Investing in London’s Electricity System: What the 2027 Rate Application Could Mean for Business Customers

Understanding your distribution charges

It's important to understand that the proposed changes relate to London Hydro's distribution rates, not the price of electricity itself.

Distribution rates form part of the Delivery section of your electricity bill and cover the cost of providing and maintaining the local electricity distribution system.

London Hydro's distribution rates have two components:

Fixed distribution charge

The fixed charge helps cover costs associated with billing, customer service, account maintenance and general utility operations.

Variable distribution charge

The variable component helps cover the costs of building, operating and maintaining the electricity distribution system, including overhead and underground power lines, poles and transformer stations. For applicable business customers, these charges are influenced by electricity demand.

The proposed rate changes affect these components differently, which is one reason the financial impact varies from one business to another.

Individual customer estimates are based on the proposed rates and account information. They do not include potential rate riders, which are temporary credits or charges that may be applied to adjust for historical variances or other approved costs. These adjustments can increase or decrease the amounts customers pay.

What are we investing in?

Over the next five years, London Hydro's distribution plan proposes average annual investments of approximately:

• $37 million for equipment renewal
• $20 million for additional capacity and automation

The cost of this work has also increased. Poles and many types of wire now cost roughly twice as much as they once did, while labour, construction and equipment costs have also increased. 

These investments will help us maintain and renew the existing system while preparing for London's growth and changing electricity needs. 

Preparing for growth

Ontario’s electricity demand is projected to increase by 65% between 2026 and 2050. Planning for additional capacity helps support new connections, business expansion and economic development.

As London grows, the electricity distribution system must be able to accommodate new businesses, larger facilities and increased electricity demand.

Supporting electrification

Businesses are increasingly considering electric vehicles, fleet charging, electric heating and the electrification of equipment and processes. 

These changes can affect electricity consumption and peak demand. Planning ahead helps ensure the distribution system can keep pace with changing business needs.

Modernizing and strengthening the grid

New technology and automation can help London Hydro monitor system conditions, identify problems and restore power more quickly. 

We also assess equipment based on its condition, performance and risk to determine when it should be replaced or renewed. This helps us prioritize investments and strengthen the reliability and resilience of the system.

What’s in it for businesses?

A reliable electricity distribution system is essential to businesses of all sizes. The proposed investments are intended to support the electricity service and capacity businesses need to operate, expand and adapt to changing energy needs.

These investments can help provide:

• Greater reliability and resilience through equipment renewal and grid strengthening.
• Faster power restoration through automation and improved system visibility.
• Capacity for growth by supporting new connections and facility expansions.
• Readiness for electrification as businesses adopt electric vehicles, heating and other technologies.

What happens next?

London Hydro's proposed 2027 distribution rates have been submitted to the Ontario Energy Board, Ontario's independent energy regulator, for review and approval.

The OEB reviews the application and supporting evidence to determine whether the proposed costs and rates are reasonable and in the public interest.

If approved as filed, the proposed new rates would take effect May 1, 2027. The final approved rates may differ from those in London Hydro's application.

A Cost of Service application is generally filed every five years and provides an opportunity to review the costs of operating, maintaining and investing in the electricity distribution system. Once approved, the rates are subject to periodic adjustments, including applicable rate riders and inflationary adjustments.

Have questions about your business's estimated rate impact?

Every business has different electricity needs, and the proposed changes will not affect every customer in the same way.

London Hydro's Key Account team is available to help eligible business customers understand their estimated rate impacts, answer questions and support budgeting and financial planning.

For more information about London Hydro's 2027 Cost of Service application, including the supporting evidence and proposed rates, visit our Regulatory Documents page.