What Is a Distributor?
Ontario’s local electrical utilities – or distribution companies – are the connection point between power generation and transmission, and the almost five million homes, businesses, and institutions around the province where electricity is put to day-to-day use. About 70 of these utilities, from all parts of the province, are members of the Electricity Distributors Association.
Local Electrical Utilities:
- Connect new homes and businesses to electricity supply, maintain their community’s network of power lines and restore them after storms.
- Invest in new technologies to create a “smarter” distribution grid.
- Are key players in the economic development and well-being of Ontario. As cities and industries expand, local electricity distribution grids expand along with them to facilitate growth.
- Are focused on the reliable and safe delivery of electricity to their customers.
- Are committed to electricity conservation, creating and implementing conservation programs across the province that help you manage costs.
- Are mainly municipally owned, with some private investment.
- Deliver your electricity bill – yet have direct control over only about 20 per cent of the costs it includes.
With population growth comes the need for more connections
Ontario’s population continues to grow rapidly, as new subdivisions, business parks, and entire communities come into being. With this growth comes new customers and increased demand on our power grid. For example, PowerStream added 8,400 new customers in 2013 alone in York Region and Central Ontario. And like other EDA members, PowerStream is not just keeping up with new demand, but working to find what could be dramatically new and different ways of meeting it.
PowerStream is investing in and piloting micro-grid technology that, rather than delivering electricity to hundreds of thousands of customers at a time, is scalable and localized. It also has the potential to better accommodate dispersed sources of renewable generation. Micro-grids can serve targeted geographic areas – pockets of growth – and more remote locations or communities, drawing on diverse electricity supplies.
Veridian Connections estimates it will need to make 1,500 new connections annually over the next several years in just one community alone – the Seaton development in north-central Pickering. And the utility is also supporting renewal in already developed areas – including an ambitious municipal project in Belleville to widen roads, replace water mains and make other upgrades. Veridian is working with the city and stakeholders to move poles and wires where needed to make this work possible.
Toronto Hydro is very active in the massive re-development of downtown Toronto, as the financial district and surrounding area come under new pressures from increased new construction. To alleviate the strain on the grid and to help increase the reliability and supply of electricity to this high-density, high-growth area, Toronto Hydro received approval from The Ontario Energy Board to construct a new transformer station. Located adjacent to the historically significant Roundhouse building, the majority of the station will be built underground and will be virtually undetectable in one of the city’s busiest tourist locations.
Horizon Utilities is the first utility in Canada to implement a customer-connection strategy inspired by Smart Growth or infill development principles. Horizon has built a database of available properties, utility infrastructure and customer-owned assets that help commercial and industrial businesses find low-cost sites. Horizon also foregoes recovery of some connection costs for customers using the program. This supports local investment and growth in Hamilton and St. Catharines, while reducing pressure for urban sprawl. And for Horizon, it encourages better use of existing assets, which ultimately reduces pressure for rate increases.
Over a 100 years of delivering power to communities across Ontario
Your Electricity Dollar – How is it Spent?
EDA member utilities are the billing agents for the entire electricity system, but distribution costs make up only about a fifth of the overall bill. Distribution costs are combined with transmission costs to make up the “delivery” line on your electricity bill.
Local electrical utilities collect the other 80 per cent of the costs as well to cover such things as generating the electricity, transmitting it around the province, and regulatory and debt retirement charges. These are direct “pass-through” costs on which there is no mark-up.
You can scroll over the pie chart to see exactly how a typical bill breaks down. An explanation of what each category consists of it found in the box below.
Your local EDA member utility delivers your bill, but has direct control over and retains only a small portion of it – the red wedge of the chart above. From the distributors’ perspective, most of it is direct “pass-through” costs (on which there is no mark-up or profit).
All components of both transmission and distribution charges are reviewed and approved by the OEB.
Ontario’s electricity system at a glance
Your local electrical utility, or hydro company as you may call it, is at the center of Ontario’s power system. It takes power from the high-voltage transmission lines that crisscross the province and “steps it down” to user-friendly voltages that power local homes, businesses, and institutions. It’s a highly interdependent system that takes power from the generation companies that create it (nuclear, hydro-electric, wind, solar, and natural gas, primarily) and delivers it using both traditional poles and wires and cutting-edge smart grid technologies. All of this ensures users like you can reliably access power whenever it’s needed.
New outage management systems deliver updates quickly and accurately
Many local electrical utilities are moving to advanced outage management systems (OMS) to reduce the frequency and impact of power disruptions and better inform their customers.
London Hydro is one of many examples. Its OMS integrates data from the company’s Geographic Information Systems and “control and data acquisition” databases to provide real-time electricity mapping data – greatly improving customer service. This means fewer outages and repairs that are completed before problems can occur.
London Hydro was one of the first utilities in North America to offer automated outbound or so-called “push” outage notifications to its customers. This program uses multiple communications channels. Customers are given the option to receive these updates by telephone, email, or text.
Because local electrical utilities know that “there is a lot on the line” for their customers, initiatives such as Outage Management Systems can not only notify customers when outages have occurred at their homes or businesses, but also provide updates about when the power is expected to be restored.
Burlington Hydro is another example of a local electrical utility using hi-tech outage management systems to make it as convenient as possible for customers to stay informed during power interruptions and extreme weather events. Customers can access current information about planned and unplanned power outages easily and in real-time from the website or from their mobile device. The Outage Map locates affected areas, while relaying information on the cause and expected duration of the power interruption.
Fixing small problems before they become big ones
Utilities Kingston, like many other local utilities, uses infrared scanning to detect faulty electric equipment. This technology has been used to scan the entire overhead and underground Kingston Hydro distribution network. In 2013, Utilities Kingston found 122 defects in the network and addressed them before any outages occurred.
We not only deliver, soon we’ll be “picking up”
Imagine your community was made up solely of one-way streets. Every road, street, highway, and path … each of them going in one direction only. Now imagine, changing most every one of them so that traffic could flow both ways.
That’s what’s happening to your electricity system and your local electricity distributors are very much the leaders in its implementation.
This is part of the broader concept you may know as “smart grid” – and it means in part that your electricity can travel two ways: from your local distributor to you, and from you to your local distributor. Yes, we’ll not only be delivering your power, we’ll be picking it up too.
How will it work?
A growing number of customers are generating their own power, using rooftop solar panels, for example. And whatever they don’t use themselves … they can send back up the grid to us. In other words, you can become a producer rather than just a consumer.
A similar concept is coming into play with power storage. You may own a plug-in electric vehicle, for example. Taking advantage of Time-Of-Use pricing, you can charge your vehicle at night – when the prices are lower. And, if you are not using your car at subsequent high-demand times, it could become a source of power for your home, or even to return power onto the grid.
PowerStream, for example, partnered with Nissan Canada to demonstrate innovative electric vehicle-to-home technology. This technology was showcased at the Georgian College Auto Show and demonstrated how a fully-charged lithium-ion battery inside a Nissan Leaf all-electric car can provide a typical Canadian household with enough power for a full day.
Investing in the grid
A lot of the infrastructure that local electrical utilities operate was built in the 1950s and 1960s, and is at or near the point where it needs to be replaced. There is also vast opportunity to further improve the reliability and scope of services by engineering new infrastructure to leverage emerging technologies.
At the same time, infrastructure investment needs to be carefully planned to maximize benefits while moderating costs. This is one of the key imperatives for local electrical utilities today, as it is in other sectors that rely heavily on physical infrastructure.
The Ontario Energy Board regulates distribution-related infrastructure investment, and recognizes the need for investment. It is working with distributors to facilitate longer-term capital spending, and to coordinate infrastructure needs regionally.
This is intended to enable the investment that will maintain safe and reliable distribution of electricity well into the future.