Hicks on Biz: Utility bills are a crock of confusion BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: FRIDAY, AUGUST 11, 2017
When my latest Enmax utilities bill arrived, I went on Facebook with my concerns.
The monthly energy costs for my house, for June, were dirt cheap — $20.05 for electricity, $7.19 for natural gas.
But the other costs, exquisitely detailed, seemed outrageous in comparison.
Another $57.48 for other electricity costs, being the administration, distribution, transmission, balancing pool allocation, rate riders and Edmonton local access fees.
An extra $66.57 for other natural gas costs: Administration charge, transaction fee, fixed delivery charge, variable delivery charge, rate riders, municipal franchise fee … and the dreaded carbon levy.
Why, I asked on Facebook, so much billing gobbledygook? Are we being hosed? Is it meant to hopelessly confuse the customer, so we shrug our shoulders and pay?
These complex bills have been around for 10 years. Yet the Facebook reaction was astounding.
Some 60 comments ricocheted back, along with hundreds of likes. “A crock of confusion … Legal day-light robbery! … My bill is pennies in actual power use, then $40 in crap I don’t even understand!”
After some research, I’ve reached a few conclusions.
The utility companies know – and quietly agree – that the billing system is too complex.
But nobody – the companies, the government-appointed Alberta Utilities Commission, the government itself – is willing to expend the effort needed to simplify the billing system.
Every time the subject comes up, it gets buried beneath bigger issues. There’s always bigger fish to fry.
You’d think a New Democrat government, so-called champions of the little guy, would take more interest.
Do they fear opening a can of worms?
The “balancing pool allocation” fee, I’m told, is set to sky-rocket. The cost of the long-term power contracts (legally) returned by power companies – however that worked – will be passed on.
Higher costs for “renewable” power, replacing coal, will be added to our power bills one way or another.
Behind the scenes, this left-of-centre provincial government is seeking huge changes to the Alberta electrical system, from a quasi-competitive system to a capacity system – whatever that means.
Like I said … bigger fish to fry.
“Originally, the new bills were all about transparency (when de-regulation took place),” says a long-time industry player. “But I’ve yet to find anybody who actually wants to know every little detail.”
It was also a means to pass the buck.
Don’t blame us for the cost for building and maintaining transmission lines, or natural gas pipelines, says Enmax. Look on your bill – that’s Epcor’s responsibility!
Don’t blame us, that’s how much the Alberta Utilities Commission tells us to charge for still-regulated services.
I don’t think we’re being hosed. But I don’t know for sure.
Jim Wachowich, lawyer for the Consumers’ Coalition of Alberta, has spent a decade representing consumers at hundreds of Alberta Utilities Commission hearings.
Within the whims and dictates of the government of the day, to ensure a reliable, good-quality energy production and delivery system, yet allowing for some consumer choice, Wachowich suggests the system is reasonably fair to consumers.
“We spend most of our time arguing that, say, a 9.5% return on investment is fair to utility companies, when they want a 10.25% return,” he says.
The fact is transmission and delivery costs remain about the same year-round. But they appear much bigger in the summer months when electricity and natural gas use is minimized.
What I don’t understand is the on-going complexity of consumer power bills. And I’m still suspicious about nickel-and-diming. A mobile-phone company CEO is alleged to have once responded to a query about new complicated billing methods with “Confusion breeds margin. Margin is good.”
Best suggestion I’ve heard: “Just send out the first page (the summary) of the billing,” says a public relations insider, “with a link to a website with the rest of the billing details … if you want it.”
In that vein, if you want to learn more about just how complicated the natural gas and electricity industries have become, check out the Alberta Utilities Consumer Advocate at ucahelps.alberta.ca or the Alberta Electric System Operator website, aeso.ca.