Most people might think the hydro bill represents their water consumption bill, but actually hydro is a cultural term for electricity. This is because most of the electricity generated in Canada is by Niagara Falls and by other hydroelectric dams.

What is Hydro Bill?

Hydro bill is simply your electricity bill. Many Canadian homes are heated by natural gas, oil, or electricity (“hydro”) and in most cases, apartments or landlords include these costs as part of the rent, usually as utility bills. Electricity can be supplied to you through a local utility or a unit sub-metering retailer.

Canadians are responsible for paying for their energy consumption when they receive their hydro bill. Although there are many line items on your bill, here is a breakdown of each charge so you know where your money is going.

What is Included in Your Hydro Bill?

Electricity bills can be somewhat confusing simply because of all the details of the charges included. Depending on your province your hydro bill can look different, but here are a few items all hydro bills have in common:

• Meter Number: Most homes are equipped with smart meters, but in the case that they are not, meter numbers are used. Your electricity provider uses your meter number as a unique identification code to be able to identify you when recording your electricity consumption. 
• Service Address: The address of the household or business that is going to be billed.
• Statement Date: This is the time period of when the electricity bill was mailed out to your household or business. Any electricity you or your family uses after this date will be charged on the subsequent hydro bill.
• Amount Due: Your energy consumption, regulatory fees, and any other charges will be totaled on your bill.
• Due Date: Date of when payment is owed in full. Any late payments can result in added interest or late fees.
• Billing Summary: Recorded history log of your transactions.
• Electricity Charges: Run-down of various fees owed on your hydro bill. By using your local utility to receive energy, you will be charged the updated regulated rate. As part of the Regulated Price Plan (RPP) rates, this also includes the Global Adjustment. In short, the Global Adjustment was used to encourage energy production. In the case you receive your energy from a retailer as opposed to a local utility, this charge will be aligned with your contracted rate. 
• Delivery Charges: Cost of delivering your electricity to your household or business. These costs may be fixed or might vary depending on the amount of your energy usage. These costs cover the fees for electricity distribution, transmission as well as a customer service fee, regulated by the Ontario Energy Board. It is important to note that despite purchasing your energy from a retailer, you will still be charged by your local utility for the delivery of energy to your home or business.
• Regulatory Charges: Service fees of your local organizations that supply power to you. There are many hands involved in providing families and businesses with energy. In order to keep operations afloat, the Wholesale Market Service Charge supplies funds to the Independent Energy System Operator, which regulates and operates the Ontario energy system. It also helps to subsidize the cost of generating renewable energy as it can get quite expensive. Another charge is the Standard Supply Service charge which pays for the administrative fees incurred by local utilities that provide energy to communities.
• Debt Retirement Charge: 0.7% cent/kWH charge used to pay off Hydro One’s debt before the deregulation of the electricity industry began.
• HST: 13% Harmonized Sales tax applied on the total value of your bill.

Why are there different electricity rates?

The price of electricity fluctuates constantly as with anything on the stock market. There are system operators who monitor the electricity market in Canada. Specifically for Ontario, the Independent Electricity System Operator (IESO) oversees the purchasing and sales of electricity to ensure that buyers can comfortably obtain the most affordable electricity price at hand.

Buyers and sellers duel it out until they settle on a price commonly known as the Market Clearing Price (MCP). The MCP is changed every five minutes and in every hour, you can have twelve MCPs averaged to achieve the Hourly Ontario Energy Price (HOEP).

The HOEP is most often used by businesses to purchase vast amounts of electricity wholesale. For homeowners or small businesses, Time-Of-Use prices are used to provide electricity. Time-of-Use prices are regulated based on the HOEP, but include other charges such as the cost of transmission and the Global Adjustment fee.