Justin Smalley | Apr 15, 2020 | Sustainability

Your electricity bill gives a great deal of information, but only if you know what to look for. The most common misconception is that the delivery charges are all fixed fees, and reducing your electricity usage will have little to no impact on your bill. In fact, most of your bill is variable including most of the delivery charges. This myth is propagated since the long list of delivery charges and riders do not have their rates stated anywhere in the bill! In part 1, we will explore the components of your electricity bill, and how to read it. Our electricity retailer is EPCOR, but there are many other retailers that serve Edmonton. While other retailers may present the bill slightly differently, the same overall concepts apply.

The Inglewood Community League has three different electricity services, and three separate meters. Service 1 is for our field hall, which is slated for demolition and currently powered off at the main breaker. Service 2 is for our parking lot lights, which typically add about 5% to our monthly usage. Service 3 is for the main hall, including the solar panel installation. For simplicity, we will only discuss Service 3 in this article.

The bill is broken down into two parts:

1. Electric Energy Charges: This pays for the actual electricity, an administration fee, and a credit for the electricity we sold back to the grid from our solar panels (MicroGen).

2. Delivery Charges: The delivery charges pay for the infrastructure to deliver electricity to your home. Most of these fees are variable, however this is not made clear on the bill.

While electricity rates are clearly shown on the bill, delivery rates are not. The rates change month to month or quarter to quarter and can be found on the EPCOR website, although unfortunately not in an easily accessible way. There are three different types of charges, each highlighted a different colour on the bill:

• Fixed: The “Administration Charge” from EPCOR is $5.59 per month.

• Mixed: The “Distribution Charge” has is made up of two components: a daily fixed fee (currently 37.844 ¢/day), plus a variable fee (currently 2.669 ¢/kWh). There were 28 days in this billing period, which means $10.60 (about 1/3rd) is the daily fixed fee.

• Variable: All other fees are variable and are charged in ¢/kWh. These scale directly with how much
electricity you consume.

VARIABLE COSTS: THE TRUE COST OF ELECTRICITY

All the variable costs on the bill are what we consumers actually pay to use electricity in our homes/buildings, and can be summed up into a single monthly rate with units of ¢/kWh. The total variable cost we end up paying each month is often 2-3 times the amount as the raw electricity rate we see written on our bill, that most of us tend to focus on.

SIMPLIFIED ELECTRICITY BILL

The average consumer is not interested in the breakdown of electricity vs. delivery costs. From a billing perspective, it makes more sense to split between variable and fixed. A simplified bill is presented below using the total variable rate from above. I find this a much more transparent way to breakdown how your money is actually being spent. Note that there is a 1 cent difference between this and the EPCOR bill due to some early rounding from EPCOR.

A simple pie chart shows the breakdown of fixed vs. variable costs on this bill. For simplicity, and to make it more in line with an average home users bill, it excludes our solar panel export and GST.

Key takeaway: Delivery charges are not fixed! They are mostly variable and depend on your electricity consumption. They can effectively double or triple your electricity rate! Next up in Part 2, we will explore how our Solar panels impact our bill.