TORONTO, April 19, 2012 /CNW/ - Today the Ontario Energy Board released Regulated Price Plan (RPP) electricity commodity prices that take effect May 1, 2012.
RPP prices are reviewed twice each year and appear on the "Electricity" line of residential and small business consumer bills. The price changes only apply to RPP-eligible consumers who buy electricity directly from their local utility.
Time-of-use (TOU) prices are changing as follows:
| On-peak (from 11 a.m. to 5 p.m. weekdays) | = 11.7 ¢/kWh (up 0.9 cents) | ||
| Mid-peak (from 7 a.m. to 11 a.m. and 5 p.m. to 7 p.m. weekdays) | = 10.0 ¢/kWh (up 0.8 cents) | ||
| Off-peak (from 7 p.m. to 7 a.m. weekdays and all day on weekends and holidays) | = 6.5 ¢/kWh (up 0.3 cents) | ||
The price change for consumers on TOU pricing is an increase of approximately $3.99 on the "Electricity" line, or about 3.3% on the total monthly bill, for a residential consumer with a typical consumption pattern who uses 800 kWh per month.
Residential consumers typically consume about 64% of their electricity during off-peak hours, and about 18% in each of mid-peak and on-peak hours.
As of February 29, 2012, there were about 3.9 million (81%) residential and small business customers on TOU billing. The remaining customers are expected to be switched to TOU from tiered prices by mid 2012.
Consumers who are not yet paying TOU prices pay tiered prices, which are changing as follows:
For consumption up to the tier threshold (Tier 1 prices): 7.5 ¢/kWh (up 0.4 cents)
For consumption above the tier threshold (Tier 2 prices): 8.8 ¢/kWh (up 0.5 cents)
On May 1, the threshold below which the lower Tier 1 price applies will change from 1,000 kWh to 600 kWh per month for residential consumers. For non-residential consumers, the threshold stays at 750 kWh throughout the year.
The price change for consumers paying tiered prices is an increase of approximately $5.80 on the "Electricity" line, or about 5.1% on the total monthly bill, for a consumer using 800 kWh per month.
Prices are changing principally because the forecast supply cost is changing. As coal generation continues to decline, it is being replaced with natural gas, nuclear and renewable generation. This includes refurbished units at the Bruce Nuclear Generating Station along with more wind and solar generation.
Overall bill increases during the past year remain within the province's Long-Term Energy Plan cost projections.
RPP prices are based on a 12-month forecast. They are designed to provide stable and predictable electricity pricing and to ensure the price residential and small business consumers pay recovers the payments made to generators that supply the electricity they consume.
The Ontario Energy Board regulates the province's electricity and natural gas sectors in the public interest. It envisions a viable and efficient energy sector with informed consumers served by responsive regulatory processes that are effective, fair and transparent.
For more information, please refer to the attached backgrounder, visit the OEB website at www.ontarioenergyboard.ca or contact our Consumer Relations Centre at 416-314-2455 or toll-free at 1-877-632-2727.
Backgrounder
April 19, 2012
| About the RPP | Prices set under the Ontario Energy Board's (OEB) Regulated Price Plan (RPP) apply to residential and small business consumers who do not have a contract with an electricity retailer. Both time-of-use (TOU) and tiered RPP prices are set to recover the total cost of supply, regardless of which of these prices (tiered or TOU) distributors use to bill their RPP consumers. RPP prices are reviewed twice per year and are adjusted as required on May 1 and November 1. They make up about half the total bill and are shown on the "Electricity" line of bills. |
| TOU pricing | Time-of-use pricing is designed to encourage consumers to shift electricity use from high price periods (on-peak) to lower price periods (mid-peak and off-peak). TOU pricing better reflects the cost of electricity supply. Prices in the market rise and fall during the day based on demand and the type of supply available. When demand is lower, less expensive sources of electricity are used. When demand rises, more expensive forms of electricity production are called upon. TOU prices take into account when, as well as how much electricity a consumer uses, as recorded by the consumer's smart meter. Consumers who are not already paying TOU prices should check with their utility for information on when TOU pricing will start. |
| Winter & Summer TOU | View the graphic online: http://www.ontarioenergyboard.ca/OEB/_Documents/For+Consumers/TOU_prices_Summer.pdf The TOU price periods change from summer to winter to better reflect seasonal consumption patterns. As such, in the winter season (November 1 - April 30) there are two peak periods, from 7 a.m. to 11 a.m. and from 5 p.m. to 7 p.m. weekdays, while there is only one in the summer (May 1 - October 31), from 11 a.m. to 5 p.m. weekdays. |
| Bill impact | The price change for consumers on TOU pricing is an increase of approximately $3.99 on the "Electricity" line, or about 3.3% on the total monthly bill, for a residential consumer with a typical consumption pattern who uses 800 kWh per month. The price change for consumers paying tiered prices is an increase of approximately $5.80 on the "Electricity" line, or about 5.1% on the total monthly bill, for a consumer using 800 kWh per month. Residential consumers typically consume about 64% of their electricity during off-peak hours, and about 18% in each of mid-peak and on-peak hours. Overall bill increases during the past year remain within the province's Long-Term Energy Plan cost projections. |
| Why bill impacts differ (TOU vs. tiered) | In the summer season (May 1 - Oct. 31), for residential consumers on tiered prices the lower price applies to the first 600 kWh of electricity used in a month (as opposed to the 1,000 kWh threshold that applies in the winter season). The bill impact of the May 1 price change is generally greater for consumers on tiered prices compared to those on TOU prices due to the change in the threshold. The opposite is generally true when prices change in November each year. If the seasonal threshold remained at the 1,000 kWh winter level rather than decreasing to 600 kWh, the price change for consumers paying tiered prices would have been approximately $3.20 per month, or about 2.8% of the total monthly bill. |
| What's affecting prices | Prices are changing principally because the forecast supply cost is changing. As coal generation continues to decline, it is being replaced with natural gas, nuclear and renewable generation. This includes refurbished units at the Bruce Nuclear Generating Station along with more wind and solar generation. |
| Forecasting electricity supply costs and prices | To calculate RPP prices, the OEB forecasts the cost to supply electricity to residential and small business consumers for the next 12 months. These forecasts, which assume normal weather conditions, include factors such as:
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| For more information | RPP prices are one portion of total electricity bills and do not include other charges like delivery. For more information, visit the Your Utility section of the OEB's consumer website at www.ontarioenergyboard.ca. |
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Media Inquiries
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Ontario Energy Board
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Or 1-877-632-2727
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