Friday, April 8, 2016

How High Will May 1st 2016 Residential Electricity Hikes Be in Ontario?

Electricity prices in Ontario (not the delivery portion) are set twice per year, on May 1st and November 1st. Prices have increased rapidly the past couple of years, far beyond the rate of inflation in the province. It is already well into April, but price changes have not been announced yet.

What can we expect? On November 1st last year, Ontario electricity peak prices rose 8.7% and the year on year increase was 25%. Year over year off peak prices were less but still considerably over inflation. My guess would be to expect more significant increases in the summer day time peak periods versus off peak. With more and more wind production coming on line that is more likely to produce at night, the province would prefer to shift demand to off peak periods and continuing to crank peak rates would help somewhat with that. I'll guess another 10%. Industrial consumers are now more insulated from price increases, so the difference has to be made up from residential customers.

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