Understanding small business utility bills

Monitor utility bills on a regular basis, even if automatic withdrawal is enabled, to ensure charges are accurate.   

Depending on the plan selected, small businesses might receive two separate utility bills – one for electricity and another one for natural gas, or the bill might be bundled to include both power and gas.  

Line items on small business utility bills

Although retailers' bills all look different, they will all contain similar information and line items. According to Section 4 of the Billing Regulation, 2003 (electricity) and Section 4 of the Natural Gas Billing Regulation, electricity and natural gas bills must show all credits or charges as separate line items.

Main charge categories

Two main charges make up utility bills: 

  • The cost of energy consumed 
  • The cost of delivering this energy 

Energy charges fluctuate based on how much electricity and natural gas was consumed during the billing period, while the cost of delivering the energy is largely fixed. 

Delivery charges cover the cost of installing, operating, and maintaining the infrastructure that's used to transmit energy to homes, small businesses, and farms. For electricity, this infrastructure includes poles, wires and transformers. For natural gas, infrastructure includes pipes and compressor stations. 

Delivery company rates are regulated by the Alberta Utilities Commission (AUC). The AUC holds rate hearings to ensure that consumers receive safe and reliable services at a reasonable cost. 

Depending on the small business’ utility rate class and the distributor, there may be other line items on the utility bill. If demand charges are applicable, they might be displayed as a separate line item or included as part of the delivery charges. These charges are based on the highest amount of power (kilowatt or kilovolt-ampere) needed at a given point in time. 

Click on the image to learn about various line items and charges on electricity or natural gas utility bills. 

Please click on the image to learn about various line items and charges on your electricity or natural gas utility bills.


Your retailer
Your retailer buys electricity or natural gas on the market and sells to you, the customer. Your retailer also bills you and manages your account.
There are two kinds of retailers. Regulated retailers set their rate using a formula approved by the Alberta Utilities Commission. Competitive retailers set their rate independently. You choose the kind of retailer and which company to buy your energy from.
kWh
Kilowatt hour is the standard measure for electricity use— one kilowatt of electricity in use for one hour. For example, a 100W light bulb uses 1 kWh if it’s on for 10 hours.
GJ
Gigajoule is a standard measure of energy use. An average family uses roughly 120 GJ of energy in natural gas in a year.
Rate
Your rate is how much you pay your retailer per kWh or GJ for electricity or natural gas you use, shown in cents or dollars.
Billing Demand
The highest demand recorded by your electric meter during the billing period and measured in kilowatt (kW) or kilovolt-ampere (kVA). It is the highest amount of power your business equipment needs at a given point in time.
Your bill
Your bill comes from your retailer, but it includes your delivery charges as well. The delivery charges on your bill come from your distributor, not from your retailer.

Site ID and meter number
These two numbers identify the meter in your house. Site ID is like the address or location of the meter, and the meter number is on the meter itself.
Meter readings
Your meter readings are either actual or estimated. An actual meter reading is taken from the meter at your house or site. If distributors don’t get an actual reading, they estimate the reading, based on past use and number of days in the period. For gas, the estimate also considers temperature during the period.
Multiplier
To convert your meter reading into kWh, multiply the reading by the multiplier. If your multiplier is 1, your reading is already in kWh.
Conversion factor
A gas meter measures volume. The conversion factor converts volume into the units of energy, or GJ, used to calculate your charges.
Who to call with questions
Call your retailer if you have questions about your bill. Call your distributor if you have an outage or emergency. Phone numbers for both companies are on your bill.
Distributor
Your distributor delivers electricity or gas to customers, answers emergency calls, and does meter readings.
Charges to buy electricity or gas
These are charges from your retailer for the amount of electricity or natural gas you use. These charges are the rate multiplied by number of kWh or GJ you use.
Charges to deliver electricity or gas
These charges are not for the electricity or natural gas itself, but for delivery from the source to your home. They are charges from your distributor and are sometimes separated into transmission and distribution.
Transmission: Transmitting electricity or moving gas over long distances from the source to your local area.
Distribution: Transmitting electricity or moving gas within your area, usually within your city or town.
Distribution demand
The distribution demand charges represent the costs that electric companies pay for distribution capacity and are based on the amount of energy your business site consumed in a specified period of time, known as a demand interval. Demand intervals are usually 15 or 30 minutes.
Transmission demand
The transmission demand charges represent the costs that electric companies pay for generating and transmission capacity and are based on the amount of energy your business site consumed in a specified period of time, known as a demand interval. Demand intervals are usually 15 or 30 minutes.
Local access fee and Municipal franchise fee
Your distributor pays a fee to the local government to use municipal land for power lines and substations or gas pipelines and infrastructure. The fee also gives your distributor the right to provide electricity or gas to your community and covers municipal taxes on property and land. The fee is shared by all customers in your area. Each local government sets the fee based on provincial law.
Balancing Pool rider
The Balancing Pool forecasts whether its assets will have a surplus or shortfall. Alberta’s electricity consumers share this surplus or shortfall as a credit or charge on their bills, usually as a credit.
Rider
A rider is a charge or a credit that adjusts your distributor charges. Riders exist for various reasons. They cover changes in circumstances since the Alberta Utilities Commission (AUC) last approved your distributor’s charges. They are also AUC- approved. You may have more than one rider on your bill at a time. Learn more.
Charges to buy electricity or gas
These are charges from your retailer for the amount of electricity or natural gas you use. These charges are the rate multiplied by number of kWh or GJ you use.
Administration fee
Your retailer charges this fee to cover billing costs and customer care.
Charges to deliver electricity or gas
These charges are not for the electricity or natural gas itself, but for delivery from the source to your home. They are charges from your distributor and are sometimes separated into transmission and distribution.
Transmission: Transmitting electricity or moving gas over long distances from the source to your local area.
Distribution: Transmitting electricity or moving gas within your area, usually within your city or town.
Distribution charge (fixed)
Fixed charges are the costs associated with the natural gas distribution services you must pay regardless of the volume of natural gas your business consumes.
Distribution charge (variable)
The variable distribution costs are related to your natural gas usage. As your consumption goes up, so do variable costs.
Local access fee and Municipal franchise fee
Your distributor pays a fee to the local government to use municipal land for power lines and substations or gas pipelines and infrastructure. The fee also gives your distributor the right to provide electricity or gas to your community and covers municipal taxes on property and land. The fee is shared by all customers in your area. Each local government sets the fee based on provincial law.
Federal Carbon Tax
The federal government applies a levy to fossil fuels based on how much carbon dioxide they release when burned. The Federal Carbon Tax is the rate multiplied by number of GJ you use. Learn more.

As business grows

As a small business expands, electricity and natural gas needs may evolve as well.  

Businesses with electricity usage that exceeds 250,000 kWh/year and/or natural gas usage above 2,500 GJ/year and have more than 100 paid employees may be able to access customized utility rates through specific retailers.   

Business owners should reach out to retailers directly and advocate for electricity and natural gas plans tailored to suit their needs.     

Larger businesses can seek clarification on bills, rates, and charges directly with their retailer or distributor. 



Learn More


The UCA is here to help

Contact the UCA toll-free at 310-4822 (in Alberta), at 1-888-644-6608 (outside Alberta), send an email to ucahelps@gov.ab.ca, or use the contact form.