OTHER ELECTRICITY CHARGES

The cost of electricity is just one component of the electricity bill. There are other charges on your electricity bill that reflect the cost of delivering the electricity, ensuring reliability of the power system and managing your account.

A new simplified electricity bill now provides greater clarity and consistency as well as more energy consumption information to help consumers better manage their bills. The simplified bill contains four different charges:

Electricity: This charge is for the electricity you use, which you buy either from your local utility or through an electricity retailer licensed by the Ontario Energy Board.

Delivery: This covers the cost of delivering electricity from generating stations to your utility along the high-voltage transmission system and then along your utility’s distribution system to homes and businesses. These rates are set by the Ontario Energy Board.

Regulatory: These rates are also approved by the OEB and are currently set at a rate of 0.62˘/kWh. They include the Wholesale Market Services Charge that covers the cost of services required to operate the electricity system and run the wholesale market. These costs include:

• Physical Limitations and Losses
  These are losses that occur as electricity flows across transmission lines. The IESO also collects other costs incurred in operating the power grid, such as when it must take actions to avoid overloads on the transmission system in cases of surges in demand.
• Energy Reliability
  There may be occasions when the balance between generation and demand is affected by an unanticipated event, such as equipment failure or a surge in consumption. The IESO purchases a certain level of spare capacity or reserve that is available on short notice to restore the balance.
• IESO Administration Service
  The IESO charges administrative costs to manage the power system and operate the wholesale electricity market in Ontario. The rate is less than one-tenth of a cent per kilowatt-hour.
  
  

  In addition, there is a Standard Supply Service Charge to cover administrative costs incurred by your utility in providing electricity to customers who buy their electricity from the utility, instead of a licensed electricity retailer. The Rural or Remote Electricity Rate Protection charge is also included and is used to partly offset the higher cost of providing electricity in rural and remote areas of the province. The Rural and Remote Electricity Rate charge of 0.12˘/kWh is in effect as of Jan. 1, 2013.

Debt Retirement Charge: This charge of 0.7 cents per kWh has been set by the Ontario Ministry of Finance to pay down the residual stranded debt of the former Ontario Hydro.

A sample of the electricity bill is available from the Ontario Ministry of Energy.

Detailed explanations of the electricity terms contained in the bill are available from the Ontario Energy Board.