Little Change to Electricity Prices at May 1st

Posted: May 02, 2018
Tagged As: Electricity, Energy Bills

On July 1, 2017, the province’s Fair Hydro Plan Act took effect.  For residential and small business accounts Regulated Price Plan (RPP) rates consuming less than 250,000 kWh annually, these prices remained frozen until April 30, 2018.  Additionally, accounts on spot market or retailer rates (such as the LAS Electricity Program) saw some relief to the high Global Adjustment rates in the form of a 3.29 ¢/kWh credit called the Global Adjustment Modifier.  It too remained frozen until April 30, 2018.

On Thursday April 19th, the Ontario energy Board (OEB) announced that starting May 1, 2018, electricity rates would remain virtually unchanged from the prices established July 1, 2017.  Further, that these prices will remain in effect until April 30, 2019.
Here is a look at current rates as of May 1, 2018.  These rates are almost identical to those set on July 1, 2017, with the only exception being the mid-peak price dropping 0.1 ¢/kWh from 9.5 ¢/kWh to 9.4 ¢/kWh.

It’s a similar story for RPP two-tiered rates as well, with the lower tier remainig at 7.7 ¢/kWh, and the upper tier decreasing 0.1 ¢/kWh to 8.9 ¢/kWh.
Price Tier Threshold Prices Change
Tier 1 Non-residential customers: for the first 750 kWh/month of electricity used per month 7.7 ¢/kWh No Change
Tier 2 Non-residential customers: for electricity used above 750 kWh/month 8.9 ¢/kWh Down 0.1 ¢/kWh

Impact on LAS Electricity Program

With the original Global Adjustment Modifier of -3.29 ¢/kWh, a 65% hedge on the program brought the total commodity cost (hedge + spot + GA) closer in line with TOU and two-tiered pricing.  With the addition 1.148 ¢/kWh credit, and what amounts to no change in TOU rates, municipalities making use of the program should see lower electricity costs in 2018 than they did in 2017.  There is, however, a caveat.

Impact of Election of Electricity Prices

If you haven’t heard by now, there is a provincial election in Ontario taking place on June 7, 2018.  While the above announcement states that prices will remain in effect until April 30, 2019, the only way to guarantee that is if we elect another majority Liberal government.  What happens to electricity prices under any other government remains somewhat up in the air.  

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