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Small Business Electricity Bills in Ontario – Key Differences Explained

Updated 2026‑04‑22

Electricity bills for small businesses in Ontario look similar to residential bills at first glance, but several important differences affect how costs are calculated. These differences can influence monthly expenses, budgeting, and long‑term planning for storefronts, workshops, restaurants, offices, and other commercial spaces.

This guide explains how small business electricity billing works in plain English, focusing on the parts that matter most to business owners: rate classes, demand considerations, load profiles, delivery charges, and how to interpret the bill.

1. Small businesses fall under different rate classes

Most small businesses in Ontario are billed under the General Service (GS) < 50 kW rate class. This is the commercial equivalent of a residential customer.

However, some businesses fall into other categories:

  • GS < 50 kW — typical small businesses with modest electrical needs.
  • GS 50–999 kW — larger businesses with higher peak demand.
  • GS 1,000–4,999 kW — large commercial/industrial customers.

This article focuses on the GS < 50 kW group, which includes most small storefronts, offices, and service businesses.

2. Small businesses can choose TOU, Tiered, or ULO pricing

Like residential customers, small businesses under 50 kW can choose between:

  • Time‑of‑Use (TOU)
  • Tiered pricing
  • Ultra‑Low Overnight (ULO)

The best plan depends on the business’s operating hours and equipment usage. For example:

  • A bakery running ovens early in the morning may benefit from TOU off‑peak rates.
  • A retail store with steady daytime usage may prefer Tiered pricing.
  • A business with overnight refrigeration or charging needs may benefit from ULO.

Businesses can switch plans once per billing cycle through their utility.

3. Small business bills include the same major components as residential bills

Small business bills include:

  • Electricity (energy) charge
  • Delivery charges
  • Regulatory charges
  • Global Adjustment (built into regulated rates)
  • HST

However, the delivery charge structure can differ significantly from residential customers, especially for businesses approaching the 50 kW threshold.

4. Demand matters — even for small businesses

Residential customers are billed only on energy (kWh). Small businesses, however, may see charges influenced by demand — the highest amount of power used at one time.

For GS < 50 kW customers:

  • Demand is monitored but not billed directly.
  • If a business regularly exceeds 50 kW, it is moved into the GS 50–999 kW class.

Once a business enters the GS 50–999 kW class, demand charges become a major part of the bill. This is why some businesses try to avoid large, simultaneous equipment usage.

5. Load profile: why two businesses using the same kWh can pay different amounts

Two businesses may use the same total energy but have very different load profiles — the pattern of when and how electricity is consumed.

Examples:

  • A hair salon with steady daytime usage.
  • A restaurant with sharp peaks during lunch and dinner.
  • A workshop with power tools that create short bursts of high demand.

Even under GS < 50 kW, a “spiky” load profile can push a business closer to the 50 kW threshold, affecting future rate classification.

6. Delivery charges differ more for businesses than for homes

Delivery charges for small businesses often include:

  • Customer service charge — usually higher than residential.
  • Distribution volumetric charge — based on kWh used.
  • Transmission charges — similar structure to residential but at commercial rates.

Because small businesses typically use more electricity during daytime hours, delivery charges can make up a larger share of the bill compared to residential customers.

7. Why small business bills can fluctuate more than residential bills

Several factors make small business bills more variable:

  • Seasonal business cycles — retail, tourism, and food service often have peaks and valleys.
  • Equipment usage — HVAC, refrigeration, ovens, compressors, and lighting can vary by season.
  • Operating hours — extended hours increase exposure to on‑peak TOU rates.
  • Demand spikes — simultaneous equipment use can push a business toward the 50 kW threshold.

Understanding these patterns helps business owners anticipate and manage costs.

8. Practical ways small businesses can reduce electricity costs

Small businesses have more control over their electricity usage than many owners realize. Practical steps include:

Shift flexible loads

  • Run dishwashers, laundry, or sanitation equipment during off‑peak hours.
  • Use programmable thermostats to reduce HVAC usage outside business hours.

Reduce peak usage

  • Avoid running multiple high‑demand appliances at the same time.
  • Stagger equipment startup in the morning.

Improve lighting efficiency

  • Switch to LEDs in retail, office, and workshop spaces.
  • Use occupancy sensors in storage rooms and washrooms.

Maintain equipment

  • Clean HVAC filters regularly.
  • Ensure refrigeration seals are tight.
  • Service compressors and motors to maintain efficiency.

These actions can reduce both energy usage and peak demand.

9. Small business vs residential: key differences at a glance

Feature Residential Small Business (GS < 50 kW)
Rate plan options TOU, Tiered, ULO TOU, Tiered, ULO
Demand charges No Monitored, but not billed unless exceeding 50 kW
Customer service charge Lower Higher
Load profile impact Minimal Important for staying under 50 kW
Seasonal variability Moderate Often significant

10. When a business should review its electricity plan

It’s worth reviewing your plan if:

  • your operating hours have changed
  • you added or removed major equipment
  • your business expanded or downsized
  • your bill has become more variable
  • you are approaching the 50 kW threshold

Switching plans is free and can be done once per billing cycle.