Some Ontarians may be in for a shock this winter, as the province announced last week it will be lowering the Ontario Electricity Rebate (OER) from 23.5 per cent to 15.7 per cent. However, the reduction may be offset by cheaper winter pricing this year.
In a press release from the Ontario Energy Board (OEB), the independent crown agency shared that the OER reduction would go into effect on November 1, impacting the electricity bills for households, small business, and farm customers. For a typical residential customer who uses 700 kWh of electricity per month, their bills will decrease by about $23.00 each month, reads the release. This is compared to $36 per month last year.
“Electricity prices under the OEB’s RPP are decreasing year-over-year, which allows for a reduction in the OER,” reasons the OEB. “The overall rate of increase for customer bills will remain consistent with previous years.”
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At the same time, winter pricing, which will be in effect from November 1 until April 30, will also be reduced. Rates per kilowatt-hour during off-peak hours (between 7 a.m. and 7 p.m.) will be 9.1 cents, 14.6 cents during mid-peak hours (between 11 a.m. and 5 p.m.), and 18.9 cents during peak hours (between 7 a.m. and 11 a.m. and 5 p.m. and 7 p.m.). Last year, the rates were 9.8 cents, 15.7 cents, and 20.3 cents, respectively.
This comes as the Independent Electricity System Operator (IESO) announces it will be importing electricity from the U.S. this winter to add extra capacity while facility maintenance is carried out. The deal with the U.S.-based Alpha Generation power company will start on November 1 and run for six months, supplying Ontario with 600 megawatts of electricity from its New York facilities.
600 megawatts represents a small but critical portion of the province’s total grid—amounting to less than 3 per cent of Ontario’s winter electricity demand.
While not stated explicitly, the expected power deficit may be due to the Pickering Nuclear Generating Station powering down the last of four remaining reactors in September for multi-year repairs and improvements.
The deal between Alpha Generation and the IESO closely follows Premier Doug Ford’s threats to cut off power or introduce a 25 per cent surcharge on exported electricity to the U.S. The threats were Ford’s way of intimidating the States amid the trade war, but instead, Ontario will now be relying on the U.S. for electricity during our coldest months.
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