danmand said:
What is the deal with the electricity plans being offered?
I was offered a 5 year fixed rate of 8.89 c/kwh, but it appears that Ontario Energy Board has capped the price at 5 c/kwh for the time being.
The supplier is a bit cheasy, sending me a cheque for $32.00 and saying: "By cashing the cheque, you have read the agreement and ......."
What to do?
Okay, here we go....
With any retailer, they are only selling you the commodity. That is, the contract is for one line on your bill called "Commodity" or "Energy" or something to that effect. The rest of your charges (Delivery, Debt Retirement) are not covered by the contract and you'll get charged these above and beyond the contract price.
Right now, the Ontario Energy Board has set the commodity price at 5.5 cents for the first 1,000 kWh/30 days, and 6.4 cents for every kWh above that (the threshold goes down to 600 kWh in the summer). The prices are subject to change every six months or so and is set such that it represents what the market price of electricity is (well, in theory).
Sounds like a shitty deal?
Keep in mind this. By 2010, the entire province will have "smart" meters, which will allow your hydro company to measure your consumption on an hourly basis. As a result, they'll be able to bill you based on when you consume your electricity, charging higher rates when more people use hydro (on-peak consumption). Right now, I think the idea is to have rates in a 3:2:1 ratio (on-peak, mid peak, off peak), so I think what has been floated is somewhere around 9 cents/6 cents/3 cents. You will also probably have the option of being charged real time prices, which will vary hour by hour. There will also be a concept known as Critical Peak Pricing, which will kick in at times when electricity demand is extremely high, and they'll charge you somewhere around 30-50 cents/kWh.
So, depending on the term of the contract and how you use your hydro, 8.89 cents might not be that bad. If you use most of your hydro at peak times, you might be better off with with the flat rate. Otherwise, you might be wise to not cash the cheque, let the contract lapse, and wait and see what happens.