Are electricity costs going through the roof? (David_Laing) wondered, so he analyzed 5 years of his home utility invoices.

If your electricity bill is anything like ours you’ll understand why this was a non-trivial task. Multiple lines of confusing and inconsistent charges make it difficult to compare and imply there might be something hidden or manipulated.

David said, "I duly entered each line item into an Excel spreadsheet, comparing the annualized numbers ending in September 2011 to the same period ending September 2006". Pleasant surprise – our average monthly bill actually dropped 26% from $152 in 2006 to $112 in 2011! Was this due to lower prices or reduced consumption? 

In an earlier article, Big_Impact_Energy_Decision Dayle described how the replacement of our aging chest freezer with a newer, smaller one plus a second fridge was projected to save us over $200/year. In addition, 4 years ago, we upgraded to a high efficiency furnace with a direct drive fan, and 2 years ago, we installed Energy Star efficient appliances when we remodelled the kitchen. Of course there was also the systematic replacement of incandescent light bulbs with LEDs and compact fluorescents. What was the impact of these changes to our electricity consumption?

Understanding consumption patterns based on the billing information was more difficult than determining total cost. Prior to the smart meter, reading was done by a utility employee traveling from house to house, a time consuming and labour intensive process. As a result, meters were read intermittently with interim billing based on estimated usage. Over the years, our utility company also experimented with different billing mechanisms, sometimes lumping usage into one billing category, sometimes breaking it up into peak, mid-peak and off-peak with a different rates. We even had one bill where the usage was broken down into 4 separate categories. This was before a ‘smart meter’ was even installed, so I am left wondering where they got the numbers! There were enough ‘actual readings’ each year, to get an accurate record of the power we consumed.

Our 2005 average monthly usage was 1428 Kilowatt hours (KWhr). By 2011, usage dropped 36% to 907 KWhr!  That was great news! Our conservation efforts had yielded significant results. Yet, it did not translate into the same savings in real dollars. Electricity prices had risen during the 5 year period but had been more than offset by our reduced usage. I was curious to see what portion of the bill contributed to the price increase. 

The Province of Ontario, where we live, recently held an election for a new government. Electricity cost was a hotly debated issue that drew fire to the incumbent party during the campaign. In 2009, the government implemented an energy generation feed-in tariff program aimed at encouraging investment in sustainable energy production methods. 2010 brought an increased sales tax to electricity bills. In the same year, the province mandated installation of ‘smart meters’ in every Ontario household. Government continued to make substantial investments in grid infrastructure and to bring new large scale power generation facilities on board. Opposition contended that electricity costs were “going through the roof” as a result of these additional taxes and “misguided” provincial policies. I was curious to see what our numbers would tell me.

The actual price of a KWhr of power itself did in fact increase 31% over 5 years. Regulatory cost was up 13% while the cost of debt retirement and delivery changed by less than 1%. During the same period, the combination of tax and tax rebates has been all over the map, reflecting the political sensitivity of these prices. In 2005 the government applied an ‘Ontario Price Credit’ which rebated over 90% of taxes paid during that year. 2007 enjoyed a ‘summer savings rebate’ which offset over 60% of the tax paid during that year. In 2007 and again in 2008 our Federal Government reduced the ‘Goods and Services Sales Tax’ rate by 1%. The ‘Harmonized Sales Tax’, a combined Federal and Provincial tax, was applied to electricity bills starting in July 2010. This initially increased the electricity taxes by 60% but was offset the following January with the introduction of the ‘Ontario Energy Benefit’ discount. The net result of all this tax ‘to-ing’ and ‘fro-ing’ is that the tax rate is now down to 2008 levels, slightly below where it was before the HST introduction!

 What about the impact of the Smart Meter? Critics felt it would jack up rates based on peak, mid-peak and off-peak usage billing while having little or no impact on changing consumption patterns.  With only two months of smart meter billing data available to us, it’s a bit too early to see a clear trend. The threat of higher prices based on time-of-day usage has altered our schedule.  Most of our laundry is now done on weekends or in the evening, and our bread machine is set to start at 2 am.  It’s wonderful to wake up to the smell of freshly baked bread!

As citizens, we should continue to encourage our governments to:

• intelligently manage our electricity needs with increased use of renewable sources
•  implement programs that encourage conservation and off-peak consumption
•  make judicious use of our existing non-renewable supplies 

As consumers, we should make the conscious choices that will maintain our comfort, while controlling our household costs.

For more information on how you can handle this issue in a positive manner, contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 905-846-3221.