2019 Delivery Rates

Our distribution system is aging and needs investment. We know every dollar we spend comes at a cost to our customers, which is why we are focusing on the most critical investments to keep the system safe, the power on and rates as low as possible.

• 1 in 4 transformers have reached their expected service life
  

• 17% of wood poles have reached their expected service life
  

• 75 distribution stations need to be refurbished over the next five years.

• We last changed delivery rates in 2017 as we were unable to increase delivery rates in 2018 due to a delay in receiving OEB approval.

• The OEB has now approved new delivery rates with an effective date of May 1, 2018.

• We are now implementing the 2018 and 2019 rate increase as of July 1, 2019.

• In addition, included in your rates is a retroactive adjustment approved by the OEB. This adjustment is to recover revenue that we were unable to collect for the 14-month period of May 1, 2018 to June 30, 2019.

• This adjustment will be applied to your Delivery charge from July 1, 2019 to December 31, 2020.

• The retroactive adjustment varies by rate class and is made up of a fixed charge and a variable charge that will vary depending on how much electricity you use

• This retroactive adjustment is for revenue that we were unable to collect for the period May 1, 2018 to June 30, 2019

• Residential customers with a medium or low density will not see the full impact of the retroactive adjustment as distribution charges (included under the Delivery line) are capped at $36.86 per month.

• For a typical medium density customer using 750 kWh a month the increase on the total bill is $2.55 or 2.1%
  

• For a typical low density customer using 750 kWh a month the increase on the total bill is $2.21 or 1.8%

To show that rates will increase on average 0.4% per year over the next four years for a medium density customer and 0.2% for a lower density customer.

The five year table shows what the rate increase would have looked like if we were able to implement new rates in 2018. If this was the case there would have been no need to recover charges that were not collected from May 1, 2018 to June 30, 2019.

Move to fixed distribution rates for residential customers

• As directed by the OEB, we have implemented the third step of eight steps towards the move to fixed distribution rates (included under the Delivery line). Currently, distribution rates are made up of a fixed service charge and a charge that varies based on how much electricity you use. By 2024, distribution rates will be based only on a fixed monthly service charge.

• Most customers will not see a significant change in their distribution rates. Customers who use very little electricity will see an increase on their bill, while customers who use a lot of electricity will see a decrease on their bill. Customers who have electric heat and/or central air conditioning will benefit from this move to fixed rates.
  

Transmission rates have changed

• There is an increase to transmission rates. Transmission rates reflect the cost of transmitting electricity over the high voltage system.

• Distribution rate protection ensures rural delivery rates are comparable to urban rates.
  

• It is a cap that lowers distribution rates (included under the Delivery line) for residential medium or low density customers.
  

• This cap ensures distribution charges will not exceed $36.86 a month.

Over the next three years, we plan on making these investments across the province:

• Replacing over 24,000 wood poles
  

• Trimming hazardous trees across more than 113,000 km of overhead powerlines
  

• Modernizing our grid so we can respond to outages faster.
  

To see what investments we are making in your area, click here

Customers will see this increase on their bill in on or after July 9, 2019.

The Ontario Energy Board (OEB) sets delivery rates. Some of the delivery charges are fixed and do not change no matter how much electricity you use, while other charges vary depending on how much electricity you use.

Delivery charges include:

• Distribution flat charge: A fixed charge for costs related to meter reading, billing, customer service and account maintenance, and for general utility operations.
  

• Distribution volume charge: A variable charge for the cost of building and maintaining the distribution system, including overhead and underground power lines, poles, transformers and distribution stations.
  

• Smart metering entity charge: A fixed charge that is collected on behalf of the IESO.
  

• Transmission rates: Variable charges that pay the cost to operate and maintain the high voltage system that carries electricity from generating stations to local electric utilities or large industrial customers such, as manufacturers and mines.
  

• Line loss adjustment: It is normal for a small amount of power to be lost as it travels over power lines to your home or business. In calculating your electricity costs for the billing period, Hydro One or your local electric utility multiplies your electricity cost by an adjustment factor that accounts for those losses. This adjustment factor is approved by the OEB.