Much of Ontario—Hamilton included—uses time-of-use pricing to calculate its hydro rates. It’s a form of price regulation that enables the Ontario Energy Board to adjust hydro rates based on current economic conditions. The rates are adjusted every six months. The energy rates are calculated based on the economic factors that condition their prices at the time in which the energy is consumed, the principle being that energy should cost less when its demand is lower, placing a lower strain on the system. When electricity demand is higher, the prices go up. It’s a form of price regulation that shifts beyond the principle of offering the absolute lowest average price to acknowledge and accommodate the fact that the economic conditions shaping those costs shift within the span of a day. As a result, consumers should always be able to get the cheapest energy rates given the time of use, and they should be able to modify their usage schedules so they can save on energy by consuming more off peak hours, when energy costs less.
How much do the energy rates vary?
Hamilton energy rates, for those who use time-of-use pricing, vary based on the time of day as well as time of year. Each day consists of off-peak hours, when energy consumption, and thus energy prices, are lowest; mid-peak hours, when energy demands and prices are both moderately high; and on-peak hours, the period of primetime energy use when demand and prices are both at their highest (this is when the vast majority of people are home with their televisions on and their heaters or air conditioners turned up.
For those looking for cheap energy rates, modifying patterns of use can help. Lowering peak hour consumption can help to significantly lower your rate based on the amount of increase: off-peak rates are currently 8.7 cents/kWh while mid-peak rates increase to 13.2 cents/kWh, and on-peak rates are almost 10 cents/KWh more, at 18.0 cents/kWh.
Comparing these energy rates can help you save on your hydro bill. Simply being aware of the cost difference of consuming more energy during on-peak hours should help individuals make choices that can lead them to cheaper energy rates. For instance, switching to doing laundry or doing most of the day’s cooking during off-peak hours can help significantly, as can ensuring heating systems and air conditioners are turned down during those times.
The rates don’t just vary based on time of day, though
The rate schedule is built around patterns of consumption, and since these patterns of use vary, so, too, do the rate schedules. In particular, the time of use schedule shifts depending on the day of the week, or the time of year. Weekends and holidays are always considered off-peak, and peak hours change between the summer and winter months.
During the summer (May 1 to October 1), off-peak hours extend from 7pm to 7am, mid-peak hours are from 7am to 11am and 5pm to 7pm, and on-peak hours extend between 11am and 5pm. In the winter (November 1 to April 30), off-peak hours (the hours offering the cheapest energy rates) continue between 7pm and 7am, mid-peak hours are limited to between 11am and 5pm, and on-peak hours extend to include the 7am to 11am and 5pm to 7pm time blocks.
Why is it so important, then, to find the cheapest energy in Hamilton?
There is one important reason: if your utility doesn’t charge time-of-use pricing, or if you don’t have a smart meter, then you are going to be charged the same blended rate no matter the time of day—and this may work better for those with small businesses or for those working night shifts or from home who can’t modify their schedules to accommodate high energy prices.
Time-of-use pricing only offers cheap energy rates for those who can make use of the price variation. For those who have no choice but to consume the bulk of their power during peak hours, time-of-use pricing can quickly add up. It’s important to compare options and be aware of the rates your utility is going to charge you so you can choose the options that will allow you to find the cheapest energy rates for your specific needs.
