Power bills, and the power system: Energy bills and a complex industry can have consumers feeling left out in the cold

November, 2016

For many Albertans, the only time any attention is paid to the gas

or electricity bill is when there’s a dramatic change to the amount owing. Otherwise, most plod along, unsure of what the many charges really mean, as they weigh terms such as regulated, de-regulated, green energy and rate riders. Adding to the confusion is talk of the larger issues facing the industry—an impending carbon tax, greenhouse gases, rebates and reduced consumption. It’s no wonder consumers feel left out in the cold. But how exactly does one start to make sense of the zenergy puzzle? One piece at a time.

Where We Came From & Where We’re At

In the late 90s, the Klein government

de-regulated Alberta’s energy industry, allowing competitive players onto the market to sell gas and electricity to residential customers and businesses. Today, dozens of companies sell energy to Albertans, two of the large players being Epcor and Atco.

Many of the companies are regionally owned and offer consumers either the regulated—yet fluctuating—rate option (RRO) for gas or electricity, or the de-regulated locked-in rate for a set term.

“What’s right is different for each person. Alberta’s system asks consumers to do their homework to determine what’s the best way to go. Those who like knowing what the bill will be each month (usually for budgetary reasons), may prefer a two-to-five-year contract at a fixed rate per gigajoule (GJ) or kilowatt hour (kWh) for the gas or electricity itself. The transmission and delivery charges are fixed no matter which option is chosen,” says Epcor External Communications Specialist Tim LeRiche. “Electricity rates are at a historic low right now, so some consumers want to be able to take advantage of that—it’s riskier to ride the market fluctuations, but it’s the right choice for some consumers.”

Conversely, LeRiche points to the winter of 2012/13 when the RRO for energy was at an all-time high. Those in a contract were able to watch heating bills skyrocket from the safety of their locked-in rates.

Power to the People

The cycle of the energy industry begins with generation—the wind farms and fossil fuel (coal) plants (TransAlta’s former coal-fired Wabamun Generating Station, for example) that create power. Next comes transmission (through larger wires to substations) and distribution (through smaller wires within a community), which bring the power to the people.

A myriad of companies (retailers) finish the cycle by taking the gas and electricity and selling it for home use. While the government’s de-regulation tackled the front end and back end of the chain, the middle piece—transmission—remains constant. Today, companies are able to produce or invest in generating energy (and many do), but it’s the back end that consumers are most familiar with.

In St. Albert, most RRO gas users get a bill from Direct Energy Regulated Services (Atco/Fortis) with itemized charges for the energy itself—the cost per GJ and the amount used. Then come the fixed amounts: a monthly administration fee (a retailer charge for the billing and customer service) and the distributor charges, which include a fixed and variable monthly delivery charge (operating costs and any temporary adjustments approved by the Alberta Utilities Commission (AUC)). Consumers may also see a rate rider and municipal franchise fee.

“People do have a lot of questions about delivery charges—it’s a fixed cost for having gas connected to a house. As a retailer, we’re a small part in the whole chain,” explains Wendy Tynan, Director of External Relations with Direct Energy Regulated Services. “Usage costs fluctuate based on consumption and are affected by the weather, storms, time of year and demand—but the delivery charges are regulated by the AUC.”

Energy retailers vie for customers with attractively priced fixed terms and hybrid plans—bundling electricity and gas at a cost savings, or offering contracts with flexible prices and even wintertime caps (to avoid nasty spikes in heating costs). Edmonton-owned Epcor distributes about 13.5 percent of Alberta’s energy consumption to some 369,000 residential and commercial customers in the capital region, and some 600,000 across Alberta. LeRiche says most customers take the RRO, but contracts are a growing part of business, as consumers look for a better deal. Epcor’s Chirp and several other companies are likewise responding to the consumer demand for green living, sourcing power from ‘clean’ generators at a premium price.

The role of the UCA

Energy users have an ally in the Office of the Utilities Consumer Advocate (UCA), a provincial government agency mandated to educate, mediate and advocate for Alberta’s residential, small business and farm electricity and natural gas consumers. Whether by phone or through the information-filled website (, consumers can learn about the industry: who the service providers are, contract options, the ABCs of understanding a bill statement and how to read a meter.

When there are disputes between consumers and utility companies, consumers can turn to UCA mediation officers to advise about terms, conditions and regulations. The UCA will also mediate with utility companies on a consumer’s behalf.

“UCA advocates for consumers by representing their interests in front of the Alberta Utilities Commission. It also ensures that people without utility service have electricity and natural gas reconnected for the winter—working with people in need and energy providers to make sure Albertans are warm over the cold months,” says John Archer, Media Officer for the Office of the Premier.

The Move Toward Energy Conservation

Part of the work of energy companies actually involves encouraging less consumption. Bill inserts and websites offer tips on how to use less energy as a means of reducing bills and in response to the greater societal awareness of reducing greenhouse gas emissions (GHG) and increasing responsible stewardship of the environment.

But it’s not an easy sell. Statistics show that energy consumption rates have stayed relatively level over the years. Though there is a turn toward tiny houses, multi-family dwellings and reducing carbon footprints, etc., single family homes are still in demand. And whether people are living in sprawling houses of several thousand square feet or more compactly, electricity consumption isn’t abating—air conditioners, video game consoles and the 24/7 technology of laptop computers, tablets and smart phones mean we’re plugged in around the clock more than ever before.

Most agree, however, that lower GHG emissions by way of reduced energy consumption is a valid end goal: in the housing sector, builders across the country are moving forward (and being encouraged by government) to build more net-zero homes. While more expensive than traditionally built homes, consumer demand and political will are forging ahead to see houses that are self-sufficient—producing all the energy they use via solar panels.

Carbon Tax

Government wants to reduce energy consumption, too, and Justin Trudeau’s Liberals are doing it in a big way with the newly announced country-wide carbon tax. Provinces have until 2018 to adopt a carbon-pricing scheme, taxing carbon dioxide pollution at a minimum of $10 a tonne in 2018 and reaching $50 a tonne by 2022. Alberta is one of four provinces with a plan already in place—a carbon tax of $20 per tonne set to come into effect January 1, 2017 and rising to $30 a tonne in 2018.

The tax will cost Alberta families about $600 a year, according to the Canadian Taxpayers Federation (CTF), which recently blitzed the province with billboards and a Scrap the Tax Campaign. The lobby group says the carbon tax “essentially taxes the necessities of life. Albertans still need to drive the kids to school and themselves to work—to heat their homes in winter,” says CTF Alberta Director, Paige MacPherson.

In response to public concern, the Alberta government has promised to turn carbon tax cash into rebates and energy savings for consumers. In October, Alberta Environment Minister Shannon Phillips unveiled plans to create a new Energy Efficiency Agency to distribute three carbon tax programs to Albertans using the estimated $645 million that will be raised from the carbon tax over the next five years.

On tap is a new ‘direct install’ residential program that will offer homeowners free or low-cost energy upgrades, such as LED light bulbs and low-flow showerheads. As well, the residential consumer products program will feature point-of-sale rebates on energy efficient lighting, insulation and appliances. Though program details are still to come, Phillips says energy efficiency is the best way to save power and money while reducing emissions.

The planned carbon tax and related rebates amount to too much change too soon, according to CTF’s MacPherson, who says that forcing a switch from fossil fuel to renewable energy sources will have a negative effect in the province, pushing businesses that can’t afford to switch to greener alternatives to shut down or leave the province.

“We’re not the same as Ontario—wind and solar power are expensive and not as reliable as coal. Losing these power plants means job losses, and an ambitious policy like this one needs a healthy economic foundation. The government is steamrolling ideology over consumers—the rebates are simply a silver lining on a bad idea, one that is all pain with no gain,” says MacPherson.

St. Albert’s Energy-saving Efforts

St. Albert is doing its part, too, with an Environmental Master Plan (approved in 2013), which outlines short, medium and long-term energy conservation action plans for reducing GHG emissions in the corporate sector. Recent energy and water audits of Fountain Park Pool, St. Albert Transit and City Hall showed room for improvement and helped establish the goal of reaching 20 percent below 2008 levels of GHG emissions by 2020. And with the same time frame and parameters, the City aims to reduce GHG emissions community-wide by 6 percent.

On the residential front, a 2017 pilot project will see a new Home Energy Assessment (HEAT) kit on loan to residents from the library. The kit will contain caulking and infrared guns, air flow testers and more.

“We know conserving energy will reduce the power bill for the City, businesses and residents, and that will limit all our vulnerability to unexpected jumps in energy prices,” says Christian Benson, Environment Manager for the City of St. Albert, who also points to the City’s commitment to implement the action plan on GHG emission reduction targets through its membership with Partners for Climate Protect (PCP), a Federation of Canadian Municipalities program.

St. Albert is also working with Fortis Alberta to convert over 5,800 street lights to LED technology—a move that will save the City 2.3 million kWh/year, which is the energy equivalent of taking 317 cars off the road, or operating 298 homes.

Understanding your energy bill is one thing, but deciding whether to take a floating or fixed rate, or how to cut back on energy consumption at all, makes the issue a more complicated one. But planned government carbon-tax rebates and retailer-supplied energy-conservation tips may help nudge consumers toward greener living no matter what options they choose. And a smaller energy bill is something we can all agree on.  t8n

Why Net-zero Homes?

Canada’s homes produce 17 percent of the country’s carbon pollution, so a handful of home builders are teaming with the federal government to create affordable net-zero homes—a.k.a. homes that produce as much electricity as they use. Some of the features include solar panels, triple pane windows and extra insulation.

Growth of this market is expected to be slow, however, because net-zero homes add approximately 15 percent to a home’s cost.

Calculate Your Options with Online Tools

Albertans have the option of choosing from over 40 energy retailers to find the company and service billing option that best suits their needs. Rates vary depending on provider, location, type of energy and whether it’s a competitive or regulated rate. The UCA has a cost comparison tool on its website——that consumers can use to help make the best choice for their particular needs.

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