Shocking! Your electricity prices have quietly been increased by 55%
Make rising electricity prices and the Carbon Tax work for you
Lean Housekeeping
Happy New Year and thank you for all your support in kicking off The Lean House Effect last year! Before we get into this month’s article, I want to share one of my new decade resolutions—because, first, I want to be accountable and, second, I need your help.
I am setting a goal of planting 1,000,000 trees by 2030.
Why trees? New research out of Switzerland shows that planting a trillion trees is the cheapest and most effective way to absorb carbon from the atmosphere. And they have shown that there is enough empty space on Earth to achieve this.
Why 2030? The International Panel on Climate Change (IPCC), made up of hundreds of the world’s leading scientific experts, concluded that in order to achieve the 1.5°C target and avoid catastrophic climate change, CO2 emissions must decline by 45% (relative to 2010 levels) by 2030, reaching net zero emissions by around 2050. This is a make it or break it decade, so let’s do what we can to actually make it.
The goal of this newsletter is to help people live sustainably while continuing to build wealth. By sharing my ideas with thousands of readers, I can have a multiplying effect—but I want to take it a step further. I’ve set this very ambitious tree planting goal, and I need your help.
The company Substack, that helps me disseminate this newsletter, allows for paid subscriptions to premium content. I’ve enabled this feature so that you can support my efforts in writing this newsletter and reaching the goal of planting one million trees. For each paid subscriber I will use the proceeds to plant two trees every month.
Will you become a paid subscriber and help us achieve this very ambitious goal?
Moving to a sustainable future requires us to weave the interests of our planet into everything that we do. With this goal, the success of this newsletter further multiplies its positive effect on our planet.
Now, let’s get into this month’s content.
Make rising electricity prices and the carbon tax work for you
You may not have heard anything about it, but electricity prices in Ontario were quietly increased by 55% in November. Yes, you read that right, fifty-five percent—and barely anyone knows about it. You can see the prices for off-peak, mid-peak and on-peak usage in the chart below, before and after the Nov 1st change.
Don’t live in Ontario? Keep reading.
In Ontario, we have what’s called time-of-use electricity pricing. Under this approach, you are charged higher prices per kilowatt-hour (kWh) of electricity when the demand is higher. However, you are rewarded with lower prices to consume electricity when the demand on the grid is lowest. Not only is it cheaper to use off-peak electricity but it’s cleaner, too. In many parts of Canada, the electricity grid is very clean due to hydro-electric power and growing installations of renewable power like solar and wind. However, during peak hours of the day, gas-fired powerplants are turned on to meet the high load requirements.
Why are electricity prices rising across Canada?
Ontario electricity prices have grown the most among all provinces, but this isn’t just an Ontario phenomenon. Electricity prices across Canada have risen, on average, almost 40% since 2008—more than four times the rate of inflation. The reason for this, though not entirely, is partly because of our need to make major investments in clean energy projects and kick our terrible fossil fuel habits.
Unless you’ve been living under a rock, you know that climate change is upon us, and this is just the beginning. There is some good news though! Let me explain.
The federal government has just instituted a price on carbon in all provinces that didn’t already have a similar program in place. This is partly responsible for rising electricity and gasoline prices. But the good news is that you can actually make lots of money from this program.
At the end of the year, the government is going to equally give every Canadian household a carbon rebate on their income taxes, for all of the taxes levied from the new price on carbon. In short, if you are responsible for the consumption of less carbon than the average person, then you will essentially get paid by everyone else who consumes more carbon than you. It is as simple as that. Consume less, save money, and get paid for being better than average.
It’s important to note, that like most good investments in the future sustainability of our planet, your investment will continue to pay growing dividends for many decades to come. In Canada, the price on carbon is going to keep rising (by approximately $10/ton per year) because the investment required to transition our economy away from fossil fuels must accelerate. Therefore, any changes to your consumption habits today, will keep getting better and better every year.
For example, in a previous article I outlined my $340.80 investment in LED lightbulbs and the $20,000 return in electricity savings that it would generate over the lifetime of the bulbs. With the new 55% increase in electricity prices, just a year after installing these new lightbulbs, my returns grow from $20,000 to $31,000 and I don’t have to do anything different!
What else can you do?
If you live in Ontario, the price of electricity changes throughout the day, and the time window for peak energy prices changes from season to season. I recommend printing two copies of the Ontario Electricity Time-of-Use Price Periods Chart above and sticking one copy near your fridge or dishwasher, and the other copy near your washer and dryer. This way you’ll be reminded to use your major appliances during the off-peak period. Or you can use the delay start button on any modern appliances so that the dishwasher or clothes dryer starts running during the off-peak hours.
Take the case of a small household that runs the dishwasher every other day, uses the oven or stove once a day, and does several loads of laundry a week. If this household’s appliances are used during off-peak hours, its residents can save up to $320 a year. Integrating these habits into your life and investing your extra savings every year would lead to $4,730 after 10 years and $68,355 after 40 years.
In order to reduce your electricity bill even further, no matter what province or country you live in, make sure that you:
Don’t leave lights on in rooms that you aren’t occupying
Set your fridge no lower than 3° Celsius (38° Farenheit)
Get a smart thermostat like Ecobee to help you save energy on heating, and
Turn your ceiling fans to the reverse setting in the winter, in order to circulate warm air up and around the room
Two more things you can do
In addition to implementing these changes into your life, there are two additional ways you can help to make a difference through this newsletter.
Become a paid subscriber to The Lean House Effect. Every month, I will plant two trees on your behalf towards the goal of planting one million trees by 2030. In addition, you will be able to comment on my articles and will occasionally receive premium content just for subscribers. Hopefully I’ve already helped your future-self save tens of thousands of dollars—what’s a few bucks for the threes?
Share these articles with anyone you know who might find them interesting or who could benefit from implementing these changes to their life. For this article particularly, send it to anyone you know in Ontario or who has an interest in the carbon tax.