Are residential customers protected from a rate increase by government subsidies?
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Residential (Year-round) customers with a
medium or low density receive distribution rate protection, which is a subsidy that caps
the amount customers pay for base distribution rates (monthly service charge and
distribution volume charge) to $38.08 a month.
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However, this rate protection doesn’t
include increases to transmission rates for the high-voltage system.
What's distribution rate protection?
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Distribution rate protection ensures rural
delivery rates are comparable to urban rates.
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It is a cap that lowers base distribution
rates (monthly service charge and distribution volume charge that are included under the
Delivery line).
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• This cap ensures distribution charges
will not exceed $38.08 a month and only applies to residential (Year-round) customers
with a medium or low density rate class.
What is the tax recovery?
It’s a temporary adjustment being applied to
delivery rates to reverse tax savings that were applied in error to customers from January 1,
2018 to June 30, 2021. This charge is being applied until June 30, 2023.
What is the change to the Smart Meter Entity Charge?
We collect this charge on behalf of the
Independent System Electricity Operator from residential and general service energy billed
customers. The monthly charge has been reduced to $0.42 (from $0.43). This charge will be in
place until December 31, 2027.
What are the credit adjustments?
The OEB directed us to clear our deferral/variance
accounts as they met the OEB-defined threshold. These credit adjustments will be in place until
December 31, 2025.
Why are seasonal rates ending?
The OEB has directed us to end seasonal rates by
December 31, 2022. Starting on January 1, 2023, seasonal customers will be moved to one of our
three residential density-based classes:
- Urban Density
- Medium Density
- Low Density
The decision to end seasonal rates was based on
the OEB’s determination that delivery rates charged to seasonal customers are subsidized by
other residential customers and don’t reflect the actual cost to serve them. Learn more here.
When will the move to all-fixed rates be completed?
The OEB directed us to transition to all-fixed
distribution rates for residential customers starting on February 1, 2016.
- Residential customers with an Urban Density – completed in 2021
- Residential customers with a Medium Density – will be completed in 2024
- Residential customers with a Low Density – will be completed in 2032
What is the Wholesale Market Service Rate?
This is a portion of Regulatory Charges line item on the bill. The rate is set by the OEB to recover the costs of the services provided by the Independent Electricity System Operator (IESO). These services include operating the electricity system and administering the wholesale market. We collect this charge on behalf of the IESO. The new charge is 0.45 cents per kWh (from 0.34 cents per kWh).
What is Rural or Remote Rate Protection Charge?
This is a portion of the Regulatory Charges line
item on the bill. This charge is designed to reduce costs for eligible customers located in
rural or remote areas where the costs of distributing electricity is higher. This charge is paid
by all electricity consumers in the province and is approved by the OEB. The new charge is 0.07
cents per kWh (from 0.05 cents per kWh), effective January 1, 2023.
Who approves delivery rates?
The OEB approved the rates that we charge for
electricity transmission and distribution over a five year period, beginning January 1, 2023 and
for each subsequent year through to December 31, 2027. These rates are reflected on the Delivery
line on bills.
We submitted a five-year application (2023-2027)
for our distribution and transmission rates. The OEB conducted an intensive, public review of
our projected costs and investment plan for the years 2023-2027.
We’re following the OEB’s multi-year rate-setting
approach. Our rates will be adjusted at the beginning of each year, consistent with the OEB’s
approval. Rates for the years 2024 to 2027 will be formulaic rate increases.
What rates and charges are included in the Delivery line?
Delivery charges are made up of the following
items:
- Distribution rates are designed to recover our costs for the poles, wires, meters, stations
that are used to deliver electricity to your home or business, as well as the costs related
to meter reading, billing, and customer service. Distribution rates include:
- a monthly service charge that does not change no matter how much electricity you use,
and
- a distribution volume rate that varies based on how much electricity you use (this no
longer applies for Urban Density residential customers who have moved to all-fixed
distribution rates).
- A smart meter entity charge of $0.42 per month that we collect on behalf of the IESO. This
charge is effective until December 31, 2027 and only applies to residential and general
service energy-billed customers.
- Cost or credit adjustments (also known as rate riders) – adjustments to reconcile for costs
or surpluses incurred while providing electricity to customers.
- Transmission rates recover the costs to operate and maintain the high-voltage transmission
system and vary based on how much electricity you use.
- An adjustment for line losses.
Where can I find my delivery rates?
Delivery rates are posted here.
What are the revised eligibility criteria for the Hydro One Sub Transmission rate class?
The Sub Transmission classification applies to
either:
- Embedded supply to Local Distribution Companies (LDCs). "Embedded" meaning receiving supply via Hydro One Distribution assets, and where Hydro One is the host distributor to the embedded LDC. Situations where the LDC is supplied via Specific Facilities are included. OR
- Load which:
- is three-phase; and
- is connected to and supplied from Hydro One Distribution assets between 44 kV and 13.8 kV inclusive, where 44 kV and 13.8 kV are the voltage of the primary side of the local transformer; local transformer can be Hydro One owned or customer-owned; and
- is greater than 500 kW (monthly measured maximum demand averaged over the most recent calendar year or whose forecasted monthly average demand over 12 consecutive months is greater than 500 kW).
