June 1, 2020
The Government of Ontario has introduced a COVID-19 Recovery Rate of 12.8¢/kWh for all time-of-use (TOU) electricity customers. Households, farms and small businesses who pay time-of-use electricity rates will be charged this fixed rate 24 hours a day, seven days a week, starting June 1, 2020. This rate will be automatically reflected on TOU customers’ electricity bills for all three TOU periods, 24 hours a day, seven days a week, and is intended to be in place until October 31, 2020.
Question & Answers:
Q1. What is being done to support households and businesses with increased electricity usage during this COVID-19 outbreak?
The government of Ontario has extended emergency rate relief for time-of-use electricity customers until May 31, 2020. Households, farms and small businesses paying TOU electricity rates will continue to be charged the lowest price, known as the off-peak electricity rate, 24 hours a day, 7 days a week until May 31, 2020. Starting June 1, 2020, the government of Ontario has introduced a “COVID-19 Recovery Rate” of 12.8¢/kWh for TOU Regulated Price Plan (RPP) customers to provide stability and predictability for families, small businesses and farms. This rate is equal to the forecasted average RPP supply cost, calculated November 1, 2019. This rate, subject to approvals, is intended to be in effect until October 31, 2020.
Q2. How will the off-peak rate appear on bills?
The off-peak rate of 10.1¢/kWh will automatically be applied to TOU ratepayers and will be shown on customer bills as the rate for all three TOU periods. Customers who pay time of-use electricity rates will continue to be billed the off-peak electricity rate. The intention is to provide the off-peak rate until May 31, 2020.
Q3. Would the new COVID-19 Recovery Rate be automatically applied to customer bills?
Yes, the fixed ‘COVID-19 Recovery Rate’ of 12.8¢/kWh will automatically be applied to all customers who pay time-of-use (TOU) rates starting June 1, 2020. It is intended that this rate will continue to be in effect until October 31, 2020.
Q4. Will the COVID-19 Recovery Rate have an impact on customer bills?
Historical consumption patterns suggest that the monthly summer bills of most residential and small business customers charged at the COVID-19 Recovery Rate would on average be expected to be within +/- 2 percent of the bill they would have received if they were charged the TOU prices by the Ontario Energy Board on November 1, 2019. The bill impact for individual customers as a result of the adoption of the COVID-19 Recovery Rate will depend on how much electricity they use and the extent to which their consumption pattern is different from what it has been in the past.
Illustrative Bill Comparison Examples:
• Compared to regular time-of-use rates, the average consumer (700kWh monthly consumption, 64% off-peak, 18% mid-peak, 18% off-peak) would not see a bill change when charged the COVID-19 Recovery Rate of 12.8 cents/kWh.
• Compared to regular time-of-use rates, a consumer who uses 700kWh a month but has an atypical consumption pattern (45% off-peak, 25% midpeak, 30% on-peak) would see a bill decrease of approximately $9.47 when charged the COVID-19 Recovery Rate of 12.8 cents/kWh.
• Compared to regular time-of-use rates, a consumer who uses 700kWh a month with a consumption pattern of 55% off-peak, 20% mid-peak, 25% onpeak would see a bill decrease of approximately $4.99 when charged the COVID-19 Recovery Rate of 12.8 cents/kWh.
• Compared to the current off-peak price of 10.1 cents/kWh, the average customer (700kWh monthly consumption) would see a bill increase of approximately $16.13 when they are moved to the COVID-19 Recovery Rate of 12.8 cents/kWh.
Q5. How will this change affect RPP customers who don’t pay TOU rates?
Tiered customers will not be affected by the new fixed price. The initial rate reduction was targeted to TOU ratepayers, as those were the customers that would see the greatest increase in cost due to being home during the day. There are approximately 5 million residential consumers, farms and some small businesses who are on TOU electricity prices under the RPP.
The remainder of RPP customers either pay tiered prices or have opted out of the RPP to sign a contract with an electricity retailer or to pay market-based pricing. At the present time, RPP customers who pay tiered rates make up less than 5% of RPP consumers.