Editor's note: This article originally appeared on The Trillium, a new Village Media website devoted exclusively to covering provincial politics at Queen’s Park.
Some Ontario ratepayers will soon be able to opt into a new electricity rate structure that will give them cheap power overnight in exchange for a higher on-peak price.
The "ultra-low overnight plan" is targeted mostly at electric vehicle owners who want to plug in at night when demand is low. It will be available to customers of Toronto Hydro, London Hydro, Centre Wellington Hydro, Hearst Power, Renfrew Hydro, Wasaga Distribution, and Sioux Lookout Hydro in the coming months.
Energy Minister Todd Smith was on-hand to make the announcement at Toronto Hydro's headquarters Tuesday.
"This ultra-low rate, which is offered alongside a higher on-peak rate, is possible because when customers shift their electricity use to overnight periods — such as a homeowner who chooses to charge their electric vehicle overnight, a family that electrically heats their home, or a shift worker who isn't home during normal peak hours — we can make better use of excess electricity that previous governments sold at a loss," he said.
"In fact, the ultra-low overnight price plan could put up to $90 back in the pockets of these customers over the course of a year, while at the same time providing potential capacity cost savings for the electricity system, up to $5.7 million per year savings that would reduce bills for all Ontario ratepayers."
Rates are set by the Ontario Energy Board. The new "ultra-low overnight plan" would set the overnight right at 2.4 cents per kWh, from 11 p.m. to 7 a.m., compared to the current off-peak rate of 7.4 cents per kWh under the current time-of-use plan, which will remain available.
Under the new ultra-low overnight plan, the on-peak price would be 10 times higher than the overnight rate — 24 cents per kWh — giving users an incentive to refrain from intensive consumption until night. That is significantly higher than the on-peak price of 15.1 cents for the current time-of-use plan, and 8.7 cents for customers on a tiered plan. The mid-peak and weekend rates for those on the new plan would be the same as those on the currently available time-of-use plan.
Anthony Haines, the president and CEO of Toronto Hydro, said if the program is successful at pushing EV charging off of peak hours, it would help his organization defer some of the capital requirements that will be needed to add additional capacity to the grid. He likened a large-sized electric vehicle being plugged in at the end of the workday to nearly the equivalent of adding another house on the grid — a particularly acute problem on a hot summer day when the demand on the grid is at 100 per cent.
He said the "aspirational" climate goals of all levels of government will require greater electricity demands and Toronto Hydro is doing long-term planning for investments in its infrastructure to be able to meet net-zero by 2050 and the first five-year phase of that plan to support decarbonization will be going to the Ontario Energy Board this fall.