Energy 101

Understanding Your Energy Bill

It takes a distributor and retailer to bring you your energy (electricity and natural gas). There are electricity distributors and natural gas distributors that deliver energy to your home and retailers sell this to you.  

Delivery charges cover the cost of installing, operating, and maintaining the infrastructure that's used to deliver energy to your home. For electricity, this infrastructure includes poles, wires and transformers, and for natural gas, infrastructure includes pipes and compressor stations.

Two main charges make up your energy bill:

  • cost of energy consumed, and
  • cost of delivering this energy.


Here is a high-level explanation of what the different charges on your bill are. 

  • Federal Carbon Tax

    Starting January 1, 2020, the federal carbon tax will be included as a line item under gas distribution charges on your energy bill. The tax is part of the Canadian government's comprehensive climate action plan to help lower carbon emissions.

    You’ll find more information about rebates, how the proceeds will be used, and additional relief available for farmers, fishers and residents of rural communities at the Government of Canada's website.

    FAQs

    How does the carbon tax work?

    Natural gas distributors will be responsible for calculating the tax based on monthly natural gas consumption. Energy retailers will then pass the tax amount on to customers through the monthly billing process. Distributors will also report, collect and remit this to the federal government on a monthly basis, similar to the process of collecting and remitting GST.

    How much is the new carbon tax?

    From January 1 until March 31, the rate will be $1.0499523/GJ, then scheduled to increase as follows:

    Start Date Carbon Tax Rate per GJ

    January 1, 2020 

    $1.0499523 

    April 1, 2020 

    $1.5762711 

    April 1, 2021 

    $2.1025899 

    April 1, 2022

    $2.6289087 

    How will the tax dollars be re-distributed?

    The federal government will return all direct proceeds collected in Alberta to families and investments to reduce emissions. The bulk of the proceeds will be returned to eligible families and individuals in Alberta through personal income tax returns. Other proceeds will be used to support the province’s schools, hospitals, small and medium-sized businesses, colleges, universities, municipalities, non-profit organizations and Indigenous communities.

    Will there be a rebate like with the provincial carbon levy?

    There will be a rebate available for eligible individuals and families through your personal income tax returns.

    There is targeted relief available for rural and remote residents, farmers and fishers. You can get more information about relief from Finance Canada.

    If you are qualified to be exempt, please submit the CRA document along with the ATCO exemption form to hotline@atcogas.com.  

    How can I lower how much I’m paying?

    The tax is tied to how much natural gas you use. One of the simplest ways to reduce how much you’re paying in Carbon Tax is to reduce your consumption of natural gas. Installing a smart thermostat and keeping your furnace in good repair are two ways to do that. Learn more about ways to save energy.

    Where will it appear on my bill?

    The Federal Carbon Tax will start appearing on your bill in January 2020. It will be displayed under the delivery charges above the GST line item. GST will be applied to the Federal Carbon Tax. 

  • Retailer

    Energy Charges

    This line shows how many kilowatt hours (kWh) of electricity or gigajoules (GJ) of natural gas you used during a specified period of time, multiplied by your plan's energy rate.

    Administration Fee

    This fee covers the costs related to billing for electricity and providing customer service. 

    Energy Total

    You will see the total charge for energy used during the billing period. Some billing periods extend over two months, and it will depend on which billing cycle you are on.

  • Delivery

    Distribution companies are responsible for getting electricity and natural gas to your home or business. Distribution charges include the cost of maintaining the infrastructure needed to provide you with safe and reliable energy when you need it.

    Your distributor is determined by where you live in Alberta. Electricity and natural gas distribution rates are regulated by the Alberta Utilities Commission.

    Delivery Charges

    Distribution companies calculate their rates based on the cost of operating the distribution system and delivery of energy to homes and businesses. A portion of these charges is fixed based on the number of days in the billing cycle, while the rest fluctuate based on your consumption. Delivery and distribution charges are approved by the Alberta Utilities Commission.

    Municipal Franchise Fee (natural gas)

    This fee is set by your municipality as a charge for natural gas facilities on municipal property. Your Distributor remits this amount to your local municipality.

    Local Access Fee (electricity)

    This fee is set by your municipality as a charge for electrical facilities on municipal property. Your distributor remits this amount to your local municipality.

    Rate Riders

    These are temporary credits or charges approved by the Alberta Utilities Commission to adjust for over or under collection of approved costs.

    Rural Electrification Association (REA) Charge (electricity)

    A monthly charge for recovery of the REA monthly operating and maintenance costs and funding of the REA operating reserve.

    Estimated Read

    This is the latest estimated meter read provided by your Distributor.

    Last Actual Read

    This is the last actual meter read provided by your Distributor.

    Delivery Total

    The Distributor's total charge to deliver energy to your home or business.

  • Other

    Electricity

    Electricity is produced in large power plants. Transmission lines are the high-voltage wires and towers used to transmit power from the power plants to the local distribution systems. Distribution lines deliver low voltage energy to neighbourhoods so homes and businesses can use it.

    Distribution companies are responsible for delivering electricity to your home, measuring your consumption, and sending their charges to retailers to pass on to customers.

    Retailers receive your consumption information from the distribution company, and are responsible for your energy rates and billing you on a monthly basis.

    Natural Gas

    Natural gas is drilled from wells and refined at processing plants. High-pressure transmission pipelines transport natural gas to major markets. Low-pressure distribution pipelines deliver natural gas to areas for use by homes and businesses.

    Distribution companies are responsible for delivering natural gas to your home, measuring your consumption, and sending their charges to retailers to pass on to customers.

    Retailers receive your consumption information from the distribution company, and are responsible for your energy rates and billing you on a monthly basis.

    Meter Number and Readings

    This is the number attached to the meter installed at your premises. Distribution companies do their best to provide actual meter readings on a monthly basis. From time to time they may be unable to access your meter to get an actual meter reading. If the meter is reading incorrectly, please contact your distribution company. Their number can be found on the back of your energy bill.

    Site ID

    Every property in the province of Alberta with an electricity or natural gas meter has a unique site ID number assigned to each meter. The site ID number corresponds to the address at which the meter is located and is used by power companies to keep track of customers and the amount of energy they use.