Quote:
Originally Posted by bizaro86
I think the biggest argument for rolling the fixed costs into the price of gas is that it would incentive people to reduce consumption. Right now it basically doesn't matter.
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I think the underlying problem is that people think of the delivery costs, rate riders and other charges as "fixed" and therefore there is no incentive to reduce consumption, when mostly they are
not fixed. The
rate is fixed by the AUC, you can't shop around for a better 'deal' on these charges, but the total charge tracks with your consumption.
Dissecting my last bill for example, I had 29 days, 9.78 GJ, $136.30.
(Amounts marked with an asterisk below are off by a penny due to rounding.)
My energy charge is a fixed $4.09/GJ, so $4.09 x 9.78 = $40.00
My administration charge from Enmax is $0.28 per day, so $0.28 x 29 = $8.11*.
The fixed delivery charge is $0.885/day, so $0.885 x 29 = $25.67
The variable delivery charge is $0.977/GJ, so $0.977 x 9.78 = $9.55*
The only rate rider applying right now is Transmission Service Charge Rider T, which is $1.258/GJ; $1.258 x 9.78 = $12.31*
The municipal franchise fee paid to the City of Calgary is far and away the most complicated part of the bill, because it's 11.11% of the "gross revenues" (energy charges + delivery charges + rate riders), but
charged at the "deemed value of natural gas" equal to the gas cost flow through rate rather than the actual energy charges. The "deemed value" was $4.430/GJ for February and $2.133/GJ for March, and the weighted, blended cost "deemed value" against which my energy was charged to calculate the municipal franchise fee was ~$2.612/GJ.
$2.612/GJ x 9.78 GJ = $25.55
$25.55 + $25.67 + $9.55 + $12.31 = $73.08 x 11.11% =
$8.12
Carbon tax was $3.3267150/GJ; $3.3267150 x 9.78 = $32.54
$40.00 energy charge
+ $8.11 admin charge
+ $25.67 fixed delivery charge
+ $9.55 variable delivery charge
+ $12.31 rate riders
+ $8.12 municipal franchise fee
+ $32.54 federal carbon tax
$136.30
Now, out of all of those charges, only $36.63—comprised of the $8.11 admin charge, the $25.67 of fixed delivery charge, and $2.85 of the municipal franchise fee—were fixed, per-day charges I had no control of whatsoever. The other $99.67 worth of charges were variable,
tied directly to my consumption. My effective consumption charge was
$10.19/GJ, and that's the figure I should use as the base of any decisions on energy-reduction measures.
And here's the big problem:
Quote:
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I do think rolling it in has the potential to increase the fixed charges over time though, because if they're less visible there will probably be less push back from the regulator to keep them reasonable. And 10% increase yearly are really significant once they start compounding.
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We're already in this situation. Consumers don't see the rates that underlie the delivery charges, rate riders and municipal franchise fees, so there's essentially no pushback from the consumers whatsoever other than vague notions of "this is bull####", which no one (i.e the AUC) take seriously.