Understanding Your Utility Bill

In Medicine Hat, you receive all utility charges on one bill - one advantage of owning our energy assets and distribution systems.

First, let's focus on the City's strategy for setting rates.

On February 28, 2022, two city representatives spoke on-air on CHAT 94.5 FM about the City's utilities. Listen below.

How do we determine utility rates?

As part of the annual operating budget, City Council approves the budget for utilities. That budget determines the amount of revenue the utility must recover through rates. From there, the City forecasts the number of customers to be served, the amount of commodity to be used, and the demand placed on the system from various customer classes (residential, commercial, etc.). For 2022 there is an average increase of 1.54% in utility charges for electricity, natural gas, water, sewer and solid waste.

Rates are approved by City Council (usually in November/December each year) through bylaws that are subject to public hearings at open City Council meetings.

Fixed charges / usage charges / commodity charges

The pricing structure for your utilities uses a combination of fixed charges, usage charges, and commodity charges. Fixed charges and usage charges combine to cover the City's cost to provide the service to you, including power plants, infrastructure, pipes, wires, maintenance, staff, vehicles, and planned capital costs (like adding Unit 17), etc. 

To illustrate, let's use the analogy of driving a car. Please click to expand through the three sections below:

Fixed charges 

If you own a car, you will have incurred fixed prices just to have it, even if you let it sit in your garage and don't use it. You can think of your fixed charges as:

  • Price you paid for the car
  • Insurance
  • License and registration

With regard to utilities, the fixed charge recognizes that much of the cost of operating and maintaining the utility infrastructure isn’t dependent on how much of the commodity is used. The fixed charge considers the potential demand that a customer places on the system, so large customers typically pay a higher fixed charge than small customers do which is why there are seven different classes in fixed charges. For simplicity, this page references the residential utility class.

The terms on your bill related to fixed charges are:

  • Service Charge (electricity, gas, water, sewer, solid waste)
  • Administration Charge (electricity, gas)
  • Municipal Consent & Access Fee (electricity, gas)
  • Waste Diversion Charge (solid waste)
  • Residential Recycling (solid waste)

The fixed charges increased by $2.60 per month from 2021 to 2022. Without any consumption based charges, residential customers are subject to fixed fees of $151.27.

Fixed Utility Charge Comparison
Type of Charge2021 Daily Rate2022 Daily Rate2021 Monthly Bill2022 Monthly BillDifference
Electric          
Service Charge $0.4176 $0.4240 $12.53 $12.72 $0.19
Administration Charge  $0.0943 $0.0917 $2.83 $2.75 -$0.08
Municipal Consent & Access Fee  $0.0388 $0.0394 $1.17 $1.18 $0.01
Total     $16.53 $16.65 $0.12
           
Natural Gas          
Service Charge  $0.7370 $0.7370 $22.11 $22.11 $ -
Administration Charge  $0.1200 $0.0990 $3.60 $2.97 -$0.63
Municipal Consent & Access Fee  $0.08844 $0.08844 $2.65 $2.65 $ -
 Total     $28.36 $27.73 -$0.63
           
Water          
Service Charge  $0.9343 $0.9436 $28.03 $28.31 $0.28
           
Sewer          
Service Charge  $1.6480 $1.7345 $49.44 $52.04 $2.60
           
Solid Waste          
Service Charge  $0.5435 $0.5435 $16.31 $16.31 $ -
Waste Diversion Charge  $0.0793 $0.0793 $2.38 $2.38 $ -
Residential Recycling  $0.2540 $0.2616 $7.62 $7.85 $0.23
Total     $26.31 $26.54 $0.23
           
Total Fixed Charges      $148.67 $151.27 $2.60
          +1.75%

 

Usage charges 

This is the maintenance on your car. You can think of it as the wear and tear that would include things like oil, mechanical maintenance, washer fluids, antifreeze, tires.

In terms of utilities, the usage charge recognizes that some costs are related to consumption and encourages consumers to use less. Even though only a portion of utility operating costs are related to usage in any particular year, overall reduction in use will reduce system demand and allow future capacity increases to be deferred. In the long term, this reduces the cost to operate the utility.

If usage charges were eliminated, fixed charges would have to increase. The usage charges on your bill include:

  • Capacity Charge (electricity)
  • Environmental Conservation Charge (electricity, gas)
  • Facilities Usage (electricity) and Delivery Charge (gas)
  • Going Green (electricity)
  • Federal Carbon Charge (gas)
Commodity charges 

In our analogy, this is the gas in your car. It is the thing you "consume" to get from point A to point B.

On your bill, the commodity charges are how much you pay for the amount of natural gas and water you take from the pipes and the amount of electricity you take from the wires. The terms are:

  • Energy Charge (electricity)
  • Commodity Charge (gas)
  • Commodity Charge (water)

In 2009, the City implemented a market based price for the electric and natural gas commodity. Since that time energy prices have been calculated based on the average of the provincial rates approved by the AUC. However, in 2012 the City implemented a fixed rate option to provide customers with a choice to lock in their energy rates. 

 

Other helpful info

How are utility charges used? 

Revenue generated by utility charges is used to cover the cost of providing a number of services for City and regional customers, including:

  • Safe and reliable delivery of electric and natural gas energy to homes and businesses in the community and surrounding area
  • Treatment and distribution of safe, reliable water for households, businesses, and fire protection
  • Collection and treatment of wastewater from households and businesses to protect the health of our citizens, the river habitat, and downstream users
  • Collection and disposal of garbage and solid wastes in an environmentally responsible manner, with emphasis on recycling and reuse
Why do utility rates change each year? 

Utility rates are re-evaluated each year and rates are adjusted to generate sufficient revenue to meet budget needs. Budget changes are affected by inflation, growth, and the services provided. For 2022, there is an increase in utility rates:

  • Electric* 1.16%
  • Natural Gas* (1.57%)
  • Water 1.00%
  • Sewer 5.25%
  • Solid Waste 0.87%

*excludes the commodity price – based on market

Rates are approved by City Council (usually in November/December each year) through bylaws that are subject to public hearings at open City Council meetings. The following table was part of the budget presentation that went forward.

2022 Rate Impact (average residential per month)

Utility2021 Rates2022 Rates$ Change% Change
Electric* $46.90 $47.45 $0.55 1.16%
Natural Gas* $41.43 $40.78 ($0.65) (1.57%)
Water $46.43 $46.89 $0.46 1.00%
Sewer $51.09 $53.77 $2.68 5.25%
Solid Waste $27.18 $27.42 $0.24 0.87%
TOTAL $213.03 $216.31 $3.28 1.54%

This table includes the fixed rates from the table above in the fixed rate section, along with the average usage rates for a home in Medicine Hat. *It excludes natural gas and electric commodity and federal carbon levy.

Understanding the language on your utility bill

You will find the following abbreviations and terms on your Medicine Hat utility statement. The statement provides a summary section with the total charge for each service, as well as a detailed section that breaks out each utility’s charges.

General terms 

Billing Period

This is the period of your bill, shown by start and end dates. Your billing period may not match the calendar month and is not the same for all customers. The City runs 16 billing cycles each month. Your bill might run on the 23rd of each month, while someone else's might run on the 14th of each month.

Note: severe weather patterns (which usually equals higher consumption and higher bills) may not impact everyone's monthly bill equally depending on when your billing cutoff appears in relation to the extreme weather.

Community Warmth
Community Warmth is an energy assistance program administered by the Salvation Army. The City provides a convenient way in which customers can donate money to the program through their utility bills.
Distribution
Transmitting electricity or moving gas within Medicine Hat and the service area (to your neighbourhood and into your home). The City of Medicine Hat owns the electricity, gas, water and sewer distribution infrastructure.
Meter Readings

Medicine Hat uses automated meters to measure actual consumption as it occurs. Reads are collected three times per month on: 

  • the first day of your billing cycle
  • the last day of the month
  • the last day of your billing cycle

This allows your consumption to be billed at the correct corresponding monthly rate.

Multiplier
Meters may not measure the same units used in billing. The multiplier converts the measured units to the billing units. Gas is measured in cubic feet but is converted to energy units for billing.
Rate
Your rate is how much you pay for electric, gas and water. Rates consist of flat daily charges and usage-based charges.
Transmission
Transmitting electricity or moving gas over long distances from the source to your local area. For electricity, the City of Medicine Hat is the source, the transmitter, the distributer and the retailer. The City of Medicine Hat purchases the majority of its natural gas from a third party. The transportation costs associated with purchasing gas are included in the delivery charge.

 

Electric service 

kWh 
Kilowatt hour is the standard measure for electricity use - one kilowatt of electricity in use for one hour. A 100-watt bulb running for 10 hours would use 1 kWh of electricity.  
Service Charge 
A fixed daily charge that covers costs associated with providing and maintaining utility service to a location. This charge includes installation and maintenance of wires, transformers, vehicles, and staff. 
Administration Charge 
A fixed daily charge that covers costs of administering customer accounts including, billing, customer collections and customer inquiries. 
Capacity Charge 
A consumption-based charge that contributes to the cost of generating power to supply to service area customers. 
Energy Charge 
This charge covers the value of electricity used by the customer measured in kilowatt hours (kWhs) and is calculated by multiplying consumption by the energy price. 
Environmental Conservation Charge 
An additional charge levied on consumption for each kilowatt hour used in excess of 950 kWhs per month.  This money is used to fund the City’s Hat Smart program. 
Facilities Usage 
This charge covers the cost of maintaining and operating the electric distribution, transmission, and substation infrastructure and is calculated per kWh used. 
Going Green 
A fee per kilowatt hour that pays for the purchase of renewable energy. 
Municipal Consent and Access Fee (MCAF) 
This fee provides the utility access to municipal land for power lines and substations. The fee is also intended to cover municipal taxes on property and land used by the utility and applies to customers within the municipality. The City establishes this fee in accordance with provincial law.

 

Gas service 

GJ 
Gigajoule is a measure of the heat energy obtained from natural gas. A gigajoule of natural gas has the same energy as 26 litres of gasoline or 277 kilowatt hours of electricity.  
Service Charge 
A fixed daily charge that covers costs associated with providing and maintaining utility service to a location. This charge includes installation and maintenance of pipes, vehicles, and staff. 
Administration Charge 
A fixed daily charge that covers costs of administering customer accounts including billing, customer collections and customer service. 
Commodity Charge 
This charge covers the value of the natural gas used by a customer measured in gigajoules (GJ) and is calculated by multiplying consumption by the gas price. 
Environmental Conservation Charge 
An additional charge levied on consumption for each gigajoule used in excess of 19 GJs per month. This money is used to fund the City’s Hat Smart program. 
Delivery Charge 
This charge covers the cost of maintaining and operating the natural gas distribution, transportation, and compressor station infrastructure and is calculated per GJ used. 
Federal Carbon Charge 
The carbon levy is part of Canada’s climate action plan. The charge puts a price per tonne of carbon dioxide equivalent (CO2e) emissions for home heating fuels. The rate changes on April 1 each year and is calculated per GJ used. The money collected from this charge is remitted to the Federal Government. 
Municipal Consent and Access Fee (MCAF) 
This fee provides the utility access to the use of municipal land for gas lines and compressor stations. The fee is also intended to cover municipal taxes on property and land used by the utility and applies to customers within the municipality. The City establishes this fee in accordance with provincial law.

 

Water 

CM 
Cubic Meter is the measure of water volume used by the customer. A cubic meter of water is equivalent to 1,000 litres or 220 gallons. 
Service Charge
A fixed daily charge associated with providing and maintaining utility service to a location.  This charge includes installation and maintenance of pipes, booster stations, vehicles, and staff.
Commodity Charge
This charge covers the value of water used by the customer measured in cubic meters (m3) and is calculated by multiplying consumption by the water price.

 

Sewer 

Service Charge 
A fixed daily charge associated with providing and maintaining utility service to a location.  This charge includes installation and maintenance of pipes, lift stations, vehicles, and staff. 

 

Solid waste 

Service Charge 
A fixed daily charge associated with providing pickup and disposal service of residential waste, including tipping fees at the landfill. 
Waste Diversion 
A fixed daily charge that covers the costs associated with the various City waste diversion programs such as depot recycling, yard waste collections, composting, electronic waste recycling, as well as other household hazardous waste. 
Residential Recycling 
A fixed daily charge that covers the costs associated with the collection of recyclable material from residential customers, including the supply and maintenance of the residential recycling carts. 

 

Why is my utility bill high?

There are many reasons why your utility bill could be higher than usual. It is helpful to investigate your usage to see if you can find the source of the increase. That way, you will be better prepared to get to the bottom of your concern when you reach out to Customer Service. To find out ways to conserve, visit HAT Smart.

Commodity rates

Fluctuations in market conditions will impact commodity rates and, subsequently, your bill. The City works hard to maintain the “Medicine Hat Advantage”.

Monthly variations

Variations may be due to visitors, more days spent at home, and/or additions such as a hot tub, home office, or new electronics and appliance. Try to recall if there have been any significant renovations, lifestyle changes, or events within your home over the last few months.

Warmer weather

In the summer, we tend to use our air conditioners for longer periods of time. Try fans to help move around the cool air. Contact a qualified professional to service the a/c and furnace and remember to replace filters regularly.

Were you keeping your lawn green during a dry summer? Outdoor water consumption can account for up to 50% of water use in the summer month. Ensure that you use water wisely to save.

Colder weather

Heating can account for up to 50% of your home's electricity bill. To save energy, close vents in rooms that are used less often and make sure that you check and replace weather stripping and caulking around doors and windows.

You've got a leak

A dripping faucet or leaky toilet can be the main cause for significant water consumption and high utility bills. Toilets are notorious for hidden leaks and if gone undetected they can waste thousands of litres per day. You may not always be able to hear the leak, so it is important to check the toilet and parts periodically.

What should I do if my utility bill is high?

Contact Customer Service

Contact Customer Service with any questions or concerns about your utility bill.

Sign up for eUtility

Viewing usage details and your consumption history can help you understand where your energy is going and the best ways to improve.

eUtility

Take advantage of rebates

The HAT Smart program offers incentives to help residential customers make smarter energy conscious home upgrades.

Current Rebates

Check out a Self-Audit Toolkit

Learn more about your home by checking out a Self-Audit Toolkit and an Infrared Thermography Camera from the Medicine Hat Public Library.