Electricity prices change in response to supply and demand. Businesses with a peak demand of 50 kilowatts or more pay the wholesale price for electricity.
The wholesale price of electricity is determined in the real-time market administered by the Independent Electricity System Operator (IESO). The IESO calculates the hourly Ontario energy price (HOEP), which is charged to large consumers that participate in the market, as well as local distribution companies, such as Alectra Utilities, who recover it from the subset of customers that pay the market price.
The HOEP is the average of the twelve market clearing prices (MCP) set in each hour. A new MCP is set every five minutes. Averages are weighted by the amount of electricity used throughout the province within each hour.
- Interval meter: Alectra Utilities 50 Kilowatt Demand and Larger customers with an interval meter pay the HOEP.
- Non-interval meter: Alectra Utilities 50 Kilowatt Demand and Larger customers without an interval meter are charged a weighted average hourly price based on consumption patterns of similar consumers in our service territory.
Learn more about the wholesale electricity market in Ontario.