Overview – Residential

Typical energy consumers in the Residential sector include water heating, space heating and cooling, appliances, lighting, and domestic transportation. The Residential sector accounts for 29 per cent of energy consumption in Canada.

Gasoline, natural gas and electricity are the largest sources of energy for residential consumption. Depending on where you live in Canada, a portion of the electricity used may be generated by natural gas-fired thermal processes, further increasing the natural gas component of the energy mix.

Costs of natural gas, heating oil, gasoline, diesel and propane depend primarily on supply and demand which in turn varies with:

• time of year
• weather
• location
• transportation charges
• provincial taxes
• federal taxes

Electricity costs have three main components – generation, transmission and delivery. Generation involves creating the electricity, whether through hydro, thermal, nuclear or wind power. Transmission lines move the electricity from the generator to the distribution system via high-voltage transmission cables. Distribution systems deliver lower voltage electricity to consumers.

In most provinces, all three components are handled by one entity, generally a provincial crown corporation such as BC Hydro or Hydro Quebec. In other provinces two or three private companies may be involved in generation or distribution but, in a regulated system, the provincial government sets prices. In a deregulated system, such as in Alberta, a number of investor-owned and municipally owned companies generate and sell electricity to a pool, allowing market forces not government regulation, to set the price. Consumers also have a choice of service providers.

Because more than 25 per cent of electricity generated in Canada is derived from fossil fuels, oil, natural gas and coal prices also impact electricity prices.

Some electricity pricing varies with the time of day.

For more detailed information on electricity in your province, see the list of regulators on the portal’s energy policy and regulation links page.