About Residential Rates… A Case Study
One of the first steps to take in the quest for truth in electricity rates (and bills) is to look at my own residential historical costs. I live in an average house in the greater Toronto area and Alectra is my Local Distribution Company (2018). I can easily look at the actual billing numbers from 2010 through 2017 however I don’t have anything prior to that. My household has actively engaged in energy conservation strategies which include upgrading appliances, switching to efficient lighting, using energy at off-peak times where possible and finding alternatives to electricity for energy (gas barbecue and hanging clothes to dry when possible).
My annual bill in 2017 was less than my bill in 2010.
My annual cost for electricity has gone down. However, the all-in rate for my energy use has gone up from 12 cents per kWh to as high as 18 cents per kWh in 2016. That’s a 50% rate increase in eight years. I haven’t made any correction for inflation, weather or any other possible year over year anomalies but these are some factors worth noting:
⇒ From 2011 to the end of 2015 we had the Ontario Clean Air Benefit which provided a 10% rebate.
⇒ In May of 2012 Time-of-Use (ToU) pricing kicked in.
⇒ In 2017 my all-in rate was 15 cents per kWh due to the rate subsidy (PST 8% rebate) and the pricing structure of my supplier.
Here is how the cost breakout of my bills shifted from 2010 to 2016:
At a glance it appears as though the energy share of cost has risen slightly and makes up the largest portion of my bill. The total billing amount is collected by your LDC (the name on your bill) with the amounts being divided (settled) with the various entities in accordance with OEB approved rate tariffs. It is important to recognize that the revenue associated with each of these portions is disbursed to several completely separate entities. Each or them has different oversight rules, checks and balances when it comes to how much they charge rate payers. Your actual LDC only gets a portion of what you pay for residential electricity.
The important takeaway from this brief personal case study is that there are two important considerations in residential energy use management.
- Commodity rates are rising
- Actual billing based on consumption is not rising (in my case)
Rates are set by the OEB however, consumption has room for management by the end-user to help control costs. Once the consumer has maximized their conservation effort they will be fully impacted by ongoing rate increases.
So far… no flap here… But what about those rising rates?