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Figuring out the power bill and how much is left of the
"Alberta Advantage"
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Under the deregulation of the public utilities, imposed
on us by Ralph Klein—asked for by no one but a handful of large producers of
electrical power—not only did the price of electrical energy almost quadruple over
night, from December 31, 2000 to January 1, 2001, but the complexity of the bills we
receive increased enormously.
The information shown here relates to the format of
the bills we used to receive. The Alberta government attempted to
simplify the power bills we used to receive — all along since the
complaints began to pour in about all of the extra charges and the
inaccuracies and the glaring errors on the bills that we did receive and
that took literally years to get straightened out.
The bills, as you well know, did become simplified. What we see on
our power bills now is a relatively small amount for energy charges (not
much bigger than it used to be before deregulation got rammed down our
throats) plus a long list of extra charges, some new and
innovative ones and some that were formerly included in the rates we used
to pay per kWh.
The net result is that now we pay every month about what we used to pay
every three months for our power bills. In addition, the power bill
is no longer comprehensible and auditable by normal mortals. Going
by the bills we receive, we have no idea, for example, when rate riders
came into effect or ceased, because all rate riders are now lumped into a
single figure.
Fewer people now complain about it all. As usual, and as expected by
the politicians who wish to substitute energy taxes for income taxes, most
consumers became tired of it all, resigned themselves to energy costs that
tripled over night from December 2000 to January 2001, and they quietly
and peacefully pay their dues to the "Alberta Advantage" that no longer
looks all that advantageous, especially not for people on low and fixed
incomes for some of whom the choice is simple. They either cut back
on their eating habits or put warmer clothes on when they are at home.
They no longer can do what they could do both in comfort, eat and heat
well.
We now peacefully pay our tithe and more to the deregulation ideology,
after being legislated to death by exhaustion. The reality is now
that Albertans who sit right on top of massive energy sources pay by far
the highest energy bills in all of Canada. It really makes it hurt
all the more like a knife being twisted in one's gut when politicians and
leaders in the energy industry parrot one another and jubilate time and
again that deregulation was a great success.
Hitler knew how to make things like that work, how to make the BIG LIE
acceptable. He simply said that if you wish to tell lies, so as to
get them accepted as the truth, just tell very big ones, tell them as
often as you can, and keep telling them. That worked then, and,
given that propaganda is no longer an art but a science, it works even
better now.
At any rate, when we still thought that honesty and accuracy were all that
mattered with our power bills, we were trying to come to terms with things
so that at least there was a discernible audit trail on our bills.
That is what the following examples tried to address. |
A simple bill
The example shown above is of a simple bill, the one for
March 2002, but frequently, when rates change, the bill becomes quite a bit more
complex.
The bill we received in February 2002 is such a complex bill. It reflected the rate
changes at the end of 2001. See the explanations for the
February 2002 bill. We received seven such complex bills since January 2000, every
time when there was a rate change.
The notes shown below are repeated in the explanations for the February bill, in addition
to a few more notes, because there are a few more problems to figure out. |
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Notes:
In the history of the Bruderheim REA, the
power- and power service providers were as follows:
Farm Electric Services — a company that got set up and operated by
Calgary Power, especially to look after the work that needed to be done for the Alberta
REAs. Calgary Power produced and distributed the power we consumed in the Bruderheim
REA.
TAU, or TransAlta Utilities; which Calgary Power became when it merged
with other power companies. Farm Electric Services came under the jurisdiction of
TransAlta Utilities. Farm Electric Services looked after the meter reading, the
accounting and the billing for the members of the Bruderheim REA.
UNC or UtiliCorp Networks Canada, a Canadian
subsidiary of an American-owned power service company. UNC distributes but does not
produce the power consumed by members of the Bruderheim REA.
Fortis Alberta, a Canadian company, ownership unknown.
Fortis Alberta distributes but does not
produce the power consumed by members of the Bruderheim REA.
EPC, EpCor or Edmonton Power Corporation is
currently the producer of the power we consume in the Bruderheim REA. EpCor does the
billing for the power it sells to us and for the costs of the services provided by UNC.
EpCor also looks after contracting out the meter reading.
Last, but not least, there's the Bruderheim REA,
or Rural Electrification Association. The REA owns some of the poles and wires
required to get power to your farm. The REA decides who does the work to maintain
and repair its plant.
Details on current usage - 1 month to Jan-23-2002
— Those details may be for a one-month or a three-months interval, depending on
whether you elected to receive a power bill every month or every three months.
The billing date may differ for different
members. It is the date on which the bill is due. If you authorized automatic
withdrawal from your bank account, the billing date is the the date on which the money
owed will be transferred to EpCor. Bills must be paid within one month from the
billing date, or interest will be charged on the outstanding amount thereafter.
The meter reading date is shown basically as three different dates that
are given names at the whim of whoever is the current producer of the bills.
Last meter reading — is the date on which the
meter was last read. If you happen to catch the meter reader when he or she comes
around, it may help to avoid confusion if you jot down on the calendar when that is and
what the meter reading is. It might come in handy when the next bill comes in the
mail.
The last-meter-reading date varies for different customers, as there is no
possible way anyone can read all meters on a single day.
The reading taken on the last-meter-reading date can show up under the
heading "current billed reading."
Current billed reading — is the date for which
the meter reading (could be an actual reading but is more often estimated) on which the
bill has been based.
The meter reading is seldom an actual reading. It is most often
calculated or estimated, based on the amount of time that has gone by since the last meter
reading and on historical rates of consumption by your service. Things may go your
way, in that the estimate may be too low.
However, eventually when the meter is read again, things will catch up with
you, and you'll have to pay a fairly and unexpectedly large amount for the last period in
the interval between actual readings. Sometimes that will work in your favour, too,
when the amount you'll be charged for the last period in the interval between meter
readings is unexpectedly low, because the estimates may have been too high and you
overpaid for a few months. In that case a credit is applied.
In all of the years I checked my consumption against what I was billed for,
nobody came out ahead in the long run.
Meter-reading costs money. EpCor hires a contractor to read the meters.
The contractor bids on the job according to how many meters must be read, how much
driving must be done to read them, and how many times a year the meters must be read.
Previous billed reading — is simply the date that
was called "current billed reading" on the previous power bill.
Energy used — That is the difference between the
meter reading shown for the "previous billed reading" and
that shown for the "current billed reading".
kWh: kiloWatt-hour
Energy charge: The price of the energy used:
Number of kiloWatt/hours used times the rate per kWh.
Delivery charge: The price for having the energy
delivered:
Number of kiloWatt/hours used times the delivery rate per kWh.
Operating charge: The price of the overhead of running
the power distribution business allocated to an individual member as per the rate that
applies for the size of transformer he uses. Different rates apply, according to
the size of transformer installed on the transformer pole in your yard. I'll have to
look them up and will show them here in short order.
Other Services — UNC charges that to each REA
member. It is for the costs of providing insurance, pole testing,
brushing, ground testing, and PCB testing of transformers, over a five-year period. The
billing collected for 'Other Services' is paid to the REA for their use in doing the
actual 'Other Services' work, when required.
REA Deposit Reserve Account: That is a sinking fund
to which the members contribute, so that when times come when major repairs are needed for
the plant and equipment we own can be paid for. That is, for example, some of the
poles and lines over which the power is being transmitted along the roads, and the lines
connecting the transformers in the farm yards to the main lines on the road.
Pole testing and replacement have to be done every few years, and the costs
of that can range from about $60,000 to $150,000 or more, depending on how many poles are
not safe to climb anymore.
Load settlement charge — The power bought in the
"deregulated" and "competitive" market is sold at varying rates,
depending on what price bids by the producers are accepted at any given time. One
the other hand, the power that is sold to us is paid for at different but fixed rates that
should guarantee the providers and distributors a fair return.
That involves a reconciliation between the amount of power fed into the
system and paid for by the distributors and the amount of power that the distributors
carried to their customers. One of the problems is that some customers pay according
to peak consumption during peak hours of consumption. Others, as most farmers do,
pay at a fixed rate per kWh. Then there are some, such as oil pumps, that don't even
have any meters attached to their services to measure what they use.
The consequence is that methods must be worked out by which the rates at
which customers pay reflect accurately what is needed for the power that got bought at
widely varying rates. It's a very complicated process that needs to be worked out in
detail now never required before.
Before deregulation it was generally that the
producer was also the retailer. It was a cradle-to-grave process under common
management, a process in which no great accuracy was required with respect to allocating
purchasing and operating costs — and visa versa, income collected — to various
portions of plant. It all went into the same bank accounts anyway. However,
now it matters, every player want his share of the loot, and it matters that everybody
involved gets his fair cut.
The process of balancing production and price paid over time with income
collected from specific geographic regions is called load settlement.
UNC charges every member $0.39/month to pay for the work that is required for
that.
It's only nickels and dimes, but collect enough of them, and before you know
it, it all adds up to real money.
2001 RRO Shortfall Charge — This is the big
one. During 2001 we consumed power that had been contracted for at 18¢/kWh.
Naturally, deregulating a commodity that had never been deregulated (in a market in which
there is essentially no competition), drove the price of power right through the
ceiling. Instead of receiving power at a more advantageous price to consumers, many
consumers (e.g: factories and steel plants), had to introduce shift work, so as to be able
to take advantage of lower prices during the off-hours of consumption. Some of them
closed shop or moved elsewhere.
It was a tough choice to make for Ralph Klein, tell the truth and lose votes
in the 2001 elections, or fudge the figures. It was quite a gamble required in
catering to the few big producers, but it paid off. The voters, hooked on TV,
peanuts, beer, and on the "Alberta Advantage," never caught on.
The consumers lost out, but what is wrong with pulling the wool
over their eyes? It always worked before, didn't it? Why shouldn't it have
worked again? And it did work only too well. But that is quite all right,
because Ralph Klein won the last provincial elections with an overwhelming margin.
That is good, isn't it? Only, now we must pay!
The subsidies came off December 31, 2001, and, to boot, we'll be paying for the next 30
months for a good portion of the price of power we consumed in 2001. For an
individual member, that's an amount about equal to the total cost of power consumed during
the year 2000. And that is in addition to higher prices of the costs of power and
the services required to bring it to us.
The subject is covered in greater depth on a
different page, but here is just a bit of a summary of what the choices were, to
explain why we got served the dish we are now having a tough time cramming down our
throats. However, whether we want it or not, down our throats it must go, all for
"The Alberta Advantage." What advantage?
The following graph depicts the total shown on the power bill for a given
member who uses power at the rate of 1000kWh/month, for a few selected months during the
2001-2005 interval.
Figure 1
For details of the changes caused by deregulation, refer to the "Analysis of the impact of deregulation".
Farm Retail Service Charge — That is money
charged by EpCor for the extra work they must do in issuing their bills to members of the
REAs. The charge includes also the cost of meter reading. EpCor collects
through their bills the moneys owed in connection with UNC's and the REAs' costs and pass
the money collected on to those two parties involved in providing power to REA members.
Interim 2002 DT Rider — An
Amount granted by the Alberta Government to UNC, to enable UNC to recover the costs of
power brought to you for which they had not been charging enough money. According to
UNC, there is:
First, a 1.004 cents per kWh charge to recover the
deferral account for energy used in the year 2000, when TransAlta/UtiliCorp did not
recover the cost of energy when we were still operating under a 'Regulated' system as
regards to energy supply.
This Rider is expected to be in place for two years, or however long it takes
to recover the shortfall. Unlike EpCor's Rider, this Rider is based on consumption used
now rather than consumption during the year 2001.
My note:
Of course the calculation should not be based on 2001 consumption figures, because it
applies to the consumption figures using the lowered rates during the year 2000.
However, it strikes me as being very odd that April 1, 2000, we had a
reduction of 1.4 cents per kWh in the price of electrical energy, down from 5.59 cents per
kWh to 4.19 cents per kWh, and that now UNC must recover most of the price decrease we
received in 2000.
However, I know exactly how many kWh I used at the new and lower price in the
year 2000 and will make sure that I pay not a cent more than what I should have to pay
according to the explanation offered by UNC.
The amount for me is 8,686kWh*1.004 cents. That will work out to a
total of $87.21 I have to pay back at the rate of 0.00384 cents per kWh used, starting
with the February 2002 bill, counting from January 1, 2002.
According to my average annual consumption of about 10,500kWh, I should be
finished paying that within about 26 months. We'll have to keep an eye on that.
Of course, there may be more to this than meets the eye. What puzzles
me is why we have to stretch out paying back a debt of $87.21 over such a long interval.
Who dreams these things up? What are they trying to achieve? What is
their objective? Is it merely to nickel-and-dime us to death? —WHS
Second, there is a 0.31 cents per kWh credit for the
Transmission System and this will be in place at least until this fall, at which time a
new Regulatory decision may change this. The net result of the Rider, at present, is a
0.694 cents per kWh charge.
This on top of the regular 1.06 cent per kWh charge for Transmission Access.
The reason the Transmission portion of the Rider shows up as a UtiliCorp
Rider is that we are required to collect/refund transmission costs as part of the
Distribution Access charges.
S & D Access Service Charge — An amount of
money EpCor charges for feeding power into the network that winds up on your farm.
I don't know why they are getting that, but the government gave it to them anyway.
It appears that the higher return they receive for power they produce and sell is not
enough.
Look, there is a good reason why the farms in the Bruderheim REA didn't get
power until 1950. That is because it was not profitable for the power companies to
bring it out to the farms. It still isn't profitable enough to do it, if there's a
lot of regulation. Basically, given that there is only one company, EpCor, that is
willing to provide power to us, the choice we've got is simple: live with what is being
done to us, live without power, or move elsewhere.
Nobody likes that, but that is free enterprise for you. Deregulation did away with any company's obligation to provide
power to us or to provide it at a rate that guarantees it a reasonable rate of
return. If you've got complaints about that, talk or write to your MLA (Ed Stelmach
for the Bruderheim REA members), or vote for a party that will do better in looking after
your interests and is not so very much in need of your money by any way in which it can
get a hold of it.
Deferred Energy charge — That is a debt of 7
cents that was being racked up during the interval from January 1, 2001 to December 2001
for every single kWh used. It is the difference between the market price per kWh of
18 cents that the power providers should have charged us and the 11 cents per kWh that
they were allowed to charge us when Ralph Klein put the price ceiling on the price of
power. The mounting total of that debt the rate at which it will be reduced, and the
declining total of that debt are shown in the pink portion at the bottom
of the sample bill.
Don't look for that information on the bill you receive in the mail.
It's not on there. I suppose that if it is hidden from us we'll not worry about it,
as long as we keep paying our $25 a month for the next 30 month to pay back that
debt. We'll be finished paying it just in time for the next provincial elections.
Federal GST — We all know what that is, so why
mention it here? The reason is that sometimes there are items on your bill for which
no GST is being charged. An example of that are the two subsidies you received
during last year to compensate you with your tax money for the higher costs of the power
that Ralph's Folly rammed down your throat, so you would not see by how much your power
bill had increased.
The two subsidies were the non-residential "rebate" (3.6¢/kWh)
and the residential "rebate" ($40/month). Those two rebates are not being
paid anymore. They ended December 31, 2001. In addition, you have now begun
paying back the debt on the power racked up by you during 2001. That's why your
current bills are substantially higher than they were during last year – even though
the power rates had already been higher. The bills will stay that high until July
2004, when you'll be finished paying your debt.
Then you can feel good that your power bill dropped by $25/month or so, which
will most likely put you in the mood to vote for Ralph Klein again to make sure he can
crank up the power costs and other forms of taxation by another notch.
Related article:
If you find the explanations offered on this page too difficult to understand, and I
can't blame you at all if you do, you can always try the explanation offered by the
Alberta Government: Understanding your power
bill It is possible but not likely that there you'll find the answers you
seek.
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Posted 2002 03 25
Updates:
2002 03 26
2002 03 29 (to fix the width of the table containing the sample bill and to
reflect that the explanations for the complex bill were
completed)
2002 04 04 (to add a reference to the explanation by the
Alberta Government)
2005 05 07 (added an update on, and a review of, the quality
of our power bills)
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