Electricity bills in Ontario could increase by nearly $13 per month over five years after Ontario Power Generation (OPG) reached a settlement with consumer and industry groups over proposed electricity rates for 2027 to 2031.
The agreement would allow the provincially owned electricity producer to receive higher payments for power generated by its nuclear plants, alongside increases for hydroelectric power. However, the settlement still requires approval from the Ontario Energy Board (OEB), the province's electricity regulator.
Under OPG's estimate, a typical residential customer's monthly electricity bill, currently around $142, would rise by nearly $13 over the five-year period if the settlement is approved. That is lower than the total increase of approximately $17 that OPG originally sought.
Proposed Rate Increases to Begin in 2027
The proposed rates would cover the period from January 1, 2027, to December 31, 2031.
OPG's application concerns payments for electricity generated by its regulated nuclear and hydroelectric facilities, including the planned Darlington New Nuclear Project facilities. The company says the increased payments are needed to support major investments in maintaining existing generating stations and expanding electricity supply to meet future demand.
The settlement would spread the financial impact across several years rather than applying the full increase immediately.
According to the reported agreement, approximately $350 million in nuclear revenue would be deferred from collection in 2027 until 2028, helping to reduce the immediate impact on customers while shifting some costs into subsequent years.
The final impact on individual households will depend on the approved rates, electricity consumption and other components of their bills.
Nuclear Power Projects Driving Higher Costs
Major investments at Ontario's nuclear facilities are among the principal factors behind OPG's request for higher payments.
At the Darlington Nuclear Generating Station, additional maintenance associated with the refurbished facility is expected to cost nearly $3 billion.
OPG is also developing a small modular reactor project at Darlington. The plan involves four units with a combined estimated cost of approximately $20.9 billion, with the first unit expected to enter service in 2030.
Meanwhile, four reactors at the Pickering Nuclear Generating Station were shut down in late September for a refurbishment programme estimated at $26.8 billion.
These projects are intended to maintain existing generating capacity and support future electricity demand. However, the cost of building, maintaining and refurbishing major energy infrastructure can place upward pressure on the rates utilities charge for their electricity.
OPG also operates 54 regulated hydroelectric generating stations across Ontario. Payments for hydroelectric power would increase under the settlement, although by less than the company initially requested.
Consumer and Industry Groups Participated in Negotiations
The settlement followed negotiations involving OPG and several organisations representing electricity consumers and businesses.
Participants included the Association of Major Power Consumers in Ontario, the Building Owners and Managers Association Toronto, the Consumers Council of Canada and the Vulnerable Energy Consumers Coalition.
These groups represent different interests, including large industrial electricity users, businesses and residential customers concerned about affordability.
The agreement reflects a compromise between OPG's original request and the concerns of participating consumer and industry groups.
Brad Duguid, president of the Association of Major Power Consumers in Ontario, said the agreement would save his members money compared with the utility's initial proposal.
However, he also warned that the substantial investment needed to maintain and expand Ontario's electricity infrastructure would continue to put pressure on electricity bills.
The settlement therefore reduces the proposed increase compared with OPG's original application but does not eliminate the broader cost pressures facing the province's electricity system.
Ontario Energy Board Must Approve the Agreement
The proposed settlement is not yet final.
The Ontario Energy Board has scheduled a meeting for October 30, 2026, to hear presentations from the parties involved before issuing a written decision on the application.
The regulator's review will determine whether the proposed payment amounts should be approved for the five-year period.
Until that decision is made, the settlement should be treated as a proposal rather than a confirmed change to customers' electricity bills.
Consumers and interested organisations can also follow the OEB proceeding through the regulator's official application page.
Electricity Affordability Remains a Concern
The proposed OPG rate settlement comes as Ontario faces wider questions about the cost of maintaining and expanding its electricity supply.
The province expects electricity demand to grow as its population increases, industries expand and more activities become electrified. New generation, grid infrastructure and refurbishment work will require substantial investment over the coming years.
At the same time, electricity affordability remains a concern for households and businesses managing higher living and operating costs.
The provincial government's electricity rebate also affects what eligible customers ultimately pay. The Trillium reported on October 16 that the Ontario Electricity Rebate is scheduled to fall from 23.5% to 15.7% on November 1, 2026, potentially increasing the amount customers pay even before the proposed OPG rate changes take effect.
The combination of changes to generation payments and electricity bill support means the final cost to consumers will depend on more than the OPG settlement alone.
What Ontario Residents Should Expect
If approved, the settlement would allow OPG's regulated electricity payment amounts to increase between 2027 and 2031, with the company estimating a cumulative increase of nearly $13 per month for a typical residential customer.
That figure represents the estimated impact of the proposed settlement over the full five-year period, not an additional $13 every year.
The agreement would also mean a smaller increase than OPG originally requested, while providing additional revenue to support nuclear and hydroelectric infrastructure.
The Ontario Energy Board's decision later this month will determine whether the proposed rates can proceed.
For Ontario households, the key issue will be how the final decision, electricity consumption and changes to provincial rebates combine to affect the amount payable on monthly bills.
