How Much Does Electricity Cost in Ontario?

How much does electricity cost in Ontario? What goes into the price of electricity? And what can we expect for the future? Find the answers to all your questions about the price of electricity in Ontario here.

In Ontario the price of electricity depends on numerous factors in addition to the cost of supply. All Ontario electricity consumers must pay an additional charge of 0.7 cents/kWh in order to pay down the residual stranded debt for the former Ontario Hydro. Electricity consumers in Ontario also pay a monthly variable Global Adjustment (GA) charge, which pays for the difference between the wholesale market price and the rates paid to contracted and regulated generators for Ontario electricity as well as for the cost of conservation programs.

The Different Components of Your Electricity Bill

The electricity bill for a residential Ontario consumer contains several components:

• Electricity Charges: The electricity supply may be priced at different rates if you are on the RPP. Blended into the RPP rates, or charged separately if you are on a retail contract, is the Global Adjustment, which varies monthly.
• Delivery Charges: This includes the costs of both electricity transmission and distribution. Some charges are fixed, and some vary depending on the amount of electricity consumed. These charges include a customer service charge, a distribution charge, and a transmission charge. All charges are approved approved by the OEB.
• Regulatory Charges: This includes charges to cover the cost of the services provided by the Independent Energy System Operator (IESO), administration charges by the Ontario Power Authority (OPA), and some renewable energy-related costs acquired by local utilities. These charges are part of the Wholesale Market Service Charge, which is approved of by the OEB. Also included in regulatory charges is a Standard Supply Service Charge, which covers a portion of the administrative costs for local utilities to supply power to those on the RPP
• Debt Retirement: this is a fixed cost that all Ontario energy users must pay, and contributes towards eliminating the debt that was incurred by the former Ontario Hydro
• Tax: electricity bills are subject to the HST

Did you know?
As electricity travels along a power line, a small amount is lost as heat. To account for these losses, the OEB approves of an adjustment factor in your electricity bill. If you are on the RPP, this adjustment is part of the Delivery line of your bill. If you are on a retail contract, this adjustment is part of the Electricity line of your bill.

Source:Ontario Power Authority

Did you know?
The Ontario Clean Energy Benefit takes 10% off of your electricity bill, if you consume under 3,000 kWh/month of electricity

How Do Electricity Prices in Ontario Compare With Other Provinces?

Click on the cities below to compare monthly electricity bills

Source: Manitoba Hydro, 2014

The cost of electricity varies widely in Canada depending on the provincial energy mix. Provinces that rely primarily on hydropower, such as BC, Manitoba, and Quebec, enjoy much cheaper electricity prices, as most of the costs of investment have been paid off. Ontario electricity prices are relatively high compared to the rest of the country. This is in part due to the Debt Retirement charge and the Global Adjustment.

How Have Electricity Prices Evolved Over Time?

Source: OEB

Electricity prices for Ontario consumers have on the whole been increasing. While some of this is due to inflation, there are several other factors that can help explain this rise, among them:

• Electricity generation costs: Steady demand for power, along with Ontario’s phasing out of coal generation facilities has made more investments in new power generation facilities and in upgrading existing ones necessary. New electricity generation, including new renewable sources that are part of Ontario’s Green Energy Act produce energy that is more expensive than previous rates.
• Charges from utilities: Charges from the local distribution utilities rose throughout the 2000s, in part due to restructuring, and also due to the need to update aging transmission infrastructure.
• Taxes: The introduction of the HST in Ontario in 2010 led to new taxes on electricity and home heating, and an increase in electricity bills.

How Are Electricity Prices Expected to Evolve in the Future?

As the factors contributing to historical electricity price increases are ongoing issues, electricity prices are expected to continue to rise in the near future. In December 2013, the Ontario Long Term Energy Plan estimated that the average household electricity bill would increase from $125 in 2013 to $167 in 2016.

Find out moreLearn more about electricity in Ontario
Learn about regulated rates for electricity