Friday, 3 August 2007

Electricty Info from EPCOR

Well, after several rounds of email between myself, EPCOR and the Office of the Electricity Consumer Advocate, I received information about the price that large commercial consumers of electricity pay in Alberta. The bottom line is, EPCOR says they pay essentially the same as small business and residential customers do. The big consumers apparently have to pay the "flow through price" for electricity, which is a price that can fluctuate on a second-by-second basis. Small business and residential customers pay a price that is set monthly, which is sort of an average of what the price has been for the month.

This surprises me. I really expected that the big consumers would get some kind of bulk rate. I asked straight out if there were any other discounts that these consumers received that small customers did not, and I was told no.

I have a hard time really believing this. I have become quite skeptical over the past couple of years, and suspicious of big companies and the 'spin' they put on everything. So it could be that I am just biased and that what EPCOR is telling me is actually the whole truth. But it just seems to run contrary to how the world operates these days, i.e., that big consumers get discounts for buying in bulk. I will have to put this matter on the 'back burner' (?solar oven?) for now and mull it over for a while.

4 comments:

Anonymous said...

Hi Theresa. I’m sorry you didn’t get a satisfactory response when you contacted us. I’ll try to provide some information here in your comments, and if you’d like more information you can reach me at corpafrs [at] epcor.ca

There isn’t a complete answer to the question “how much do commercial customers pay for electricity?”, but I’ll do my best.

If a commercial customer uses less than 250,000 kilowatt hours (kWh) per year of electricity, then they’re eligible for the regulated rate option (RRO) – the same rate that you or I pay (assuming you’re on a regulated rate and not on a contract with another company).

If a commercial customer uses more than 250,000 kilowatt hours (kWh) per year of electricity, then they aren’t eligible for the regulated rate. Most customers in this category sign a contract with a competitive provider of electricity. Those that aren’t signed to a contract are charged what’s called the “default supply rate.” In July when the RRO rate in Edmonton was 9.613 cents per kWh, the default supply rate for commercial customers was forecast to be 11.90 cents. The final price for July isn’t known yet – it should be finalized and up on our web-site next week – but given the actual pool prices from last month, it’s not unreasonable to think it could be higher than 11.90 cents.

Now as I mentioned, most customers in this category sign a contract. How much are those customers paying? It depends on many factors, including the market price, when they use power – also known as “load shape” (generally speaking, businesses whose power use is high at peak times of day will pay higher rates), and their desire to take risks (some customers are willing to bear risk that the market price will move up or down, while others want to get a fixed price in advance, much like the differences between fixed and variable rate mortgages).

Based on these criteria, competitive electricity providers offer a number of products. The price depends on the product, the factors I just mentioned (market price, load shape, and risk), and the customer’s credit rating.

I hope the above information helps. While the answer isn’t as straightforward as “all commercial customers get rate x,” it’s hopefully enough to provide you with a sense of how prices are set for commercial customers, and it does let you know what commercial customer on default supply pay.

Best of luck with your energy conservation goals – and congratulations on having already reduced your electricity consumption by so much.

Martin Kennedy, EPCOR

PS – Since I’m providing information on behalf of our company about competitive and regulated energy products, I’m required to repeat what’s called a “fair competition statement,” which is that: Electricity products and services are competitive. You are free to choose a retailer. Regulated wires services are not dependent upon the retailer you choose. You can find a listing of licensed Alberta retailers at www.ucahelps.gov.ab.ca or call 310-4UCA (toll free in Alberta).

Theresa said...

Hello Mr. Kennedy;

Thanks for your thorough reply, and also for replying here on my blog. I still can't believe anyone but a couple friends and family members actually read it! How did you find it?

What I would really like to know is what is the best price a commercial customer could pay. For example, a 250 000+ kWh customer who has the highest possible credit rating with very consistent usage patterns and a high risk tolerance. Could this company pay 30% less than I would? Or would it still average out to be about the same, or even more than what I would pay?

What I would really like to see is a system where frugal, conserving users are rewarded through a better price structure. I would also happily choose to run my dishwasher at night when rates are lower, if I actually got a discounted rate for doing that.

Is EPCOR considering any of these initiatives?

Also, for your information, my husband and I have signed up with Bullfrog Power, choosing to pay more for our power so that the equivalent amount of electricity transmitted to our house from EPCOR via Fortis, is in turn generated by wind power and put back into the grid on our behalf. I had originally looked to EPCOR for a green power option but was disappointed to find none for residential customers.

Thank you for your well wishes - our household is indeed working toward reducing our consumption in a number of areas.

(copy sent via email to Mr. Kennedy at corpafrs [at] epcor.ca)

BP said...

I just stumbled on your blog through your comment on Crunchy Chicken. My girlfriend and I are in the same boat, many of the eco changes we've made are relatively new, we live in a more liberal area so that makes it easy, however our family is not. I think the more we do these things and the more they become part of who we are the easier it will be to be confident in an against the grain persona. Good Luck

Theresa said...

Thanks BP. Crunchy Chicken is a great blog, and I'm glad now to have found yours! It does help a lot to know there are people everywhere moving towards a more sustainable lifestyle. Congrats on going vegan!