What can we learn from Ontario’s full-scale implementation of a default residential time-of-use (TOU) rate and the impacts on peak demand and overall consumption?
- The province of Ontario is the first electricity market in North America with smart meters fully deployed across its residential sector and a default TOU electricity rate (default, or opt-out, rates are those where customers are assigned to the rate, but can opt out of it if they so choose. In Ontario, customers can in effect opt out of the TOU rate by choosing to purchase electricity from competitive electricity retailers).
- Evaluations of the Ontario TOU rate show that customer price-responsiveness—that is, customer demand for electricity that is shifted from high to low price periods—is in the range of what other TOU evaluation studies have reported.
- However, the overall level of peak reduction, 1–2% from the most recent evaluation, was relatively small. This is likely due to the modest price differentials between on-peak and other period prices. Higher price ratios would likely elicit higher load reductions.
- There was no discernible conservation effect attributable to the TOU rate.