Modify key power rates: report

Ontario Time-of-Use Rates drive demand response via smart meters, with peak pricing far above off-peak. The Brattle Group urges larger differentials; the OEB may adjust tariffs to cut peak load and bills.

A report for the Ontario Energy Board recommends big changes in peak and off-peak electricity prices in the province.

Ontario residents who are on smart meters pay different rates for their electricity, depending on the time of day.

The report says the difference isn't big enough to encourage people to change their energy consumption habits but if the OEB does move to change the prices in line with raising peak-time rates across the board, customers will see results.

"As customers shift consumption in response to the rates, the percentage of those experiencing bill savings will increase," said the report, written by the Brattle Group.

"There's no question we're aware of the fact the bigger the difference between on-peak and off-peak use," said Ontario Energy Minister Brad Duguid.

Duguid said he wants to create a "bigger the incentive for people to shift to off-peak use."

The province's new smart meters are supposed to encourage consumers to shift away from expensive daytime electricity use in favour of using more electricity in the evenings and on weekends.

Currently, the price for using electricity during peak hours reflects higher daytime rates compared to off-peak, but the report says that's not a big enough spread.

The report suggests making peak power three or even four times more expensive than off-peak to ensure TOU rate adjustments deliver results.

Duguid says the final decision for setting those prices will be up to the OEB.

But Marc Antoine Fleury of the energy-consulting firm Elenchus says the report sends a clear message.

"It seems in the near future, the peak price of the time-of-use option will be increasing. The only question is by how much," he said.

Ontario plans to have three million households on TOU billing by next summer.

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