Future Cost of Electricity

November 2017

Toronto has the highest electricity bill increases in North America over the past decade.  Condo corporations and residents can continue to expect annual increases in their electricity fees.

Electricity bills continue to include charges for excess electricity capacity even as overall usage declines.

The cost of electricity temporarily “decreased” by 8% in early 2016 when the “Debt Retirement Charge” was eliminated from electricity bills.  The charge will soon be replaced by a new one to cover the cost of provincial energy policies.

Ontario has overbuilt its electricity infrastructure in recent years as demand has declined by 10% since 2007.  The current overcapacity means that electricity generators are paid to curtail output.

When electricity is not generated as projected, this “lost revenue” is recovered through higher electricity rates.  Another factor affecting current electricity rates is cost overruns on prior nuclear energy projects.  It is these costs which will soon begin to be repaid by the new fee.

Options for reducing electricity use, and costs, in condo buildings include efforts to change consumer habits by educating them on the cost of poor electricity use habits.  Metering and submetering offer a way to ensure those who use more electricity pay accordingly.