Time-of-Use - FAQs

Here are some answers to common questions about smart meters and Time-of-Use prices.

What is Time-of-Use Pricing?

Time-of-Use pricing (also known as TOU) is pricing based on the time of day, day of the week, and season of the year that energy is used. Smart meters that measure hourly energy use make this kind of pricing possible. The pricing is determined by the Ontario Energy Board based on how much energy is used and how much energy is available in the province of Ontario at different times.

Why is Ontario moving to Time-of-Use rates for electricity?

Ontario is introducing smart meters and Time-of-Use rates for electricity to encourage residents to reduce their electricity use during peak times and help the environment.

How will Time-of-Use pricing help reduce peak electricity demand?

When we are all using a lot of electricity at the same time, we create "peak demand" periods. Time-of-Use pricing is designed to encourage Ontarians to shift some of their peak demand electricity usage to cheaper mid-peak or off-peak times in order to smooth out peak demand periods.

Supplying electricity at peak times has a range of impacts:

• It adds to our electricity costs because higher demand leads to higher prices.
• It's hard on the environment because meeting the peaks may require the building of additional electricity generation plants.
• It adds to the amount of new generation, transmission and distribution infrastructure Ontario must build; and consumers must pay for.
• It puts a strain on our electricity system.

Shifting usage away from peak times to take advantage of lower rates for electricity will help reduce the strain on Ontario's electricity system and improve the environment.

How Will Time-of-Use Pricing Work?

With Time-of-Use pricing, electricity prices will vary, based on when it is used. That includes time of day, day of week (weekdays versus weekend), and season (winter or summer). This is a significant change from the way prices currently work.

Right now, our electricity rates* are based on averaging out the more expensive (daytime) and cheaper (nighttime) prices of electricity, simply because our older meters can't report when it was used. Time-of-Use pricing will encourage Ontarians to shift some electricity use to off-peak hours.

Time-of-Use pricing better reflects the way the electricity market works. Prices rise and fall over the course of the day and tend to drop overnight and on weekends based on the amount of supply available and our levels of demand.

*The Ontario Energy Board (OEB) sets prices for electricity under the Regulated Price Plan (RPP) . They are based on the electricity supply costs forecast for the year ahead, and any adjustments required due to differences between what was paid and what supplies actually cost over the previous period.

What are the Time-of-Use time periods?

The Ontario Energy Board has established a winter and a summer calendar. See the images below for the calendar currently in effect. Please be aware that Time-of-Use periods and prices change bi-annually (May 1st and November 1st).

Summer (May 1 - October 31) weekdays	The Summer Weekdays The highest energy prices occur over the afternoon, largely due to greater air-conditioning use. That's why the on-peak rate is from 11 a.m. to 5 p.m.
Winter (November 1 - April 30) weekdays	The Winter Weekdays Energy prices peak twice - in the early morning and in the evening - mainly due to space heating, plus increased lighting and appliance use.
Weekends and Statutory Holidays	Weekends and Statutory Holidays Demand and electricity prices are lower on weekends and statutory holidays - as well as overnight - so these periods are all off-peak, both Summer and Winter.

What are considered "Holidays" under Time-of-Use Pricing?

Electricity used on weekends and holidays is billed at the off-peak rate of 5.3¢/kWh. See the Time-of-Use Holiday Pricing calendar for further details.

When will the Time-of-Use prices take effect?

Utilities across Ontario are in the process of installing smart meters and introducing Time-of-Use rates. Milton Hydro and Newmarket-Tay Hydro have already implemented Time-of-Use rates, while Horizon Utilities along with Toronto Hydro and Powerstream will be rolling out these rates to customers starting in 2009.

All of Horizon Utilities customers will be on Time-of-Use rates by the end of 2010.

Customers will receive advance notification when they are about to be migrated to Time-of-Use rates.

How do Time-of-Use prices compare to what I am paying now?

The current regulated price plan rates are:
6.5 cents/kWh for the first 600 kWh per month
7.5 cents/kWh for all remaining energy used per month
If you pay for your electricity under a contract with an energy retailer, your rates will be different.

What if I have a contract with an energy retailer?

if you currently purchase electricity under a contract with a retailer, you will continue to follow the terms and price stated in your contract. If you would like to view your hourly energy consumption being reported via your smart meter, simply access your account on line at: www.horizonutilities.net/HHSCNetWeb/Login. For more information about your energy options, visit the Ontario Energy Board site at: www.oeb.gov.on.ca/OEB/

How will Time-of-Use prices affect my bill?

It all depends on your current consumption patterns and how much electricity you use at different times of the day. To get an idea of how much electricity your household uses within each Time-of-Use time period, simply access your account online at: www.horizonutilities.net/HHSCNetWeb/Login.

Your new electricity bill will also provide you with information about how much electricity you are using during the various peak periods.

Keep in mind that it is important to look at your electricity bills over the longer period. One or two months won't provide the whole picture. You'll likely find that even if you pay a little more during the summer and winter months, you could just as easily save money during the spring and autumn.

One thing to note is that any reduction in total electricity consumption will also lower other charges on your bill. Your regulatory, debt retirement and most of your delivery charges are also determined by how much electricity you use. We would be happy to answer any questions you may have about Time-of-Use rates and your household's energy consumption pattern. Please call our Customer Care Centre during regular business hours at 1-866-458-1236.

What can I do to save money?

Visit the following sections on our website to find out how to reduce your energy consumption and shift to save.

Reducing Energy Consumption to Save
Shift to Save

Will Time-of-Use periods ever change?

The Ontario Energy Board (OEB) is responsible for setting prices and daily and seasonal Time-of-Use periods. These rate are subject to change twice a year on May 1 and November 1.

Why are different communities being switched to Time-of-Use rates months apart?

Each utility decides when it is able to start switching its customers to Time-of-Use rates. This depends on when they think they have enough smart meters installed to offer Time-of-Use rates, and when they have sufficiently tested the meter reading and data systems to ensure accurate customer billing. Ontario 's electricity rates are set by the Ontario Energy Board to be fair to customers using either time of use or the older two-tiered electricity prices.

I don't think these rates will work in my favour. Do I have another option?

Time-of-Use rates will fully replace the two-tiered rate system that Ontario utilities have been using for their residential and small business customers. Electricity retailers may offer other types of pricing plans to consumers. Some customers - particularly businesses, might also want to look into interval or hourly pricing options available through their utility. For more information about your electricity options, please visit the Ontario Energy Board site at: www.oeb.gov.on.ca/OEB/

Why are there different prices and time periods?

At the request of the Minister of Energy, the Ontario Energy Board developed an electricity price plan to provide stable and predictable electricity pricing, which also encourages conservation and ensures the price consumers pay for electricity better reflects the actual cost of producing the electricity they use.

Electricity prices charged per "kilowatt-hour" change throughout the day, like long distance telephone rates used to be, to better reflect the changes in the costs to produce electricity at different times of the day. When total consumption is high, such as a hot summer afternoon, Ontario often has to rely on higher priced sources to produce the same amount of electricity. For example, natural gas generation is generally more expensive to operate than nuclear or hydro generation.

One of the Ontario Energy Board's goals through Time-of-Use pricing is to provide an incentive for consumers to shift some of their consumption away from periods of high total consumption (called "on-peak") to periods of low demand (called "off-peak"). Consumers who do so can save money on their bills.

The different pricing periods ("On-Peak, Mid-Peak and Off-Peak") were set based on how the cost to produce electricity in Ontario varies by the time of day, the week and the season. For example, winter "on-peak" hours include 5pm to 8pm, when consumption levels jump as many people arrive home from work and require electricity to prepare their dinner, watch TV, etc. By contrast, "on-peak" hours in the summer occur in the afternoon (noon - 5 pm) when most air-conditioners are running full-out.

Shifting electricity use will mean the higher cost electricity generators will be needed less. All consumers will benefit from this; even those who find they are less able to change their consumption patterns. Some of those higher cost generators also create more air pollution, so relying on them less can also help benefit the environment. In the longer run, lower peak demand will mean less new generation needs to be built to serve that peak.

How were Time-of-Use prices developed?

The current Time-of-Use pricing was arrived at following a multi-stakeholder working group process and then consultations with the public, consumer groups and industry participants. An independent consultant with expertise on electricity prices was also retained to advise the Ontario Energy Board.

What is the benefit of having Time-of-Use (TOU) pricing?

Currently, consumers have little financial incentive to manage their use of electricity over the day. Smart meter pricing sets a higher price at peak periods when prices are highest in the wholesale market. This gives consumers an incentive to reduce or shift their use to periods of lower demand (e.g. weekends or later in the evening) and away from times when electricity is most expensive.

Consumers will not be able to shift all of their electricity use away from peak demand periods, but the more they are able to do so, the more they can manage their costs and contribute to lower overall peak electricity prices for everyone.

Won't the increased demand in the off-peak period turn it into a peak period?

This has not happened in other jurisdictions where time of use pricing is in place and we don't expect this to happen in Ontario. If consumers shift more of their use of electricity to periods when demand is lower, that can eventually reduce the prices during peak periods.

Will the Ontario Energy Board (OEB) take into account special consumer circumstances?

The OEB is aware there are circumstances where some consumers may find it difficult to shift their consumption patterns. Since provincial legislation requires that consumers pay the true cost of the electricity they consume, the OEB designed Time-of-Use electricity prices that are realistic for the majority of consumers while meeting government requirements.

What can consumers do?

Examples of some changes consumers can make include turning on the dishwasher at 9pm on a weekday before going to bed instead of right after dinner as most of us tend to do, or doing more laundry (especially hot water washes) on weekends when the lowest (off-peak) price applies all day (24 hours).

Are there other options for consumers who do not want to pay Time-of-Use prices?

Consumers have the option to switch to an electricity retailer. Most of these types of contracts, which are not regulated by the Ontario Energy Board (OEB), currently offer consumers a fixed electricity price that stays the same all day. If you decide to consider this option, click the link below for suggested questions to ask before signing such a contract. One question to ask is whether the contract price stays the same all day and all week.

Your options for buying electricity

Note: If you currently purchase electricity under a contract with a retailer, you will continue to follow the terms and price stated in your contract.