Ontario's new hydro plan for 'ultra–low' off-peak rates could benefit some, but not all EV owners

Ontario's new "ultra-low" overnight electricity price plan is advertised as a good option for those who use power overnight, such as electric vehicle (EV) owners and shift workers. But experts say that, depending on the length of the daily commute, this new price package may not be the best deal.

Customers can opt-in to the new ultra-low overnight rate which will be 67 per cent lower than the current off-peak rate, in exchange for a higher on-peak rate during the day. 

Ontario already offers time-of-use and tiered power pricing plans, so this new overnight rate adds a third option for hydro consumers. 

The new plan will be available May 1 for customers of Toronto Hydro, London Hydro, Centre Wellington Hydro, Hearst Power, Renfrew Hydro, Wasaga Distribution, and Sioux Lookout Hydro.

I would say this rate is not for electric vehicles, although it's somewhat advertised as such.​​​​​​- Jessy Richard, CEO, Hearst Power

All utilities in the province will be required to offer the option to their customers within six months.

According to an Ontario government press release, "customers that use more electricity at night, including shift workers and those that electrically heat their home or charge their electric vehicle, could save up to $90 per year."

Hearst Power's CEO Jessy Richard owns an EV— a Ford F-150 Lightning—and did some calculations using the Ontario Energy Board's hydro bill calculator. 

"I would say this rate is not for electric vehicles, although it's somewhat advertised as such," he said.

"This rate classification is beneficial for those who have a battery storage system at home that can withdraw power from the grid at night and then use it in the day, and at night also charge their EVs."

Richard said because people often have shorter commutes to work in a small town like Hearst, they may not have to charge their EVs as much overnight as someone who has a 40-kilometre daily commute in the Toronto area.

He added that there are currently only around 30 EVs in Hearst, a northern community that doesn't have the same public charging infrastructure as larger urban centres to the south.

Devin Arthur, president of the EV Society in Greater Sudbury, agreed the new pricing option won't benefit all electric car drivers. 

"If you drive a lot, you plug in, you're going to charge for a longer period of time and that'll save you more money," he said.

Arthur said he probably won't switch to the new plan because he doesn't drive enough to take advantage of the cheaper off-peak rates, in exchange for higher rates during peak times.

But he added he appreciates that the option exists for people who would benefit from the new plan and it could encourage more people to switch to EVs or appliances like heat pumps.

"It's always nice to see something that would, you know, help people afford those types of purchases," he said.

More options

Adam Fremeth, an associate professor of business, economics and public policy with Western University's Ivey Business School, said the changes will give hydro customers one more option.

Fremeth said that as EVs and home battery storage systems become more common, people will gravitate to pricing plans that suit their needs.

"The way that we use power is going to vary based on temperature, based on daylight, based on our commute, based on our lifestyles," he said.

"And so I think it could differ based on where customers are and how they use their power."