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Market Snapshot: Why do electricity rates change throughout the day in Ontario and Nova Scotia?
Release date: 2018-09-26
Time-of-use electricity rates are prices that change depending on the time of day. Ontario and Nova Scotia apply time-of-use rates to many of their residential electricity consumers by using smart meters. Smart meters not only measure the amount of electricity consumed, but also when in the day it is consumed. Time-of-use rates are typically higher during times of high electricity demand (from 7 AM to the mid to late evening, for example) and lower during hours of lower demand (such as overnight).
Changing prices during the day are meant to encourage customers to shift their electricity consumption from periods of high demand to periods of lower demand. This could mean starting dishwashers and clothes driers early in the morning or later at night to save money.
Source and Description
Description: This bar chart shows the time-of-use electricity rate, per hour, for Ontario and Nova Scotia. The chart illustrates the rates for different types of days in cents per kilowatt-hour.
For Ontario, it shows the rate for weekdays in the warm season (from May to October), weekdays in the cool season (November to April), and weekends and holidays.
For the warm season, the rate is 6.50¢ from 0:00 to 7:00, 9.40¢ from 7:00 to 11:00, 13.20¢ from 11:00 to 17:00, 9.40¢ from 17:00 to 19:00, 6.5¢ from 19:00 to 23:59.
For the cool season, the rate is 6.50¢ from 0:00 to 7:00, 13.20¢ from 7:00 to 11:00, 9.40¢ from 11:00 to 17:00, 13.20¢ from 17:00 to 19:00, 6.50¢ from 19:00 to 23:59.
For weekends and holidays the rate is 6.50¢.
For Nova Scotia, it shows the rate for weekdays in the warm season (from March to November), weekdays in the cool season (from December to February), and weekends and holidays.
For the warm season, the rate is 8.40¢ from 0:00 to 7:00, 15.33¢ from 7:00 to 23:00, and 8.40¢ from 23:00 to 23:59.
For the cool season, the rate is 8.40¢ from 0:00 to 7:00, 19.69¢ from 7:00 to 12:00, 15.33¢ from 12:00 to 15:00, 19.69¢ from 16:00 to 23:00, 8.40¢ from 23:00 to 23:59.
For weekends and holidays the rate is 8.40¢.
Time-of-use rates are also meant to reduce the overall cost of electricity. As electricity demand rises during the day, a region may need to call on more expensive forms of electricity generation so supply can meet demand, and overall costs rise. A region might also need to import more expensive electricity from somewhere else.
Time-of-use rates also vary by season. Warm season rates peak during the middle of the day, when temperatures are highest and air conditioning is the most heavily used. In the colder months, rates peak in the morning and evening when people are using relatively more hot water, lighting, and heating.
Another benefit of spreading electricity demand throughout the day is that peak demand can decrease over the long term, reducing the total required generation capacity of an electricity system. Lower generation capacity means fewer, under-utilized power stations are needed.
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