Time-of-Use Pricing And Your Business’ Electric Bill

If you’re a small business here in Ontario, odds are that your electricity is charged on a “time of use” basis.

In fact, the Ontario Energy Board (OEB) has been shifting businesses like yours (along with residential customers) to this pricing approach since 2005, and making your usage more easily adjusted and tracked with “smart” meters since 2010.

It’s all part of a $2 billion project by the province to cut electric demand by shifting customers away from the tiered pricing that today is applicable to only about 10 percent of customers.

But, has time-of-use pricing lowered your electric bill or increased your energy savings?

Despite a host of other benefits to time-of-use pricing, the short answer would be…no. In fact, Ontarians’ power costs are more than any other province’s, skyrocketing 82 percent (at peak periods) since 2010, according to a report late last year by CBC News .

Managing your power use more efficiently–and getting better energy savings–starts with understanding time-of-use pricing.

It’s based on the fact that energy is less expensive to produce when there is less of it being used. This leads many industrial customers, which typically use this pricing method throughout Canada, to plan their production schedules around non-peak times.

Ontario’s time-of-use electric pricing changes with the season, with three price periods:

• Off-peak, or 7 p.m. to 7 a.m. weekdays and around the clock on weekends and holidays.
• Mid-peak, or between 11 a.m. and 5 p.m. weekdays.
• On-peak, or 7 to 11 a.m. and 5 to 7 p.m.

When demand is lower, the majority of power is generated by Ontario’s nuclear generators and large hydroelectric stations that run all the time. During peak times, other, higher-cost sources may be turned to when needed, like natural gas-fired plants. Renewable sources, solar and wind, are also tapped into when available.

Compare time-of-use pricing to tiered pricing. That approach allots a certain amount of monthly energy per month. If you exceed that level, your rate goes up.

Sounds like time-of-use is more controllable, right?

Plus, you’re helping the environment by helping cut down on greenhouse gas emissions and helping to ease the pressure on Ontario’s energy grid.

So, why are you paying more despite the promised efficiencies of time-of-use pricing?

A lot of factors have played a role, not the least of which have been well-intended public policy decisions that ultimately led to overcapacity. According to our Auditor-General, we have the capacity to produce 30,203 megawatts of power but only need, on an average day, 15,959. Moreover, according to most assessments, the pricing structure has not provided sufficient incentives for shifted or lowered use.

There may be ways to better manage your power costs and increase your energy savings that you are not aware of. Active Business Services works with businesses of all sizes with both basic and comprehensive energy assessments to understand your business operation, energy requirements, financial objectives and risk appetite.

There may be more incentives than you know of to make time-of-use pricing pay off. Or, you may be in a position to better manage your electricity costs through a different purchasing strategy – like market price or block products – that help you mitigate your risk. It doesn’t hurt to ask. And you might well save some money in the process.

Active Business Services: A Brief History of electricity in Ontario

When we flick on the lights or plug our digital devices into their chargers, few of us think about the electricity we are using or where it’s coming from. That’s in part because electricity is so much a part of our daily life that we sometimes fail to even notice it, until there is a failure or outage.

In 2003, when much of North America’s eastern seaboard went dark due to a widespread electricity outage, residents in Ontario and 8 U.S. states were quickly reminded of the importance of electricity. The outage, which lasted a day in some areas and weeks in more remote areas, affected more than 50 million residents on both sides of the Canadian-U.S. border.

After an investigation, the outage was linked to laxed or non-existent regulations, overloaded transmission lines, overworked generating stations and poorly manicured trees in Ohio, which culminated in the perfect storm rippling across neighbouring states and Ontario.

During the early hours of the outage, U.S. officials were attributing the blackout to Canada, despite Ontario being the only jurisdiction with an implemented standards guideline.

“Ontario already had enforceable standards – with utilities or power agencies liable to fines if they didn’t make the grade. But in 2003, Ontario was the only jurisdiction in North America that did,” Bruce Campbell, chief executive of Independent Electricity Systems Operators said at the time.

The August 14^th outage showcased how intricate and delicate our electricity grid is, while also highlighting how susceptible an overburdened system is to outages.

In the thirteen years since the Blackout of 2003, Ontario has come a long way in the distribution of energy and particularly electricity.

Last year, Ontario became the only Canadian province to completely eliminate coal from its energy grid, which put added pressure on energy sources that are less harmful to the environment.

Because a large amount of Ontario’s electricity is generated by the water power of Niagara Falls, electricity in Canada’s largest province has always been abundantly cleaner than provinces that rely on coal-burning electricity generation plants.

In the early 1900’s, hydroelectricity was introduced to the power grid as other energy sources, like wood, began to dwindle. The immense power generated by Niagara Falls provides enough energy to not only power much of Ontario, it also powers several U.S. states.

Hydroelectricity offers a clean, renewable energy source that creates no harmful emissions or dangerous byproducts.

In the century since hydroelectricity was first integrated into Ontario’s power grid, millions of residents and business owners have benefited from the clean energy water power produces. There has also been the addition of other renewable energy sources, like wind, natural gas and solar.

With so much choice, it can often be hard for business owners to decide which energy source is best for them. Active Business Services, a Burlington, Ontario energy management firm, was established a decade ago to assist commercial and industrial businesses in choosing the right energy package for their business.

Utilizing a comprehensive assessment process, Active Business Services works with business owners to assess risk level, energy consumption and demand, future use and a host of other issues to build a customized energy plan that benefits every business client.

As innovators around the world continue to look for green energy sources, Ontarians can rest assured that their province is committed to providing them clean energy in various forms.

Active Business Services: Why You Should Choose Natural Gas

Have you considered natural gas as an energy source?

Natural gas is one of the safest and cleanest fuels available; it emits less pollution than other fossil fuel sources and is available in abundance. When natural gas is burned, it produces mostly carbon dioxide and water vapor — the same substances emitted when humans exhale.

Comprised primarily of methane natural gas it is the lightest hydrocarbon (a compound of hydrogen and carbon) and cleanest fossil fuel. Natural gas is odorless and colorless, however when it’s burned, it gives off a lot of energy that can be used for cooking, heating, generating electricity and other necessities.

Natural gas has often been praised as a clean energy alternative because it burns more cleanly than other fossil fuels, emitting lower levels of harmful emissions such as carbon monoxide, carbon dioxide and nitrous oxides. In our environmentally conscious day and age, natural gas is emerging as a leader for many reasons, one of which is it produces less greenhouse gases than other fossil fuels do. It also doesn’t produce ash or particulates that cause health problems.

 

While it is not classified as a renewable resource natural gas is a viable alternative because it’s abundant, relatively inexpensive and easy to use. Natural gas savings allow people to spend less money on energy.  It has even been hailed as a bridge or stop-gap measure as society makes the transition to other energy sources.

Natural gas also boasts versatility, and can be used for a number of things including heating/cooling a home or business, heating water, cooking and drying clothes, powering pool pumps, and so on.

When it comes to efficiency natural gas is hard to beat, 90 percent of the natural gas that enters the pipeline reaches the consumer, meaning a mere 10 percent of the energy is lost in the process.

On the other hand, producing and delivering electricity is 2/3 less efficient. Only 30 percent of the energy used to generate electricity actually reaches your home. This means 70 percent of that energy is lost along the way. Part of it is lost while burning energy to create electricity. The rest is lost in the transmission and distribution of the electricity.

For business owners, making the switch can translate to more money from natural gas savings to run the business. Natural gas appliances are faster and use less energy than electric appliances and most natural gas appliances cost less money to operate than electric appliances.

Also most natural gas appliances work even when the electricity is out which is great for a restaurant owner, or any other type of business owner that relies heavily on industrial appliances.

How do you know if natural gas is right for your business?

Choosing the right energy source is critical for a business’s success, for owners who are looking to save on energy bills without sacrificing convenience and reliability then natural gas is for you. Taking an energy assessment like the one Active Business Services offers can give you a better idea of what your options are and whether natural gas savings are your best choice.

At Active Business Services, we offer a number of cost saving tools to help assure business owners the steady reliability of natural gas without the worry of fluctuating energy costs.

Canada is the fourth largest natural gas producer on the planet, with approximately 18.3 billion cubic feet extracted daily. With volume like that it is no surprise that natural gas is the leading choice of Ontarian homeowners and business owners.