Understanding your electricity cost per dollar, Ontario

51¢ is the electricity price for each dollar you pay

Because your electricity dollar covers many charges, this is why it is important to understand what you are paying. Here is an approximate breakdown base on a typical residential electricity bill.

Every $1 dollar spend on electricity

Delivery charges from your hydro/electricity provider is 18¢

The 18 ¢ pays for the delivery of electricity through your local hydro/electricity supplier network of lines, poles and other equipment to your home or business. It also covers the administration and billing services as well as the maintenance and upgrades that allow your local hydro/electricity supplier to keep pace with customer demand and ensure a safe and reliable supply of electricity.

While some of these electricity prices are fixed and don’t change from month to month and others will depend on how much electricity you use.

Electricity price is 51¢

This is the cost of the electricity itself. The electricity you use in each of the three Time-O-Use (TOU) rate periods (on-peak, mid-peak, and off-peak) is multiplied by an adjustment factor for power that is lost through wires and equipment before it gets to your home or business.

You local hydro/electricity provider collects this amount, without markup, and pays it directly to the Independent Electricity System Operator (IESO). (If you buy electricity through an energy retailer at fixed rate, you are charged the price noted in your contract.)

Transmission price is11¢

This 11¢ pays for moving electricity at high voltages over long distances from the generating stations through the provincial grid across Ontario to local transformer stations where it is loaded on to your local hydro/electricity providers distribution system. Charges for transmission are collected, without markup, and passed on to the Independent Electricity System Operator (IESO).

Debt retirement price is 7¢

This 7¢ is collected to pay down the stranded debt of the former Ontario Hydro administered by the Ontario Electricity Financial Corporation.

For full information on this charge, visit www.oefc.on.ca/debtmanage.html

HST 13¢

Effective July 1, 2010, a 13 per cent Harmonized Sales Tax (HST) replaces the 5 percent GST in Ontario. HST is charged on all electricity consumed after June 30, 2010.

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Author: Electricity Companies


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One thought on “Understanding your electricity cost per dollar, Ontario

  1. You said "(If you buy electricity through an energy retailer at fixed rate, you are charged the price noted in your contract.)"

    But you neglected to mention the "Provincial Benefit" charge. he Provincial Benefit is charged to all energy customers. It was implemented by the government in 2005 as a way of paying for new generation in the province, including renewable generation under the Green Energy Act. All residential and commercial electricity consumers in the province pay this charge whether they are with the local electricity utility (on a Regulated Price Plan) or have made the choice to sign a contract with a retailer. When the Ontario Government forces retail customers to pay the Provincial Benefit, they are effectively asking retail customers to pay for this generation twice. The government is placing an unfair burden on customers who have chosen stability in their energy prices.

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