Hydro One is the single largest electricity distribution company in Ontario, and operates about 97% of Ontario’s total electricity transmission infrastructure. In addition, it is a regulated provider of electricity to roughly 1.3 million customers in the province.
Current Electricity Plans
As a regulated utility company, Hydro One delivers electricity to its customers at rates that are established by the Ontario Energy Board. These prices are recalculated twice a year, on May 1st and November 1st.
The vast majority of Hydro One’s residential customers pay Time-Of-Use rates, which vary according to the time of day, with higher prices during high-demand times, and lower prices during lower-demand times. Currently, these rates range between 8.7 cents/kWh during the lowest demand periods, and 18 cents/kWh during highest demand.
A smaller subset of customers pay tiered rates, in which they are charged one rate for the first 600 or 1,000 kWh they use in a month (depending on the season), and a higher rate for each kWh they use beyond that threshold. In winter, these rates are currently 9.9 cents/kWh and 11.6 cents/kWh, and in summer are 10.3 cents/kWh and 12.1 cents/kWh.
History of Hydro One
Hydro One was originally established as the Hydro-Electric Power Commission of Ontario (commonly called Ontario Hydro, or by the abbreviation HEPC) in 1906, in accordance with the Ontario Power Commission Act. Ontario Hydro’s job at the time was to build transmission lines bridging the gap between Ontario residents and hydroelectric generators at Niagara Falls.
In the 1920s, Ontario Hydro became an electricity distributor, building what was at the time the world’s largest power generating station on the Niagara River. Ontario Hydro continued to grow through middle of the century, expanding into other provinces and ramping up its generating capacity by building additional power generation facilities on the Ottawa and St. Lawrence rivers. In the 1950s, Ontario Hydro completed the process of connecting all of its transmission networks and power production stations into a single network spanning multiple provinces.
In 1999, in response to the Energy Competition Act, Ontario Hydro was split up into five companies, one of which was Ontario Hydro Services Company. This company, later renamed Hydro One, was designed to function as a commercial provider of energy. Within two years it acquired 88 utility companies.
In 2015, Ontario began the process of privatizing the company, publicly offering shares in an IPO in November 2015, and again in April of 2016.