Elexicon Energy wants to help you select the electricity rate option that works best for your lifestyle. If you are a residential customer 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. Ontario households use the majority of their electricity – nearly two thirds of it – during off-peak hours.
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 when people are cooking, starting up their computers and running heaters or air conditioners.
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.
The threshold normally changes with the season to reflect changing usage patterns. In the winter period (November 1 – April 30), the Tier threshold is 1,000 kWh so that households can use more power at the lower price. In the summer period (May 1 – October 31), the Tier threshold is 600 kWh.
Are you thinking about opting out of TOU prices in favour of Tiered prices? Here are a few things to consider. 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 residential and small business customers in Ontario pay TOU prices.
How much electricity do you 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. Historically, the typical customer who paid TOU prices has used nearly two thirds of their power at off-peak times – the time when the lowest TOU price applies. The other third of their power used was typically split equally between on- and mid-peak times. Look at the Electricity line of your bill to see how much power you use in each of the three TOU price periods.
As described above, the TOU price periods and Tier thresholds change with the season and are different during the winter (November 1 – April 30) and summer (May 1 – October 31) periods. Does the amount of electricity you use change based on the season?
If you’re thinking about switching, you should pay close attention to how much electricity you use in a month, because on Tiered pricing the price is higher for every kWh of electricity that you use above the Tier threshold of 1,000 kWh in the winter or 600 kWh in the summer. For instance, if you heat your home electrically, your monthly use in the winter may be higher. The same goes for the summer if you need to run your air conditioner. With TOU prices, the price depends on when you use electricity. Although the TOU price periods also change with the season, the electricity you use after 7 p.m. every day, and all the time on weekends and holidays, is charged at the lowest price under TOU all year round.
Are you often home during the day on weekdays, so that shifting your usage is more challenging? Do you have large appliances that you need to run during the day on weekdays? Can you shift more of that usage to nighttime or weekend hours?
If you’re a small business owner, some of the same factors mentioned earlier also apply – how much electricity do you use each month, and when do 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.
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 and when it is consumed during the day. 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.