Ontarians Have Electricity Choice30 April 2006
On May 1st, the electricity rate increases contained in Ontario Energy Board's new Regulated Price Plan (RPP) take effect. Direct Energy, North America's largest competitive energy solutions provider, is pleased to provide some contextual information to help Ontarians understand their various electricity options.
While Ontario's electricity structure can be complex, there are a number of key information points for homeowners to keep in mind when selecting their personal electricity solution.
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- The Ontario Energy Board (OEB) is responsible for regulating natural
gas and electricity utilities as well as setting just and reasonable
energy rates.
- The RPP's electricity rates, which increase on Monday, May 1st, are
based on the OEB's forecast of the cost to supply electricity to
Ontarians over the next year and the recouping of any costs in excess
of the forecast incurred for last year's supply.
- The RPP electricity rates will be reviewed every six months and
adjusted if required.
- The RPP has two rate levels, a lower rate applies to consumption up
to 600 per kilowatt-hour (kWh) per month during the summer season
(May 1 to October 31) and 1,000 kWh per month during the winter
season (November 1 to April 30). The RPP's higher rate applies to
consumption above these threshold levels to reflect higher costs
during high consumption periods, like hot summer evenings.
- The RPP rates also include two types of rebates, both related to the
relatively low cost for generating power from the Ontario Power
Generation's generation assets.
- Homeowners who choose to sign a long-term fixed price contract with a
retail electricity provider, like Direct Energy, are also eligible
for any and all rebates and will generally receive them on a separate
line on their electricity bill.
- A kilowatt-hour is the basic measure of electric power consumption
and standard through the world. For instance, a 100-watt light bulb
burning for 10 hours uses one kilowatt-hour. The average home
consumes 10,400 kWh of electricity per year.
- The cost of the electricity consumed is just one part of a
homeowners' electricity bill. All bills also include charges to
recover the cost to distribute the electricity, the cost to
administer the wholesale electricity system and maintain the power
grid and a debt retirement charge to pay down Ontario Hydro's
remaining debt.
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With Ontario's regulated rate having increased by 55% since the spring of 2004 and 16% since last year, a retail energy contract provides customers with long-term rate certainty and shelter from future price fluctuations. While these contracts offer customers control over their electricity costs and a stable, guaranteed electricity rate for the term of their contract, there is also the potential to accrue financial savings.
"When initially launched in 2005, the price of electricity under Direct Energy's electricity price protection plan was higher than the RPP. Following Monday's increase, some of our customers, who signed an Electricity Price Protection Plan less than a year ago, are already enjoying a net electricity rate that is lower than the new RPP," said Clinton Roeder, Senior Vice-President, Energy Services, Canada.
Direct Energy's current electricity offer is a Flat Price Protection Plan for 9.65 cents per kWh which is guaranteed not to increase for five years. "When the current forecasted rebates of 1.1 cents per kWh are taken into consideration, the net rate under Direct Energy's Flat Price Protection Plan is 8.5 cents per kWh," continued Mr. Roeder.
About Direct Energy
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Direct Energy is North America's largest competitive energy solutions provider, with over five million residential and commercial customer relationships. Direct Energy provides customers with choice and support in managing energy costs through a portfolio of innovative products and services. To learn more about Direct Energy or its energy efficient products and services, call 1-800-266-3939 or visit www.directenergy.com.
For further information: Aishling Cullen, Director, Media Relations, Direct Energy Essential Home Services, (416) 590-3306
Source: newswire
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