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Preamble:
WHEREAS Alberta’s electricity distribution system is facilitated by various service areas, serviced by different companies, resulting in a disparity in pricing; and
WHEREAS electricity delivery prices, which are regulated by the Alberta Utilities Commission for residential, farm, and commercial customers, are extraordinarily high in some service areas; and
WHEREAS in 2024, annual distribution charges paid by the average residential customer with 600kWh of consumption ranged from $387 (EPCOR service area) to $1,211 (ATCO service area); and
WHEREAS 60% of energy demand in the ATCO service area is driven by industrial customers, benefitting the entire province through direct and indirect employment and income taxes;
Operative Clause:
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate to the Government of Alberta to adopt a new electricity pricing model for distribution that eliminates the disparity in pricing across Alberta.
Member Background:
The Alberta Utilities Commission (AUC) reviews the costs of electricity delivery in the province, and ensures all charges are fair and reasonable. However, there is an unfair disparity in electricity delivery charges across the Alberta; namely, in distribution.
Distribution costs are typically between 22% and 47% of a customer’s total bill and cover the cost of moving electric energy to the customer’s needs from substation transformers to local lines. One kilometer of distribution line will service many more customers in urban centres than in large, sparsely populated areas. In some parts of the province, total delivery charges make up nearly 70% of customers’ electricity bills.
Business and residential customers endure economic penalties based on geographical and population density disadvantages in large areas of the province. British Columbia and Saskatchewan have successfully built and operated distribution systems which more evenly distribute delivery service costs.
In Saskatchewan, all cities, towns, and villages pay a set rate for transmission and distribution. All rural areas pay a marginally higher rate. In British Columbia, all electricity costs including transmission and distribution are equalized across the entire province.
As the electrical grid for Alberta operates as a single entity, it would be reasonable to distribute costs equally across the province. Alberta’s model disadvantages communities at the border between service providers. In doing so, it minimizes competitiveness to attract businesses in Alberta outside of urban centers. Continual increases in distribution rates, in areas already experiencing a disparity, result in increased energy poverty for many Albertans.
RMA Background:
RMA has no active resolutions directly related to this issue.
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