Ontario Power Prices Are Too High!
My service provider is Enersource Hydro (now Alectra Utilities) Mississauga and I just received my latest electricity bill covering the period June 12th through August 13th 2016. I had to go back 24 previous bills (August 2012) to find one this high! No doubt the hotter than normal summer temperatures were a contributing factor; we were guilty of using 6.8% more electricity in this billing period than the same period in 2015. However the main reason is our average cost per kWh was 20% higher than last year. Ouch!This aroused my curiosity; what exactly is the cost for electricity in Ontario? So I opened up my files and took a closer look at our billing cost, consumption, and the average unit price we paid for electricity going back to October 2002. [I keep close track of utility bills as part of my home office costs so the information was close at hand].
Price
To make things easy I simply took the dollar cost for each billing period and divided it by the electricity consumed to determine my average unit price. This makes the most sense to me because it equates what I pay to exactly what I use. I then totaled annual cost and consumption based on an August through June cycle. Here is what I found... |
Chart 1: Power Prices are Increasing |
More bad news - in recent years the price increase has accelerated. Since August 2013 my average price has increased by 31% or 10.3% per year - with no apparent end in sight. [My last two bills for the 2016 year had average rates of $0.172/kWh and $0.182/kWh].
Consumption
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Chart 2:Consuming Less is No Longer Reducing My Bills |
External factors like temperature and humidity do impact the consumption of power but it is fairly obvious from Chart 2 that in recent years we have found ways to reduce our electricity use. To illustrate this point our average annual consumption from 2003 through 2012 was 20,230 kWh with a peak consumption of 21,263 kWh in 2010. Since then we have had six years of declines. Our 2016 usage was 12,398 kWh - the lowest level since we have been in our house; (8,865) kWh or (41.7)% lower than the 2010 peak and (38.7)% lower than the 2003 to 2012 average.
Billing Cost
Our annual cost of electricity since 2003 has averaged $2,183 with a peak cost of $2,597 in 2011. Since 2011 our annual cost has fallen. By 2015 we were paying $(701) or (27)% less than 2011 and essentially the same amount as in 2003! This was accomplished by a significant reduction in consumption that more than made up for the price increases. Our 2016 cost was $205 or 10.8% higher than 2015 and a chilling reminder of what happens when consumption doesn't fall anymore.Long Term Price Impact
Using the Ontario Energy Board Monthly Bill Estimator I took my 2003 consumption and divided it equally into six to simulate an average bi-monthly bill. I picked my utility from the drop down box (Enersource Hydro Mississauga). I have Time of Use (TOU) billing and for this exercise I left the splits for off-peak, mid-peak and peak usage at the provincial average of 65%, 17% and 18% respectively. Popping in consumption of 3,486 kWh my estimated bi-monthly bill would have been $598.49 or $3,590.94 annually. If we had done nothing our power bill in 2016 would have resulted in a 91% increase in annual costs (assuming today's prices, normal TOU consumption patterns and our 2003 consumption).TOU Consumption
Part of the efforts we have made to manage our electricity costs is to consciously try to defer usage to off-peak hours; 7 pm to 7 am on business days and anytime on weekends and holidays. In that regard we pay less than the average provincial consumer using the same quantity of electricity as our split for 2016 averaged 73% off-peak, 14% mid-peak and 14% peak. The TOU savings for us amounted to about $66 annually and our electricity bill as a result is (3.1)% lower than it otherwise would have been.Mike Says ...
Since 2003 power prices have risen by almost 90% and our consumption is down almost 40% leaving us with a reasonable increase in our electricity cost.It has not been easy reducing our power consumption and shifting demand to lower cost time periods. We have incurred other costs; investment in new energy efficient devices, and changes in our energy usage habits including a willingness to forgo consumption (i.e. turn up the thermostat on our AC) to reduce costs.
But after five years and a very hot summer we are tiring of this never-ending battle. Now that our consumption has stopped declining we could be facing significant increases in future power costs. It is one thing to reduce consumption to save money and something totally different to reduce consumption to minimize cost increases. In the latter case you are getting ahead and in the former barely staying afloat.
If the real reason for rising prices is to contract for more expensive new generation should there not be incrementally higher price points for excessive consumption? As brother Mike correctly points out the Ontario power system penalizes the poor but does nothing to curtail the rich from using as much power as they want. In fact as you consume less energy your average unit cost actually increases due to the nature of the charges; some are fixed, some are variable. [For the fixed portion the less consumed the higher the impact of the fixed charges].
I support using electricity more efficiently but enough is enough! We need to better understand how to reduce consumption without dramatically reducing our standard of living. Prices are out of control and many folks are feeling the pain.
