Ontario Electricity Rates Rocket Higher in May

Electricity costs increased another 4% on May 1, 2016. The government blames the latest increase on the recent mild winter which resulted in lower electricity consumption. After raising hydro rates every year for the past 8 years, resulting in a cumulative increase of 140%, the fact that they even feel the need to offer an excuse for this particular rate increase is laughable.

To add insult to injury, previous increases tended to be most concentrated within the on-peak and mid-peak periods. This allowed the government to claim that consumers could help compensate by shifting their consumption to off-peak hours. With the latest rate hikes, the highest percentage of increases went toward off-peak rates, which increased 4.82%, while mid-peak and on-peak rates climbed 3.12% and 2.86%, respectively.

Adjusting rates every 6-months helps to obfuscate the annualized increases so we used the Ontario Energy Board’s latest data to calculate annual increases effective May 1 for each of the past 9 years. According to the OEB, the average consumer uses 750 kWh per month with 1/3 of their consumption during off-peak hours and the remaining consumption split between mid-peak and on-peak hours. Note that this chart just shows the electricty portion of the bill. Generally, this is only about 56% of your total bill which also includes distribution, transmission, regulatory fees, etc.