Starting next month, some 10,000 Toronto households will begin being billed on a time-of-use electricity pricing system.

It's all part of a provincial initiative to get Ontarians to think about their energy use and the electricity demands they generate.

"We know that smart-use meters and time-of-use pricing will arm Ontarians with the information they need to make smart decisions about how and when they use electricity," Energy and Infrastructure Minister George Smitherman said Thursday.

Torontonians are actually following in the footsteps of 40,000 households in Milton, Newmarket and Chatham-Kent, which have already switched over to time-of-use rates.

By next summer, the province says one million Ontario households will be on time-of-use rates. Within two years, that number will jump to 3.6 million provincial households.

These hydro users pay more money when they use electricity in peak periods, while saving money when using electricity on weekends, holidays, or after late in the evening on weekdays. (Currently off-peak hours start at 10 p.m., but as of November they begin at 9 p.m.)

As of May 1, the three Ontario time-of-use rates for electricity are:

  • 9.1 cents per kilowatt hour at on-peak times
  • 7.6 cents per kilowatt hour at mid-peak times
  • 4.2 cents per kilowatt hour at off-peak times

Off-peak times will start at 9 p.m. on weeknights and all day on weekends and holidays.

These rates are reset every six months (May and November) to new levels that are based on projections by the Ontario Energy Board.

David O'Brien, the CEO of Toronto Hydro, told CTV Toronto that each of these monthly rates can go up or down, depending on public demand.

Toronto Mayor David Miller said city residents currently pay an average of five cents for each kilowatt hour that they use.

"You're paying five cents now for electricity whenever you use it," Miller said. "But it costs the system way more than that at peak times."

The new system will fully be in place by next year.

David Thompson is already monitoring his usage on the Toronto Hydro website. He's gotten rid of a "dinosaur" refrigerator that used too much energy.

"I noticed the bill go down quite a bit with that," he said.

With a report from CTV Toronto's Reshmi Nair and files from The Canadian Press