COVID-19 Recovery Rate starting June 1, 2020
The Government of Ontario has introduced a COVID-19 Recovery Rate of 12.8 cents/kWh for all time-of-use (TOU) electricity customers, to support Ontarians as we restart the economy. Households, farms and small businesses who pay time-of-use electricity rates will be charged this fixed rate 24 hours a day, seven days a week, starting June 1, 2020.
This rate will be automatically reflected on TOU customers’ electricity bills for all three TOU periods, 24 hours a day, seven days a week, and is intended to be in place until October 31, 2020.
What is being done to support households and businesses with increased electricity usage during this COVID-19 outbreak?
The government of Ontario has extended emergency rate relief for time-of-use electricity customers until May 31, 2020. Households, farms and small businesses paying TOU electricity rates will continue to be charged the lowest price, known as the off-peak electricity rate, 24 hours a day, 7 days a week until May 31, 2020. Starting June 1, 2020, the government of Ontario has introduced a “COVID-19 Recovery Rate” of 12.8¢/kWh for TOU Regulated Price Plan (RPP) customers to provide stability and predictability for families, small businesses and farms. This rate is equal to the forecasted average RPP supply cost, calculated November 1, 2019. This rate, subject to approvals, is intended to be in effect until October 31, 2020.
That’s a big price increase on June 1. Won’t that create hardship if people haven’t gone back to work yet?
Compared to having peak/mid-peak/off-peak rates, the 12.8¢/kWh rate would better reflect ongoing adjustments to Ontarians working arrangements.
A price that doesn’t vary by time of day is a simple way to enhance predictability for residential, small business and farm customers about their costs at a time when their electricity use might be a lot different than it is normally. This rate provides stability for Ontarians who are working and learning from home over the warm summer months.
This rate is based on the forecasted average RPP supply cost, calculated by the Ontario Energy Board as of November 1, 2019.
The government’s primary focus remains protecting the health and well-being of Ontarians, while taking measures to stop the spread of COVID-19 and save lives.
The province just announced that schools will remain closed until the end of the current school year. Why are you increasing prices on June 1 when kids will still be at home?
Compared to having peak/mid-peak/off-peak rates, the 12.8¢/kWh rate would better reflect ongoing adjustments to Ontarians’ working arrangements.
A price that doesn’t vary by time of day is a simple way to enhance predictability for residential, small business and farm customers about their costs at a time when their electricity use might be a lot different than it is normally. By moving to the average rate, we are continuing to suspend the TOU program to provide relief to Ontarians who are working and learning from home. This rate is based on the forecasted average cost of supply. The government’s primary focus remains protecting the health and well-being of Ontarians, while taking measures to stop the spread of COVID-19 and save lives.
Small businesses are already struggling, is it fair to increase the price of electricity when they are just starting to reopen after being closed for two months?
Compared to having peak/mid-peak/off-peak rates, the 12.8¢/kWh rate would better reflect ongoing adjustments to Ontarians’ working arrangements. A price that doesn’t vary by time of day is a simple way to enhance predictability for residential, small business and farm customers about their costs at a time when their electricity use might be a lot different than it is normally. This rate is based on the forecasted average cost of supply and is intended to be revenue neutral, and therefore would not require additional subsidies from government to support it. This would free up funding for other government priorities, like health care, during the COVID-19 outbreak. The government’s primary focus remains protecting the health and well-being of Ontarians, while taking measures to stop the spread of COVID-19 and save lives.
Would the new COVID-19 Recovery Rate be automatically applied to customer bills?
Yes, the fixed ‘COVID-19 Recovery Rate’ of 12.8¢/kWh will automatically be applied to all customers who pay time-of-use (TOU) rates starting June 1, 2020. It is intended that this rate will continue to be in effect until October 31, 2020.
Will the COVID-19 Recovery Rate have an impact on customer bills?
Historical consumption patterns suggest that the monthly summer bills of most residential and small business customers charged at the COVID-19 Recovery Rate would on average be expected to be within +/- 2 percent of the bill they would have received if they were charged the TOU prices by the Ontario Energy Board on November 1, 2019. The bill impact for individual customers as a result of the adoption of the COVID-19 Recovery Rate will depend on how much electricity they use and the extent to which their consumption pattern is different from what it has been in the past.
