On May 1, 2023, seven of Ontario’s 63 utilities will begin offering the province’s new Ultra-Low Overnight (ULO) electricity price plan. For Hydro Ottawa customers, ULO rates will be available on November 1. This is because there is significant behind-the-scenes work required to configure our systems to test and implement the new rate plan, ensuring a seamless and positive customer experience.
The ULO rates are designed to further incentivize customers to use electricity when demand is low and electricity is less expensive. Ultra-Low Overnight rates can be an economical option for those who use more electricity overnight, such as shift-workers, or for those who charge their electric vehicles while they sleep.
Similar to time-of-use (TOU) pricing, ULO depends on the time of day and day of the week that you use electricity. The difference with ULO is that there’s a 68 per cent lower overnight rate (compared to TOU off-peak) offered every day between 11 p.m. and 7 a.m., and a 59 per cent higher on-peak rate between 4 p.m. and 9 p.m. (compared to TOU on-peak hours) on weekdays. See the TOU and ULO May 1 charts below for a detailed breakdown of costs and hours.
May 1, 2023 - TOU periods and rates:
|TOU Periods - Summer (May 1 to October 31)||Rates (¢/kWh)|
Weekdays 7 p.m. to 7 a.m. - All day weekends & holidays
Weekdays 7 a.m. to 11 a.m. and 5 p.m. to 7 p.m.
Weekdays 11 a.m. to 5 p.m.
May 1, 2023 - ULO periods and rates:
|ULO Periods - All Year||Rates (¢/kWh)|
Weekdays 7 a.m. to 4 p.m. and 9 p.m. to 11 p.m.
Weekdays 4 p.m. to 9 p.m.
Under tiered rates, customers pay based on how much electricity they use overall in a monthly billing period. With tiered pricing, customers have a threshold amount of electricity at a lower price. Summer thresholds for residential customers are 600 kWh/month and 750 kWh/month for small businesses. Once electricity usage exceeds those thresholds, the higher tiered rate applies.
May 1, 2023 - Tier thresholds and rates:
|Tier Thresholds - Summer (May 1 to October 31)||Rates (¢/kWh)|
Residential - first 600 kWh/month
Residential - electricity used above 600 kWh/month
Choosing which rate plan is right for you will come down to when you use electricity during the day, how much electricity you use in a month, and what makes the most sense for your lifestyle. To help, the Ontario Energy Board (OEB), the province’s independent regulator for the electricity and gas sectors, has an electricity bill calculator where you can input your own electricity usage information and see what your bill could look like under each plan.
Hydro Ottawa does not earn any profit from electricity rates, no matter which plan you choose. Rather, utilities in the province recover their operating costs and an approved level of return through their distribution charges (included in the delivery line item on your bill). Hydro Ottawa is heavily regulated, and our distribution rates must be approved by the OEB, whose mandate is to protect the interests of Ontario customers.
While your total bill is paid to Hydro Ottawa, only the distribution charges are kept by us. Hydro Ottawa collects the remaining charges on behalf of industry and government agencies, without any mark-up to customers.
The big picture
The overall goal of price thresholds and shifting electricity usage to off-peak hours, is to reduce the strain on the power grid during peak times, which in turn will reduce greenhouse gas emissions (fossil-fuel is more commonly used during on-peak) and reduce the need to build new generation and other infrastructure.
Thanks to Ontario’s adoption of smart meters more than a decade ago, utilities are able to accurately measure and track electricity usage in their service areas throughout the day; ultimately informing their decisions and planning.
Whether it’s TOU, ULO or tiered, all three rate plans are designed to benefit both customers and utilities by reducing energy consumption, costs, and the need for new infrastructure. The ULO rate plan can be seen as another step toward Ontario's efforts to be more energy-efficient and further incentivize conservation.
Leading up to the November 1 implementation of the ULO price plan, we will keep you informed on when you can complete your rate selection form, should you decide to opt in for this new pricing option. Watch MyAccount for an update to our electricity calculator featuring ULO rates in the coming months.
For now (and reflected in the charts shown here), while electricity rates remain unchanged on May 1 this year, summer time-of-use (TOU) hours, as well as summer tiered thresholds will be in effect for residential and small business customers in Ontario the beginning of next month.