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Energy companies' unpaid electric bills sent to Alberta farmers

Some Alberta farmers got a rude surprise on their power bills last summer. They were getting dinged for the unpaid bills of energy companies that had leased their land to drill a well.

Relationship fraying between Alberta farmers and energy companies

Rural Albertans are feeling the brunt of the oilpatch downturn: lease payments are dropping, more wells are being abandoned, and in some cases farmers are being dinged with the unpaid bills of oil companies. (Tracy Johnson/CBC)

Last June, Alberta's Farmers' Advocate Office got a surprising phone call from a rural landowner. The farmer had noticed something strange on his power bill from the utility company Epcor. 

He had leased a portion of his land to an energy company that had drilled a well, but the company hadn't paid its power bills. And now the farmer was getting dinged for the bill.

"Epcor was attempting to collect payment for the three-phase electric power to that site and attempting to collect it from the landowner, because the company was no longer in existence," said Jeana Schuurman, rural engagement officer with the Farmers' Advocate Office.

Schuurman said the office got a number of these complaints over the past few months, and Epcor seemed to be relying on a clause in its terms and conditions that allowed it to charge the owner of a property if the tenant defaulted on its bills. However, that rule was intended to apply to residential situations, not to rural landowners and energy companies.

"The Alberta Utilities Commission is working to correct the way those [terms and conditions] are drafted so that in the future these issues don't come up again," said Schuurman.

"What we don't know is if this is happening somewhere else, and we are asking if anyone has spotted anything unusual on their bills to check with us, and we'll pursue that on their behalf."

Epcor's response

After being contacted by the Farmers' Advocate Office, Epcor is working to refund landowners who were overcharged.

"We know it's tough out there for farmers, it's tough for a lot of people, and we understand they should not be charged for somebody else's activity on their land," said Epcor spokesman Tim LeRiche. "And in cases where we've been notified this has happened, we've credited the farmer and we will continue to do that."

Alberta's power market is deregulated, so Epcor acts as the retail agent for Fortis Alberta, which provides the electrical wires and meters. As a result, LeRiche said, when the bills were unpaid, it wasn't clear to Epcor that it was dealing with rural landowners and energy companies. He said the company is now checking all its customers' bills for the past two years to make sure no landowner was overcharged.

Tough times in rural Alberta

The past two years have been challenging for rural Albertans, particularly those with oil and gas sites on their land.

The number of abandoned and orphaned oil and gas wells in the province has shot up sharply. As well, some farmers are not being paid for the use of their land. Alberta law requires landowners to lease their land to energy companies for the purpose of exploration and production.

If the rent isn't paid, the provincial government is supposed to step in and help the landowners recover the money. Ultimately, it has the responsibility to cover the payment. The number of applications to the Alberta Surface Rights Board for rental recovery is up more than 700 per cent in the past four years, with 1,966 applications so far in 2016. According to the Farmers' Advocate Office, other companies are unilaterally decreasing the amount of rent paid to landowners.

As CBC News reported last summer, many municipalities are suffering as energy companies do not pay their education property taxes. Earlier this year, Canadian Natural Resources appealed to municipalities where it operates, asking for a break in taxes as it tried to cut costs. The company said it was partially successful in its appeal. Notably, Canadian Natural Resources raised its dividend to shareholders earlier this month. 

Lawyer Keith Wilson said that he also has represented clients who have had liens filed against their land for unpaid work done by oil company contractors.

"There's a need to rethink the system," said Wilson. "It wasn't designed for what's happening now [with the economic downturn]. And as it becomes more endemic, it underscores how Albertans have expected this one sector of our society to bear all these risks and hassles."