Transmission and distribution fees are found on every Alberta residential energy bill. But if you’ve ever wondered what exactly each means and why it’s on your energy bill, then you’re not alone. A common question we get at EnergyRates.ca is, what are transmission and distribution charges, and how do they impact my energy bill?
In this article, we’ll define what transmission and distribution fees are, why they are added to your energy bill, and how they impact your overall energy costs.
What are Transmission and Distribution fees?
Transmission and distribution fees, often shortened to T&D, are the charges for delivering electricity and natural gas to your home. They are often listed underneath the “Delivery Charges” portion of your energy bill. They are calculated and administered by the wire service providers (ATCO, ENMAX, EPCOR, or FortisAlberta) and are separate from the energy rate charged by your energy retailer. T&D fees are then approved by the Alberta Utilities Commission (AUC). Therefore, T&D fees are regulated and do not change regardless of your retailer. New transmission and distribution fees are released at the beginning of each year.
Now let’s look at each fee a bit closer.
Transmission charges recover the cost of moving electricity from generation facilities through the grid system to local substations. It is based on the amount of electricity or natural gas you have consumed during the billing period. Transmission charges for natural gas are incorporated into the delivery fee on your natural gas bill.
Distribution fees cover the cost of moving energy from the distribution centres to people’s homes. For electricity, distribution charges vary with location and your consumption levels. For example, Albertans living in rural areas will incur higher distribution fees due to lower population and greater distances between consumer sites.
Distribution charges for natural gas have a fixed and variable component. The fixed portion is a set daily fee that covers infrastructure and maintenance costs, regardless of your gas consumption. The variable portion also covers infrastructure and maintenance costs, but it is based on the amount of natural gas you consume. Even with the variable component, the majority of natural gas distribution charge costs are fixed.
So why are they added to my bill?
As we noted above, transmission and distribution charges help pay for the cost of installing, operating, and maintaining Alberta’s energy infrastructure. In other words, T&D charges are used to pay for the towers, wires, meters, pipelines, and other pieces of physical infrastructure.
Another way to think of T&D charges is that they are like the shipping fees you pay with online shopping, essentially an additional cost for the delivery of the service.
How do they impact my energy bill?
Transmission and distribution charges can have varying impacts on your bill. While they do factor in with your energy bill, it can be difficult to pin down the exact percentage T&D fees comprise of the total amount. Estimates include approximately 15-20% for transmission fees and 24-33% for distribution charges.
Your distribution and transmission charges can also be higher or lower depending on your location and the distribution provider serving your area.
However, depending on the month, T&D fees can have a more or less noticeable impact on your energy bill. For example, if your energy charge is higher, it will seem like T&D charges have a lesser impact on your total bill costs. Likewise, if your energy charge is lower, then it can look like the charges have a greater impact.
For example, Albertans were faced with higher energy prices in 2022, with floating electricity rates peaking at ¢37.464/kWh, while the regulated rate peaked at ¢22.043/kWh. As a result, customer energy bills were higher. An average Alberta household in 2022 with a consumption of 7,200 kWh/year would have an energy charge of about $60-$65/month at the low end, and $180-$195/month during higher-priced months. Transmission, distribution, and admin charges were approximately $50-$80 per month on bills during this time. Furthermore, in 2021, residential customers with a yearly consumption of 7,200/kWh were paying approximately $239.28 in transmission charges and about $308.40 in distribution charges (in the ENMAX service area) in that year.
Rates were also higher in 2023 but began to lower in 2024 and the next two years, continuing into 2026.
The seven-month average for floating rates in 2026 was ¢4.9/kWh, and the seven-month average for fixed rates was ¢8.45/kWh. The prices for the Rate of Last Resort for the 2025-2026 term were:
- EPCOR: ¢12.01/kWh
- ENMAX: ¢12.06/kWh
- Direct Energy Regulated Services: ¢12.02/kWh
As a scenario, a consumer on the RoLR with a consumption of 600 kWh/month living in the ENMAX area would be paying the following:
- Approximately $72/month energy charge
- Approximately $58/month on T&D fees
- The total would come to $130/month
What can I do to lower my Transmission and Distribution fees?
Unfortunately, there are not many steps consumers can take to lower their T&D charges. Every Albertan who is connected to Alberta’s energy grid pays them, even those who don’t consume energy from the system. Even if you switch retailers, you will still end up paying about the same in transmission and distribution charges. The main items you can compare are:
- The energy rate
- The administration fee
- The contract terms
However, since T&D charges are calculated mainly on the amount of energy you use, reducing your consumption levels can help lower this fee to some extent. This will depend on your wire service provider and the area that you live in. However, this strategy can only go so far, though. Even if you drastically cut down your energy consumption, you will still be paying the fixed portion of T&D fees no matter what.
Key Takeways
A key takeaway is that transmission and distribution charges are a part of every Albertan’s energy bill. Any consumer who is connected to Alberta’s energy system will pay these fees, regardless of the retailer they are signed with. And while you can technically lower T&D fees by lowering your consumption, you’ll still be paying the fixed portion. If you’re looking to lower your energy bill, focus on the energy charge and admin fee; those are the two components of your bill you have the most control over.
Why compare energy plans?
Many Albertans question the worth of switching retailers or energy plans due to high transmission and distribution costs. While T&D costs can be high, there is still value in comparing energy plans to find one with the lowest possible rate. This is where comparison tools like EnergyRates.ca can come in handy. We can help you compare plans from several retailers to help you save on the portions of the bill you can control (the energy charge). Selecting a new energy provider could save you up to about 30% on your bill, depending on the current market conditions.
For example, using current fixed electricity rates and delivery charges, a large household in Edmonton that uses 1.065.8 kWh of electricity each month could pay around $179 per month or about $215 per month with different retailers. That’s approximately a $35 difference each month, and about $426 over the course of a year. This demonstrates how choosing a lower electricity rate can lead to significant savings, even when the largest portion of the bill isn’t under your control.
