Rates, Price Drivers and 2026 Rules
Delivery vs commodity charges: what each line on a Canadian energy bill means
Why a lower electricity or gas price barely changes your bill: commodity, delivery, regulatory charges, riders, Global Adjustment, rebates and taxes explained.
Every Canadian electricity and gas bill splits into two kinds of cost. The commodity (or energy, or supply) charge pays for the electricity or gas itself. Delivery pays for the wires or pipes that bring it to your home: transmission, local distribution, metering and customer service. Delivery is charged by your local regulated utility no matter who sells you the energy, and it often includes a fixed daily or monthly amount you pay even if you use almost nothing. That is why switching retailer or plan changes only part of your bill, and why a headline cut in the energy price can leave the total almost unchanged.
This guide is part of our overview of rates by province.
The usual lines on an electricity bill
| Line (names vary) | What it pays for | Who sets it | Changes when you switch plan or retailer? |
|---|---|---|---|
| Electricity / energy charge | The kWh you used | Regulator for the default; retailer under a contract | Yes |
| Global Adjustment (Ontario, retail contracts only) | Generator contract and regulated generation costs not covered by the market price | Calculated by the IESO; passed through | Appears only if you leave the RPP |
| Delivery: fixed | Meter, billing, a share of the local network | Regulator, per distributor | No |
| Delivery: variable | Transmission and distribution per kWh, plus line losses | Regulator | No |
| Regulatory charges | Wholesale market operation, system reliability | Regulator | No |
| Rate riders | Temporary refunds or recoveries of past differences | Regulator | No |
| Local access fee or franchise fee (some provinces) | Municipal fee for use of rights-of-way | Municipality, approved by regulator | No |
| Rebates and credits | Ontario Electricity Rebate, low-income credits | Province | No (OER applies to retail customers too) |
| Taxes | GST/HST, PST or QST | Federal and provincial | No |
On a gas bill the parallel lines are the gas supply or cost-of-gas charge (commodity), transportation, storage, delivery, a customer or basic charge, and rate adjustments. See natural gas rates after the carbon charge.
Why delivery matters so much
Delivery costs are largely fixed: poles, wires, transformers, meters and staff cost about the same whether you use 400 or 900 kWh. Regulators recover them partly through a fixed monthly charge and partly per kWh. In Ontario, the OEB moved residential distribution charges to a mostly fixed monthly charge over the late 2010s, so a household's distribution charge depends little on usage.
Illustrative Ontario winter bill, 700 kWh, tiered, from 1 November 2026 (delivery and regulatory amounts are assumptions; your distributor's rates differ):
| Line | Amount |
|---|---|
| Electricity: 700 × 11.2¢ | $78.40 |
| Delivery (fixed + variable, assumed) | $52.00 |
| Regulatory charges (assumed) | $6.00 |
| Pre-tax subtotal | $136.40 |
| Ontario Electricity Rebate, 15.7% | −$21.41 |
| HST 13% on the subtotal (as shown on many bills) | +$17.73 |
| Total | $132.72 |
Now cut the energy price by 10%: electricity becomes $70.56, a saving of $7.84 before rebate and tax. After the 15.7% rebate and 13% HST, the total falls by roughly $7.84 × (1 − 0.157 + 0.13) = about $7.63, which is under 6% of the bill. A 10% energy price cut is not a 10% bill cut.
Alberta: the same split, different names
An Alberta electricity bill shows an energy charge (your RoLR or retailer price × kWh), an administration charge from the retailer, then transmission and distribution charges, often a local access fee set by your municipality, and rate riders. Delivery charges are approved by the AUC for each wires owner. Because transmission and distribution charges in Alberta are substantial, households comparing retailer offers should remember those lines do not change. See Alberta's RoLR vs retailers.
BC and Québec: integrated rates
BC Hydro and Hydro-Québec bills do not separate commodity from delivery in the same way. The energy price per kWh and the basic or access charge together recover generation, transmission and distribution. You still see a fixed daily charge (the BC Hydro basic charge, the Hydro-Québec access charge) plus energy, so the fixed-versus-variable logic is the same. See BC Hydro's rates and Hydro-Québec Rate D.
Ontario's Global Adjustment: the line that surprises contract customers
If you stay on the RPP, the Global Adjustment is already blended into the TOU, ULO or tiered price. If you sign a retail contract, the bill shows the retailer's price and a separate Global Adjustment charge per kWh, which changes monthly. Comparing a retailer's fixed price directly with the RPP price is therefore misleading. The fixed contract vs default guide shows how to add it.
How to read your own bill in five minutes
- Write down kWh (or GJ/m³) and the number of days.
- Note each charge and mark it commodity or delivery/other.
- Calculate the commodity share. On many residential bills it is under half.
- Check which lines would change if you switched plan or retailer: usually only the commodity and admin fee.
- Put those numbers into the bill estimator or plan comparison.
FAQ
Can a retailer reduce my delivery charge?
No. Delivery is charged by the regulated distributor for everyone in its area.
Why do I pay a delivery charge on a vacant cottage?
Fixed delivery charges cover the connection itself and accrue daily while the account is open.
What is a rate rider?
A temporary charge or credit approved by the regulator to recover or refund past differences between forecast and actual costs.
Does the regulator check that my bill is correct?
Regulators set the rules and handle complaints; your first step for a billing error is the utility. See complaints by province.
Sources
- Ontario Energy Board — understanding your electricity bill and distributor rates
- Independent Electricity System Operator — Global Adjustment
- Utilities Consumer Advocate — understanding Alberta utility bills and rate riders
- Alberta Utilities Commission — distribution and transmission rate decisions
- British Columbia Utilities Commission — BC Hydro and FortisBC rate design
