Ontario’s Energy Minister Todd Smith has asked the Ontario Energy Board (OEB) to provide him with options to implement a new ultra-low overnight Time-of-Use electricity price plan as the province continues to provide Ontario families with more ways to save money and take more control of their energy bills.
The new ultra-low overnight rate could help shift workers and residential consumers that use more electricity at night save money while supporting electric vehicle (EV) adoption, by reducing overnight EV charging costs when province-wide electricity demand is lower. Yesterday, Ontario also launched a public consultation on the proposal, said a media statement.
“Our government has reversed the trend of skyrocketing electricity prices and given families and businesses more control when it comes to their energy bills,” said the minister. “Introduction of a new ultra-low overnight price plan that would benefit shift workers and support EV adoption is our next step as we focus on helping electricity customers save money and take more control of their energy bills.”
Since the Ontario Government introduced Customer Choice in 2020, many residential and small business consumers have benefitted from switching their electricity pricing plan to one that best suits their lifestyle or business – either Time-of-Use or Tiered. The introduction of a third electricity price plan would give even more control to families and small businesses to find savings and reduce their electricity costs.
Excess Electricity
Delivery of a new ultra-low overnight price is possible as Ontario continues to have excess electricity during overnight hours. Shifting electricity use to these hours would make better use of Ontario’s clean electricity supply when province-wide demand is low, increasing grid efficiency and generating value for all Ontario ratepayers. An ultra-low overnight rate could also further support decarbonization by using more nighttime electricity, which is typically generated from non-emitting resources. Supporting EV adoption through lowering overnight charging costs also supports objectives in the government’s Made-in-Ontario Environment Plan and Driving Prosperity automotive sector strategy.
Minister Smith’s letter to the OEB requests the OEB to examine and report back by April 2022 on potential designs for a new optional Time-of-Use price plan featuring an ultra-low overnight rate. The government will consider the OEB’s report along with stakeholder feedback received through the public consultation on the Environmental Registry of Ontario with the intention of making the new price plan available to customers by April 2023.
Quick Facts
- The Independent Electricity System Operator’s 2021 Annual Planning Outlook projected an annual growth rate of 22 per cent in electric vehicle electricity demand by 2042. Ontario generates electricity at a lower cost, while emitting less carbon in its generation during overnight hours.
- As of November 1, 2020, most families, small businesses, and farms now have a choice between electricity rate plans: a Time-of-Use rate or Tiered rate plan.
- The Auditor General advised in 2014 that a more significant difference between on-peak and off-peak electricity pricing would have a more tangible impact on consumption patterns.
- This work builds on pilots commissioned by the OEB to test new pricing structures, including one led by Alectra Utilities where participants opted into being charged a higher on-peak electricity price in exchange for an ultra-low overnight price.