Why Is My Power Bill So High?
You may ask “Why is my power bill so high?” Here at Park Power we want to explain how the structure of the Alberta utilities market affects your power bill and what you can do to reduce your costs.
In very simple terms consumers can lower their power bill in two ways, Use Less or Pay Less.
To use less consumers can lower their power bill by reducing their usage and increasing their efficiency. This will lower the amount of energy that a consumer gets billed for, both delivery (cost of distribution) and usage (cost of energy).
To pay less consumers can choose to pay a lower rate (¢/kWh) to their retailer for the cost of the energy they are using. Unfortunately, in Alberta consumers do not get to choose the rates for the cost of distribution. Our existing transmission and distribution in Alberta is regulated by the Alberta Utilities Commission(AUC) under a cost-of-service model where consumers pay for the full costs of operating the system plus a reasonable return, and transmission owners are guaranteed these costs and a return on their investment.
The reality is that while companies in the de-regulated sectors of the market (generation & retailing) have brought the cost of electricity for the consumers down, it is the government regulated sectors of the market (transmission and distribution) that have consistently increased the cost of delivering the electricity to the consumers. So if you hear politicians fear mongering about how deregulation is bad for consumers, read the following information and then inform your Member of the Legislative Assembly about what is really costing consumers of the Alberta Utilities market.
The Positive News: The cost of energy is at an all-time low(March, April, September 2015 were the 3 lowest months in history of deregulation). Under deregulation (and the competitive market structure), consumers are paying less today than they were in 2000. There is no need to change existing policies and disrupt the competitive market, it is working and consumers are benefiting. The only cost on the consumers utility bill that has actually gone down is the portion that was deregulated: the cost of energy.
The Problem: The cost of distribution has increased by 100% over the last 10 years. Some consumers today are paying as much as 3 to 4 times for the regulated wires distribution fees compared to the cost of energy they consume. (Remember this is the regulated part of the equation – and has absolutely NOTHING to do with deregulating the retail end of Alberta’s energy industry.) Consumers in ATCO Territory are paying twice as much for distribution fees compared to rural consumers in the FortisAlberta Zone and over 300% more for the distribution services compared to a residential consumer in the city of Edmonton.
Delivery Charges and Rate Riders are complex, convoluted and difficult to understand but if you distill the rates down to what an average residential consumer has actually paid it is easy to see the problem.
Cost of Services in ¢/kWh
Franchise Wire Territory 2005 2010 2015 Change
ATCO Territory 7.5 10.6 15.9 112%
Fortis Territory 4.0 6.1 8.3 108%
City of Calgary 2.8 3.8 5.7 104%
City of Edmonton 3.0 4.0 4.7 5.7%
So if you want to pay less for the cost of your energy Sign Up with Park Power.
Our Alberta based customer service is superior than the outsourced customer care centres of the other retailers. Even with our Fixed Rates, you will never be locked in and can cancel for free at anytime. Plus 10% of Park Power’s profits from your bill will be donated to the Community Partner of your choice. Try us out to Pay Less.