Understanding Your Energy Bill

We, ATCO Electric, are a distribution company which means we deliver you the electricity to keep your lights on, cook your dinner and charge your phone. We read your meter and send the reading to your retailer. They use this information to send you an energy bill which includes the charge for your electricity usage. 

Distribution and Transmission charges are the two charges that cover the cost of getting electricity to you. Transmission lines transport electricity from the power plants to substations across the province. All electricity customers in Alberta pay for building and maintaining transmission lines. Most of the costs are paid by the heaviest users – the industrial and commercial sectors.

The distribution lines take electricity from the substations and deliver it to your home and business. 

This is called idle billing. Even though your site is de-energized, we still need to maintain the infrastructure that brings power to your site. Idle billing represents the lowest amount of billing for a site while having the electrical infrastructure installed. When you’re ready to re-energize your site, we ensure we’re able to deliver your electricity. 

Even if you don’t use electricity, the poles, wires, substations and meters are there in case you need them. It’s like having cable TV or telephone services. You pay a fixed fee so you can watch TV or use the phone whenever you want.

The following items make up the delivery charges on your bill and may be itemized or rolled together depending on how your retailer chooses to display the information: 

• The fixed delivery charge covers the cost of building, operating, and maintaining our distribution system. It’s a fixed, daily rate.
• The variable charge also helps cover the cost of maintaining the system. It is calculated based on the amount of electricity you use.
• Your bill might include a rate rider, an adjustment approved by the AUC, to recover costs or refund money for something that is temporary or caused by factors outside of our control. 
• In some communities you may see a local access fee. Your municipality sets a local access fee as a charge for using the municipal property for electric facilities. The fee can also include the exclusive right to provide distribution services in the municipality. We collect this amount on behalf of your town or city and then submit it to the municipality.
• You might see an REA tariff if you are connected to an electricity distribution system owned by a Rural Electrification Association (REA). You pay an REA tariff instead of a distribution tariff. The fee is for the delivery of power.

In Alberta, there are four main electricity distribution companies. In ATCO Electric’s service territory, we cover 2/3 of Alberta’s land area but only 13% of the population. This means there are fewer customers to share the cost of the infrastructure and longer distance between customers resulting in higher rates. Compared to other major cities in Alberta, this means our rates are higher.

There are many factors that affect your bill. While we as your distribution company can’t speak to the retailer charges, here are a few factors that affect your electricity distribution charges:

• Extreme temperatures – when temperatures drop for an extended period of time, this increases demand and consumption,
• Your billing cycle timing – If the majority of the billing cycle falls during the peak of extreme temperatures, you might have seen your highest levels of consumption on one bill,
• Cost of energy – the price of electricity has doubled from last year.

A few other things to consider in regards would be:

• Your thermometer – what’s the temperature in your house set? Is your furnace higher to keep you warm during the winter months? Do you have an A/C unit or fans helping you stay cool? Your consumption may have changed without you realizing it.
• Do you have appliances plugged in that you aren’t using? This adds up and adds to your consumption. 

Our rates are regulated by the Alberta Utilities Commission (AUC) to ensure our rates are fair and reasonable. Our rates (tariffs) we charge are all approved by the AUC in an open, public process. 

Farm rates are partially calculated based on the amount of electricity you use, but are also affected by the breaker size installed at your site.  

Over the years you’ve probably paid the initial capital costs to install the power service; however, all electric facilities have ongoing capital costs. To maintain safe, reliable electricity, your power lines need to be upgraded and rebuilt as time goes on. It’s like financing a new car with a loan to be paid off over 12 years. By the time the loan is paid off, you’ll probably need to buy a new car or pay to upgrade the old one.

Think of electricity like shopping online. You can buy your product from any number of suppliers. The supplier then uses a delivery company to distribute the product to you. Well, we distribute electricity. Energy retailers use the same distribution company in a service area because it would be impractical to build another set of power lines and facilities.

In the regulated utility business, shareowners invest in building, upgrading and maintaining a reliable distribution system. The Alberta Utilities Commission regulates and approves the return they are allowed to make on that investment. There is no guaranteed profit. If we fail to earn the regulated rate of return, we can’t recover our losses.

If you have any further questions about your electricity bill, feel free to contact us using the live chat button on your right and our team will be happy to help you.