Hydro customers in Toronto will be forced to open their wallets a little wider starting in 2016, due to rate increases from Toronto Hydro and the Ontario government.

The Ontario Energy Board has given Toronto Hydro permission to raise rates in the city every year until 2020.

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Though Toronto Hydro has yet to provide a specific rate increase, recent estimates suggest the increase would be approximately $40 per year for the average home.

In a news release issued Tuesday, Toronto Hydro said it will provide specific rate increase details directly to customers.

The statement said Toronto Hydro's distribution charges account for approximately 25 per cent of customers' total bills. Toronto Hydro is using the increase to fund necessary improvements to its aging infrastructure.

In addition to the local utility's increases, Ontario residents are expected to be hit by two more rate hikes at the start of the year.

The province's Clean Energy Benefit, which provided customers with a 10 per cent discount, will be eliminated as of Jan. 1. The province's debt retirement charge expires Dec. 31, and customers will no longer pay into the fund through hydro bills. However, the charge was less than the discount, so customers will still end up paying more than they did in 2015.

At the same time, the Liberal government is going to give higher discounts to low-income households. The majority of Ontario Hydro customers will pay more in 2016 to compensate for the discounts given to lower-income families.

Combined with the $40 Toronto Hydro hike, the Ontario increases will add an estimated $165 per year to the average Toronto customer's bill.

With files from CTV Toronto's Paul Bliss