What happens if you never shop around for electricity? In Ontario, you don’t get cut off or stuck with some random rate. You land on the Regulated Price Plan (RPP), a government-approved pricing system that sets what households and small businesses pay for each kilowatt-hour they use. It’s the quiet default behind millions of hydro bills, and most people who are on it have never actually looked at how it works.
That’s worth fixing. The RPP decides whether your bill goes up or down every few months, and it shapes the choices you have when a door-to-door energy salesperson knocks. Here’s a plain-language look at what the plan is, how prices get set, and where it can work against you.
What the Regulated Price Plan Actually Is
The RPP is a regulated electricity pricing scheme for residential and small-business consumers in Ontario who buy power from their local distribution company instead of a competitive retailer. It exists under the province’s Electricity Act, 1998, and it has been part of the province’s electricity market since the market opened on May 1, 2002.
Think of it as the “no-decision” option. When you move into a home and set up an account with your local utility, you’re automatically placed on the RPP unless you sign a contract with a licensed competitive electricity retailer. Nobody asks you to opt in. You’re in by default.
The prices themselves are not set by your utility. They’re approved by the Ontario Energy Board (OEB), the independent regulator that oversees the province’s electricity and natural gas sectors. That separation matters: your local utility bills you, but it doesn’t get to decide what the electricity costs.
Who Ends Up on the RPP
The plan covers two main groups:
- Residential customers who haven’t signed a retail contract.
- Small business customers that fall under the eligibility threshold set by the regulator.
If you rent, own, or run a small shop and you’ve never actively chosen an electricity retailer, you’re almost certainly on the RPP. It’s also where you return if a retail contract ends and you don’t sign a new one.
One practical trap: some people assume that because they pay a company other than the provincial utility, they’ve left the RPP. Not necessarily. In many areas the local distribution company still delivers the power and handles billing even when the commodity price comes from the RPP. Reading the fine print on the commodity line of your bill is the only reliable way to know which plan you’re on.
How RPP Prices Get Set
The regulator reviews RPP prices periodically, historically on a roughly six-month cycle, though the exact cadence has shifted over the years. Each review produces a price schedule that applies going forward.
The price reflects the forecast cost of supplying electricity, not a profit margin for the utility. Because forecasts are never perfect, the RPP includes a variance account mechanism. When actual supply costs come in higher or lower than forecast, the difference is tracked and later recovered from consumers or refunded to them through future RPP prices. In plain terms, you’re settling up for yesterday’s estimate on tomorrow’s bill.
This is why RPP prices can move even when nothing about your own usage has changed. The forecast shifted, or the variance account swung one way or the other.
Time-of-Use vs. Tiered Pricing
Ontario has used two pricing structures under the RPP, and the default has moved between them over time. This is one of the most misunderstood parts of the plan, so it’s worth being precise.
| Structure | How it works | Who it tends to suit |
|---|---|---|
| Time-of-use (TOU) | Price per kWh changes by time of day, with defined peak, mid-peak, and off-peak periods | Households that can shift heavy use (laundry, dishwashing, EV charging) to off-peak hours |
| Tiered | A lower price up to a monthly consumption threshold, a higher price above it | Households with steady, high usage that can’t easily be moved, such as electrically heated homes |
The key point: the default structure for RPP customers has changed more than once, and it can differ by season and by regulatory decision. Anyone who tells you “the RPP is always time-of-use” or “the RPP is always tiered” is working from an outdated assumption. The only reliable source is the current price schedule published by the regulator.
If you’re weighing which structure fits your household, the same logic that applies to housing decisions applies here: match the plan to how you actually live, not how you’d like to. A family that runs three loads of laundry on weekday evenings will get a very different result under TOU than a retired couple who are home all day. That kind of honest self-assessment is just as useful for picking an electricity structure as it is for comparing floor plan options for a new home.
RPP vs. a Competitive Retailer Contract
This is the decision that actually matters for your wallet. The RPP is the default; a retail contract is the alternative. Neither is automatically better.
| Factor | Regulated Price Plan | Competitive retailer contract |
|---|---|---|
| Who sets the price | Ontario Energy Board | The retailer, per your contract |
| Price stability | Changes at scheduled reviews | Fixed or variable per contract terms |
| Commitment | None; you can leave anytime | Usually a fixed term, sometimes with exit fees |
| Default status | Yes, if you don’t choose | No, requires signing |
| Risk | Price moves with regulated reviews | Can be higher or lower than RPP; depends on contract |
A fixed-rate retail contract can protect you from price increases, which is genuinely valuable for budgeting. But it can also lock you into a rate above the RPP for the length of the term. Variable contracts shift the risk back onto you.
The practical mistake people make is signing at the door without comparing the offered rate to the current RPP price. That comparison takes two minutes and is the single most useful thing you can do before signing anything. If the salesperson can’t tell you how their rate stacks up against the current RPP price, that’s your answer.
How to Check Your Own Situation
A simple routine keeps you from overpaying:
- Find the commodity line on your bill. It will state whether you’re on the RPP or a retailer contract, and which pricing structure applies.
- Note your usage pattern. Pull three months of bills and look at total kWh and, if you’re on TOU, how much falls in peak hours.
- Compare structures. If you’re on TOU but most of your usage is at peak, run the numbers on tiered pricing, and vice versa.
- Check the current RPP price schedule before evaluating any retail offer.
- Reassess after each price review. A structure that suited you a year ago may not suit you now.
People who track their usage carefully tend to make better calls here, much like buyers who study the numbers before committing to a property and check apartment prices against comparable units rather than accepting the first figure quoted. The pattern is the same: know the benchmark before you agree to anything.
Where the RPP Fits Alongside Other Regulated Pricing
“Regulated price plan” isn’t a term unique to Ontario. Other jurisdictions, including some U.S. states, the UK, and other Canadian provinces, use similar language to describe a default or tariff-based price set by a regulator. But the rules, eligibility, and price-setting mechanics differ enormously from place to place. (15 Fastest Luxury Cars in 2026: Speed & Price Compared)
That means any advice you read online about “the regulated price plan” needs a jurisdiction check before you act on it. A tip that’s perfectly sound in Ontario could be irrelevant or actively wrong somewhere else. If you’re outside Ontario, look for the specific regulator and the specific tariff name in your area rather than assuming the Ontario model applies.
The Criticisms Worth Knowing
The RPP isn’t beyond reproach, and a balanced look should say so.
It can dull the incentive to conserve. Because the price is set by forecast rather than by real-time market signals, consumers don’t see the true marginal cost of power at peak times. TOU pricing was partly designed to fix this, but its effectiveness depends on whether households can actually shift their usage.
The variance account creates lag. Adjustments for past forecasting errors show up later, which can make bills feel disconnected from current conditions.
It can be confusing. The shift between TOU and tiered defaults, plus periodic price changes, leaves many consumers unsure what they’re paying or why. Confusion is expensive when it stops people from comparing options.
On the other side, the RPP provides real stability. It removes the risk of a bad contract, guarantees a regulated price rather than a markup, and gives consumers a fallback they can return to at any time. For households that don’t want to think about electricity pricing, that’s a genuine benefit.
Practical Tips That Actually Help
- Don’t assume “regulated” means “cheapest.” It means “approved by a regulator.” A competitive contract can beat it, and can also lose to it.
- Read the commodity line, not the total. Delivery and regulatory charges sit on top of the RPP price and don’t change based on which plan you choose.
- Watch for contract renewal letters. Many people drift back onto the RPP without realizing it when a fixed term ends.
- Keep a note of your price review dates. Knowing when prices reset helps you time a decision.
- Ignore urgency tactics. A limited-time offer that expires tonight is a sales technique, not a reason to skip the comparison.
If you’re managing a household budget alongside other planning, whether that’s care arrangements or a new venture, the discipline is similar to sketching out a caregiver business plan: write down the real numbers, compare them against alternatives, and revisit when conditions change. Electricity pricing rewards the same habit.
Conclusion
The Regulated Price Plan is best understood as Ontario’s safety net for electricity pricing: a regulator-approved default that protects consumers from bad contracts while giving them a clear benchmark to shop against. It isn’t the cheapest option by definition, and it isn’t designed to be. It’s designed to be predictable, transparent, and available to anyone who doesn’t want to navigate the retail market.
The real value for consumers comes from knowing which plan they’re on and why. Check the commodity line on your bill, understand whether you’re on time-of-use or tiered pricing, and compare any retail offer against the current regulated price before you sign. That short routine is worth more than any single rate change.
Frequently Asked Questions
What is the Regulated Price Plan in simple terms?
It’s the default electricity price for Ontario households and small businesses that buy power from their local utility instead of a competitive retailer. The price is approved by the Ontario Energy Board rather than set by the utility or a retailer.
Am I automatically on the RPP?
In most cases, yes. If you set up an account with your local distribution company and never signed a contract with a licensed electricity retailer, you’re on the RPP by default. You leave it only by signing a retail contract.
Is the RPP time-of-use or tiered pricing?
It has used both, and the default has changed over time. Time-of-use pricing charges different rates by time of day, while tiered pricing charges a lower rate up to a monthly threshold and a higher rate above it. Check the current price schedule to see which applies to you.
Can I leave the RPP at any time?
Yes. Signing a contract with a licensed competitive electricity retailer takes you off the RPP. If that contract ends and you don’t sign a new one, you typically return to the RPP automatically.
Why do RPP prices change?
Prices are based on the forecast cost of supplying electricity, reviewed periodically. Because forecasts are never exact, a variance account tracks the difference between forecast and actual costs and recovers or refunds it through future prices.
Is the RPP cheaper than a retail contract?
Not necessarily. It depends on the contract terms and the current regulated price. A fixed retail rate can be lower or higher than the RPP, so the only way to know is to compare the offered rate against the current regulated price before signing.
