Items on your bill

Items on your bill

The Alberta Utilities Commission’s mandate is to approve rates for regulated utilities that ensure safe reliable service at just and reasonable rates.

Items on your electricity bill

 

The Alberta Utilities Commission’s mandate is to set rates for regulated utilities that ensure safe reliable service at just and reasonable rates. Please see the following table showing the breakdown of items on a typical residential consumer’s electricity bill:

 
 

The monthly cost estimates shown in the graph are based on a typical electricity bill in Alberta, consuming 600 kWh per month. Costs will vary depending upon the distribution service area, the municipality where you live, your energy use and billing period.

 

Distribution and transmission rates may be different in each area of the province because they incur different costs to build, operate and maintain their system depending on how big the system is, how new it is and how many customers are sharing the cost. A distribution company that serves rural areas will cost more than a system that serves urban areas because the utility has to build, operate and maintain more poles, wires and facilities to serve each customer.

 

Distribution charges are typically higher than the energy charges. For information on why, please see From resource to your home.

 
                           
  • Energy charge - The per unit cost (price per kilowatt hour) for the electricity used during the billing period. This charge is the cost for the commodity itself and does not include the cost to deliver power to homes and businesses. Prices are based on the competitive energy market. Energy charges vary between retailers, who purchase energy in the market through a combination of long term and short term contracts with suppliers. If you do not choose to sign a contract with a competitive retail service provider, your rate will fluctuate each month and your regulated rate (also called the regulated rate option) is approved by the AUC. For more information on how these rates are determined please visit retail rates.

    Customers have a choice to sign a fixed or variable rate contract with a competitive retailer. Go to https://ucahelps.alberta.ca/cost-comparison-tool.aspx for competitive retail service providers in your area.

  • Administration charge - This charge covers the cost to your retailer to provide billing and customer services. It is a fixed charge either based on the number of days in the billing period or a fixed charge per month. For more information on how these rates are determined please visit retail rates.

  • Distribution charge – The distribution charge covers the cost incurred by the distribution company (which is typically a different company than your retail provider) to bring electricity from the transmission system to your home. It includes costs for building, operating and maintaining their distribution systems. The charge is composed of a fixed fee, based on the number of days in the billing period, and variable component, based on your energy usage in the billing period. The fixed component is included because even if you do not use any electricity for the billing period, the distribution company has still incurred the costs associated with delivering energy or making energy available to you when you need it (e.g., poles, wires, etc.). For more information on how these rates are determined please visit distribution rates.

  • Transmission charge - The transmission charge recovers the costs incurred to safely and reliably plan Alberta’s transmission grid and transport electricity via the transmission grid from where it is generated to the distribution system. Transmission charges for residential customers are based on their energy consumption during the billing period. For larger customers, a more complicated tariff is in place, which, in addition to energy consumption is also based on the required demand level (i.e. load). For more information on how these rates are determined please visit transmission rates.

  • Rate riders – A rate rider is a temporary, additional rate on a customers bill, which is separate from the monthly rates that are charged for electricity usage. A rate rider can be a credit or charge. For more information on how these rates are determined please visit rate riders.

  • Local access fee rider - Municipalities charge distribution companies for the right to exclusively serve its residents and to have utility infrastructure on municipal lands. These costs are then passed on to the utility customers. The municipality determines the level of the fees. For more information on how these rates are determined please visit other charges other charges.

  • Transmission adjustment riders – A charge or refund to reconcile the AESO charges paid by the distribution company with those charges collected from customers in a previous period. Each quarter, the AESO recovers or refunds accumulated deferral account balances which are comprised of differences between revenues and costs incurred in providing system access service to the distribution wire owners. The distribution wire owners, in turn, add an adjustment rider, which could be a charge or refund, to their delivery charges at the beginning of each quarter (January 1, April 1, July 1 and October 1). This adjustment reconciles current costs to date and estimates transmission costs into the next quarter.

  • Balancing Pool adjustment rider – A rider designed to collect or refund charges that are flown through the Balancing Pool credit or charge from the AESO. Each year the Balancing Pool is required to forecast its revenues and expenses to determine any excess (or shortfall) of funds. Based on this forecast, the Balancing Pool determines an annualized amount that will be remitted to (or collected from) electricity consumers over the year. Pursuant to the Electric Utilities Act, the benefits and costs associated with the Balancing Pool are shared among all electricity customers in Alberta. These distributions or charges are made through the AESO tariff pursuant to Section 82 of the Electric Utilities Act, by way of the AESO Rider F. The AESO Rider F is approved by the Alberta Utilities Commission.

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