Ontario Changing Electricity Rates for Residential, Farm and Small Business Consumers

Today, the Government of Ontario announced changes to electricity rates paid by approximately five million Regulated Price Plan (RPP) customers previous being billed on time-of-use (TOU) prices. Since an emergency order was issued March 24th, TOU pricing has been suspended with RPP customers paying only the off-peak rate of 10.1 cents/kWh during all hours of the week. The province has indicated that while TOU pricing will remain suspended, this emergency pricing framework is being replaced with a new COVID-19 Recovery Rate of 12.8 cents/kWh effective during all hours from June 1st – October 31st.

The COVID-19 Recovery Rate is based on the average cost of electricity, set by the Ontario Energy Board (OEB) and will allow RPP customers to avoid any adverse impacts of peak TOU rates as a result of spending more time at home. Likewise, doing so in a way that does not necessitate the degree of tax-based subsidization required under the terms of the emergency order – totalling approximately $175 million (net) since March 24th.

Sussex continues to monitor pandemic-related impacts and changes to Ontario’s electricity sector, including those affecting commercial and industrial consumers who are also currently operating under a time-limited emergency order capping and deferring a portion of their Global Adjustment (GA) costs until the end of June.

Please do not hesitate to reach out to a member of the Energy and Environment Practice should you have any questions about this announcement or other policies under consideration.