Electricity rates for Ontarians will increase this Saturday but will be partly offset by a higher provincial rebate.Nathan Denette/The Canadian Press
Electricity rates for Ontarians will increase by approximately 29 per cent starting Saturday, but the impact will be blunted by a large increase in provincial subsidies.
The cost of supplying electricity in the province has surged because of higher-than-expected nuclear generation costs as well as increased spending on electricity conservation programs, the Ontario Energy Board stated in a report published Oct. 17.
Offsetting the rate hikes, the Ontario Electricity Rebate, which appears as a credit on power bills, will rise to 23.5 per cent of pretax charges. (Previously it was 13.1 per cent.) That rebate will reduce the typical residential customer’s monthly bill by $36.
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Introduced in 2019, the Ontario Electricity Rebate is part of a suite of electricity cost-relief programs that the government’s latest budget, published in May, estimated will cost more than $6.4-billion combined for this fiscal year.
Ontarians can choose from three regulated electricity pricing plans. Those on time-of-use plans will pay an off-peak rate of 9.8 cents per kilowatt hour, 15.7 cents mid-peak and 20.3 cents on-peak.
There’s also a tiered price plan. Starting Nov. 1, those customers will pay 12 cents per kilowatt hour for the first 1,000 kilowatt hours they consume, and 14.2 cents for every additional kilowatt hour.
The cause of the increased costs for nuclear generation were not immediately apparent; representatives of Ontario Power Generation and the OEB were not made available for interviews late Thursday or early Friday.
Increased payments to OPG appear to be one factor. In a report, the OEB said that prescribed payments to the province-owned utility for nuclear generation will rise to nearly $124 per megawatt hour, compared with $112 previously. (Payments for OPG’s hydroelectric generation remain unchanged, at $47 per megawatt hour.)
Another factor may be that Ontario’s nuclear fleet, which has historically generated well over half of the province’s electricity, will produce substantially less power over the next few years.
That’s partly owing to the province’s refurbishment program, which is expected to cost ten of billions of dollars. It has already extended the lives of several reactors, and more will follow: Darlington Station’s Unit 4 and Bruce Station’s Unit 3 are scheduled to resume service next year.
Meanwhile, however, more reactors will be taken offline for extended periods as they undergo multiyear refurbishments, including four of Pickering Nuclear Generating Station’s reactors, which are scheduled to be shut down in September, 2026. Two other Pickering units were permanently retired late last year.
In a report used by the OEB to help set rates, Power Advisory LLC, a Toronto-based consultancy, said wholesale electricity prices are expected to rise sharply in October, 2026, after the four Pickering units go out of service, along with another Bruce unit that’ll be refurbishment.
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The Ontario Clean Air Alliance, which opposes nuclear power generation, accused the Ford government of using the rebate to “bury” the higher rates.
“The bill for maintaining this taxpayer subsidy for electricity rates will now cost Ontario’s taxpayers much more than the $6-billion per year we’re already paying to artificially lower rates,” it said in a statement.
“This massive subsidy disguises the real cost of keeping the lights on with expensive nuclear reactors.”
The OEB also indicated that rates were affected by higher-than-expected conservation program costs. It did not identify which programs had proved more expensive than forecast.
The province launched a slew of new energy efficiency programs in January that were expected to cost $10.9-billion over 12 years; Energy Minister Stephen Lecce dubbed it the “largest efficiency program in Canadian history.” It included rebates for windows, insulation, rooftop solar panels and other home upgrades. The province expected the programs would deliver $23.1-billion in benefits to the electricity system.