Electricity Pricing Explained

Power factor is the measure of how effectively equipment converts electric current into useful power output, such as light, heat or mechanical motion. Power factor matters because it can cost your business money. A low power factor means your business is drawing significantly more power than it is actually using. This results in additional charges on your electricity bill and increases the amount of energy demanded from the power grid. To improve a low power factor, businesses can install power factor correction capacitators or harmonic filters.

The Hourly Ontario Energy Price is set based on the bids and offers that are settled in the electricity market. This price varies on an hourly basis depending on demand. The price also takes into account factors such as weather, time of day, day of week and economic conditions. Your business has the option of buying electricity through your local utility and paying the Hourly Ontario Energy Price, or paying a fixed rate through an energy retailer licensed by the Ontario Energy Board.

The Global Adjustment covers the cost of building new infrastructure and other forms of supply to ensure enough electricity supply is available over the long-term. The charge accounts for the difference between the market price of electricity and the rates paid to various contracted and regulated generators and other suppliers across Ontario.

This charge provides for the reliable management of the power system and the wholesale electricity market. It is approved by the Ontario Energy Board.

This 0.7¢/kWh charge is set by the Ontario Ministry of Finance and is used to pay down the residual stranded debt of the former Ontario Hydro.

This $0.25 charge per month covers a portion of administrative costs that your utility incurs.

This fixed monthly charge covers administrative costs such as meter reading, billing and customer services.

This is a variable rate that is regulated by the Ontario Energy Board. It reflects the cost of delivering electricity from the transmission system to your business. The charges are used to build and maintain distribution lines, towers and poles.

Transmission rates vary. They are regulated by the Ontario Energy Board and allow the electricity transmission company to recover the costs of operating and maintaining the high-voltage system that carries electricity from generating stations to your local utility.

Transmission rates vary. They are regulated by the Ontario Energy Board and allow the electricity transmission company to recover the costs of operating and maintaining the high-voltage system that carries electricity from generating stations to your local utility.