set to reflect the trends in wholesale rates by looking at what hourly prices have been over the previous six months, as well as a forecast of future prices over the next year. Time-of-use prices are designed to provide the benefits of variable rates while avoiding the volatility that is seen with the hourly wholesale prices. You can see the changes in average monthly and yearly wholesale prices since 2002. Note that the prices posted here do not include adjustments such as the Global Adjustment that are incorporated in the time-of-use prices.

How do I track the electricity demand?

The IESO website offers a wealth of information about daily demand and price information. The Demand and Price page provides hourly updates on demand in Ontario and the current price for electricity. You can also view historical data for the previous month on the Monthly Market Update page, which shows demand and generator capacity as well as what types of fuel was used to produce that energy.

Why does the IESO issue public appeals to conserve energy?

There can be times when demand for electricity has the potential to exceed available supplies. This usually happens on extremely hot or cold days. The IESO will ask the public to reduce unnecessary use of electricity in order to protect the reliability of the system. When a public appeal is in effect, a notice will be clearly posted on this website and distributed to the news media.

 

RELATED INFORMATION

Your local utility can answer questions about your bill and can provide many energy efficiency ideas.

If you would like to know more about the changes taking place in the electricity sector and how it affects you, contact the Ministry of Energy at 1-888-668-4636

The Ontario Energy Board regulates Ontario's electricity sector. Its Customer Information Centre can be reached by phone at 1-877-632-2727 (toll-free)
or 416-314-2455

IESO Customer Relations is also available to provide more information about the market.
Toll Free 1-888-448-7777
Tel: 905-403-6900
Fax: 905-403-6921
E-mail: customer.relations@ieso.ca