A Tale of Two Homes

I am fortunate (I think) to be able to own two homes: my main residence in Ohio and a secondary home on Amherst Island, Ontario.  One of my great joys (not!) is paying monthly electric bills at both places.  Call me A-R, but I’ve still got all those bills, starting with January 2000.  Finally, my rat-pack tendencies pay off – I can compare Ontario’s electric rates with Ohio’s, and see how they have changed over the 12+ years.  I really feel sorry for ordinary Ontarians.

I plugged all my usage and costs into a spreadsheet, calculated the monthly cost per kw-h, and charted it over time.   In Ohio the calculation is pretty simple – the difference in the monthly meter readings times a slightly tiered rate equals what you pay.  In Ontario it gets complicated, no doubt the result of political meddling.  They take the meter readings, factor in line losses, do the time-of-day thingie, add global adjustment, add regulatory and debt charges, add the HST, subtract the pseudo-named Clean Energy Benefit, and voila!  To get an equivalence I used the total costs in both cases; what you end up actually paying.

To try and smooth Ontario’s prices out a little, I used a 3-month moving average.  They still jump all over the place.  All those meddlings interact in strange and often unpredictable ways.

The first chart below shows the costs in cents per kw-h over the period from January 2000 to July 2012.  On the x-axis the “1” is the start of 2000, “13” is the start of 2001 and so on.  The y-axis is the price in the respective local currencies.  Electricity prices are increasing in both areas; Ontario’s are increasing at twice Ohio’s.  As interesting as the chart above is, it doesn’t provide an accurate picture of the comparative prices.  If we take the exchange rate into account we get a better picture of how a business might view these rates.  The next two charts do just that.  The first one shows the prices in US dollars and the second in Canadian dollars; they are sort of mirror images of one another.   The Canadian dollar appreciated from the 60-cent range to parity during the period, making the difference in the rate increases that much more.

At one time Ontario had pretty much the lowest electric rates in North America, and the charts confirm that for the first couple of years the real costs of electricity in Ohio were above Ontario’s.  At the end of the period Ontario’s real prices were roughly twice Ohio’s.  Perhaps even more worrisome for Ontario would be the trend over the last few years.  Ohio’s rates peaked in 2010 and have drifted downward since then (no doubt due to fracking) while Ontario’s have continued to climb.

The first chart below shows the Ontario prices adjusted to their US$ equivalents. Ontario’s increases now appear appropriately larger than before.The second chart below shows the Ohio prices adjusted to their CDN$ equivalents.  Note that from a Canadian perspective, Ohio prices have not increased at all during this 12+ year period.

 

One thought on “A Tale of Two Homes”

  1. Wayne

    I have just been looking at my costs – total paid/kwh – my costs for Kingston area from Hydro one are around 17 cents per kwh. I am surprised you are paying that much more on Amherst Island.

    Cheers
    Ian

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