Canadians from coast to coast to coast pay a different price on their electricity bill. Why? There are a number of factors that determine the price Canadians pay for electricity.
Mix of generation sources
Each province has its own mix of renewable and non-renewable electricity sources. The combination of these sources, for example, hydro, natural gas, solar, is unique to each region and has an influence over the price of electricity.
Infrastructure maintenance and renewal
Infrastructure and equipment has to be maintained, for example, downed power lines and poles caused by storms, to avoid power outages.
The age of the infrastructure will also have an effect on cost, but this isn’t always negative. If an existing asset is producing electricity long after its capital costs are paid off, it can have a positive impact on price.
The price of electricity is influenced by fixed and variable costs. The price of building transmission wires would be an example of a fixed cost, while the price of the fuel used for generation is variable.
Geography of the region
The distance electricity has to travel over the transmission and distribution system from the generation source to the customer can influence the final price.
Access to natural resources and generation facilities determine the cost of electricity, alongside overall population density. Often in remote areas, more infrastructure is required to deliver electricity from the generation source to homes, businesses, and communities with the cost shared among fewer customers.
Selected world residential electricity prices, 2012
Some of the best rates in the world
Canada’s access to renewable natural resources allows for some of the lowest residential electricity prices in the world. This provides the opportunity for more freedom and flexibility in their budgets than similar countries like the United Kingdom and the United States.
A fraction of your household budget
The average Canadian spends less than $4 per day on electricity, well below the national average for other necessities like food and shelter. In fact, most Canadians spend more money on clothing and footwear than they do their electricity.
Investing in our future
Although Canada’s current electrical system was designed to power a much smaller population, today it’s working double time to reach over 35 million people, along with all of their personal devices and home electronics. In order to support its growing population and the use of modern day electronics, Canada will need to invest more than $350 billion into the system over the next 20 years — that’s $15 billion each year.