How electricity distribution is regulated in Canada

Provincial regulatory boards or municipalities establish rules and regulations that govern their distribution systems and regulate electricity prices. For example, the Ontario Energy Board (OEB) regulates the rates that local electricity distributors can charge Ontario customers for their distribution services.

Consumers pay different rates to receive electricity from distribution utilities. These rates cover the cost of energy per kilowatt-hours, and vary depending on their customer class (residential, commercial or industrial), how much energy they consume at a specific period or sometimes by the time of day or the season of the year (for example, some industrial customers choose to receive their power at off-peak hours in return for a discount rate). Each distribution utility has established rate schedules that are usually approved by regulatory agencies for a given customer type.

In most provinces and territories electricity prices are regulated on a cost-of-service basis, with prices reflecting the costs of generation, transmission and distribution. These costs vary among provinces and territories.