Proposed implementation of Customer Choice for Regulated Price Plan Time-of-Use Customers
O. Reg. 95/05
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Decision:
On August 20, 2020, the government made regulatory amendments that impose new requirements on the Ontario Energy Board (OEB) as of November 1, 2020 to require electricity distributors to provide Regulated Price Plan (RPP) customers paying Time-of-Use (TOU) rates with the choice to switch to tiered pricing.
The regulatory amendments also enable the OEB to establish rules for how RPP TOU customers can choose to switch to tiered pricing.
Analysis of Regulatory Impact:
Since the opportunity to change rate plans is customer-driven, RPP TOU customers, including small businesses and farms, will need to determine whether it is worthwhile to switch rate plans. This regulatory change does not introduce a new mandatory administrative burden on small businesses and farms since the initiative is voluntary.
By offering RPP TOU customers a choice of rate plan, these customers will be able to choose a plan that best fits their individual needs, which may result in some cost savings. However, savings will depend on consumption patterns and amounts, and the OEB has a regulatory obligation to ensure that electricity prices are set in a manner that ensures electricity system cost recovery.
This change does not impact large commercial and industrial businesses, who do not pay electricity through the RPP.
July 3, 2020
Summary of Proposal:
On June 1, 2020, it was announced that starting November 1, 2020, Regulated Price Plan (RPP) Time-of-Use (TOU) electricity customers would be able to choose a rate plan that best suits their household and lifestyle by giving them the option of switching from TOU pricing to tiered pricing. Tiered pricing provides a set rate for electricity up to a certain level of consumption, and a higher rate for electricity used above that level.
In order to implement this change, the Ministry of Energy, Northern Development and Mines (ENDM) is proposing regulatory amendments to O.Reg. 95/05 that will, if approved, impose a requirement on the OEB to require distributors to permit RPP TOU customers to elect instead to be charged tiered prices for electricity starting November 1, 2020. If approved, the regulatory amendments will also provide that the Ontario Energy Board (OEB) will establish rules for how RPP TOU customers can elect to switch out of TOU pricing.
Time-of-use (TOU) electricity rates vary by time of day and are comprised of three different rate periods of off-peak, mid-peak and on-peak pricing.
Tiered electricity rates provide customers with a set rate for electricity up to a certain level of consumption. The rate is higher for all electricity use that exceeds this threshold.
The OEB sets both tiered and TOU rates as part of the RPP.
There are approximately five million residential consumers, farms and small businesses billed using TOU electricity prices under the RPP.
77 Grenville St, Toronto, ON M7A 2C1
August 20, 2020