Ontario’s Quiet Shift to Gas is Showing Up on Your Power Bill
When the Ontario Energy Board published its 2025 system supply mix in June 2026, one figure deserved more attention than it got. Natural gas generation now accounts for 19.4% of Ontario’s electricity. On its own that sounds modest. The trend is what matters. The same figure was 16% in 2024 and 12.5% in 2023. In just two years, Ontario’s reliance on gas has grown by more than half. This is not a one off. It is a pattern, and it goes a long way toward explaining why electricity costs climbed so sharply in 2025.
The numbers behind the mix
- Ontario generated 169.3 TWh of electricity in 2025.
- Nuclear supplied 46.2%, falling below 50% for the first time since 2003 as several reactors went offline for refurbishment.
- Hydro generation held at 22.5%.
- Natural gas, oil and other emitting sources filled much of the gap, producing 32.8 TWh, or 19.4% of the total. Wind contributed 9.3% and solar 2.1%.
Nuclear and hydro are Ontario’s least costly and steadiest sources. When they cannot keep up with demand, gas plants ramp up to cover the difference. That is precisely what happened last year, and it is what pushes wholesale prices higher.
Demand kept breaking records
The other half of the story is demand. Total electricity demand rose about 4.4% in 2025, an increase of 6.2 TWh over the prior year. On June 24, the grid hit a summer peak of 24,862 MW, the highest in 12 years. The system operator beat 2024’s peak demand on seven separate occasions throughout the year. Heat waves drove much of it, as did slower moving forces that are not going away: data centre growth, EV adoption, broad electrification and a rising population. The IESO now expects provincial demand to grow roughly 75% by 2050. The pressure that defined 2025 is the early edge of a much longer climb.
Why gas drives the bill
Here is the part that matters most for your costs. Natural gas is usually the last resource called on to meet demand, which means it frequently sets the wholesale price for the entire market. The more hours gas runs, the more often it sets a higher price for everyone. With nuclear units offline and demand spiking through the summer, gas ran more in 2025 than it had in years, and wholesale market prices reached their highest level since 2005.
That pressure landed on bills. On November 1, 2025, regulated rates under the OEB’s Regulated Price Plan rose about 29%, the steepest single increase since 2019. The province softened the impact by raising the Ontario Electricity Rebate from 13.1% to 23.5%. But a rebate does not lower the real cost of power. It moves that cost onto taxpayers, and it can be trimmed or removed in any future budget. The underlying price of electricity went up, plain and simple.
A structural trend, not a one year blip
It would be easy to write off 2025 as a hot summer paired with an unlucky stretch for the nuclear fleet. The data says otherwise. Gas has taken a larger share three years running. More nuclear capacity comes offline after 2026 as the Pickering B units enter refurbishment, tightening supply further. Demand is forecast to keep rising. Every one of these forces points in the same direction: more reliance on natural gas, and more upward pressure on price.
For consumers, that means higher bills cushioned by a shrinking margin of government support. For businesses, the stakes are larger. Energy is often one of the biggest controllable costs on the books, and the rules around peak demand, Global Adjustment and hourly zonal pricing reward organizations that manage it well while quietly penalizing those that do not.
What you can do about it
Rising rates are largely outside your control, but your exposure to them is not. Businesses that understand when and how they draw power can cut costs meaningfully, often without changing how they operate. In practice that can mean shifting load away from peak hours, qualifying for Class A treatment under the Industrial Conservation Initiative, tightening efficiency, or exploring on site generation and storage to ride through the most expensive hours of the year. The first step is simply knowing where you stand. Most organizations have never had their consumption profile and rate exposure properly reviewed, and the savings sitting in that blind spot tend to be larger than expected.
If you want to understand how Ontario’s changing supply mix affects your bottom line, please email me at bharucha@xcela.ca to request a free assessment. We will review your usage, show you where you are most exposed to rising rates, and lay out practical ways to bring your energy costs under control before they climb further.