There are many reasons your recent bill could be higher than you’re used to. Some factors, like how much energy you use, are mostly within your household’s control, while others are due to external factors you can’t control. Energy prices go up and down following supply and demand. Did you know that where you live in Alberta also affects your bill?
Read on to learn about all the factors that affect energy prices — and ways you can save.
Quick Guide
- Understanding Factors That Affect Your Energy Bill
- Usage Period Charges
- Bill Payment History
- Statement Corrections
- Carbon Tax
- Supply & Demand
- Winter Energy Bills
- Summer Energy Bills
- The Current Climate of Global Fuel Costs
- Other Fees
- What Can I Do To Reduce Future Bills?
- Improving Energy Efficiency at Home
Understanding Factors That Affect Your Energy Bill
Your energy bill is a routine expense when running a household, but when the number suddenly skyrockets, it can leave you with more questions than answers. How can my bill be so high? Why did the price go up this season? And what do all these extra fees mean?
If you’ve been noticing higher-than-usual numbers on your most recent bills this season, you’re not alone.
First Question
Check to make sure you paid your last bill, and that the payment went through. It may seem silly to point this out, but we get a lot of fellow Albertans who contact us only to find out that their last payment wasn’t showing on their bill.
Usage Period Charges
Some bills are higher than others simply because they reflect more days than a 30-day billing period. Some months are longer than others, and this can make a difference to your bill. On rare occasions, there may be an adjustment or one-time realignment of dates too. Take a close look at the date range that is reflected under your Electricity or Natural Gas charges. How many days are included? If it’s more than the 30 you’re used to, it might be the reason this bill is higher.
Your Bill Payment History
If you’re noticing a particularly large increase from your last energy bill, take an extra close look at the bill. Is it possible you forgot to pay last month or that the payment isn't showing yet? If the total is much more than the usual amount, this might just be the case. To find out, check out the Account Summary section of your current bill. The line labelled Balance Forward will show a total of $0 if your last bill was paid in full. Late fees from previous months can also affect your current bill, which may be the reason your bill seems higher than usual.
Statement Corrections
Statement corrections happen if a distributor’s estimated consumption calculation is audited and found to be higher or lower than estimated. If a statement correction adds charges to your bill, it means you may have been undercharged in the past. If this is the case, you will see a note on your bill explaining the charge.
Carbon Tax
The Federal Carbon Tax is another line item on your bill that all energy retailers, including ATCOenergy, are required to charge. It’s fairly new and will be an ongoing charge if you are a natural gas customer. Since January 2020, Albertans have been required to pay a tax for natural gas usage on each bill. The rate has increased every year and will likely continue to increase in the future.
What’s the impact of these increases on your bill? Well, this tax has increased by 33% in the last year. In winter of 2020, the Carbon Tax was set at $1.58/GJ. Now compare that to the $2.10/GJ on your bill this year, and the difference becomes much more obvious.
Because this tax has increased a fair amount over the last few years, it might be part of the reason for a bill that’s higher than you expected. Check the Federal Carbon Tax line on your bill to see how much this tax affects the cost of your natural gas usage. Because it's charged per tonne, reducing your natural gas usage can help reduce the amount of Carbon Tax paid.
Supply and Demand
Electricity and natural gas are not exempt from the laws of supply and demand. When there is a surplus of any product and low demand for it, the price of that product will go down. Conversely, when there is a limited supply of a product and high demand for it, that product’s price will go up. Scarcity drives prices up.
We can’t predict the first snow fall, but we can tell you with certainty that when winter cold hits, Albertans use a lot of heat and power to battle the cold and the dark evenings. This spike in demand eats up supply. When the supply of electricity and natural gas goes down, the price goes up.
Energy is no different than other products in terms of supply and demand. One extreme example of low supply and high demand for energy happened on February 9, 2021, when Alberta hit an all-time high record for energy consumption. In the days leading up to this infamous day, a cold snap brought “wind chill values between -40 and -55°C.” Albertans cranked their thermostats to combat the deep freeze, while unplanned outages toyed with energy supplies. These extreme weather days hit us a few times each year. The daily price of heat and power can go up and down faster than the pump price at your local gas station.
Knowing that supply and demand affects the price of electricity and natural gas, it’s no wonder that many Albertans got a big shock when they opened their monthly invoice. On days when lots of people in Alberta are all using energy at the same time, it costs everyone a lot more for heat and power. This change in energy rates only applies to you if you are on a variable style rate plan. For example, our ATCO Advantage Plan is a variable-rate plan in which your rate fluctuates with the market. In the long run, this type of plan is often more cost effective because you only pay for what you use, and you pay market prices. If you are looking for less fluctuation in your rates, you can consider a guaranteed-rate plan.
Winter Energy Bills
In addition to historically low temperatures and high prices due to supply, the winter months are an expensive time for energy consumption. But snow, wind and rain generate hydropower more efficiently in the winter, so in theory energy should be more available, right? Well, it’s complicated.
It takes more heat to keep even a moderate temperature at home when everything outside is frozen solid. If your family likes to be really warm and toasty, it takes even more heat energy to get the whole home feeling cozy. Add the increased demand for supply at the community level, and your high bill starts to make more sense. Plus, air leaks and other home inefficiencies let warmth escape, meaning more energy is needed to keep the home hospitable.
If you are looking to reduce your winter bill, investigate your energy usage. Can you shorten your hot morning shower? During the holiday season, perhaps your holiday lighting hours can be reduced to evening only, when they are most vibrant! Heat is important, but there are ways to save energy on some of the extras.
Summer Energy Bills
You might be surprised to learn that hot summer temperatures can be just as disruptive to energy prices as cold winters. Summer drought makes it more difficult to generate energy via hydropower. Wind power goes a long way to filling the gap in Alberta, as the southern regions are famously windy. If wind speeds drop suddenly on a calm summer day, the lack of energy supply leads to higher prices. With 1 in 3 Albertans using air conditioners to keep cool during heat waves, the demand for energy increases, and prices rise accordingly.
If you don’t notice this uptick on your summer energy bills, it might be that you don’t use air conditioning or are home less often. Regardless, the price per unit of energy in the summer may in fact be higher than the rates you paid in the winter, if you’re on a variable plan.
Pay attention to summer energy guzzlers like hot tubs, fans, dehumidifiers or outdoor grills and fireplaces. Reducing your bill means taking a holistic look at how you use energy.
The Current Climate of Global Fuel Costs
At the beginning of the COVID-19 pandemic, fuel prices tanked. With fewer people travelling and many working from home, low demand and an uncertain future contributed to the low prices. But today, energy prices seem to be higher than ever. What gives?
Global Uncertainty
The COVID-19 pandemic sparked a recession, but the economy is always changing. Currently, more people are returning to work, causing a greater demand for energy. But the effects of the pandemic are not over yet. Supply chain issues continue in many industries and global factors will continue to affect the ups and downs of home utility prices for a while to come.
Greater Home Energy Consumption
Most people have been spending a lot more time at home these days. Because of this, home energy consumption is generally trending upward — particularly for those who’ve transitioned to remote or hybrid work schedules.
Inflation
You may have noticed that everything seems to be more expensive these days. It’s not all in your head: Inflation jumped significantly in 2021, and experts expect this trend to continue in 2022. Despite inflation and rising energy costs, we aim to keep our rates competitive so you can feel confident you have the best plan in the current market.
While inflation may be affecting groceries, clothing and even rent prices, fuel and electricity are actually some of the least affected areas so far. Here’s hoping it stays that way!
Uncertainty around the globe, higher consumption and inflation will likely affect energy pricing and consumption in 2022 and beyond.
What Are All the Other Fees on My Alberta Energy Bill?
Energy rates are one thing, but the amount you pay on your energy bill also includes regulated fees, taxes and charges. Sometimes Albertans are surprised to learn how much of their bill is above and beyond the electricity and natural gas that their home uses every month. These other charges are collectively referred to as Distribution and Transmission charges. You see it on your bill from ATCOenergy, but actually this part of your bill is not from us. As your energy retailer, we are required to flow through certain costs on your energy bill, at cost with no mark-up, on behalf of other parties, including the government.
Delivery and Third Party Charges, or Distribution and Transmission Charges, are labelled as Delivery Charges on your ATCOenergy bill and are dependent on factors like where you live and the energy distributor in your area.
This means these fees would be the same amount on your bill, no matter which energy retailer you use.
Although we try to make your energy bill simple and easy to understand, it’s not always clear what the fees mean. What’s a transmission charge? Is there any way to get out of the carbon tax? Why do I have to pay an administration fee?
While no one loves an extra fee, these expenses help keep your energy services running smoothly. To learn more about the fees on your bill, check out our page Understanding Your Retail Energy Bill.
What Can I Do to Reduce Future Bills?
A large portion of your bill depends on where you live: the local distributor in your area, energy infrastructure near you and the number of neighbours sharing energy resources. Unless you’re thinking about moving, your best bet is to make your home as energy efficient as possible and revisit your ATCOenergy plan if necessary. Remember, you can switch and renew your energy plan with us any time with no cancellation penalty!
Improving Energy Efficiency at Home
While Albertans can't easily change external factors like who their distributor is, or the balance between energy supply and demand within the province, the good news is that there are still many ways to lower your monthly energy bill! Energy inefficiencies can account for around 9% of your annual energy costs, so it’s always worth investing in appliances and renovations that can make your home more efficient.
Take back your energy bill! Here are some home energy-efficiency tips that can help you save:
- Learn which appliances drain the most energy in your home. You might be surprised to learn who the biggest electricity guzzlers are!
- Unplug small appliances and gadgets when not in use. Even when switched off, plugged-in electronics drain small amounts of electricity over time, which adds up over time.
- Turn off unnecessary lights.
- Prioritize energy efficiency when buying new appliances. Appliances that are certified energy efficient reduce greenhouse gases, use less water and help you save on your energy bill.
- Working in a home office? Choose lighting that is comfortable and cost-saving with our Guide to Energy-Efficient Home Office Lighting.
- Complete home maintenance as needed. That means prioritizing maintenance that improves energy efficiency, like getting your dryer vents cleaned annually and fixing that leaky tap! Not sure who to call? The pros at Rümi can help with maintenance, cleaning and energy efficiency — including green energy solutions.
- Wash laundry on cold. Not only do cold loads protect your vibrant colours from fading and help clothes last longer but using less energy to heat laundry water will help you save money on your bill!
- Clothes dryers are some of the biggest energy-draining culprits! Air dry wet laundry whenever possible to save.
What If I Can’t Pay My Bill?
Hey, we’ve all been there! Times are tough, and late or missed payments can make an uncertain situation even worse. As fellow Albertans, we’re here for you.
If you anticipate a problem paying your energy bill, give us a call! We’ll learn about your situation and work with you to figure out a solution to help you stay powered with ATCOenergy in the coming months.
Communication is key! If you miss payments or make only partial payments without reaching out to us, your bill may automatically enter the collections process. Avoid this by keeping us in the loop. We’re here to help.
What Goes Up Must Come Down
There’s no denying that energy prices are high these days. But there is hope for the future. Just as rates can go up, they can also come down. As the pandemic continues to evolve and global prices continue to change, we will see rates go up and down. Experts are predicting that rates in Alberta will eventually stabilize and return to something like what we’re used to.
Until that time, we commit to offering our customers the best possible energy plans. Reliable service, friendly customer support and flexible payment options go a long way.