Moving to Fixed Distribution Rates for residential customers formerly served by Norfolk Power
The Ontario Energy Board (OEB) is changing how distribution rates will be billed for residential customers. Currently, distribution rates are a blend of fixed and variable rates. Over the next four years, the rates will gradually change so residential customers who were formerly served by Norfolk Power will be billed an all-fixed monthly service charge.
How Delivery rates are currently calculated
The Delivery line on your bill is made up of distribution and transmission charges and the cost for line losses*.
After the transition to all-fixed distribution rates is complete, the Delivery line on the bill will be made up of a distribution service charge ($/month), retail transmission rates (cents per kWh) and the cost for line losses*.
* When electricity is delivered over a power line, it is normal for a small amount of power to be consumed, or lost, as heat. An OEB-approved adjustment factor is used to calculate the line losses in the electricity system that aren't measured by your meter.
How will the move to fixed distribution rates affect my bill?
Most residential customers won't see a significant change in their distribution rates. For a residential customer using 750 kWh a month, the increase in the monthly fixed charge will be fully offset by a decrease in the distribution volume charge. Residential 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 air conditioning will benefit from this move to fixed rates.
Why is the OEB moving to fixed distribution rates?
The OEB's policy to move to fixed distribution rates for residential customers is a fairer and more transparent way to recover the costs related to distribution. There's no change in our costs to serve residential customers, regardless of how much electricity they use.
How are my distribution rates changing for 2017?
As approved by the OEB, we have increased the monthly service charge to $28.38 (from $25.51), effective January 1, 2017. At the same time, we have reduced the distribution volume rate to 1.18 cents per kWh (from 1.73 cents per kWh).
To ensure residential customers continue to receive the 1% reduction in their distribution rates we applied a credit of $0.43 to the monthly service charge and a credit of 0.02 cents per kWh to the distribution volume rate.
We'll need to apply to the OEB each year to update distribution rates.