What is the cost of electricity in Ontario?
Attached on the following two pages is a document from Hydro One called “A closer look at how
your bill is calculated”. This is a closer look at the cost of that electricity.
The attached table is taken from the example given. They state that the metered amount of
electricity is 1000 kWh. When you take the total bill and divide by the number of metered kW
then the amount paid per kW is 14.58 cents. The chart on the right shows a breakdown of the
charges on a pie chart. Please note the 1000 kWh is the actual mount of kW used. The adjusted
amount (1092 kWh) is how much they bill you by estimating the amount of line loss getting to
you house and adding that loss to you bill.
This would be like Petro-Canada saying the price of gas is only 58 cents per liter, but when you
buy it at the pump you pay $1.02 a liter because of the extra charges and gas spills that occurred
getting it to you.
Charges
600 KWh @ 5.8
Cents
492 @ 6.7 Cents
Delivery
Regulatory
Charges
Debt Retirement
GST
$34.80
$32.96
$54.46
$7.02
$7.00
$9.54
600 Kwh @ 5.8
Cents
492 @ 6.7
Cents
Delivery
Reguatory
Charges
Debt Retirement
Total
Metered Usage
kWh’s
Cost per kWh
kW
$145.78
1000
$0.1458
GST
A closer look at how
your bill is calculated
Electricity used this billing
period
This section shows your meter number and the dates
we read your meter. It also tells whether your bill is
based on an actual or an estimated meter reading.
Metered usage in kilowatt-hours – This is the amount of
electricity you used in kilowatt-hours (kWh). It is calculated by taking the difference in meter readings and
multiplied, if applicable, by the multiplier indicated
on your meter.
Adjusted usage in kilowatt-hours – This is the amount
of electricity you used in kWh adjusted to cover the
line losses in the electricity system that are not measured by your meter. When electricity is transmitted
over long distances and passes through wires and transformers, it’s normal for a small amount of power to
be used or lost as heat. For example, if we deliver
1,000 kWh to you, we must purchase a small amount
more than what you use. To determine the amount of
electricity we need to buy for you, we use a calculation
called an “adjustment factor.”
The adjustment factor used in the sample bill is 1.092,
but it will vary according to your service type. Adjusted
usage in kilowatt-hours is used to calculate the
Electricity, , Delivery and Regulatory charges
on your bill.
How do we arrive at the adjustment factor?
We calculate the adjustment factor by comparing the
total amount of electricity we buy on behalf of all our
customers to the amount of electricity we deliver to
their homes and businesses. Once we compare how
much electricity we purchased to the amount of electricity used by customers, we can arrive at how much
electricity was lost during delivery. Adjustment factors
are reviewed and approved by the Ontario Energy
Board (OEB).
Electricity
This is the cost of the electricity supplied to you during this billing period. These prices are set by the
OEB and may change every six months. For residential and most farm customers the price threshold – the
amount of electricity that is charged at the lower price
– will change twice a year. During the summer season
(May 1st – October 31st) the threshold is 600 kWh
per month and 1,000 kWh per month during the
winter season (November 1st – April 30th). For nonresidential customers the threshold is 750 kWh per
month throughout the year.
For customers paying either the wholesale market
price for electricity or are enrolled with a Retailer,
your electricity charges will also appear here.
It is calculated based on your Adjusted usage in kilowatt-hours (amount of electricity we purchased on
your behalf after adjustment for line losses).
Delivery
These are the costs of delivering electricity from generating stations across the province to Hydro One and
then to your home or business. This includes the costs
to build and maintain the transmission and distribution lines, towers and poles, and operate provincial
and local electricity systems. It also includes calculating your charges, meter reading and 24-hour emergency power restoration service.
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A portion of these charges is fixed and does not
change from month to month. The rest of the charges
fluctuate depending on the amount of electricity you
use. The OEB sets delivery rates.
Delivery rates are set according to your service type.
The breakdown of delivery charges is:
• Distribution service charge ($/month)
• Distribution volume charge (Metered usage –
¢/kWh or $/kW)
• Transmission Connection Charge (Adjusted usage
– ¢/kWh or $/kW)
• Transmission Network Charge (Adjusted usage –
¢/kWh or $/kW)
Regulatory charges
The breakdown of Regulatory charges is:
• Standard supply service administration charge
($/month)*
• Rural rate protection charge (Adjusted usage –
¢/kWh)
• Wholesale market service rate (Adjusted usage –
¢/kWh)
Debt Retirement Charge
This charge is used to pay down the debt of the former Ontario Hydro and is managed by the Ontario
Electricity Finance Corporation (OEFC). It is calculated based on the amount of your Metered usage in
kilowatt-hours, and varies from one bill to the next.
Got Questions...
Hydro One Networks
• about your bill
www.HydroOneNetworks.com
1-888-664-9376
Ontario Energy Board (OEB)
• about OEB approved rates
• about consumer protection and complaints
www.oeb.gov.on.ca
1-877-632-2727
These charges include the cost of services required to
operate the electricity system and run the wholesale
market. The majority of these charges fluctuate
depending on the amount of your Adjusted usage in
kilowatt-hours (amount of electricity we purchased on
your behalf after adjustment for line losses). The OEB
regulates these charges.
* If you’ve enrolled with a retailer, the standard supply service
administration charge does not apply.
Bringing Power to the People of Ontario™