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Become an Educated Energy Consumer    OttawaEnergyAudit     Tuesday 18 December 2018
Current Time-of-use pricing is: medium at 19.393¢/kWh
Contact us now to book your audit.

Published Columns: May 2006
Curbing Your Consumption:
Those Darn Numbers

By John Ford

Each month there is feedback from readers about various subjects, but the one which repeatedly creates the most misunderstanding and frustration is the actual price we are paying for each kWh. This is very important for us this month because our costs have just gone up more than any time in Ontario's history, according to Tom Adams of Energy Probe. You should take the time to understand how much you are paying, and how to determine the costs as you see them on the bill.

The first misunderstanding is the net energy price versus the actual cost. The cost of a kWh which is often quoted in the media or by the government is only a fraction of the total cost. If you sign a contract with a reseller, this is the line on the bill which will be different from those buying directly from the utility at the raw cost. From the capped price in 2003 of 4.3¢ to the peak demand smart meter price of 9.3¢ per kWh, this seems to show an increase of 216%. When you factor in the other costs, charges, and taxes, the actual increase is closer to 65%. A bill for the average 1000 kWh per month has gone up by about 28% overall from 2003 capped price to the announced non-smart meter prices this summer.

Your bill can be difficult to understand, partly because you need to do some relatively complex math to figure it out. There may also be some assumptions which may not be obvious, like when the stepped price kicks in. In the summer of 2005, you could use 750 kWh before you moved to the higher price. In the winter this threshold was increased to 1000 kWh, and this summer it moves farther down to 600 kWh. In fact, those numbers are not correct, since your consumption is corrected to reflect transmission losses by adding 3.64% before being compared. The actual numbers are 724, 965, and 579 kWh. This loss compensation is also used to increase the amount you pay for a transmission charge, and a wholesale market charge, but not the debt retirement charge or the local delivery charge. Still following? It's even tougher to follow when the various charges are either combined or broken out on various lines of the bill over separate time periods or categories which can also affect the rounding on tax totals.

What is important is how much you will save for each kWh of consumption reduction, or by how much you will pay for each additional kWh. If your consumption is above the actual threshold above, you need to use the new net energy price of 6.7¢ in the equation which gives an actual billed price of 11.962¢/kWh*. A typical consumer using 1000 kWh per month will see over 42% of their use billed at this rate. That means each hour of your air conditioning this summer will cost 60¢. If you run it for eight hours a day, that's just under $300 per bill.

In addition to the per kWh charge, there is a fixed charge of $14.32* added to each bill including taxes.

* At the time of writing, exact numbers for changes to the other costs were not available so this may be off by a small factor.

John Ford is a technology consultant, owner of a small energy conservation business, and Energy Advocate for the Green Party of Ontario.