“Time-of-Use (TOU) billing encourages shifting electricity use to off-peak hours for lower costs, but in B.C. and Alberta, utilities primarily use tiered or market-based rates instead. BC Hydro applies stepped rates, while Alberta’s RRO plans fluctuate with market prices. As the grid modernizes, TOU could become a future tool for efficiency and stability in Western Canada.” – MJ Martin
Time-of-Use (TOU) billing for Canadian electricity meters is a pricing structure where electricity rates vary based on the time of day, the day of the week, and the season. This system encourages consumers to use electricity during off-peak hours when demand is lower and supply is more abundant.
We are seeing increased interest and activity in Canada in different provinces lately with several pilots underway to evaluate the concept. Ontario has used TOU for 15 years now, and recently Alberta, British Columbia, and Quebec are all investigating the TOU use case to determine if its value proposition makes sense in their respective provinces.
Key Features of TOU Billing in Canada
1. Rate Periods
Electricity rates are divided into three main periods:
- Off-Peak: Lowest rates (late night and early morning)
- Mid-Peak: Moderate rates (daytime and early evening)
- On-Peak: Highest rates (typically during the afternoon and early evening)
2. Seasonal Adjustments
- Winter (typically November – April): Higher demand for heating shifts peak hours.
- Summer (typically May – October): Higher demand for air conditioning shifts peak hours.
3. Billing via Smart Meters
- Smart meters record electricity usage in 15-minute or hourly intervals.
- The utility company calculates bills based on consumption during each rate period.
4. Provincial Variations
- Alberta: Some areas offer TOU, but many use tiered pricing instead.
- British Columbia: Some areas offer TOU, but many use tiered pricing instead.
- Ontario: TOU pricing is mandated by the Ontario Energy Board (OEB) and applies to most residential and small business customers.
- Quebec: Hydro-Quebec has an optional TOU rate for winter peak periods.
5. Alternative Rate Plans
- Tiered Pricing: A flat rate applies up to a certain consumption threshold, with a higher rate for additional usage.
- Ultra-Low Overnight Rates: Some utilities, like Hydro One in Ontario, offer super-low overnight rates for EV charging and other nighttime energy use.
Advantages of TOU Billing
- Encourages shifting electricity use to off-peak hours, reducing grid strain.
- Can lower electricity bills for consumers who adjust their usage patterns.
- Supports integration of renewable energy by balancing demand.
Challenges of TOU Billing
- Consumers who cannot shift their electricity use (e.g., working from home) may pay higher rates.
- Requires smart meters and infrastructure, which can be costly for utilities to implement.
In B.C., there is a test pilot underway with the suggestion that if it is a positive pilot then TOU will be deployed province-wide afterwards. In Alberta, rumours persist that TOU will arrive in late 2027 or early 2028. Yes, it is highly likely that time-of-use (TOU) billing is being introduced in both British Columbia (B.C.) and Alberta over the next 2-4 years.
British Columbia:
BC Hydro has launched an optional time-of-day rate to provide customers with more choice in how they pay for electricity use. This new rate offers residential customers the option to pay lower rates if they shift their electricity use to periods when demand is lower. Participating customers will receive a 5-cent discount for each kilowatt hour of electricity consumed during overnight periods (11 p.m. to 7 a.m.) and a 5-cent surcharge for each kilowatt hour consumed during the on-peak period (4 to 9 p.m.). Rates for the remaining hours of the day remain the same. Customers can sign up using their online BC Hydro account and use a rate estimator tool to determine potential savings.
Alberta:
ATCO is launching a program to test Time of Use (TOU) rates in select communities in Alberta. In a TOU program, the price you pay depends on when you use electricity, with rates fluctuating throughout the day based on supply and demand. ATCO is planning a pilot study in Grande Prairie to evaluate TOU rates and technology. To qualify, participants must plan to stay in the same primary residence for 12 months from the start of the study, consent to receiving monthly energy reports, and have large, controllable electrical loads on site (e.g., air conditioning, electric vehicle, hot tub). There is no minimum monthly consumption, and participants can opt out with 30 days’ notice.
These initiatives aim to encourage consumers to shift their electricity usage to off-peak times, promoting more efficient energy consumption and potentially leading to cost savings.
Time-of-use (TOU) billing is being introduced in both British Columbia and Alberta as an option for electricity consumers. BC Hydro has launched an optional time-of-day rate, offering lower prices for electricity used overnight (11 p.m. to 7 a.m.) and higher rates during peak hours (4 to 9 p.m.). Meanwhile, ATCO in Alberta is piloting TOU pricing in select communities, such as Grande Prairie, allowing participants to test variable rates based on supply and demand. These initiatives aim to encourage consumers to shift electricity usage to off-peak times, potentially lowering costs and improving energy efficiency.
About the Author:
Michael Martin is the Vice President of Technology with Metercor Inc., a Smart Meter, IoT, and Smart City systems integrator based in Canada. He has more than 40 years of experience in systems design for applications that use broadband networks, optical fibre, wireless, and digital communications technologies. He is a business and technology consultant. He was a senior executive consultant for 15 years with IBM, where he worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He is a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX).
Martin served on the Board of Directors for TeraGo Inc (TGO: TSX) and on the Board of Directors for Avante Logixx Inc. (XX: TSX.V). He has served as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology. He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) [now Ontario Tech University] and on the Board of Advisers of five different Colleges in Ontario – Centennial College, Humber College, George Brown College, Durham College, Ryerson Polytechnic University [now Toronto Metropolitan University]. For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section.
He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has three undergraduate diplomas and seven certifications in business, computer programming, internetworking, project management, media, photography, and communication technology. He has completed over 50 next generation MOOC (Massive Open Online Courses) continuous education in a wide variety of topics, including: Economics, Python Programming, Internet of Things, Cloud, Artificial Intelligence and Cognitive systems, Blockchain, Agile, Big Data, Design Thinking, Security, Indigenous Canada awareness, and more.