Effective April 1, 2005, a revised price structure under the Regulated Price Plan was announced by Energy Minister Dwight Duncan. As a result, most Ontario electricity consumers will be covered by one of the following price plans:

A. Regulated Price Plan (RPP)

The RPP applies to residential and small business customers who consume less than 150,000 kWh of electricity per year. It also applies to hospitals, schools, and municipalities. The current RPP will remain in effect until April 2008, after which it will only apply to residential customers and smaller businesses with less than 50 kW demand.

Under the RPP, residential and small-business electricity consumers are charged according to a 2-tier pricing model in which the regulated price varies according to consumption.

Pricing under the RPP

Effective April 2006, new rates will be determined every 6 months based on the OEB's then current forecast.

The following are the current RPP residential rates for May 1, 2010 to Oct 31, 2010:

If Time-of-Use (interval meter) pricing is applied to your account the RPP rate is:

9.9 cents / kWh for On-peak power
8.0 cents / kWh for Mid-peak power
5.3 cents / kWh for Off-peak power

If Time-of-Use pricing does not apply to your account the RPP rate is:

for the first 600 kWh each month, the rate is 6.5 cents/ kWh
for usage above 600 kWh in a given month, the rate is 7.5 cents / kWh

The small business RPP rates are the same as the residential rates shown above, except, when not paying Time-of-Use rates, the threshold for the higher rate is 750 kWh/month regardless of the season.

Seasonal Pricing for Residential Customers

A seasonal RPP took effect on November 1, 2005 for residential customers only excluding Time-of-Use accounts. This varies the level at which the higher-priced tier comes into effect as follows:

during the winter season of November 1 to April 30, the lower tier pricing will apply to the first 1,000 kWh each month to recognize the additional electricity requirements of most Ontario residential customers during the winter months.
during the summer season of May 1 to October 31, the lower tier pricing will apply to the first 600 kWh only.

The threshold for non-residential electricity consumers that are eligible for the RPP remains at 750 kWh throughout the year.

B. Hourly Ontario Electricity Price (HOEP)

Every hour, up to 25,000 MWh of energy is traded through the wholesale electricity market in Ontario, which is administered by the Independent Electricity System Operator (IESO).

The IESO constantly monitors the market and neutrally collects bids and offers and matches them to maximize the economic return of the system. This market is controlled by a computer system that determines a uniform electricity price for the province every 5 minutes.

The Hourly Ontario Electricity Price (HOEP) is the arithmetic average of the twelve 5-minute electricity prices in that hour. The local utilities translate the 24 daily HOEP prices into a daily weighted average price (DWAP) based on their local system load. The rate shown on your electricity bill is a weighted average of these DWAP's over the appropriate billing period.

Most Ontario businesses that are not covered by the RPP have been subject to HOEP Pricing since the market opened in 2002. The exceptions are organizations that are able to strike their own wholesale deals due to the large quantities of electricity they consume.