How Ontario electricity billing works (in plain language)
Purpose: give you a mental model for the whole bill before we dive into individual charges.
Big idea: Your bill isn’t “one price.” It’s a bundle of different costs that behave differently.
Some parts depend on how much electricity you use; other parts are fixed or policy-driven.
The 4 big parts most households see
| Bill part | What it covers | What makes it change |
|---|---|---|
| Electricity / Usage | The energy you consume (kWh) priced under the rate structure in effect (e.g., TOU or Tiered). | Your usage and the applicable rate periods. |
| Delivery | Moving electricity to your home: local lines, poles, transformers, meters, and system operations. | Often a mix of fixed and variable charges; not always proportional to usage. |
| Regulatory / Other | System-wide charges and adjustments that fund oversight and certain system programs. | Policy updates, rate adjustments, and system cost recovery mechanisms. |
| Taxes | Sales tax applied to the total. | Mostly just tracks the total bill amount. |
Who is involved (without getting too technical)
- Your local utility (LDC) bills you and maintains local distribution infrastructure (the "wires" side).
- System operators and market/regulatory bodies influence how electricity is procured, priced, and how system costs are recovered.
- Provincial policy can shape rate structures and cost recovery over time.
Why bills can rise even when usage falls
This is the most common frustration. Three reasons show up again and again:
- Fixed charges: parts of Delivery and other fees don’t drop much when you use less.
- Rate structure shifts: the same kWh can cost more depending on time-of-day rules or tier thresholds.
- System cost recovery: some charges recover system-wide costs that aren’t tied to your personal kWh in a simple way.
Next: if you only read one deep-dive, read Global Adjustment explained simply.