The cost impacts of a mandatory move to time-of-use pricing on residential customers: an Ontario (Canada) case-study

Using 2008 hourly electricity data from 1,020 households in Milton, Ontario (Canada), this article asks and answers two questions: 'How do residential customers' total costs change as the result of a mandatory move from a traditional, flat-rate pricing structure, to a time-of-use one?'; and 'Are particular kinds of customers either winners or losers as a result of this move?' In response to the first question, 45% of customers have lower bills under a time-of-use regime (as compared with what they would have paid, had the previous two-tier regime continued, with their 'new' consumption patterns), while 55% of customers have higher bills. For 98.2% of customers, the difference in total cost is less than 5% (either way), and the average relative change is a 0.233% increase. In response to the second question, customers that have a relatively high level of consumption in either peak periods or wintertime are, in the absence of other differences, more likely to have higher bills under a time-of-use regime. Those households that consume higher quantities of electricity are more likely to have lower bills under a time-of-use regime, as compared with the two-tier regime. The article concludes by highlighting the equity implications of this finding and by identifying areas for future research.