a poor Connecticut: Ontario Electricity Pricing

I found myself in front of some U.S. Energy Information Administration data today, and, as anybody would, thought that with a little summarizing and some formatting it might make for a pretty enthralling scatter plot.

How right I was!

I looked up the data after seeing some comments on a recent article by Parker Gallant (And the winner is : Hydro One! Most expensive residential power rates in North America).

I know I paid about 20 cents/kWh in 2015 (up to ~23 in 2016), so I wanted to check U.S. EIA data to see how that compared – and when I want to check data, I want to check base data. This I found in the form EIA-826 data for Sales and revenue. The data is by utility and state, and it includes revenues, sales and the count for consumer groups – including residential.

Forgetting Ontario temporarily, I summarized data by state and created the posted scatter plot to test for a connection between consumption, and pricing. It seems to exist and that seems pertinent beyond a rant – as well as important within a rant.

The one state where rates are higher than mine (ignoring currency valuations) is Hawaii – which also has the lowest average consumption.

The state most like Ontario, by rate and average residential consumption level (around 9000 kWh a year – or 750 kWh a month) was Connecticut.

You should read Parker’s entire article, but I’m looking at one particular statement showing some of us moved out of Connecticut, and on to Hawaii:

The title for most expensive rates now belongs to Hydro One, whose low-density clients pay 25.9 cents per kWh and medium-density clients pay 22.6 cents per kWh effectively, in a tie with Oahu. Add in the HST and the price jumps to over 27 cents per kWh for low-density ratepayers.

of interest due to one particular comment made after his article:

As usual with Parker Gallant analysis, he is very selective with the “facts”. He only reference s”Low” and “Medium” density customers, which make up very few Hydro customers in Ontario. What about urban customers? He also obsesses about delivery charges and includes HST and does not just price at the actual price of electricity. He should not be including HST unless he is going to include taxes in every jurisdiction in North America. He claims Ontario is the highest in North America, but only compares to Hawaii. What about all the other electricity markets in all of North America.

So let’s look at US utilities average rates, and consumption, over the first 5 months of 2016 – so “Low” and “Medium” Hydro One customers know where they  rate – so they can select an appropriate contempt level for persons responsible for putting them there.

Parker’s blog post and the OEB’s rate calculator both show the average cost/kWh, including all charges, to be 24 to 27.5 cents/kWh. Querying the EIA data for the first 5 months of 2016*, and limiting the results to utilities with over 10,000 residential consumers, I found few above the level of Hydro One’s medium density consumer:

over24

If you are a low-density Hydro One consumer you are at rarefied rate levels only experienced in a unique section of California or in spots on Hawaii. A significant difference is your energy needs are far greater – none of those areas consume 2/3rds the average residential consumption in Ontario, let alone the consumption in more remote areas not serviced by natural gas.

If you are a medium density Hydro One consumer your rates are comparable to a couple of pockets in Alaska and Massachusetts and – believe it or not – New York City.

All areas in the U.S., and probably Canada, with rates comparable to Ontario’s, have milder environments with lower energy needs – I can’t see that any have both the high rates and lack of energy substitutes that are common in much of Ontario.

The Wynne government is essentially messaging rural residents that either:

  • they should not be where they are, or
  • they should not be

The city that Toronto often wishes it was comparable to is one of the few places in the United States with rates comparable to medium density Hydro One consumers in Ontario.

 

End-note:

*Here’s the EIA’s description of revenue in form 826:

The electric revenue used to calculate the average price of electricity to ultimate consumers is the operating revenue reported by the electric utility. Operating revenue includes energy charges, demand charges, consumer service charges, environmental surcharges, fuel adjustments, and other miscellaneous charges. Electric utility operating revenues also include State and Federal income taxes and taxes other than income taxes paid by the utility.

 

spreadsheet with scatter plot
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