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Electricity

This charge is for the electricity you use, which you buy either from your local utility or through a licensed electricity retailer. (View Current Rates)

The total amount of electricity consumed is multiplied by an adjustment factor, previously called the Loss Factor. When electricity is transmitted over a power line, a small amount of that electricity is lost naturally, as heat. (The transmission equipment, such as wires and transformers, consumes this power before it gets to your home or business.) Your local utility must purchase the power to cover these losses. It collects the cost of this power from consumers through the adjustment factor and passes the amount directly to its suppliers.

Delivery

This charge is made up of the following components, which are approved by the Ontario Energy Board for each utility:

DISTRIBUTION COSTS: This component covers the costs your utility incurs in delivering electricity to your home or business.

Distribution costs include:

• CUSTOMER SERVICE CHARGE: This charge covers the utility’s administrative costs, such as meter reading, billing, customer service and maintenance of accounts. It is a fixed cost – that is, it does not change with the amount of electricity used.
• DISTRIBUTION CHARGE: This charge reflects the costs involved in delivering the electricity from the local utility to your home or business. It includes the cost of building and maintaining infrastructure, such as wires and hydro poles. The distribution charge varies with the amount of electricity used.

TRANSMISSION COSTS: This component covers the costs of delivering electricity from the generating stations to your utility along the high-voltage transmission system (also called the transmission grid) owned by Hydro One Networks Inc. Transmission costs vary with the amount of electricity used.

Transmission costs include:

• NETWORK SERVICE CHARGE: This charge covers the cost of delivering the electricity from the generating stations to your utility through Hydro One’s transmission system.
• LINE AND TRANSFORMATION CONNECTION SERVICE CHARGE: This charge covers the costs your utility incurs in connecting to Hydro One’s transmission lines, as well as the cost of transforming the electricity from the high voltages used in the bulk transmission system to the lower “distribution voltages” used by your local utility.

Regulatory Charges

This charge is made up of the following components, which are approved by the Ontario Energy Board:

WHOLESALE MARKET SERVICE CHARGE: This charge (View Current Rates) covers the cost of services provided by the Independent Electricity Market Operator (IMO). The IMO operates Ontario's competitive electricity market, where electricity is bought and sold. This charge also includes a 0.1 cent per kWh charge for Rural and Remote Rate Protection, which all customers pay to offset the higher cost of distributing electricity to consumers in rural and remote areas of Ontario.

STANDARD SUPPLY SERVICE CHARGE: This charge (View Current Rates) covers the administrative costs incurred by your utility in providing electricity to Standard Supply Service customers. Electricity that is bought from the utility - instead of from a licensed electricity retailer - is called “Standard Supply Service”.

Debt-Retirement Charge

This charge (View Current Rates) has been set by the Ontario Ministry of Finance to pay down the residual stranded debt of the former Ontario Hydro.

Provincial Benefit

The price of power generation in Ontario is set by a competitive market. Certain generators receive payments through regulation or contract that differ from the market price. Your portion of the net adjustment arising from these different payments is included on your bill.

RPP Settlement

If you leave the Regulated Price Plan, you will receive or pay your share of the difference between the amount RPP consumers have paid for electricity and the amount that has been paid to generators.