Frequently Asked Questions
Please select one of the questions below.
- Why are electricity bills so high?
- Does the opening of the market have anything to do with higher prices?
- How can I control my bill so that it’s not so high?
- Why is my bill different than my neighbour’s bill?
- Why didn’t Essex Powerlines get into the retail business?
- The price per kilowatt-hour on my bill isnt the same as the IESO price. Why?
- If I had signed with a retail company would I have saved money?
- Does it make financial sense to choose a retail contract?
- What does Essex Powerlines charge for?
- New Customer Contact Information Form
1. Why are electricity bills so high?
High temperatures and humidity over the summer months increase the demand for electricity. This results in a higher kilowatt-hour rate for electricity. The charge for the actual electricity commodity (electricity charge) accounts for about 50% of your bill. When the price of electricity rises, that portion of your bill will too. As of December 1, 2002, the Ontario Energy Board enacted legislation to fix the price of electricity to low volume and designated customer.
The electricity charge is billed on behalf of electricity generators and/or retail companies, and is not kept by Essex Powerlines. By law, local distribution companies like Essex Powerlines cannot make any profit on the charge for electricity.
2. Does the opening of the market have anything to do with higher prices?
In the new open market for electricity, electricity rates are based on supply and demand. Customers (who have not signed with a retail company) pay a fluctuating rate that is averaged over their billing period. The Independent Electricity Market Operator operates the new market for electricity. Designated Consumers (most residential customers) pay a fixed price set by legislation.
3. How can I control my bill so that it’s not so high?
You can control your bill by reducing your electricity consumption. The less energy used, the lower the bill. Refer to the residential energy tips on this web site for some simple things you can do to reduce your consumption:
- Turn off unnecessary lights and appliances
- Reset the thermostat
- Wash clothes in warm or cold water
- Leave pot lids on while cooking
You may also want to take a few moments with the Energy Calculator on our web site and find out how the electricity you use can add up. The Energy Calculator estimates the monthly kilowatt-hours used by the electrical appliances in your home.
4. Why is my bill different than my neighbour’s bill?
You may have used more or less energy than your neighbour (the more energy you use the higher your bill will be), your neighbour may have a different billing period, or your neighbour may have signed a contract with a retail company. Different retail companies have different contract rates and terms.
5. Why didn’t Essex Powerlines get into the retail business?
Essex Powerlines chose not to retail electricity in order to focus on reliable, safe delivery of electricity to its customers in Amherstburg, LaSalle, Leamington and Tecumseh.
6. The price per kilowatt-hour on my bill isn’t the same as the IESO price. Why?
This charge is billed on behalf of electricity generators and/or retail companies, and is not determined by Essex Powerlines. By law, local distribution companies like Essex Powerlines cannot make any profit on the charge for electricity.
For residential and other general service customers, Essex Powerlines averages the cost of electricity charged over the customer billing period. To do this, Essex Powerlines takes the total amount of power purchased each month, subtracts the amount sold to commercial customers with interval meters and streetlighting accounts. The remainder is then used to determine the weighted average price per day for residential customers. This rate is determined by the price Essex Powerlines paid to the Independent Electricity System Operator for electricity every hour of the month.
As of May 1, 2006, the price charged to residential, low volume, designated customers as set by the OEB is 5.8 cents per kWh for the first 600 kWhs and 6.7 cents for all kWh after that. The 750 kWh threshold will change to 1000 kWh’s per month during the winter season (Nov. 1 to Apr. 30) and 600 kWh’s per month during the summer season (May 1 to Oct. 31).
7. If I had signed with a retail company would I have saved money?
Ontario’s electricity market opened to competition on May 1, 2002. This gave customers the choice of purchasing their electricity from a retail company, or continuing to purchase it from their local distribution company, Essex Powerlines. Customers who signed contracts with electricity retail companies paid their contracted rate, regardless of what the fluctuating rate is on the spot market. Essex Powerlines does not have specific rate information for each retail company. Therefore, Essex Powerlines cannot determine if a customer will actually save money.
8. Does it make financial sense to choose a retail contract?
It is impossible to predict the future market rate price of electricity. It is much like predicting mortgage rates. Retail companies offer a fixed rate over a fixed term, while charging a premium to cover market risk. Deciding to buy hydro from a retail company is a personal decision. Essex Powerlines does not financially benefit from a customers’ decision to stay with Essex Powerlines or to go with an energy retail company. While the two tier fixed rates established by the OEB are in place the price of electricity for Residential, Low Volume or Designated SSS customer and a Retail Contract customer is the same.
9. What does Essex Powerlines charge for?
Essex Powerlines is responsible for delivering electricity to all customers in its distribution area, whether they choose a retail contract or the market rate. These charges include the delivery charge and the fixed charge for operating, maintaining and improving our electricity delivery system, infrastructure, billing and information services.
For all customers, Essex Powerlines continues to have two important functions:
- We ensure the safe, reliable delivery of electricity, generated by other organizations, to homes and businesses; and
- We bill customers both for our services and for the services provided by other organizations in Ontario electricity system.