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Starting June 1, 2020, electricity prices are changing for residential and small business customers as well as farms on TOU pricing under the Ontario Energy Board’s (OEB) Regulated Price Plan (RPP). The same fixed price of 12.8 ¢/kWh applies to all of the electricity that they use, no matter the time of day or the day of the week.
The new price was set by the government and applies automatically – no customer action is required. It will appear on the Electricity line of customers’ bills and is only for the electricity they use. It does not include other charges like delivery. The government announced that this pricing will be in effect until October 31, 2020.
For many customers, the first bill after June 1, 2020, will have six line items – three line items at the emergency off-peak price of 10.1 ¢/kWh in effect until the end of the day on May 31, 2020, and three line items at the fixed price of 12.8 ¢/kWh for electricity consumed starting June 1, 2020.
The new price of 12.8 ¢/kWh was announced by the government on May 30, 2020. The price is equivalent to the average cost to supply RPP customers with the electricity they are expected to use, as forecast by the OEB when it set RPP prices on November 1, 2019. This means that the new price would be expected to recover that cost of supply over the 12-month period from November 2019 to October 2020 if all of the forecast assumptions from November 1, 2019 remain the same.
The OEB expects to reset RPP prices for November 1, 2020. The OEB will do a new forecast of the cost to supply electricity to RPP customers for the November 1, 2020 to October 31, 2021 period, and will base the new RPP prices on that new forecast. Those RPP prices will also include an adjustment to account for any difference between prior prices and the actual cost of electricity supply over the previous 12 months. Under the RPP, prices are set so that, over time, RPP customers pay the actual cost of the power they use.
The new price does not apply to RPP customers that pay tiered prices. The prices tiered customers have been paying since November 1, 2019 remain in effect. Those prices are 11.9 ¢/kWh for the lower tier price and 13.9 ¢/kWh for the higher tier price.
Under tiered pricing, the price does not change depending on the time when the customer uses electricity; instead, it changes depending on how much power the customer uses in a month. As announced on April 14, 2020, the OEB is keeping the winter tier threshold of 1,000 kWh in place in the summer period for residential customers, giving them an additional 400 kWh per month at the lower price.
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