Sault Ste. Marie PUC
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Understanding Your Bill

Glossary of Billing Terms:

ELECTRICITY

This line of the bill shows the price you are paying for the electricity you used during the billing period. Low-volume consumers (households and small businesses) who buy their electricity from their utility pay either tiered or time-of-use (TOU) prices. These prices, referred to as Regulated Price Plan or RPP prices, are set by the OEB based on a forecast of how much it will cost to supply electricity to RPP consumers over the next 12 months. RPP prices are designed so that the price RPP consumers pay for electricity recovers the payments made to electricity generators for the electricity they produce (including both market costs and the Global Adjustment). Twice a year, the OEB reviews the forecast and, if necessary, adjusts prices accordingly (May 1st and Nov 1st).

Our utility buys the electricity it supplies to you from the wholesale market. The RPP prices you pay allow our utility to recover that supply cost. Utilities are not permitted to make a profit on the sale of electricity to consumers.

DELIVERY

This line of the bill shows the cost of delivering electricity from generating stations across the Province to your home or business via the high voltage (transmission) and low voltage (distribution) electricity systems.

All the charges on the Delivery line of the bill are approved by the OEB. Some of the charges are fixed at a set amount per month. Others are variable and increase or decrease depending on the amount of electricity you have used. Delivery charges include:

Monthly Service Charge: A fixed monthly charge intended to allow your utility to recover the costs associated with meter reading, billing, customer care and account maintenance, and general utility operations.

Distribution Charge: A variable per kilowatt-hour (kWh) charge intended to allow your utility to recover the cost of building and maintaining its low-voltage distribution system, including overhead and underground distribution lines, poles, and transformer stations.

Transmission Charge: A variable charge for the costs of transmitters to operate and maintain the high-voltage transmission system that carries electricity from generating stations to your utility.

Line Losses: When electricity is delivered over a power line, it is normal for a small amount of power to be consumed, or lost, as heat. In calculating your electricity costs for the billing period, our utility adjusts your metered consumption to account for those losses using an adjustment factor that is approved by the OEB.

REGULATORY CHARGES

The Wholesale Market Service Charge covers the cost of services provided by the Independent Electricity System Operator (IESO) to operate the wholesale electricity market and maintain the reliability of the high voltage power grid. It also covers the administration costs of the Ontario Power Authority (OPA) and certain costs incurred by local utilities to connect renewable generation. Although the Wholesale Market Service Charge is set by the Board to allow these costs to be passed on to consumers, the Board does not set or approve all of the costs that are recovered through that charge.

Standard Supply Service Charge covers a portion of a utility’s administrative costs to provide electricity to customers that purchase their electricity from the utility (i.e. customers that are not served by a retailer). This charge is set by the OEB and is the same for all utilities across the province.

DEBT RETIREMENT CHARGE (DRC)

This charge is set by the Ontario Ministry of Finance and is used by the government to pay down the residual stranded debt of the former Ontario Hydro.  Effective as of January 1, 2016 the DRC will be removed from residential bills and general service rate class accounts that may be eligible for an exemption based on eligible residential units.

Water

The treatment and delivery of potable water for public consumption by a Public Utility Commission is regulated by the Safe Drinking Water Act. The activities of the commission are regulated by the Municipal Act. Waterworks systems are natural monopolies and are the only cost effective economic model for bringing large quantities of water on demand to consumers at reasonable cost. Drinking water represents less than 1% of total consumption despite the fact that a major portion of the cost of water treatment is to produce water that meets drinking water standards. The requirement for municipal fire protection is the major cost determinant for the water distribution system.

Class A Water Rates consist of a monthly basic service charge plus metered water rates.

Sewer

The City of Sault Ste. Marie is responsible for maintaining the sewage collection pipes and the sewage treatment plants serving residents of the city. It is a common practice across the province for municipalities to base the revenue they need to operate and maintain the sewage system on the costs of operating and maintaining the drinking water system. In Sault Ste. Marie, the PUC bills and collects costs for the sewage system on behalf of the City through the monthly PUC water bill. The PUC does not charge the City for this service and all the money collected is turned over to the City each month. The City determines how much is required; effective as of January 1, 2016 the city sewer charge for a residential customer is 62% of the total water charges and 82% for a non-residential customer.

Understanding Your Bill
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