A rate class is a group of customers who use a prescribed amount of energy for a similar purpose. For example, households in residential neighbourhoods or businesses in commercial buildings. Utility rates should be proportionate to the costs of providing service to that group of customers. In addition to overall consumption in kilowatt-hours (kWh), non-residential customers' rates may include demand costs in kilowatts (kW).
Rate classes in Alberta
While utility distributors may have different classifications and thresholds, generally, rate classes are established for:
- Residential Service
- Small General/Commercial Service
- Medium General/Commercial Service
- Large General/Commercial Service
- Oilfield/Oil and Gas Service
- Farm Service
- Irrigation Service
- Street Lighting Service
How to find the rate class
It is the consumers' responsibility to find out what rate class their property is. To find the rate class, check the utility bill. It is usually indicated in the account information section or near the Site ID line, as illustrated in this example.
Rate class description and requirements
Each utility distributor has a list of its rates and charges. It is a public document that lists the utility’s customer classes, rates, and service charges. The Alberta Utilities Commission (AUC) reviews and approves these rates before they are used for billing consumers. Distribution company websites or the AUC website can be checked for “Distribution Tariffs” or “Rate Schedules.”
Changing rate class
In some instances, rate classes can change.
For example, a distributor may install a commercial meter on a residential property for a home-based business and change the rate class from Residential to Commercial based on usage.
For growing small businesses, when electricity usage exceeds 250,000 kWh/year and/or natural gas usage is above 2,500 GJ/year and there are more than 100 paid employees, customized utility rates through specific retailers may be available.
As businesses grow, owners should reach out to retailers directly and advocate for electricity and natural gas plans tailored to suit their needs.
Rate classes can also change when demand needs change. For example:
ABC Auto Body was registered under Medium Commercial rate class. According to the utility distributor’s distribution tariff, to stay in this rate class, the site’s usage consumption should be equal to or greater than 5,000 kWh per month for at least six of the last 12 invoice periods, provided a peak demand greater than 150 kVA was not registered twice in the previous 365 days. Even though the customer had an acceptable kWh consumption, the shop’s power demand increased and registered at 160.32 kVA in August and 160.68 kVA in October. The site has exceeded the requirements for rate class Medium Commercial, so as a result, the distributor assigned rate class Large Commercial-Secondary to this site in November.
