Do you know how much you are charged for electricity?
The amount Ontarians pay for electricity depends on two factors:
- The rate plan they’re on.
- The time of day they use electricity.
For many years, the default rate plan in Ontario was Time-of-Use (TOU). As of 2020, customers now have the option to choose from three different plans. But most homeowners never question it, or are even aware they have other options which could save them money.
So, what are these options of Ontario Electricity Rates?
Ontario’s Electricity Rate Plans
Why Does Ontario Offer Different Rate Structures?
In Ontario, the bulk of our electricity comes from a clean, reliable mix of sources like nuclear power and hydro, which run steadily 24/7 and can’t easily be ramped up or down to match demand. However, a significant portion also comes from renewable sources like wind and solar, which vary based on weather conditions.
When demand spikes beyond what our baseload and variable sources can supply, the grid operator must bring on natural gas–fired peaking plants. These plants are faster to start but far more expensive and carbon-intensive. This extra generation, combined with the increased strain on transmission and distribution infrastructure during peak hours, is why electricity costs more at those times.
By charging more during high-demand hours and less during off-peak times, the Ontario Energy Board is encouraging homeowners to shift some of their energy use to periods when the grid is less stressed. Even small changes like running the dishwasher at night or doing laundry on weekends helps reduce the need for expensive “peaking” power plants. And although shifting appliance use makes a relatively small impact to an individual household’s bills, when done on a larger scale, it can make a big impact on the grid.
When Does Switching Rate Plans Make Sense?
When ULO doesn’t make sense
Most households simply don’t use much electricity overnight. If you and your family are asleep between 11 p.m. and 7 a.m., your home is likely only running essentials like the fridge and internet router. That means you wouldn’t actually shift much of your energy use into that ultra-cheap window, and the savings you do see could easily be wiped out by ULO’s much higher peak rate of 28.4¢ / kWh (compared to 15.8¢ / kWh on TOU) during daytime hours.
When ULO does make sense
ULO only starts to make sense when you have significant controllable loads that can be shifted overnight. For example: charging an EV, pre-heating your water tank, or using a smart battery to store cheap power for daytime use. Without those, most 9-to-5 households would see their bills go up rather than down.
Even if your household doesn’t naturally use much electricity overnight, certain technologies can unlock the benefits of the Ultra-Low Overnight (ULO) plan. The goal is simple: shift as much of your high-demand usage as possible into the cheapest rate window (11 p.m. – 7 a.m.) without disrupting your lifestyle.
One of the best examples is electric vehicle (EV) charging. If you schedule your EV to charge only during the ultra-low overnight period, you can save around $60 per month compared to charging at TOU rates.
Here are some other scenarios that can help you decide which rate plan would work best for you:
These upgrades lower your bills for a reason. They help Ontario’s grid by reducing daytime demand, which means fewer expensive, carbon-intensive natural gas plants need to come online.
Want to explore some of these electrification solutions for your home? Visit dawnenergy.ca or get in touch with me to talk more.
