# Tiered vs Time Of Use Electricity Pricing



## Simon Says (Jan 5, 2013)

I'm in Ontario and have been contemplating switching from TOU to Tiered pricing.

In almost every month, including the summer, I'm saving anywhere from $10 to $20 per month, I haven't seen a scenario where tiered would cost more.

Then I would also not have to worry about when I run pool pumps etc.

Am I missing something here? We use a fair amount of power so I was surprised in the summer months it still came out less.

Thanks!

Si~


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## sags (May 15, 2010)

I noticed the same thing looking at my bill last month. It doesn't seem right somehow.

I switched back to Tiered pricing.


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## AltaRed (Jun 8, 2009)

I cannot imagine not running pool circulation 24/7 for proper filtration and salt cell operation. Only you can decide whether TOU or tiered pricing works best. In south central BC, a/c has to work hard most days from about 9am to midnight so TOU would not make a lot of sense.


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## nathan79 (Feb 21, 2011)

I would assume the Tiered pricing is better for most, but those with electric vehicles could benefit from the TOU pricing.

My parents always had the tiered pricing (I believe that's the only option with BC Hydro). They call it Step 1 and Step 2, but we never used enough to reach Step 2, even with a detached house. We always had gas heat/hot water, though.


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## Money172375 (Jun 29, 2018)

I’m in Ontario. TOU is better for us. We’re an all electric home. Hydro One has a comparison tool that will tell you which option is better based on previous usage. TOU always comes out ahead for us to the tune of about $20 month. 

I wonder though how much the Pandemic has altered previous usage norms And impacted the recommendation.


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## Dilbert (Nov 20, 2016)

Being retired in Ontario we can easily leverage TOU for most things.


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## Simon Says (Jan 5, 2013)

Interesting discussion, in the summer the pool and AC are our biggest users, but I only run my pool pump at night during off peak hours (we have a small chlorine above ground) and it works out fine. I'm going to do a bit of a deeper dive, try out that comparison calculator and see how it plays out. $20 a month is still $240 per year.


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## Synergy (Mar 18, 2013)

I recently crunched the numbers for my hydro bill (business). Switching to tiered would save me $20-30 per month. Not a huge savings as the distribution charge is a big portion of the bill. I'm one of few in Ontario without a smart meter for my residence and I couldn't be happier.


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## Beaver101 (Nov 14, 2011)

Synergy said:


> I recently crunched the numbers for my hydro bill (business). Switching to tiered would save me $20-30 per month. Not a huge savings as the distribution charge is a big portion of the bill. * I'm one of few in Ontario without a smart meter f*or my residence and I couldn't be happier.


 ... how do you manage that? I mean Ontario Hydro (or in my case Toronto Hydro) do the switch over for your for free (aka auto-switch like you got a choice).


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## Beaver101 (Nov 14, 2011)

^ If I recall "correctly", tiered pricing works better than TOU. TOU pricing works better only if you're "in control" aka can time your usage and few can do that. I can't imagine switching from tier to TOU back to tier and then to TOU depending on the season, say.


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## OptsyEagle (Nov 29, 2009)

The way I figured it, some amazing scientists worked very hard, over the past 200 years, so I can create light and run some amazing machines by thoughtlessly flicking a switch. I decided I did not want to insult them by spending way too much extra thought, and mathematical calculations, on whether I should hit that switch now or would it be better to wait another hour.

I think I prefer to spend my thoughts and math on things that might make me more then $20 per month.


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## Money172375 (Jun 29, 2018)

I used over 5000kwh in January. I need to keep an eye on it, hydro One makes it easy by doing the math for you,


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## hboy54 (Sep 16, 2016)

I am not even certain I am on TOU. Pretty sure I am. Current bill is"big" at just over $100 because I am running a 600W grow light 12 hours a day - at night. Otherwise it would be in the $70s or $80s. Nothing is heated or cooled with electricity here, but some air is circulated. Like someone above said, electricity is a modern miracle and there are more productive places to hunt for $20/month.


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## cainvest (May 1, 2013)

OptsyEagle said:


> I think I prefer to spend my thoughts and math on things that might make me more then $20 per month.


If the electric company has already done the math for you and it's just a matter of switching your billing type to save you $20/month seems like a easy and smart thing to do for minimal effort.


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## Money172375 (Jun 29, 2018)

$100 big ha ha! 

my Feb bill was just under $600


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## Ponderling (Mar 1, 2013)

I will wait to see how my consumption evolves beyind changing from time of use.
I drive an electric car and it eats at least 4kwh a day on my daily commute and keeping the bettery warm in the garge in the winter.
I have a hot tub that eats at least 6kWh a day
Our daily consumption prior the water heater described below is well above 20kWh a day

I just put in an air source heat pump water heater that currently runs about 12 hours a day but today am installing a drain water heat recovery pipe so that should cut the water heater run time.

Next summer I am going to an air source heat pump so more electrical consumption in spring and fall with less furnace run time. So we will see if another plan makes sense down the road.


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## OptsyEagle (Nov 29, 2009)

cainvest said:


> If the electric company has already done the math for you and it's just a matter of switching your billing type to save you $20/month seems like a easy and smart thing to do for minimal effort.


Unfortuneately it is not that easy. Try it. You will see. Every switch is a decision in timing.


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## cainvest (May 1, 2013)

OptsyEagle said:


> Unfortuneately it is not that easy. Try it. You will see. Every switch is a decision in timing.


I'm not in Ontario so I can't compare.


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## andrewf (Mar 1, 2010)

It would be nice if they just charged you under the lowest rate plan. Then people wouldn't have to think about this.


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## like_to_retire (Oct 9, 2016)

andrewf said:


> It would be nice if they just charged you under the lowest rate plan. Then people wouldn't have to think about this.


Yeah, it does seem incongruous that they don't automatically charge you the least when they have all the data available. My hydro web site even has a swell "Compare Rate Savings" calculator where they show all your data for the last year and make the analysis comparison and then show which plan (TOU or TIER) cost the least over the last year, and then a button if you want to switch. For goodness sake, why do they do this, just give me the cheapest rate.

ltr


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## Beaver101 (Nov 14, 2011)

^ What? And have the executives over at the hydro forfeit their annual YE bonuses? And management declaring that its shareholder are screaming in their ears for their lack-lustred divvies?


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## OptsyEagle (Nov 29, 2009)

I am pretty sure the concept of TOU was not a program that was originally designed to come up with a way to save people money. It was a program designed to adjust our behaviours so as to conserve energy during expensive peak times and perhaps even save a planet by not having to generate more power during those peak times. The problem with the plan was politics. The politics that says every good idea can only last until too many voters start to complain about it AND the politics that created an over-priced power system, used to fuel a climate change political agenda at any cost, and when those costs are eventually added to the bill, the savings from time of use all gets lost or marginalized.

If I recall when they implemented the TOU in Ontario, the deal was that your bill was going to rise considerably and if you worked hard moving your power needs to sometime that was very annoying for you, you could be left with an electicity bill that just went up a little. That was the options Ontarioans got. Now if your bill actually could have possibly gone down you might have found a little more support for it.

Now although I believe the idea of TOU is sound and the investment in smart meters has already made, my personal complaint was that even with solid efforts in moving power usage around, it ended in very little savings due mainly to a bunch of fixed costs that I was required to pay no matter what I did. Since I can't save the world by myself, like many others, I simply gave up and went back to using power when I wanted power.

That said the idea of TOU is sound. It is just the implementation of it that got messed up.


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## Synergy (Mar 18, 2013)

Beaver101 said:


> ... how do you manage that? I mean Ontario Hydro (or in my case Toronto Hydro) do the switch over for your for free (aka auto-switch like you got a choice).


The technology was failing in rural Ontario so they pulled the plug...









‘Astonishing’: Hydro One pulling plug on 36,000 rural smart meters after years of complaints


Kelly Egan: The utility admits it has decided to manually read roughly 36,000 meters instead of counting on the wireless technology




nationalpost.com


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## Synergy (Mar 18, 2013)

OptsyEagle said:


> That said the idea of TOU is sound. It is just the implementation of it that got messed up.


If we truly have a time of use issue than all they need is better incentives. As it stands, we pay too much distribution / fixed costs. My bill barely fluctuates based on my actual usage. There's little incentive for me to hang my clothing to dry, etc.


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## Money172375 (Jun 29, 2018)

Synergy said:


> If we truly have a time of use issue than all they need is better incentives. As it stands, we pay too much distribution / fixed costs. My bill barely fluctuates based on my actual usage. There's little incentive for me to hang my clothing to dry, etc.


There was talk of a 4th tou segment in ontario….ultra low rate…I think it was 11pm-5am, but haven’t seen anything recently about it


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## andrewf (Mar 1, 2010)

OptsyEagle said:


> I am pretty sure the concept of TOU was not a program that was originally designed to come up with a way to save people money. It was a program designed to adjust our behaviours so as to conserve energy during expensive peak times and perhaps even save a planet by not having to generate more power during those peak times. The problem with the plan was politics. The politics that says every good idea can only last until too many voters start to complain about it AND the politics that created an over-priced power system, used to fuel a climate change political agenda at any cost, and when those costs are eventually added to the bill, the savings from time of use all gets lost or marginalized.
> 
> If I recall when they implemented the TOU in Ontario, the deal was that your bill was going to rise considerably and if you worked hard moving your power needs to sometime that was very annoying for you, you could be left with an electicity bill that just went up a little. That was the options Ontarioans got. Now if your bill actually could have possibly gone down you might have found a little more support for it.
> 
> ...


The overwhelming majority of my power usage is off-peak. TOU incentivized me to pre cool my house overnight so the AC doesn't need to run at peak. I pretty well exclusively use my dishwasher and clothes dryer off peak.


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## andrewf (Mar 1, 2010)

Money172375 said:


> There was talk of a 4th tou segment in ontario….ultra low rate…I think it was 11pm-5am, but haven’t seen anything recently about it


It will be implemented next year:









Ultra-Low Overnight Electricity Rate Supporting EVs To Become Available in 2023


The Ontario Energy Board will implement a new optional Ultra-Low Overnight Price Plan for Regulated Price Plan customers, to be available for May 1, 2023. Electricity distributors can choose whether to make this available to their customers on May 1, 2023, or to wait until November 1, 2023.



www.airdberlis.com


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## andrewf (Mar 1, 2010)

Synergy said:


> The technology was failing in rural Ontario so they pulled the plug...
> 
> 
> 
> ...


One would think that with coming satellite internet constellations, rural IoT might become a possibility.


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## OptsyEagle (Nov 29, 2009)

If it costs more to produce real hardwood flooring then it does laminate flooring, we all seem to understand that if we want real hardwood flooring we will need to pay extra for it. Unfortuneately, even though we should all know by now that a kwh produced for you to use at 1:00pm in the afternoon costs significantly more then the kwh produced for a 1:00am use, we still a lot of resistance to paying more for it.

As I have said, it does not help that they bury so many fixed costs into our electricity bills that even with TOU billing it did not really amount to much tangable savings and let's face it. The price of electricity is going to have to go up a considerable amount before I turn off my air conditioning at 1:00pm on a high humidity day in July, when the temperature just rose above 35C. But with that said, that above average temperature in July does not change the cost of supplying electricity to me at 1:00pm in the afternoon. In a well run, fair and knowlegable world, I really should pay more for it.


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## andrewf (Mar 1, 2010)

OptsyEagle said:


> If it costs more to produce real hardwood flooring then it does laminate flooring, we all seem to understand that if we want real hardwood flooring we will need to pay extra for it. Unfortuneately, even though we should all know by now that a kwh produced for you to use at 1:00pm in the afternoon costs significantly more then the kwh produced for a 1:00am use, we still a lot of resistance to paying more for it.
> 
> As I have said, it does not help that they bury so many fixed costs into our electricity bills that even with TOU billing it did not really amount to much tangable savings and let's face it. The price of electricity is going to have to go up a considerable amount before I turn off my air conditioning at 1:00pm on a high humidity day in July, when the temperature just rose above 35C. But with that said, that above average temperature in July does not change the cost of supplying electricity to me at 1:00pm in the afternoon. In a well run, fair and knowlegable world, I really should pay more for it.


If you cool your house overnight, you should not need to run your ac at 1pm.


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## OptsyEagle (Nov 29, 2009)

andrewf said:


> If you cool your house overnight, you should not need to run your ac at 1pm.


35C, high humidity. Dream on

Or did you mean, cool your home down to below 10C overnight? I might have misunderstood your plan.


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## andrewf (Mar 1, 2010)

If your house is properly insulated and has decent thermal mass, this works. As evidence, I do this regularly, and my ac seldom kicks in during the afternoon. 8 usually set it to 19 or 20 overnight, and takes until 7 pm the following day to hit 24 or 25. At the very least, you should cycle it before 11am on mid peak.


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## Tostig (Nov 18, 2020)

Using this website calculator





Bill calculator | Ontario Energy Board


Use our bill calculators to help you: Compare electricity price plans Compare your current electricity or natural gas bill with a contract offered by an energy retailer Compare Time-of-Use to Tiered pricing Residential and small business customers can choose their electricity price plan. Find...




www.oeb.ca





I plugged in my actual monthly kwh usage for all twelve months.
The ToU estimated bill was just $1.63 (0.11%) higher than my actual bill.

So in comparison, Tiered pricing would save me $38.67 over the year which is 2.69%. So the savings is in-line with cash back credit cards, loyalty point and gasoline savings when prices take a dip.

The biggest savings with Tiered was 
1) October - November
2) November -December
3) March-April
4) April - May

ToU benefitted the most was for 
1) July - August
2) June - July
3) August - September

You could potentially squeeze out another 0.69% in savings if mid-year you keep flipping back and forth.


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## Synergy (Mar 18, 2013)

OptsyEagle said:


> If it costs more to produce real hardwood flooring then it does laminate flooring, we all seem to understand that if we want real hardwood flooring we will need to pay extra for it. Unfortuneately, even though we should all know by now that a kwh produced for you to use at 1:00pm in the afternoon costs significantly more then the kwh produced for a 1:00am use, we still a lot of resistance to paying more for it.


I priced out luxury vinyl vs qualify hardwood flooring last year and was surprised that the vinyl was more expensive. Turns out it's the installation costs of the hardwood flooring that is bringing the total cost higher. I install myself so the labour cost does not factor into my decision making. I found a similar issue with real stone vs faux stone veneer. Material cost was higher for the fake stone. Sales guy told me they can charge more as the installation time is much less. 

But, I get your point....


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## gardner (Feb 13, 2014)

I happened to have my 2021 usage numbers handy and plugged them into the calculator for Hydro Ottawa. It looks like I could have saved $45 for similar usage this year by switching to tiered. It is tempting to switch, but the main motivation for me would be to avoid the inconvenience of timing electricity use. It would be nice to ignore the season/hour when doing laundry or meal planning.


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