Add-on fees paid by Calgarians on utility bills have doubled since 2010

Electricity rates aren't the only item going up on the power bills. 

Number crunching by CBC Calgary has found the fees customers pay for the provincewide gas and power infrastructure climbed steadily over the past decade.

In particular, rates for access to the electrical grid and back alley power lines have more than doubled since 2010, when the province embarked on an effort to modernize and beef up the system. That hasn't gone unnoticed.

Customers are frustrated and ticked off at these add-ons — which appear with little explanation and can add up to more than the cost of the energy used.

It was one of the most common complaints mentioned by the nearly 800 people now signed up in CBC Calgary's texting community. 

"It has all these extra charges — distribution charges, transmission charges … a whole bunch of things in there that I have no visibility of in terms of what they are. And I have no control over them," said Shakeel Ahmed, who followed up on his text message with an interview. 

A recent Enmax bill was $165 for electricity. Only $65 of that was for energy used. 

"My concern is, what's the regulation? Can the companies keep increasing fees and I can't do anything about it? I can control my consumption, yes. But really in that bill, the consumption is the smallest element of this, and the same thing goes for my gas bills."

So what's on the bill?

Acting on what we heard, our first step was to figure out how those fees are even calculated. They can look like fixed amounts on the bill but they're actually per day and per unit fees. The rates are buried in pdf documents deep inside each company's website.

We looked at those from Enmax and ATCO, the two companies with monopolies on distributing the electricity and gas to houses in Calgary (even if you buy power through a different retailer).

The electricity fees are listed as distribution, transmission and a rate rider — basically, the wires and such in the city, the high power transmission equipment across the province, and the special temporary fees that get added on when companies realize they over or under estimated how much a capital build would cost. 

The combined per kWh rate increased to 5.3 cents per kilowatt hour (kWh) in January 2022, from 2.4 cents per kWh in January 2010. 

The per day fee also went up. It's at 59 cents now, up from 32 cents in 2010.

From what we've seen in Calgary bills, the amount people pay varies widely, as does how much electricity they use. But provincial bodies say the average household uses 600 kWh per month, which means a fee of under $50.

Fees for natural gas are similar, covering the pipes to get the gas across the province and to your house. ATCO lists them going back only to 2013, but they've nearly doubled, too. 

The daily fee rose to $1.05 from 75 cents in 2013; the rate per gigajoule (GJ) jumped to $2.2, from $1.2 in 2013.

What is driving the increase?

Ever noticed those massive steel towers and thicket of power lines crossing the QEII just north of Crossfield? It's projects like that transmission line — massive investments in the grid — that drove up costs.

That power line upgrade cost roughly $2 billion, which customers are now paying back in the rates. And it's just one part.

The Alberta Electric Systems Operator (AESO) has a bird's-eye view on the system and helps co-ordinate and argue for the upgrades.

Spokesman Mike Deising says companies spent $13.5 billion over the last two decades just on the provincial grid. All of those costs go right back to customers through these fees. 

"Because the system was just, frankly, getting old. It needed to be upgraded," he said in an interview.

"And now that allows us to have a robust system that can deal with, as we saw this year, three weeks of significant cold snaps across the province. Or last year, when the heat dome came in and we had two weeks of record-breaking temperatures — we didn't have any electricity outages in our province because we have a robust transmission system."

Other investments have been made in gas pipelines and the electrical transmission networks within communities.

Who is watching to make sure customers aren't overcharged?

The power and heat are supplied through a system that's only partly market-based in Alberta. You can choose what retail company you buy from, but you cannot choose who distributes it or how much you pay for the infrastructure. Distribution is where companies get a monopoly.

The Alberta Utilities Commission (AUC) is the regulator or judge in this system; its job is to make sure the system is fair, and that companies are getting paid back for only the approved capital and maintenance costs.

Companies like Enmax, ATCO and AltaLink pitch budgets and fees at hundreds of hearings a year. The commission makes a ruling on what can go ahead or needs to be trimmed back.

And to try to ensure the commission considers your pocket book, we've got folks like advocate Chris Hunt and lawyer Jim Wachowich.

"We provide a little bit of inflation control by working with other groups and interveners to make those arguments," said Hunt, who argues in front of the commission as the Alberta Utilities Consumer Advocate. By his calculations, he has saved the system about $1.78 billion since 2013.

"It's legitimate arguments about what level of IT security do you need on the system? Can you upgrade your computer plan? How many computers get upgraded? That's the minutia we're getting into," he said.

"We'll frequently say, 'Look at these costs more closely,' and the utilities don't like that," said Wachowich, who works for the independent Consumers' Coalition of Alberta and gets cost recovery through a process decided by the commission if it thinks his input is useful.

Historically, the industry has gone with slow, steady increases and avoided rate shock, Wachowich said. But these last increases have been too much to slip by unnoticed. 

Now the system is worth tens of billions of dollars.

"Billion with a 'B.' And we're now paying for it.… I like the analogy of the frog in the pot of water. If you turn the heat up slowly, the frog won't jump out and it'll eventually boil to death," he said.

"But if it's thrown into a boiling pot, it will try to go as quick as it can. What we're getting now is a point at which customers are looking at their bills and they're saying this is a rate shock."

Still frustrated at the fees

As for Ahmed, he now knows more about where the fees come from. But he's still frustrated.

"This tells me that I can only control a tiny portion of my electricity and gas bill. The major chunk of it, I have no control over it whether I like it or not," he said, after CBC News shared the details of this research.

He'd like to see more transparency and accountability aimed at the average consumer.

"If it's explained in common terms," he said. "Sure, you can go research it and you might find stuff. But if I don't see it on my bill, I don't understand it.

"So once a quarter, once a month, once a year — whatever frequency — something that helps us understand, 'Hey, here's what you're paying for and here's how it is allocated to us.'"

Facing down utility bills

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Editor's note: The graphs in this article were republished to make the information easier to understand. Now both per day and per GJ or kWh fees are on the same graphs.