EPCOR: Why Are Their Fees So High?

An In Depth Look At Extortionary Rates

12/29/202410 min read

a tall building with a flag flying in the sky
a tall building with a flag flying in the sky

EPCOR's Utility Fees: An In-Depth Comparison with British Columbia

EPCOR, the primary utility provider in Edmonton, Alberta, has faced criticism for its high utility costs compared to other provinces, particularly British Columbia. This report delves into the reasons behind this disparity, examining EPCOR's fee structures and comparing average monthly and yearly utility costs for similar homes in Edmonton and select cities in British Columbia.

EPCOR's Fee Structures

EPCOR's fee structures have been a point of contention for many consumers. Beyond the basic charges for electricity and natural gas consumption, EPCOR levies several other fees, as detailed in the table below:


Fee Type

Description

Calculation Method

Potential Impact on Bill

Administration Fee

A daily charge applied to electricity and natural gas accounts.

27¢ per site per day for electricity 1

Can add a noticeable amount to the overall bill, especially for high-consumption households.

Transmission Charge

Covers the cost of transmitting electricity over long distances from the generation source to local areas.

3.834¢/kWh 2

Represents a significant portion of the electricity bill, as it's charged per kilowatt-hour consumed.

Distribution Charge

Covers the cost of distributing electricity to homes and businesses within the local area.

1.643¢/kWh + $0.66988/day 2

Adds to the overall electricity cost, with both a per-kilowatt-hour charge and a daily fee.

Local Access Fee

Charged by municipalities for the use of local electricity and natural gas distribution infrastructure.

Varies by municipality; can be a fixed monthly fee or a variable rate based on consumption3.

Can significantly impact the overall utility bill, especially in municipalities with higher local access fees.

Rate Rider

Additional charges that can fluctuate based on various factors, such as market conditions or regulatory decisions.

Varies depending on the specific rider2.

Can increase the overall cost of electricity or natural gas, as these charges are often subject to change.

These fees can add up significantly, making it difficult for consumers to understand their bills and potentially leading to higher overall costs. This lack of transparency in how utility costs are presented to consumers is another factor contributing to the perception of high utility bills in Alberta 5.

Average Utility Costs in Edmonton and British Columbia

To understand the extent of the cost difference, let's compare the average monthly and yearly utility expenses for similar homes in Edmonton and two cities in British Columbia: Chilliwack and Sicamous.

Edmonton, Alberta

Estimating the average monthly utility costs in Edmonton for a typical home is challenging due to variations in reported figures. Here's a summary of the information available from different sources:


Source

Average Monthly Cost

Notes

Alberta Government 6

Electricity: $121.33 <br> Natural Gas: $72.40

Reddit 7

Water, Wastewater, Drainage, Stormwater: $90-$120 <br> Garbage: $43 <br> Electricity: $80-$100 <br> Natural Gas: $80 (summer) - $150-300 (winter) <br> Internet: $50-$75

Based on user reports, so may not be representative of the average.

QMM 8

$254.85

For a 915 sq ft apartment.

Canadian Real Estate Magazine 9

$257

Homes for Sale 10

$580

Includes electricity, natural gas, water, garbage, cable, phone, and internet.

This table highlights the variability of utility expenses based on factors such as home size, energy consumption habits, and the specific utility plans chosen.

Based on the Alberta government figures and the Reddit user reports, a reasonable estimate for the average monthly cost in Edmonton would be:

  • Electricity: $121.33 6

  • Natural Gas: $72.40 6

  • Water, Wastewater, Drainage, Stormwater: $90-$120 7

  • Garbage: $43 7

This brings the total monthly cost to approximately $326.73 - $356.73, not including internet, which averages around $50-$75 per month 7.

Based on these figures, the estimated average yearly utility cost for a home in Edmonton is between $3,920.76 and $4,280.76, with a possible additional $600 - $900 for internet.

Chilliwack, British Columbia

In Chilliwack, the average monthly utility cost is significantly lower. One source estimates it at $123 11, including electricity, heating, water, and garbage. Internet services add approximately $85.7 per month 12.

A more detailed breakdown of average monthly costs for a typical household in British Columbia is as follows 13:

  • Electricity: $187

  • Water: $244

  • Natural Gas: $87

  • Internet: $75

This totals an average monthly cost of $593.

One resident of Chilliwack reported their average monthly utility costs as follows 14:

  • City Utilities (water, sewer, garbage collection): $218 per quarter ($72.67 per month)

  • Gas: $70 in summer, $150 in winter (average $110 per month)

  • Hydro: $30 in summer, $40 in winter (average $35 per month)

This totals an average monthly cost of $217.67.

Based on the Chilliwack resident's figures, the estimated average yearly utility cost for a home in Chilliwack is $2,612.04.

Sicamous, British Columbia

While specific data on average monthly utility costs for Sicamous was limited, sources suggest that it likely has similar or lower average utility costs compared to other cities in British Columbia 15. The average monthly cost for a basic utility package in Vancouver, including electricity, heating, water, and garbage, is approximately $150 16. Another source indicates that the average monthly cost of utilities in BC, excluding gas, is around $572 15. This includes electricity, water, internet, cable, and home phone services.

Comparison





City

Average Monthly Cost

Average Yearly Cost

Edmonton, AB

$326.73 - $356.73 (excluding internet)

$3,920.76 - $4,280.76 (excluding internet)

Chilliwack, BC

$217.67

$2,612.04

Sicamous, BC

Likely similar to or lower than Chilliwack

Likely similar to or lower than Chilliwack

This comparison clearly shows that utility costs in Edmonton are higher than in the British Columbia cities considered.

Reasons for the Disparity

Several factors contribute to the higher utility costs in Edmonton compared to British Columbia:

  • Deregulated Electricity Market in Alberta: Alberta has a deregulated electricity market, meaning that generators compete in an open market, leading to price fluctuations and potentially higher costs for consumers 17. In contrast, British Columbia has a regulated electricity market with more stable and generally lower prices 19. It's important to note that Alberta's electricity grid is partially deregulated and partially regulated, adding complexity to the market and potentially impacting prices 20.

  • Higher Transmission and Distribution Costs in Alberta: Due to lower population density and longer distances between customers, transmission and delivery charges for electricity and natural gas are higher in some parts of Alberta, including rural areas served by ATCO 21.

  • Government Subsidies and Programs: British Columbia has several government subsidies and programs aimed at reducing utility costs for residents. These include the B.C. Electricity Affordability Credit, which provides an average annual savings of $100 for BC Hydro residential customers 22, and the CleanBC Better Homes rebate program, which offers rebates for energy-efficient upgrades 25. While Alberta also has some financial assistance programs, such as the Energy Rebate Program and the Low-Income Energy Assistance Program (LEAP) 29, they may not be as comprehensive or widely accessible.

  • Rate of Last Resort (RoLR): Effective January 1, 2025, the Regulated Rate Option (RRO) in Alberta will be replaced by the Rate of Last Resort (RoLR) 33. This change introduces a two-year fixed rate of just over 12 cents/kWh, with a maximum 10% adjustment during each renewal 33. While this aims to provide more price stability and protect consumers from unexpected price spikes 33, it could result in higher costs for some consumers who were previously on the RRO.

  • Transparency of Utility Rates: While Alberta's electricity rates may appear more transparent due to the itemized fees, the overall cost can be significantly higher than in British Columbia 5. For example, one Reddit user in British Columbia noted that their electricity bill in Alberta was much higher despite similar usage, primarily due to the added fees 18.

  • Energy Efficiency: British Columbia has a strong emphasis on energy efficiency, with programs and incentives encouraging residents to reduce their energy consumption. This can contribute to lower overall utility costs in the province.

Regulatory Bodies

The regulatory landscape for utilities in Alberta and British Columbia differs, which can influence utility rates and consumer protection.

In Alberta, the primary regulatory body is the Alberta Utilities Commission (AUC) 36. The AUC regulates investor-owned electric, gas, and water utilities, some municipally owned electric utilities, and regulated retailers of electricity and natural gas 38. The AUC sets regulated utility rates, approves rate changes, and oversees pipeline construction and safety 36.

In British Columbia, the British Columbia Utilities Commission (BCUC) regulates energy utilities, including electricity and natural gas 39. The BCUC's mandate is to balance the interests of consumers and utility companies, ensuring safe and reliable service at fair rates 42. The BCUC approves rate applications, determines a fair return for utilities, and oversees capital projects 44.

The different approaches and priorities of these regulatory bodies can contribute to variations in utility rates and consumer experiences in the two provinces.

Conclusion

This report confirms that EPCOR's utility fees are higher than those in comparable cities in British Columbia. This disparity stems from various factors, including Alberta's deregulated electricity market, higher transmission and distribution costs, EPCOR's complex fee structures, and the availability of government subsidies and programs in British Columbia.

The implications of these findings are significant for Albertan consumers, who face higher utility bills compared to their counterparts in British Columbia. This can impact household budgets and affordability, particularly for low-income households. Policymakers in Alberta may need to consider measures to address the issue of high utility costs, such as:

  • Promoting energy efficiency: Implementing programs and incentives to encourage energy conservation can help reduce overall consumption and lower utility bills.

  • Advocating for regulatory reforms: Exploring options for greater regulatory oversight or adjustments to the deregulated electricity market could help stabilize prices and protect consumers.

  • Exploring alternative energy sources: Investing in renewable energy sources and diversifying the energy mix can reduce reliance on fossil fuels and potentially lower costs in the long term.

For consumers, understanding EPCOR's fee structures and exploring available options for reducing energy consumption are crucial steps in managing utility costs. While some factors are outside individual control, proactive measures can help mitigate the impact of high utility bills.

Works cited

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