Residential Electricity Pricing in Canada v1.0

Residential Electricity Pricing in Canada

pg. 1 ©Sageline Consulting - 2015


A Report by Sageline Consulting

August 2015



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1 CONTENTS

2 Summary ............................................................................................................................................... 5

3 Introduction .......................................................................................................................................... 6

4 Pricing .................................................................................................................................................... 7

4.1 Pricing Structures .......................................................................................................................... 7

4.2 Pricing to Encourage Conservation ............................................................................................... 8

4.2.1 Flat rates ............................................................................................................................... 8

4.2.2 High rates .............................................................................................................................. 8

4.2.3 Tiered rates ........................................................................................................................... 8

4.2.4 Time of Use rates .................................................................................................................. 8

4.3 Taxes ............................................................................................................................................. 9

4.3.1 Government Sales Tax (GST) ................................................................................................. 9

4.3.2 Provincial Sales Tax (PST) ...................................................................................................... 9

4.3.3 Provincial Rebates ................................................................................................................. 9

4.3.4 Local Taxes ............................................................................................................................ 9

5 Breakdown of Costs ............................................................................................................................ 10

5.1 Energy Charges ............................................................................................................................ 11

5.2 Service Charges ........................................................................................................................... 12

5.3 Taxation ....................................................................................................................................... 13

5.3.1 Provincial Taxation .............................................................................................................. 13

5.3.2 Surcharges and rate riders .................................................................................................. 13

5.3.3 Rebates ............................................................................................................................... 14

6 Conclusions ......................................................................................................................................... 15

Appendix - City Studies ............................................................................................................................... 16

Whitehorse ............................................................................................................................................. 16

Vancouver ............................................................................................................................................... 17

Yellowknife .............................................................................................................................................. 18

Calgary..................................................................................................................................................... 19



Edmonton ............................................................................................................................................... 20

Regina ..................................................................................................................................................... 21

Winnipeg ................................................................................................................................................. 22

Toronto ................................................................................................................................................... 23

Ottawa .................................................................................................................................................... 24

Montreal ................................................................................................................................................. 25

Iqaluit ...................................................................................................................................................... 26

Labrador City ........................................................................................................................................... 27

Fredericton .............................................................................................................................................. 28

Halifax ..................................................................................................................................................... 29

Charlottetown ......................................................................................................................................... 30

St John’s .................................................................................................................................................. 31



2 SUMMARY

The sixteen cities chosen for this report represent a cross section of all Canadian customers.

Cumulatively, these cities hold a quarter of the nation’s population.

Sageline Consulting has developed a tool that allows residential bills to be accurately calculated for any

utility, no matter how complicated the design of the rate structure. This tool has been used to calculate

comparative monthly bills for each of the sixteen cities in this report.

Monthly bills for residential electricity customers vary from $41 in Labrador City to $397 in Iqaluit.

This high level conclusion is underpinned by further analysis of the core components of the residential

electricity bill. It quantifies the substantial differences between the amounts charged for energy,

service, and taxation and suggests that federal coordination of provincial energy policies could benefit

consumers.

This report also identifies and evaluates the different rate designs used in Canada to encourage energy

conservation by residential customers.



3 INTRODUCTION

This report investigates the variety of prices offered to Canadian residential customers. Taking data

from utility websites and regulatory filing documents it exposes the wide variation in electricity pricing

across the country. The sixteen city vignettes in this report take the reader across Canada - from sea to

shining sea – visiting every province and territory along the way.

This report is not intended to be a comprehensive catalogue of every community in Canada.

Undoubtedly there will be customers who are subject to rates higher (or lower) than the extremes

identified here. The sixteen cities highlighted here have been chosen to illustrate the range of customer

experience in major population centers across the country. In doing so it also shines a light on the

different utility structures and regulatory regimes that have evolved in different provinces and

territories.



4 PRICING

This chart summarizes the monthly cost of an average residential user, assuming consumption of

900kWh each month.

Monthly bills vary by a factor of 10. The highest charges, as might be expected, are in the territories

where isolated communities rely on diesel generators. The fuel for these generators has to be shipped

in or, sometimes, flown in which adds to the cost.

The lowest rates identified in this report are in Labrador City. This reflects the abundance of low cost

hydro generation available in Labrador.

4.1 PRICING STRUCTURES The pricing structure varies from province to province and is influenced by the local industry

structure.

In British Columbia - where there is a single utility responsible for all aspects of the market – there

is a monthly fixed charge and a single usage rate. This is simple for the customer to understand

but provides no transparency into how these rates are set.

Alberta and Ontario both operate wholesale markets for procuring generation of electricity. In

Alberta competition between supply companies has been also been extended to all customers. In

both of these provinces rates are separated into their constituent parts: energy; transmission;

distribution; losses; and regulatory charges. This can be confusing for residential customers as

the headline rate quoted by the utility is typically only the energy component. Since this is around



60% of the combined rate, customers may, with some justification, ask why their final bills are

high when the quoted rates are low.

4.2 PRICING TO ENCOURAGE CONSERVATION The structure of electricity rates can be designed to encourage conservation by customers. There

are a number of ways in which this may be achieved.

4.2.1 Flat rates

Uniform (flat) rates do not encourage any form of conservation from customers. This is

the case in 10 of the 16 cities reviewed in this report. This is a lost opportunity.

4.2.2 High rates

Setting high charges would encourage consumers to use less energy. It is a discriminatory

practice as it has a disproportionate impact on low income households. Regulatory

bodies across Canada encourage utilities to set charges that reflect the costs imposed by

customers and would not approve the application of high uniform rates purely to reduce

overall demand. There is no evidence to suggest that any utility in Canada marks up rates

to encourage demand reduction. The high rates seen in Iqaluit and Yellowknife reflect the

high costs of electricity generation in those areas.

4.2.3 Tiered rates

Tiered rates, which progressively increase with a customer’s consumption do provide

some encouragement to reduce usage. This is a simple rate design that is easily

understood by customers. Setting the lowest rate for the first tranche of energy

consumed, avoids discrimination against low income households (which tend to have

lower than average usage).

Vancouver and Montreal both have 2 tier rates. The second tier is approximately 50%

higher than the first tier. The higher rates are imposed after the first 666kWh

(Vancouver) or 900kWh (Montreal)

Whitehorse has a 3 tier rate. The second tier is 6% higher than the first tier and applies

after the first 1000kWh each month. The third tier is 15% higher than the first tier and

applies after the first 2500kWh per month. The higher usage needed to incur the higher

rates and the lower differential between rates means that Whitehorse customers are

subject to a lower conservation incentive than customers in Vancouver or Montreal.

Charlottetown customers are subject to a 2 tier rate. However the rate for high usage

(above 2000kWh in a month) is 20% lower than the first tier rate. This provides no

incentive to customers to conserve energy – in fact it actively rewards the highest usage

customers.

4.2.4 Time of Use rates

Ontario has installed smart meters for all residential customers and operates Time of Use

rates. These rates do not provide incentives for customers to reduce overall consumption

in the way that tiered rates do. Instead they encourage customers to shift demands from



peak times to off-peak times. This in turn reduces the need for generation at peak times

and reduces the wholesale market price at times of peak.

Off-peak times in Ontario are 7pm to 7am and all day on weekends and public holidays.

Peak times in Ontario are 11am to 5pm in Summer and 7am to 11am and 5pm to 7pm in

Winter. Other periods are classified as mid-peak.

Published peak rates are 100% higher than offpeak rates. However, other elements of the

customer’s bill are charged at flat rates per kWh. This has the effect of diluting the

differential of peak to offpeak prices. The final incentive as seen on customer bills is that

peak prices are approximately 65% higher than offpeak prices.

4.3 TAXES No comparison of electricity prices across Canada would be complete without accounting for taxes. The

tax regime varies across the country and complicates like for like comparisons between jurisdictions.

4.3.1 Government Sales Tax (GST)

GST at the federal rate of 5% is applied to all electricity sales in Canada

4.3.2 Provincial Sales Tax (PST)

Provincial Sales Tax is applied to electricity sales in some, but not all, provinces. PST of 8%

apples in Manitoba, Ontario, New Brunswick, and Newfoundland and Labrador. PST of 9%

applies in PEI. PST of 9.75% applies in Quebec. PST of 10% applies in Nova Scotia.

4.3.3 Provincial Rebates

To mitigate the impact of Provincial Sales Tax, some provinces provide rebates to the

customers bills. These have typically been introduced at the time that provincial Sales Tax

has been applied to customer bills and they are generally calculated to cancel out the

provincial element of the taxation. Currently provincial rebates are provided in Ontario

and Nova Scotia.

Provincial rebates may be offered as a time limited program. For example the Clean

Energy Benefit in Ontario expires in December 2015.

In Yukon Territory, the Government applies an Interim Electrical Rebate of 2.9 c/kWh for

the first 1000kWh consumed each month. This rebate offsets (at least for residential

customers) surcharges that are currently applied to Yukon electricity bills in response to

under recovery by the industry in previous years. The Interim Electrical Rebate has

recently been extended to March 2016.

4.3.4 Local Taxes

In addition to federal and provincial taxes, some utilities are also required to tax electricity

customers on behalf of municipal governments. These local taxes take a variety of forms.

In Alberta, both Calgary and Edmonton levy a Local Access Fee of between 0.4 to 0.7 cents

per kWh. This can add $6 per month to an average bill. Customers in Yellowknife pay a

Franchise Fee of 2.26% added to their bill.



5 BREAKDOWN OF COSTS

The chart in Chapter 4 can be redrawn to highlight individual components of the residential bill. The

core components are Service Charges, Energy Charges and Tax. Although energy charges are the

dominant component of the bill, service charges vary widely and are an important element in

determining ranking between cities.



5.1 ENERGY CHARGES Energy charges range from $30 per month in Labrador City to $360 per month in Iqaluit.

In general, energy prices reflect the underlying costs of the dominant generation source: hydro in

Labrador City; diesel in Iqaluit. Charlottetown and Halifax import energy from New Brunswick.

The energy costs for these cities are higher than for Fredericton as they include the costs of

transmission between provinces.

Alberta and Ontario have competitive generation markets and it would be expected that

competition would lead to low energy costs. This can be seen in Edmonton and Calgary where

energy costs are lower than in Vancouver (which is predominantly hydro powered).

The energy costs in Toronto and Ottawa are not as competitive as those in Alberta. This may

signify inefficiencies in the design and operation of the Ontario wholesale electricity market.



5.2 SERVICE CHARGES In cities like Vancouver, the tariff is expressed simply as a Service Charge, an Energy Charge, and

Taxation. Although not described explicitly, the service charge covers a range of costs such as

metering, billing, and the costs of the transmission and distribution networks that convey

electricity from generators to the consumer. It also includes the costs of operating the electricity

market and the cost of regulatory bodies.

In other cities, such as Calgary and Toronto, some of these individual charges are set out

separately on the bill in addition to a fixed monthly charge. In this chapter these non-energy

charges have been consolidated to allow comparison between cities.

Service charges range from $5 in Vancouver to $57 in Toronto.

It is notable that the lowest monthly service charges are in those cities whose supplier is an

integrated energy company. For example, BC Hydro supplying Vancouver and Hydro-Quebec

supplying Montreal.

Conversely, the highest service charges are in Alberta and Ontario where the electricity industry

has been divided into separate companies for Generation, Transmission, and Distribution.

Economic theory would suggest that this separation with the associated transparency on the costs

of individual elements of the market allows greater control of costs. However it appears that for

residential customers in Canada, the integrated companies are better able to manage service

costs.



5.3 TAXATION The tax element of residential electricity bills varies from $1 per month in Whitehorse to $75 per

month in Yellowknife. There are several factors at play in these values.

5.3.1 Provincial Taxation

Whilst all provinces and territories apply the federal Government Service Tax of 5%, a

number of provinces also apply Provincial Service Tax. PST is applied to the bills of:

Winnipeg; Toronto; Ottawa; Montreal; Fredericton; Labrador City; Charlottetown; Halifax;

and St John’s.

5.3.2 Surcharges and rate riders

Various charges can be added to residential bills by the regulator. For example a utility

may be allowed to impose a surcharge to recover costs that were incurred but

unrecovered in previous years. Usually these costs are a small component of the overall

bill. In 2015, two cities in this report are subject to significant surcharges. Residents in

Whitehorse are paying a 17.69% surcharge which adds $22 to the monthly bill. Residents

in Yellowknife are paying a surcharge of 0.586 cents/kWh which adds $53 to the monthly

bill.



5.3.3 Rebates

In Toronto, Ottawa, and Halifax, the provincial government provides a rebate that broadly

cancels out the provincial component of taxation. These rebates are time limited and will

expire at the end of 2015. In Whitehorse, the territorial government provides a rebate

that broadly offsets the surcharge. This rebate has been extended to March 2016. The

graph below shows how the 16 cities in this report compare in terms of taxation on

monthly electricity bills if the rebates were not applied.

Whilst the rebates in Whitehorse may well be continued indefinitely, residents in Toronto,

Ottawa and Halifax should be prepared for an increase of around $15 per month to their

monthly bills in 2016.



6 CONCLUSIONS

Residential electricity pricing in Canada is primarily influenced by three factors: available energy

sources, electrical connectivity, and politics.

Utilities that have access to low cost hydro generation pass this benefit to consumers. This can be seen

in British Columbia, Quebec, and Labrador. Conversely, North West Territories and Nunavut rely on

imported diesel fuel and have no choice but to pass these costs onto their consumers.

Electrical connectivity allows the lowest cost generation to be shared amongst all customers. In general,

those utilities with the most extensive transmission system and interconnectors to other systems are

able to offer lower residential prices. The geography of Canada is not always favourable to electrical

networking. Where generation sources are distant from customers, the cost of transmitting electricity

can be significant. ATCO Electric Yukon deserves special mention here. Its ability to harness hydro

energy with a series of local electricity networks allows it to provide electricity to residential customers

at prices below the Canadian average.

The politics emerges in the industry structure and the range of surcharges, taxes and rebates applied to

electricity bills. Those provinces which allow a single integrated electricity utility generally see lower

service charges than those provinces where the industry has been fragmented. The local taxation

arrangements vary widely form province to province. Municipal taxation is incorporated into electricity

bills in Edmonton, Calgary and Yellowknife. Provincial Service Tax is applied in 7 of the 13 provinces and

territories. Rebates in Ontario and Nova Scotia which were introduced to mask the introduction of

provincial Sales Tax will soon expire.

Energy is a provincial responsibility. Given the differences in geography and environment between

provinces and territories, there would be challenges to development of a federal energy policy.

However, without a detailed understanding of the differences in market design and rate setting in each

province and territory it becomes impossible to tell if customers across Canada are being treated fairly

and equitably. Federal co-ordination of the provincial energy programs would benefit all customers.



APPENDIX - CITY STUDIES

WHITEHORSE

Background

Whitehorse is the capital of Yukon Territory and the largest city in Northern Canada. Its population of

28,000 is supplied by the distribution utility ATCO Electric Yukon. AEY purchases the bulk of its

electricity from the Yukon Electric Company. There are no connections from the Yukon Electric Grid to

other networks. The Yukon electricity mix is predominantly hydro with diesel generation maintained as

backup. The rates in Whitehorse incorporate a three tier structure which should discourage excessive

consumption. However the spread between high and low rates is modest.

Monthly bills

The average monthly bill in Whitehorse is $125.

Components of residential bill

Service charge: $14.65

Energy charges: 12.14c/kWh for first 1000kW;

12.82c/kWh between 1000 and 2500kWh;

13.99c/kWh above 2500kWh

Additional charges: 16.9% surcharge on bills

Government Rebate: 2.9c/kWh on first 1000 kWh each month

Taxes: GST at 5%



VANCOUVER

Background

Vancouver is the largest city in British Columbia. Its population of 603,000 is supplied from BC Hydro, an

integrated utility that encompasses Generation, Distribution and retail supply of electricity. The BC

Hydro transmission system has interconnections to Alberta and to the state of Washington in the US.

The British Columbia electricity mix is overwhelmingly (95%) hydro-powered with the balance provided

by gas fired generation.

The rates in Vancouver incorporate a two tier structure which should discourage excessive consumption.

The rate for consumption above 666kWh per month is 50% higher than the base rate.

Monthly bills

The average monthly bill in Vancouver is $91.



Energy charges: 7.97 c/kWh for first 666kWh;

11.95 c/kWh above 666kWh

Additional charges: none

Government Rebate: none

Taxes: GST at 5%



YELLOWKNIFE

Background

Yellowknife is the capital city and largest community of the Northwest Territories. Its population of

19,000 is supplied by Northland Utilities an investor owned distribution utility. The majority stake in

Northland Utilities is owned by the Alberta based ATCO Electric. Northland Utilities purchases

electricity from the Northwest Territories Power Corporation. The electricity mix for Yellowknife is

predominantly hydro (from the Snare Dam) backed up by diesel generation.

The NWT electricity grid has no interconnections to other provinces or territories.

The rates in Yellowknife incorporate a single tier structure which provides no incentive to discourage

excessive consumption.

Monthly bills

The average monthly bill in Yellowknife is $308.


Service charge: $18

Energy charges: 23.72 c/kWh

Additional charges: 0.635% rate surcharge; 0.586c/kWh energy surcharge,


Taxes: Yellowknife Franchise Fee of 2.262%;

GST at 5%



CALGARY

Background

Calgary is the largest city in Alberta and the third largest city in Canada. Its population of 1,000,000 have

a choice of electricity providers. The dominant provider in Calgary is Enmax and the rates calculated

here for Calgary assumes Enmax is the supplier of choice.

The electricity generation mix in Alberta is Coal (44%), Natural Gas (40%) Renewables (10%) and Hydro

(6%). The Alberta transmission system has interconnections to the provinces of British Columbia and

Saskatchewan and to the state of Montana in the US.

A residential bill in Alberta has separately identified charges for the transmission system and distribution

system used to convey electricity from generators to the consumer.

The rates in Calgary incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Calgary is $117.

Enmax offers a choice of energy tariffs to customers. By default, the variable market price is passed

through but this can fluctuate markedly from month to month. Many customers opt for contracts with

fixed energy prices for periods of up to 5 years. The charges set out in this report assumes that the

customer has opted for a 2 year fixed price contact.




Additional charges: 1.9463 c/kWh Transmission charge;

0.8896 c/kWh Distribution Charge


Taxes: Calgary Local Access Fee 11.11%

GST at 5%



EDMONTON

Background

Edmonton is the second largest city in, and the capital of Alberta. Its population of 812,000 have a

choice of electricity providers. The dominant provider in Calgary is Epcor and the rates calculated here

for Edmonton assumes Epcor is the supplier of choice.

The electricity generation mix in Alberta is Coal (44%), Natural Gas (40%) Renewables (10%) and Hydro

(6%). The Alberta transmission system has interconnections to the provinces of British Columbia and

Saskatchewan and to the state of Montana in the US.

A residential bill in Alberta has separately identified charges for the transmission system and distribution

system used to convey electricity from generators to the consumer.

The rates in Edmonton incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Edmonton is $106.

Epcor offers a choice of energy tariffs to customers. By default, the variable market price is passed

through but this can fluctuate markedly from month to month. Many customers opt for contracts with

fixed energy prices for periods of up to 5 years. The charges set out in this report assumes that the

customer has opted for a 2 year fixed price contact.




Additional charges: 2.901 c/kWh System Access charge


Taxes: Edmonton Local Access Fee 0.413 c/kWh

GST at 5%



REGINA

Background

Regina is the capital city of Saskatchewan. Its population of 193,000 is supplied by Sask Power an

integrated utility that encompasses Generation, Distribution and retail supply of electricity. The

Saskatchewan transmission system has interconnections to Manitoba, Alberta and to North Dakota in

the US. The electricity mix in Saskatchewan is a combination of Coal, Natural Gas, Hydro and

renewables.

The rates in Regina incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Regina is $138.






Taxes: GST at 5%



WINNIPEG

Background

Winnipeg is the capital and largest city of Manitoba. It’s population of 663,000 is supplied by Manitoba

Hydro an integrated utility that encompasses Generation, Distribution and retail supply of electricity.

The Manitoba transmission system has interconnections to the provinces of Saskatchewan and Ontario,

and to the states of North Dakota and Minnesota in the US. The electricity mix in Saskatchewan is

overwhelmingly Hydro. An HVDC system, the Nelson River Bipole connects hydro generation in

northern Manitoba to customers in the south.

The rates in Winnipeg incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Winnipeg is $85.






Taxes: City of Winnipeg Tax 2.5%;

HST at 13%



TORONTO

Background

Toronto is the capital of Ontario and the largest city in Canada. Its population of 2,600,000 is supplied by

Toronto Hydro a distribution company owned by the city of Toronto. Ontario has a wholesale electricity

market administered by the Independent Electricity System Operator. Electricity is transmitted from

Generation to distributors by a separate transmission company (Hydro One). The Ontario wholesale

market is open to competition for generation but there is limited competition for electricity retail

customers.

Since generation, market operation, transmission, and distribution are undertaken by different

organisations in Ontario, the costs attributable to each function are separately identified on a

customer’s bill. The residential energy rates set by the regulator and quoted by the suppliers, are only a

fraction of the final energy rates charged on the bill. This is intended to create transparency for the

customer but instead, often causes confusion.

The Generation mix in Ontario is 37% Nuclear, 29% Natural Gas, 24% hydro and 10 % renewables. The

Ontario electricity grid has interconnections to Manitoba and Quebec, and to the US states of

Minnesota, Michigan and New York.

The rates in Toronto are Time of Use with a three tier structure of peak, mid-peak, and off-peak. These

rates are not designed to deter overall consumption, but instead are designed to encourage demand to

shift away from peak periods. Peak rates are 65% higher than off-peak rates.

Monthly bills

The average monthly bill in Toronto is $157.

Note that in order to provide a direct comparison between Toronto and the other cities in this report,

energy is assumed to be consumed in the ratio 20% peak, 15% mid-peak, 65% off-peak. Customers who

are able to defer a higher proportion of energy to off-peak periods could see a small reduction in their

monthly bill.



Energy charges: 8 c/kWh (off-peak); 12.2 c/kWh (mid-peak); 16.1 c/kWh (peak)

Additional charges: $1.11 surcharge;

1.538 c/kWh Distribution charge;

1.366 c/kWh Transmission charge;

0.57 c/kWh Wholesale Market charge;

0.7 c/kWh Debt Retirement charge;

3.76% Distribution Losses charge

Government Rebate: 10% Clean Energy Benefit

Taxes: HST at 13%



OTTAWA

Background

Ottawa is the capital of Canada and the second largest city in Ontario. Its population of 883,000 is

supplied by Hydro Ottawa a distribution company owned by the city of Ottawa. Ontario has a wholesale

electricity market administered by the Independent Electricity System Operator. Electricity is

transmitted from Generation to distributors by a separate transmission company (Hydro One). The

Ontario wholesale market is open to competition for generation but there is limited competition for

electricity retail customers.

Since generation, market operation, transmission, and distribution are undertaken by different

organisations in Ontario, the costs attributable to each function are separately identified on a

customer’s bill. The residential energy rates set by the regulator and quoted by the suppliers, are only a

fraction of the final energy rates charged on the bill. This is intended to create transparency for the

customer but instead, often causes confusion.

The Generation mix in Ontario is 37% Nuclear, 29% Natural Gas, 24% hydro and 10 % renewables. The

Ontario electricity grid has interconnections to Manitoba and Quebec, and to the US states of

Minnesota, Michigan and New York.

The rates in Ottawa are Time of Use with a three tier structure of peak, mid-peak, and off-peak. These

rates are not designed to deter overall consumption, but instead are designed to encourage demand to

shift away from peak periods. Peak rates are 65% higher than off-peak rates.

Monthly Bills

The average monthly bill in Ottawa is $154.

Note that in order to provide a direct comparison between Ottawa and the other cities in this report,

energy is assumed to be consumed in the ratio 20% peak, 15% mid-peak, 65% off-peak. Customers who

are able to defer a higher proportion of energy to off-peak periods could see a small reduction in their

monthly bill.



Energy charges: 8 c/kWh (off-peak); 12.2 c/kWh (mid-peak); 16.1 c/kWh (peak)

Additional charges: $1.04 surcharge;

2.34 c/kWh Distribution charge;

1.19 c/kWh Transmission charge;

0.57 c/kWh Wholesale Market charge;

0.694 c/kWh Debt Retirement charge;

3.58% Distribution Losses charge

Government Rebate: 10% Clean Energy Benefit

Taxes: GST at 13%



MONTREAL

Background

Montreal is the largest city in Quebec and the second largest city in Canada. Its population of 1,600,000

is supplied by Hydro Quebec an integrated utility that encompasses Generation, Distribution and retail

supply of electricity. Hydro Quebec’s electricity grid has interconnections to the provinces of Ontario,

Newfoundland and Labrador, and New Brunswick and to the US province of Vermont.

Hydro Quebec’s generation is overwhelmingly hydro powered and as a result, the rates in Montreal are

among the lowest in Canada.

The rates in Montreal incorporate a two tier structure which should discourage excessive consumption.

The rate for consumption above 900kWh per month is 50% higher than the base rate.

Monthly bills

The average monthly bill in Montreal is $73.



Energy charges: 5.68 c/kWh for first 900kWh;

8.6 c/kWh above 900kWh



Taxes: HST at 14.975%



IQALUIT

Background

Iqaluit is the largest city in and capital of the territory of Nunavut. Its population of 6,000 is supplied by

Qulliq Energy. There is no interconnected grid system in Nunavut. Each community relies on

independent diesel generators, with fuel shipped in each summer.

The resultant energy charges on an Nunavut electricity bill are the highest in Canada and reflect the cost

of imported diesel fuel. However, residential customers may qualify for an energy allowance that

offsets the monthly costs.

The rates in Iqaluit incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Iqaluit is $397.

Note this figure is calculated at the residential rate for a monthly consumption of 900kWh purely for

comparison with the other cities in this report. The average residential consumption may be

significantly higher than this especially in Winter when temperatures average -25degC. Residential

customers in Iqaluit may qualify for an allowance of 700kWh per month in Summer and 1000kWh per

month in Winter. Consumption in excess of this is charged at the residential rate.


Service charge: $18

Energy charges: 40 c/kWh



Taxes: GST at 5%



LABRADOR CITY

Background

Labrador City is a mining town situated in the west of Labrador near the border with Quebec. Together

with the nearby township of Wabush, it is the largest population centre on the mainland of Labrador

and Newfoundland. Its population of 9,000 is supplied by Newfoundland and Labrador Hydro an

integrated utility that encompasses Generation, Transmission, Distribution and retail supply of

electricity. NLH is a major generator of electricity. Its portfolio includes the 5428MW Hydro generation

facility at Churchill Falls which is the second largest underground power station in the world. The low

cost of generation at Churchill Falls is reflected in the energy rates charged to Labrador residents, who

enjoy the lowest electricity charges noted in this report.

The rates in Labrador City incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Labrador City is $41.






Taxes: HST at 13%



FREDERICTON

Background

Fredericton is the capital of New Brunswick. Its population of 56,000 is supplied by NB Power an


electricity. The New Brunswick electricity grid has connections to the provinces of Quebec, Prince

Edward Island and Nova Scotia and to the state of Maine in the US. The electricity generation mix in

New Brunswick is a combination of Coal, Oil, Nuclear, Diesel and Hydro.

The rates in Fredericton incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Fredericton is $127.






Taxes: HST at 13%



HALIFAX

Background

Halifax is the capital of Nova Scotia. Its population of 390,000 is supplied by Nova Scotia Power an


electricity. The electricity generation mix in Nova Scotia is a combination of Coal, Natural Gas, Hydro,

and renewables. The Nova Scotia electricity grid has connections to New Brunswick.

Plans exist to create an interconnection to the island of Newfoundland. This project is dependent on

completion of an interconnection between Newfoundland and Labrador. Once both links are complete,

Nova Scotia will have access to the hydro generation at Churchill Falls. This will allow for the closure of

some thermal generation. However, the additional infrastructure costs will offset the fuel cost savings

and are unlikely to reduce customer rates in Nova Scotia in the near-term.

The rates in Halifax incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in Halifax is $153.





Government Rebate: 10%

Taxes: HST at 15%



CHARLOTTETOWN

Background

Charlottetown is the capital of Prince Edward Island. Its population of 34,000 is supplied by Maritime

Electric. Prince Edward Island is the only province in Canada that is dependent on electricity imports.

Maritime Electric operates two diesel generation stations as backup plant but is dependent on

interconnectors from New Brunswick.

The rates in Charlottetown incorporate a two tier structure. Uniquely in Canada the base rate is higher

than the rate for high consumption. This rate will not discourage excessive consumption and may

encourage high consumption. The rate for consumption above 2000kWh per month is 21% lower than

the base rate.

Monthly bills

The average monthly bill in Charlottetown is $163.



Energy charges: 13.16 c/kWh for first 2000kWh; 10.38 c/kWh above 2000kWh



Taxes: HST at 14%



ST JOHN’S

Background

St. John's is the capital and largest city in Newfoundland and Labrador. It is located on the eastern tip of

the Avalon Peninsula on the island of Newfoundland. Its population of 211,000 is supplied by the

Newfoundland and Labrador Hydro an integrated utility that encompasses Generation, Transmission,

Distribution and retail supply of electricity. The island of Newfoundland has no electrical connections to

the mainland and its electricity generation portfolio is a mixture of hydro and thermal generation. The

cost of the thermal generation is reflected in the electricity rates charged to customers in St Johns’s.

A planned electrical interconnection between Labrador and the island of Newfoundland will provide St

John’s residents with access to the cheap hydro generation of Churchill Falls and eliminate the need for

the thermal generation. However, the additional infrastructure costs will offset the fuel cost savings and

will not reduce customer rates on the island in the near-term.

The rates in St John’s incorporate a single tier structure which provides no incentive to discourage


Monthly bills

The average monthly bill in St John’s is $131.






Taxes: HST at 13%

Residential Electricity Pricing in Canada v1.0

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Transcript of Residential Electricity Pricing in Canada v1.0