Advancing Work on a New Ultra-Low Overnight Electricity Rate

The Ontario government is advancing work to deliver a new optional ultra-low overnight Time-of-Use (TOU) electricity price plan, as part of its plan to provide consumers with more ways to keep costs down, save money, and take control of their energy bills. According to a report released today by Ontario’s independent energy regulator, the Ontario Energy Board (OEB), the new rate could save customers who switch up to $90 per year. At the same time the new rate will support electric vehicle (EV) adoption and the province’s growing EV manufacturing industry by decreasing overnight charging costs when province-wide electricity demand is lower.

“Our government has put families back in control of their energy bills and we will continue this work by delivering a third electricity price plan for customers across Ontario” said Todd Smith, Minister of Energy. “Introducing the ultra-low overnight electricity rate will help our efforts to make life more affordable for Ontario families by keeping costs down and saving them up to $90 per year while reducing EV charging costs and supporting the historic investments in our province’s rapidly expanding EV manufacturing sector.”

This report released today is the result of a request from Minister Smith, who asked the OEB to provide him with options to implement the new ultra-low overnight price plan. The OEB has proposed a new electricity pricing structure that would be presented as a third option to electricity customers, in addition to the existing TOU and Tiered plans.

If the proposed price plan was in place today, the OEB estimated that it could offer a new ultra-low overnight rate of approximately 2.5 cents per kilowatt-hour (kWh), which is 70 per cent lower than the current off-peak rate, in exchange for a higher on-peak rate. This would help consumers who use more electricity at night, such as EV users, find savings of up to five per cent on their bills, equivalent to savings of up to $90 per year.

“This initiative will help support the uptake of EVs in Ontario, by making it more affordable for drivers to charge up,” said Caroline Mulroney, Minister of Transportation. “As we build Ontario’s transportation network for the future, we continue to invest in low-carbon travel options that reduce greenhouse gas emissions and get people to where they need to go.”

Delivery of a new ultra-low overnight rate is possible as Ontario continues to have excess electricity during overnight hours. Shifting electricity use to these hours would make better use of Ontario’s clean electricity supply when province-wide demand is lower, supporting decarbonization efforts and resulting in potential capacity cost savings for the electricity system of up to $5.7 million per year. Together this would increase grid efficiency and generate value for all Ontario ratepayers.

“Customers expect to be able to choose the electricity price plan that best fits their lifestyle, allows them to manage costs and incents their adoption of new energy technologies,” said Susanna Zagar, CEO of the OEB. “We are pleased that the insights we have gained through our analysis might enable more choice and empower Ontarians.”

The government will consider the OEB’s report along with stakeholder feedback received through the recent proposal on the Environmental Registry of Ontario and the OEB’s consultation held earlier this year, with the intent of making the new price plan available to customers by April 2023.

“New ultra-low overnight rates are further proof that our government is working to rebuild Ontario’s economy all while keeping costs down for families,” said David Piccini, Minister of the Environment, Conservation and Parks. “These changes will enable further EV adoption and provide relief for consumers and small businesses while utilizing the full capacity of Ontario’s clean energy grid, protecting the environment now and for future generations.”

Quick Facts

Quotes

"CVMA welcomes the new ultra-low overnight rate that will reduce energy costs for Ontarians and support electric vehicle adoption by reducing charging costs when electricity demand is lower."
- Brian Kingston
President and CEO, Canadian Vehicle Manufacturers’ Association

"We strongly support the Province's plan to implement an ultra low electricity price overnight. This rate structure will not only make electric vehicles even more affordable to own and operate, but will also make better use of Ontario's surplus of electricity at night, benefiting the electricity system as a whole."
- Cara Clairman
President and CEO, Plug'n Drive

"The new ultra-low overnight rate could help residential consumers that use more electricity at night save money, while supporting electric vehicle (EV) adoption, by reducing overnight EV charging costs when province-wide electricity demand is lower. An ultra-low overnight rate could also further support decarbonization and help achieve Ontario’s climate goals. It’s a win-win situation."
- Sandro Perruzza
CEO, Ontario Society of Professional Engineers

"I am extremely pleased that Alectra’s pilot has helped create an opportunity for another electricity rate plan option for Ontarians. This new rate will attract and reward electric vehicle users, incent consumption behaviours that help us better manage the electricity grid, and provide our customers with the choice that they value."
- Brian Bentz
President and CEO, Alectra Inc.

"Ontario’s new ultra-low overnight Time-of-Use electricity price plan recognizes that electrification is key to the province’s economic growth. This plan empowers customers with more choice and control over their energy usage, particularly for those looking at electric vehicle (EV) adoption, by reducing the cost to charge overnight. The EDA’s research shows that the number of Ontarians who believe it is likely that someone in their household will buy an electric or plug-in vehicle in the next five years is 30 per cent – with a further 27 per cent seeing it as likely in the next five to 10 years. Ontario’s local hydro utilities are ready and willing to assist, operate, and own charging infrastructure services to plug in the growing demand for electrified transportation."
- Teresa Sarkesian
President and CEO, Electricity Distributors Association

"ChargePoint is pleased to see Ontario’s new ultra-low overnight Time-of-Use electricity price plan. This is an important step in making it easier for small businesses and consumers in Ontario to go electric. The new ultra-low overnight Time-of-Use electricity price plan will allow electric vehicle drivers to save on fueling costs when they charge overnight - for electric vehicle drivers, this can be as simple as plugging in when they get home and programming their charger to do the rest. The new rates can also help utilities manage demand on the grid, when electric vehicle drivers choose to charge overnight when there is more available capacity, including from renewables. This is a win-win for Ontario’s electricity system, consumers, and small businesses."
- Suzanne Goldberg
Director, Public Policy – Canada, ChargePoint Canada Inc.

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