It can be overwhelming to try and understand the incredible amount of information contained in your electricity bill. This breakdown is intended to make your bill easier to understand.
Types of Electricity Bill Charges
When you pay for electricity, you aren’t just paying for the energy itself. After all, it costs money to transport electricity, and to manage the many different elements of Ontario’s complex energy system. Generally speaking, there are five types of charges on your electricity bill:
- Electricity supply charge: This is what you pay for your electricity. If you use your local utility, you will be charged the current regulated rate. (If you pay the RPP, this will include the Global Adjustment, which will otherwise be listed separately) If you obtain your electricity from a retailer, this charge will be in accordance with your contracted rate.
- Delivery costs: As noted above, it costs money to transport electricity. Delivery charges cover the cost of transmitting and distributing electricity. These costs may be fixed, or may vary depending on the volume of your energy consumption. Delivery costs typically include fees for distribution, transmission, and a customer service charge. All of these costs are regulated by the Ontario Energy Board. Delivery is handled by your local utility, so even if you purchase your electricity from a retailer, your utility will still bill you for the cost of delivery.
- Regulatory fees: These are fees charged to consumers to support organizations which are integral to the province’s energy system. The Wholesale Market Service Charge pays for the operation of the Independent Energy System Operator (which manages the Ontario energy market), and subsidizes the generation of renewable energy. In addition, the Standard Supply Service Charge covers some of administrative costs incurred by local utilities.
- Debt Retirement: Ontario Hydro (now Hydro One) incurred a great deal of debt before the deregulation of the Ontario energy market. All electricity consumers in Ontario pay a 0.7 cent charge per kWh to pay off this debt.
- Tax: Electricity bills are subject to the 13% Harmonized Sales Tax (HST). There is currently some speculation that Ontario may eliminate the provincial portion of the tax (8%) on electricity, but it’s uncertain as to whether this will actually happen.
As a whole, Ontario electricity bills have been climbing in the last decade. Many of these various charges factor into that overall increase. For instance, energy generation costs have risen due to increased investment in green energy, the cost of transmission has increased due to the need to replace old lines and infrastructure, and the imposition of the HST in 2010 added a 13% tax on electricity.
What’s in Your Electricity Bill?
Part of the reason why electricity bills in Ontario can be confusing is simply because they contain so much information. Depending on where you live, the overall organization and appearance of your bill may vary, but almost everyone’s electricity bill will include the following details:
Account Number: Your account number (or alternatively, customer number) is the number that your utility company or retail energy provider uses to track your home or business in their system. If you ever have a question for your energy provider, you will need to provide this number to them.
Meter Number: Every electricity meter in Ontario has a unique identification number. For homes and businesses that are not yet equipped with smart meters, meter readers use this number to identify you when recording your energy consumption.
Service Address: This is simply the address for the home or business being billed.
Statement Date: This indicates when the electricity bill was printed and mailed out. Any activity occurring after the statement date will not be reflected on the bill.
Amount Due: This is the total amount that you have to pay for your electricity usage. This amount includes the cost of electricity, as well as all of the additional charges and regulatory fees described in the breakdown above.
Due Date: This is the date when payment is due in full. Interest or late fees may be assessed for any unpaid balance.
Billing Summary: This is simply a log of your payment history.
Electricity Charges: This is a breakdown of the various charges and fees which comprise the total amount that you owe on your electricity bill. For more information on these charges, read the “Different Types of Electricity Bill Charges” section above.
Delivery Charges: This lists the cost of delivering your electricity, as described in the breakdown above. Included in these transmission costs is an adjustment factor (sometimes listed as adjusted consumption), which accounts for the small amount of electricity which is lost in the transmission lines between the generation facility and your home.
Regulatory Charges: These fees pay for the operation of various organizations which are integral to the operation of Ontario energy market.
Debt Retirement Charge: This is a 0.7 cent/kWh charge which pays off the debt incurred by Ontario Hydro (now Hydro One) in the years before the deregulation of the electricity market.
HST: The 13% Harmonized Sales Tax, which is assessed on the total amount owed on your bill.