What is Time-of-Use (TOU) or Tiered Price Customer Choice?

If you’re a residential or small business customer that pays TOU electricity prices, you can choose to switch to Tiered prices beginning with your electricity used starting November 1, 2020.

 

If I elect to switch pricing options, when will my change take effect?

In accordance with the Ontario Energy Board’s Standard Supply Service Code no election shall be applied to a billing period that begins before November 1, 2020. Milton Hydro will process your request to be effective with the first full meter reading period where both the “Present” and “Previous” reading dates are on or after November 1, 2020. All consumption billed must be after October 31st, 2020. You will find your meter reading dates at the bottom of your bill under Service Period. Once the date under the heading Previous is a November date then your elected RPP electricity rates will become effective. You may receive up to two more bills at the current RPP electricity rates before your elected RPP electricity rates are implemented for November 2020.

 

If you want to continue paying TOU prices, no action is required.

To switch from TOU to Tiered prices, you must notify Milton Hydro by completing an election form. Milton Hydro will begin accepting election forms on October 13, 2020. There is no deadline. You can ask to switch at any time. You can find the election form on the Milton Hydro web site, or we can mail you an election form if you don’t have internet.

Since June 1, 2020, customers on TOU have been paying a fixed electricity price of
12.8 ¢/kWh for all hours of the day (known as the COVID-19 Recovery Rate) which the government put in place as part of its response to the COVID pandemic. This fixed price ends on October 31, 2020. On November 1, 2020 the TOU prices approved by the Ontario Energy Board (OEB) will replace the fixed price.
 
 

What are TOU prices?

With TOU prices, the price depends on when you use electricity. There are three TOU price periods:
  • Off-peak, when demand for electricity is lowest. This price applies in the evenings on weekdays and all day on weekends.
Every household and small business is different, but on average, Ontario households use nearly two thirds of their electricity during off-peak hours.
  • Mid-peak, when demand for electricity is moderate. These periods are during the daytime, but not the busiest times of day.
  • On-peak, when demand for electricity is generally higher. These are the busier times of day – generally when people are cooking, starting up their computers and running heaters or air conditioners.
 
With TOU pricing, you can help manage your electricity costs by shifting your usage to lower price periods when possible.
 
People use electricity differently depending on the season, so the TOU price periods are different in the summer (May 1 to October 31) than they are in the winter (November 1 to April 30).
 
 

What are Tiered prices?

With Tiered prices, you can use a certain amount of electricity each month at a lower price. Once that limit (called a threshold) is exceeded, a higher price applies.

Although May to October 2020 has been an exception due to COVID-19, for residential customers, the threshold normally changes with the season to reflect changing usage patterns – for example, there are fewer hours of daylight in the winter and some customers use electric heating.

In the winter period (November 1 – April 30), the Tier threshold for residential customers is 1,000 kWh, so that households can use more power at the lower price.

In the summer period (May 1 – October 31), the Tier threshold for residential customers is 600 kWh. The Tier threshold for small business customers is 750 kWh all year round.

Tiered prices give you the flexibility to use electricity at any time of day at the same price, although that price will change if you exceed the threshold during the month.
 

What you will see on your bill if you are a Residential Class Customer choosing RPP Tiered Prices?

If you elected to be billed for your electricity usage based on the optional RPP Tiered prices your next invoice will appear different from how you were previously billed based on the RPP Time of Use pricing structure.  To see an example of how a Tiered Electricity bill will look, click here.
 
Once you start being billed Tiered RPP electricity prices, you will no longer be billed for electricity usage based on the time of day you use the electricity. Instead, since you have opted to be billed based on Tiered prices, you will pay based on a price of 12.6 cents/kWh for up to the Block-1 threshold (based on 1,000 kWh per 30 day period), during the winter period and any additional electricity usage over the threshold in the billing period will be billed based on a price of 14.6 cents/kWh. 
 
The electricity you are billed is based on the electricity loss adjusted usage. Milton Hydro’s electricity loss adjustment factor is 1.0375.

What are electricity losses?

When electricity is delivered over a power line, it is normal for a small amount of power to be consumed or lost as heat. Equipment, such as wires and transformers, consume power before it gets to your home or business. The dollar amount of electricity that is lost through distributing electricity to your home or business, is billed to customers by Milton Hydro who in turn pays the full amount to its electricity suppliers.

 

Where do I find the electricity losses on my bill?

The delivery line on your bill incorporates the electricity losses you are charged. Electricity losses are calculated based on Milton Hydro’s loss factor of 3.75% multiplied by the Base electricity used.

 

Example - Can you provide a detailed example of how tiered electricity prices are calculated and shown on my bill?

table2-new-(1).png
 

  • Electricity usage:
Item “a” provides the meter reading data. Base usage is 1,500 kWh and billed usage is 1,556.25 kWh (1,500 kWh X 1.0375).

table1.png
  • Components of base electricity usage billed:
  • Block 1 price of 12.6 cents (up to 1000 kWh)
    • Item b - base electricity usage of 963.86 kWh billed at the Block 1 price, and
    • Item d - electricity losses of 36.14 kWh billed at Block 1 price
    • Total = 1,000.00 kWh
    • Total of 1,000 kWh billed at Block 1 price is $121.45 + $4.55 = $126.00 (1,000 kWh X 12.6 cents)
 
  • Block 2 price of 14.6 cents (any usage over 1000 kWh)
    • Item c - base electricity usage of 536.14 kWh billed at the Block 2 price
    • Item e - electricity losses of 20.11 kWh billed at Block 2 price
    • Total = 556.25 kWh
    • Total of 556.25 billed at Block 2 price is $78.28 + $2.94 = $81.22 (556.25 kWh X 14.6 cents)
 

What do TOU and Tiered prices pay for?

The OEB sets TOU and Tiered prices based on a forecast of how much it will cost to supply TOU and Tiered customers with the electricity they are expected to use over the next 12 months. The OEB sets TOU and Tiered prices to recover the same forecast average cost of supply.
The OEB sets both TOU and Tiered prices under the Regulated Price Plan (RPP). The RPP is designed to provide stable pricing, encourage conservation and ensure that the price customers pay for electricity better reflects the price paid to generators that produce the electricity that customers use in their homes or small businesses.
Electricity utilities are not allowed to make a profit from the sale of electricity.

 
How often are TOU and Tiered prices set?

The OEB typically sets new TOU and Tiered prices for May and November, based on an estimate of how much it will cost to supply residential and small business customers on the Regulated Price Plan with the electricity that they are expected to use.
 

Will I save money by opting out of TOU prices?

There is no guarantee you will save money if you switch from TOU to Tiered prices. The total bill impact of switching will vary depending on how much electricity you consume in a month and when it is consumed during the day.

Considering a switch to Tiered prices? For more information, go to the Milton Hydro Customer Portal and select the “Smart Meter” section and select the “$ Price Comparison button” to compare the difference in electricity cost between the TOU to Tiered pricing  options.

 
What do I need to do to switch to Tiered prices?

If you’re a TOU customer and don’t want to switch to Tiered prices, you don’t need to do anything. You will stay on TOU prices.
If you do want to switch to Tiered prices, here are the rules that apply. These rules also apply if you later want to switch back to TOU prices.

  • Starting October 13, 2020, Milton Hydro is making its election form available on our website, and to any customer that requests it. Milton Hydro is accepting election forms by email or mail. You’ll need to fill out the election form to notify Milton Hydro that you want to switch. The form is intended to be as simple as possible in terms of the information that you need to provide. You will need to have a recent electricity bill on hand when filling out the form, as the information provided on the form must match the information on your bill.

  • Within 10 business days of receiving your election form, Milton Hydro will tell you if your election form cannot be processed and must explain why (for instance, if you’re not authorized to make changes to the account, or the account can’t be verified).

  • If there are no issues with your election form, Milton Hydro has the same 10 business days to let you know when you can expect to start being billed on Tiered prices. Milton Hydro will notify you of when your change will take effect, either by email or mail if we don’t have your email address.

  • A switch from TOU to Tiered prices can only take effect at the start of a billing period. A billing period is generally about 30 days long, and the start and end dates are identified on your electricity bill. Many customers are not billed based on a calendar month, and the start of your billing period can be any given day of a month.

  • Milton Hydro will start charging you Tiered prices as of your next billing period after you submit your election form if Milton Hydro receives that form at least 10 business days before that billing period starts, and provided there are no issues with your form (see above).

  • If Milton Hydro receives your complete election form less than 10 business days before the start of your next billing period, Milton Hydro will start charging you Tiered prices at the start of the next billing period after that.

  • Because a switch in prices can only take effect at the beginning of a billing period, it will take some time between the day you provide your election form and the day you actually start getting charged Tiered prices.

  • Even if you provide your election form to Milton Hydro before the end of October, you’ll very likely pay TOU prices for at least some period of time between November 1 and the time when your next complete billing period starts (or the billing period after that, depending on when you provide your election form).

 
 
 
If I have opted into Tiered prices, can I switch back to TOU prices?

Yes. And the rules that apply to switching to Tiered prices also apply if you later want to switch back to TOU prices.

 
  Can all customers opt out of TOU prices?

Any customer on TOU may opt out and pay Tiered prices instead.
Customers who are currently paying Tiered prices can’t switch to TOU prices at this time because their meters can’t be used to bill TOU prices.
If you live in a condo or apartment that has its own individual meter and your bill comes from a company other than your electricity utility, you are a customer of a unit sub-meter provider (USMP).  Customers of USMPs also can’t switch to Tiered prices. That decision can only be made for the building as a whole by the master consumer, who is the person that retained a USMP for the property. In most cases, the master consumer is the property manager, landlord or condominium board.

Can customers with energy retailers switch pricing plans?

No, customers that are buying their electricity from an energy retailer pay the electricity price set out in their contract. Once they have left their retail contract, they will have a choice between paying TOU or Tiered prices. For details about your energy contract, contact your energy retailer.

I receive a monthly credit from the Ontario Electricity Support Program (OESP). Will I lose that credit if I switch to Tiered prices?

No. You will still receive the credit.

I receive the Ontario Electricity Rebate. Will I lose that rebate if I switch to Tiered prices?


No. You will still receive the credit.
 

I am about to sign up with a new electricity utility. Will the utility inform me that I have a choice between TOU or Tiered prices before I sign up?

Yes. Milton Hydro will inform all new Regulated Price Plan customers that they have a choice between TOU or Tiered prices when they set up the account. 

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