What is Your Real Electricity Rate?

If you live in Ontario, you are usually quoted some nice low numbers as the rate you pay for electricity.  When you take those numbers and plug them into some calculations, it doesn’t seem to make much sense to bother conserving electricity because the “potential savings” are rather low in most cases.

But what is your real electricity rate?

In Ontario, there are a number of other charges that get added to your electricity bill. Some are fixed monthly charges which you can’t avoid. The ones that are “hidden” are the charges where you pay more per kWh of electricity usage. Instead of just including these in the advertised and posted rates, they are sort of hidden to the consumer and often forgotten about when people are doing rough calculations on potential savings.

Now, they aren’t completely hidden, your bill will have a nice total which sort of splits the charges out but it’s not always clear where the number comes from. Thankfully, companies like Hydro One (my electricity provider) are required to publish the numbers. What we are interested in are the Residential Delivery Rates. Here is the current (May 1, 2010) breakdown from the Hydro One page.

Detailed Breakdown of Residential Electricity Rates

Urban
Density
High
Density
Normal
Density
1.
Electricity:
– First 1,000 kWh per month (adjusted usage – ¢/kWh)
– Additional kWh
(adjusted usage – ¢/kWh)

6.4¢

7.4¢

6.4¢

7.4¢

6.4¢

7.4¢

2. Delivery:– Distribution service charge ($/month)
– Distribution volume charge (metered usage – ¢/kWh)*
– Transmission connection charge (adjusted usage – ¢/kWh)
– Transmission network charge (adjusted usage – ¢/kWh)

$16.19

2.807¢

0.456¢

0.575¢

$21.19

3.17¢

0.464¢

0.585¢

$27.45†

3.245¢

0.440¢

0.574¢

3. Regulatory charges: – Standard supply service administration charge ($/month)
– Rural rate protection charge (adjusted usage – ¢/kWh)
– Wholesale market service rate (adjusted usage – ¢/kWh)
$0.25*0.13¢

0.5573¢

$0.25*
0.13¢

0.5573¢

$0.25*
0.13¢

0.5573¢

4.
Debt Retirement charge
(metered usage – ¢/kWh):
0.70¢
0.70¢
0.70¢

5.

Adjustment Factor
1.078 1.085 1.092

What is missing here is a final total of what the cost is per kWh. Here, I’ll do it for you:

Urban
Density
High
Density
Normal
Density
1.
Total Cost:
– First 1,000 kWh per month (adjusted usage – ¢/kWh)
– Additional kWh
(adjusted usage – ¢/kWh)
12.5321¢
13.6101¢
13.0268¢
14.1118¢
13.1546¢
14.2466¢

WOW! Those prices suddenly seem much higher but we’re still missing one more thing – HST!  You need to add another 8% onto the price you see above.

What does this all mean?

Well, let’s look at something simple – if you can reduce electricity consumption by an average of 50W/hour every day for a year (which isn’t that difficult if you remember to turn off some of the big items like TVs, computers, etc when they aren’t in use), that would reduce your consumption by 438kWh/year.

With the regular posted rate of 6.4¢/kWh that appears to only save you $30/year. Not a whole lot. But, what are you really saving if you live in an High Density location (for example)? You are potentially saving $61/year. That’s easily a case of beer and a couple decent steaks for a pretty simple 50W/hour reduction in electricity usage.

How do I reduce my usage by 50W/hour?

Yeah, I knew I’d get you with the case of beer. Why not check out my Woods Smartstrip power bar save money post for information on a relatively easy way to do this. Other options include using CFL and LED lighting, reducing your screen time (TV and computer), or simply turning off items or lighting that isn’t needed.

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