FortisAlberta’s role as your electric distribution utility: what we do, where we fit in Alberta’s electricity industry and how our rates are setApr 25, 2022, 19:52 PM
Prior to the mid-1990s, Albertans obtained their electricity from single companies that managed all aspects of electricity production and consumption, from generation to transmission and distribution, and even operating retail arms. Today, these services are still provided, but by different companies working in sync to bring you electricity – from generation and transmission to distribution and retail. You might wonder where exactly FortisAlberta fits in. We are proud to deliver safe and reliable electricity to our customers’ homes, businesses and farms throughout Alberta.
To gain a better understanding of the industry of a whole, visit this guide.
FortisAlberta is an electricity distribution provider, also known as a Distribution Facility Owner. Our company manages the safe and reliable distribution of electricity over a network of more than 127,000 kilometres of wires linked together by approximately 1.1 million poles. As a distribution-only provider, our focus is on delivering electricity; other parties manage generation, transmission, and retailing.
FortisAlberta’s system receives electricity from both large generators connected to the high-voltage transmission system, as well as smaller ones connected to the distribution system (e.g., distribution connected generators like wind and solar PV farms). It takes around 350 dedicated Power Line Technicians (PLTs) to keep our system running for over 590,000 customer sites in 240 Alberta communities, from the US border in the south to Conklin in the north, in all kinds of weather.
You can view a short video about FortisAlberta and its role in providing customers with electricity here.
1. What is electric distribution service?
FortisAlberta builds and maintains infrastructure that delivers power to our customers the moment they need it. Our system is the link between transmission, which carries electricity at high voltages, and the customer sites where electrical energy is consumed. We also coordinate directly with electricity retailers to ensure that billing is accurate, providing automated meter readings and managing the services requested by customers, such as disconnecting and reconnecting sites.
FortisAlberta monitors its distribution network 24/7/365 using the powerful technology housed at our Control Center. Control Center operators are able to detect outages in real time and, in many cases, the system operators can restore service using automated technology to allow the system to self-heal in as little as a few seconds while appropriate repairs are being determined. In the past, many of these same restorations would have taken several hours.
2. What charges appear on customer bills?
FortisAlberta customers receive bills from their chosen retailer that contain a breakdown between energy charges and delivery charges. Energy charges are the price that is paid for the electricity that is used by the consumer and are determined by the retailer. Delivery charges include regulated rates charged by the companies that own and operate the transmission and distribution systems that transport the electricity from the generator to the end user. All these charges are initially paid to the retailer, which then pays the charges for transmission and distribution services to the appropriate parties.
Customers are free to choose their preferred electricity retailer. FortisAlberta works with retailers serving communities across Alberta and encourages customers to explore which retailer best suits their electricity needs and preferences.
The Alberta Utilities Commission (AUC) approves all regulated utility rates before they can be charged to customers. This means that the charges related to transmission service, distribution service, local access (or franchise) fees and other riders that appear on customers’ bills have been reviewed and approved by the AUC; this is why public utilities like FortisAlberta are considered to be rate regulated. An entity affiliated with Service Alberta called The Office of the Utilities Consumer Advocate (UCA) participates in the AUC’s rate approval process to ensure that consumers’ interests are protected when utility rates are set.
Like other utilities, FortisAlberta assigns customers to different rate classes based on the kind of services being used (e.g., residential, farm or small commercial). Together, these rate classes make up a utility’s rate design. A breakdown of our rate classes and how these are defined can be found here. Some of the charges that are applied to a rate class are fixed, while others can change based on how much energy the consumer uses (i.e., variable rates).
FortisAlberta’s Rate Guide and new Service Estimator allow customers to understand how rates can differ for a variety of service types that may be assigned to different rate classes.
3. Where do Rural Electrification Associations (REAs) fit in?
Rural Electrification Associations (REAs) are member-owned not-for-profit cooperatives that were initially created to provide electric distribution service to agricultural consumers in rural Alberta. These entities have been a feature of rural Alberta since the late 1940s and, in fact, many areas of FortisAlberta’s distribution system were, at one point in time, owned and operated by REAs. FortisAlberta’s responsibilities as a market participant require our company to interconnect REAs to the wider grid. However, REAs are not like other users in that they cannot be charged rates under FortisAlberta’s regulated tariff. While FortisAlberta’s rates and Terms and Conditions of Service must be approved by the AUC, REA rates and service offerings are approved by individual REA Boards, which are elected. Oversight of REAs in Alberta falls under the Rural Utilities Act and is administered by the Rural Utilities Branch of Alberta’s Ministry of Agriculture and Forestry.
To learn more about electricity distribution in Alberta, check out these resources: