Elexicon Energy wants to help you select the electricity rate option that works best for you. If you own a small business and pay Time-of-Use (TOU) electricity prices, you can choose to switch to Tiered prices. Here’s what you need to know.
When you pay Time-of-use (TOU) prices, the price depends on when you use electricity. As prices vary according to the time of day and season, you can manage your electricity costs by shifting your usage to lower price periods when possible.
There are three rate periods:
Off-Peak, when demand for electricity is lowest.
Mid-Peak, when demand for electricity is moderate. These periods are during the daytime, but not the busiest times of day.
On-Peak, when demand is highest. These are the busiest times of day, generally during regular business hours.
If you want to continue paying TOU prices, you don’t need to do anything.
When you pay Tiered prices, you are charged a set rate for electricity up to a certain amount each month, and once that limit (called a threshold) is exceeded, a higher price applies.
Tiered prices give you the flexibility to use electricity at any time of day at the same price, although that price will increase if you exceed the threshold during the month.
Are you thinking about opting out of TOU prices in favour of Tiered prices?
Here are a few things to consider.
As a small business owner, think about how much electricity you use each month, and when you use it. Keep in mind that the Tier threshold for small business customers is 750 kWh all year round. And not all small businesses are the same. A large restaurant with several ovens running in the evening may have a very different electricity usage pattern than a small salon that’s only open during the day. So may a dry cleaner compared to a convenience store, or a clothing store compared to a bakery.
To help you determine which option is right for you, make sure you have some of your recent electricity bills handy as you go through the information below. Keep in mind the effect of COVID-19 on your electricity use (for instance, you may be working from home when you normally wouldn’t be). Most of the information you will need is on the Electricity line of your bill.
Do you pay TOU or Tiered prices for your electricity? If you’re unsure, take a look at the Electricity line of your bill. Most small business customers in Ontario pay TOU prices.
How much electricity does your business use in a month? If you’re unsure, take a look at the Electricity line on your bill. You might also want to look at the historical usage graph on your bill, which shows your average daily usage over the past 12-month period.
When you use electricity can be another factor in your choice. Look at the Electricity line of your bill to see how much power you use in each of the three TOU price periods.
There is no guarantee you will save money if you switch from TOU to Tiered prices. The total bill impact of switching will vary depending on how much electricity is consumed in a month. Compare TOU and Tiered prices using this bill calculator, provided by the Ontario Energy Board.
As a switch in prices can only take effect at the beginning of a billing period, it will take some time between the day you submit your request and the day you are charged at the new pricing.
If you want to continue paying TOU prices, you don’t need to do anything. To switch to Tiered pricing, select one of the options below. The following also applies if you later want to switch back to TOU pricing.