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.

When Will the Electricity Price Increases For November 2015 Be Announced For Ontario?

Electricity prices are change May 1st and November 1st in Ontario. In theory they could go down, but obviously lately they have gone up quite rapidly. It is now October 11, so we are getting close to the point that the increases should be announced.

For the last increase, I found a CBC article dated April 20th, so likely around October 20th. Conveniently for the federal Liberals, that's after the October 19th federal poll. sdfds

This blog post of mine describes the Ontario electricity price increases in May 2015:

"For on peak pricing, the price per kWh is increasing on May 1st from 14 cents to 16.1 cents, a 2.1 cent increase or 15%. The on peak increase on November 1st was from 13.5 cents to 14 cents, a 3.7 increase. Thus the year over year increase, from 13.5 cents to 16.1 cents, is 2.6 cents or a 19.2% increase which is obviously significantly more than Ontario's inflation rate.

For mid-peak, prices will increase on May 1st from 11.4 cents to 12.2 cents, a 0.8 cents increase or 7%. On November 1st, the price increase from 11.2 cents to 11.4 cents, only a 1.8 percent increase. Year on year the increase was 1 cent or an 8.9% increase, again significantly above Ontario's inflation rate.

Finally for off-peak, the increase on May 1st is 0.3 cents, from 7.7 cents to 8 cents, a 3.9% increase. On November 1st, the price increased from 7.5 cents  to 7.7 cents, a 0.2 cent increase or a 2.7% increase. Year over year the increase was 0.5 cents from 7.5 to 8 cents, a 6.7% increase, which is well above Ontario's inflation but nowhere near the massive increase in on peak pricing."

What can we expect for this November? Perhaps 3.5 to 4% overall, with different increases for the different periods. With wind production up and peaking overnight, keeping off-peak rates low relative to peak pricing makes a lot of sense. 
 

Why Doesn't the Media Report the Year on Year Ontario Hydro Increases? On Peak Electricity Pricing Up 19.2% Year on Year

With news that the electricity price increases coming May 1st for Ontario will be particularly high, I'm wondering why the media never reports the year over year increases. Ontario power prices are raised every May 1st and every November first, but the media usually only reports on the six month increase and doesn't bother looking at the yearly increase, which would be useful for comparing to Ontario's inflation rate.

This CBC article has the price increases coming May 1st and this Toronto Star article has the increases that happened on November 1st 2014.

For on peak pricing, the price per kWh is increasing on May 1st from 14 cents to 16.1 cents, a 2.1 cent increase or 15%. The on peak increase on November 1st was from 13.5 cents to 14 cents, a 3.7 increase. Thus the year over year increase, from 13.5 cents to 16.1 cents, is 2.6 cents or a 19.2% increase which is obviously significantly more than Ontario's inflation rate.

For mid-peak, prices will increase on May 1st from 11.4 cents to 12.2 cents, a 0.8 cents increase or 7%. On November 1st, the price increase from 11.2 cents to 11.4 cents, only a 1.8 percent increase. Year on year the increase was 1 cent or an 8.9% increase, again significantly above Ontario's inflation rate.

Finally for off-peak, the increase on May 1st is 0.3 cents, from 7.7 cents to 8 cents, a 3.9% increase. On November 1st, the price increased from 7.5 cents  to 7.7 cents, a 0.2 cent increase or a 2.7% increase. Year over year the increase was 0.5 cents from 7.5 to 8 cents, a 6.7% increase, which is well above Ontario's inflation but nowhere near the massive increase in on peak pricing.

The Ontario Liberals have crafted an electricity policy where prices have skyrocketed, despite relatively low natural gas prices and neighbouring states and provinces having seen no such crazy price increases. Starting in January, the 10% Ontario Clean Energy benefit will end, which will give an even bigger boost to electricity prices in Ontario. Unfortunately the media hasn't done a very good job of putting these prices in context.

For another post I'll look at the price increases over two years.

Ontario Electricity Prices Going Up Yet Again May 1st 2015, Peak Rates Rise A Whopping 15%

Ontario sets electricity prices every April and October with the changes beginning May 1st and November 1st. Obviously prices have been steadily increasing and the change for May 1st is no exception.

Summer weekday peak rates (from 11 am to 5 pm) rise from 14 cents per kWh to 16.1 cents per kWh, a 2.1 cent increase. That's a 15 percent increase, which obviously is quite massive, considering that prices are changed twice per year and they already went up in November 2014. Plus we found out the province is dropping the Green Energy Benefit that cut electricity rates by 10% next year although to be fair they are also getting rid of the smaller debt reduction charge.

Summer weekday mid-peak rates (from 7 am to 11 am and 5 pm to 7 pm) rise from 11.4 cents per kWh to 12.2 cents per kWh, a 0.8 cent increase and a 7% increase.

Summer off peak rates (from 7 pm to 7 am and weekends and holidays) rise from 7.8 cents per kWh to 8.1 cents per kWh, a 0.3 cent increase and a 3.85% increase.

Obviously the big change here is the on-peak increase which is far beyond inflation. Clearly they want people to shift to using electricity during off-peak hours, considering the on-peak price is roughly double the off-peak price. My guess is that this has to do with significant numbers of wind turbines coming on line this year which Ontario is pretty much contractually obliged to buy at relatively high prices. Wind blows the most during the middle of the night when demand is low so there's a mismatch and shifting some demand to the night would help. Plus obviously demand is at peak during the middle of the day when no wind is blowing (although solar production is highest during the middle of the day).

There's some other strange feedback effects going on too. Ontario has been producing too much power of late (see Scott Luft's blog for numerous posts) and ends up exporting it at a loss. Electricity prices going up means people will use less, which means there is more of a surplus which is sold at a loss resulting in a vicious circle.

All in all, Ontario's electricity prices have been rising at a ridiculous rate for years now compared to all our neighbouring states and provinces, which obviously isn't good for manufacturing in the province or business in general. It will be interesting to see what the rate rises are in November. 
  

Ontario Energy Board Raises Electricity Prices, November 1st 2013

More higher cost electricity for Ontarians. The Ontario Energy Board has announced price hikes for consumers and small businesses starting November 1st, 2013. All times are going up 0.5 cents per kilowatt hour. Peak prices will now be 12.9 cents (weekdays 7 am to 11 am and 5pm to 7 pm), mid-peak will be 10.9 cents (weekdays 11 am to 5 pm) and off-peak 7.2 cents all other times (including all day forweekday holidays). That's a large 7.46% increase for off-peak, compared to September's inflation rate for Canada of 1.1%. Also note that these prices will all have the full 13% HST applied to them.

I'm not sure what the demarcation is between small and large businesses, but obviously for small businesses, high electricity costs compared to neighbouring jurisdictions is a competitive disadvantage.

Note the PDF of the release is here.

Ontario Energy Prices Going Up Again

There's an article in the Globe today (paywalls be damned) about a recent court ruling that could allow Ontario Power Generation to get a 6.5% hike for their power. Originally the Ontario Energy Board allowed only a 1% increase, and complained about the number of employees at OPG:

But the Ontario Energy Board only allowed it to make a one-per-cent hike and ordered it to find $145-million worth of savings over two years. The board ruled that OPG salaries were too high and that it had too many people in its employ.

Ontario Power Generation does have a lot of employees, making a lot of money. Here's an earlier post on the most recent sunshine data (7960 workers) for OPG, complete with all the data, rankings and the top ten, along with the total number in salaries paid to those on the sunshine list (hint it is ten figures).

It will interesting to see if this hike will now actually happen on top of of already high electricity prices. Stay tuned.