Residents have long-since expressed concerns over rising electricity bills in Alberta's market-based system.
But in recent months, customers from Bonnyville, Cold Lake and St. Paul reached out to the Nouvelle after noticing a steady increase in fees on electricity bills, culminating with a “significant” jump in costs on December's bill.
Travis Eddingfield, a resident of St. Paul, said his monthly bill with Direct Energy, which combines both gas and electricity, jumped to $690 in December. He said his bills in the winter don't usually rise above $500.
“Typically, in the winter time we get bills between $400 and $500, but recently we saw a significant increase, which saw our bill jump to $690,” Eddingfield said. “I put in several calls to Direct Energy and spoke to a number of their agents and eventually I got a response from one that essentially told me the company was two months behind on billing and this was an issue likely affecting 90 per cent of people in this area.”
He added, “We were told the issue came down to the distributor in the area (ATCO) not getting its meter readings in on time to Direct Energy. So, rather than sending out accurate bills for November, they generated estimated bills. Now everyone is being charged more to compensate for a cheaper bill (in November).”
According to Direct Energy, the problem surrounding the double billing stems from changes the company made to its billing cycles to align with changes ATCO Gas made to its cycles last year.
Jeff Lanthier, manager of external relations for Direct Energy's Canadian branch said the changes, while confusing customers with larger bills presently, would serve to provide them with a more accurate bill moving forward.
“Prior to Direct Energy making these changes customers were receiving charges for natural gas and electricity that were on different calendar cycles,” Lanthier said. “For example, a customer could be billed for up-to-date electric usage, but natural gas charges could be a month behind, or vice versa.”
He added, “By making this change to align with ATCO Gas, some of our dual-fuel customers were billed for two months of either natural gas or electric charges to bring them up to their current usage period. We made this change so that customers received a more accurate bill for their energy consumption. There are no errors in consumption, the charges are for energy consumed by the site.”
Lanthier said he looked into the issues and concerns Eddingfield had over his bill, stating that the customer's electric charges were lagging by a month, so the company decided to bring those charges up to date to ensure that both his natural gas and electric charges were aligned.
Eddingfield said he didn't understand why customers were expected to pay more without being consulted, pointing out that a lot of people live on a strict budget and extra, unexpected charges could cause significant problems.
“I don't understand just because a distributor doesn't meet timelines, or changes are being made (within the organization) that I'm all of a sudden penalized with a larger bill than I was expecting,” Eddinfield said. “I think the old saying is a lack of planning on your part should not constitute as an emergency on my part. Why are we the ones that have to foot the bill unexpectedly?”
Lanthier said the organization would be working with customers affected by this change on a case-by-case basis and, if necessary, would be offering alternate payment arrangements.
According to Direct Energy, ATCO Gas and ATCO Electric are the utility companies in Alberta who deliver electricity and gas to homes, maintain the electricity wires and gas pipelines, respond to emergencies and outages, and read meters. Direct Energy is the regulated rate provider who does not own or operate any part of the distribution but purchases electricity and gas on behalf of the customer and provide billing and customer service.
Others in the region took to social media last week to complain about the rising costs of electricity, with some branding the bills “outrageous.”
One individual noted the most annoying thing about her power bill was the fact that service charges well exceeded the price she was charged for the amount of power her family had used over the course of the month.
Bobbi Lambright, president of ATCO Electric's distribution division said there were two components that drive the cost of electric for consumers and that unless you have a fixed bill agreement with your energy provider, monthly bills are likely to fluctuate.
“Really, when we talk about power bills there are two main components that we need to take into consideration, those being the delivery charges and the actual energy costs, which are typically tied into usage,” Lambright said. “Delivery charges are regulated and set by the Alberta Utilities Commission and covers everything related to building, operating, maintaining, upgrading and even eventually replacing any infrastructure needed to take electricity from a generating station to a consumer's home.”
She added, “The energy costs are what it actually costs the customer to buy electricity to use in their home. The market on the energy cost side has been de-regulated now for ten or so years and these costs are driven by what is happening in the market. Consumers have the option of purchasing electricity through different parties and through different arrangements so it can vary a lot person by person.”
Lambright noted that one of the more prominent reasons consumers could notice a change on their bill comes down to a fee the company charges its customers from the Alberta Electric System Operators. She says the organization charges distribution companies a fee for the services they provide that are related to ensuring there is sufficient electricity capacity available to meet the needs of consumers.
In a report released last summer, it was stated that electricity prices in Alberta have been on the rise since the provincial government created a system based on markets and competition, which included the Marketing Surveillance Administrator (MSA) as an overseer to ensure “Alberta's electricity markets are fair, efficient and competitive.”
The MSA's report, which is available on Albertamsa.ca, indicated that electricity providers throughout the province were “signaling” each other so as to keep energy prices up through collusion.
The report goes on to call Alberta's electricity market an oligopoly - a market form in which a market or industry is dominated by a small number of sellers. Oligopolies can result from various forms of collusion, which reduce competition and lead to higher costs for consumers.
According to ATCO, it services roughly 35,543 customers in the Bonnyville region, with 9,409 situated within the town. Lambright said that if you were to assume the average consumer uses 600 kilowatts of energy a month, their bill would be in the region of $160.
Some have questioned what the provincial government is doing to help regulate the market and ensure that electricity costs are kept reasonable throughout the province.
The office of the Minister of Electricity and Renewable Energy in Alberta stated that it was a priority for the province to keep energy prices down for residents.
“The government knows that Albertans expect reliable electricity, and we know consumers care about the price they pay for that electricity,” said provincial government spokesperson Dustin Owens. “In our market-based electricity system here in Alberta, the government has several ways to ensure that electricity rates are reasonable for families.”
Owens pointed towards the Alberta Utilities Commission (AUC), a Retail Market Review Committee as well as the Utilities Consumer Advocate (UCA) as playing important roles in keeping energy costs down.
“The AUC was given a stronger mandate to scrutinize the costs of new transmission lines in the province this year and the onus is now on electricity transmission companies to prove the cost of transmission is reasonable,” Owens said. “The review committee was created in March 2012 to focus on reliable and cost effective electricity for consumers in Alberta. This report includes 33 recommendations, many focused on consumer protection. A team of MLAs from across the province is working on a plan to put these recommendations into action.”
He added, “As well as that, the province is very supportive of the UCA. They help customers understand their electricity bills and mediate disputes between customers and utility providers. Customers with any concerns can contact the advocate for any information or concerns they may have regarding their monthly bill.”
