Electricity prices will dip slightly with the temperatures this fall, the Ontario Energy Board has announced.

Starting Nov. 1, consumers will see a reduction of about five per cent in electricity rates,  the province's first cut since 2002.

Similar to last year, residential customers will also be charged a lower electricity rate for the first 1,000 kilowatt hours they use from November through April.

From May through October, the lower rate will apply to the first 600 kilowatt hours.

Households that use 1,000 kilowatt hours per month will save $6.60 on each bill starting in November compared to a bill from this past summer for the same amount of power, the utility said in a news release Wednesday. The savings will come from a combination of the rate change and the greater number of hours charged at the lower rate.

Board spokesman Paul Crawford said the average Ontario household uses slightly less than 1,000 kilowatt hours per month. One kilowatt hour is enough electricity to power ten 100-watt light bulbs for one hour.

The changes affect homeowners and business owners who use less than 250,000 kW-h per year.

The new rates mean:

• Regular residential customers will pay 5.5 cents/kW-h for the first 1,000 kW-h/month this winter and for the first 600 kW-h/month this summer (down 5.2 per cent from 5.8 cents/kW-h).
• Regular small business customers will pay 5.5 cents/kW-h for the first 750 kW-h/month year round (down 5.2 per cent from 5.8 cents/kW-h).
• Regular residential customers and businesses will pay 6.4 cents/kW-h for electricity use above those thresholds (down 4.5 per cent from 6.7 cents).

Residential customers are being allowed to use more electricity at the cheaper rate during the winter because they spend more time indoors and need extra electricity for lighting and heating, the news release said.

For customers with smart meters who use time-of-use pricing, the new rates will be:

• 3.4 cents/kW-h for off-peak periods (down three per cent from 3.5 cents/kW-h).
• 7.1 cents/kW-h for mid-peak periods (down five per cent from 7.5 cents/kW-h).
• 9.7 cents/kW-h for peak periods (down eight per cent from 10.5 cents/kW-h).

Lower electricity prices will affect only the "electricity" line and not the "delivery" line of consumers' bills.

According to the Ontario Energy Board, prices are typically based on electricity prices forecast over the next year.

In the summer of 2005, the actual price of electricity was higher than anticipated, partly thanks to hot and humid weather that drove power-guzzling air conditioners to suck up the supply of power, increasing the price.

That created a $420-million debt. A surcharge of .5 cents/kW-h has been included in rates to pay it off.

Surcharge paying off deficit

The board expects 75 per cent of that deficit will be paid off by Oct. 31, thanks to the surcharge and the lower-than-expected cost of generating power from natural gas this year. Electricity in the province is also generated from nuclear and hydroelectric power.

Only $105 million of the debt is outstanding. The surcharge has been reduced to 0.15 cents/kW-h, and is expected to pay off remaining debt over the next year.

The board will review prices again in six months.

The board is a provincial government agency that regulates electricity and natural gas prices in Ontario.