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Natural Gas Rate Updates

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As the regulator in the province, the Ontario Energy Board sets the rates that natural gas utilities are allowed to charge their customers for:

  • the gas you use, also known as Gas Supply Charge
  • transporting the gas into Ontario and delivering it to your home
  • storing the gas until it is needed
  • managing your account – a fixed charge for services like meter readings, equipment maintenance, emergency response, billing  and account changes. This is also known as Customer Charge or Monthly Charge

Visit the Natural Gas Bill webpage for descriptions of these of charges.

 

Current Rates for Supply - At a Glance

These rates are for the gas you use (gas supply). They are adjusted four times each year, on January 1, April 1, July 1 and October 1.  Some rates, such as transportation, may change at the same time. Others follow a different timeline, like delivery rates, which generally change once a year.

April 1, 2016 Natural Gas Rates
Union Gas Limited (southern) 9.2053 ¢/m3
Enbridge Gas Distribution Inc. 11.3848 ¢/m3
Natural Resource Gas Limited 15.0229 ¢/m3
The rate for NRG includes storage and transportation charges.

To see how these natural gas rates relate to your overall bill, visit our Natural Gas Bill Calculator.

View past natural gas rates

 

Rate Changes - How it Works

Natural gas is a commodity that is traded on North American markets. Market prices fluctuate daily, rising and falling based on supply and demand (how much is available and how many people/businesses need it). Major weather events are one factor that can affect the market price.

Utilities in Ontario are not allowed to earn a profit on the supply – the price paid on the open market must be passed through to customers with no markup.

Every three months, each utility asks the OEB to adjust its rates to cover:

  • Future costs – the utility estimates the market price for natural gas over the next 12-month period. This is used to calculate the rate to charge customers.
  • Past costs – the utility also reviews the difference between what was forecast to be paid the last time and what was actually paid. The customer is either refunded or charged the difference through the rate. If a utility collected more from customers than it paid for the gas, the rate will include a credit. Likewise, if not enough was collected, the rate will include a charge. This is called the Gas Price Adjustment or Cost Adjustment, which you may see on your bill under Supply.

Because the forecasting is done far in advance it is never exact. But, by adjusting the gas rate periodically through the year instead of one time, there’s less likelihood of customers or the utility owing a large amount.

 

How Seasonal Factors Can Affect Costs

Another factor affecting costs is the time of year. Natural gas is generally more expensive in the winter months, so most utilities buy a certain amount during the summer when the price is cheaper. The supply is stored, and then delivered to customers during colder months when customers need it to heat their homes.

Sometimes, as happened in the unexpectedly cold and long winter of 2014, a utility may underestimate the amount of supply it will need and then have to buy extra supply at a higher price. Because it passes on the actual cost of the gas, the utility then has to collect the extra cost from its customers. The reverse also happens, where the actual market price is lower than the forecast, so the utility credits its customers the amount.

 

Rate Changes - by Utility

Union Gas Limited

April 1, 2016 Natural Gas Rates

Annual Rate Impact for an Average System Supply Consumer (using 2,200m3/year):

Rate Zone

Total Annual Increase/Decrease

Fort Frances -$35.74
Northwestern -$36.35
Northern -$36.62
Eastern -$36.84
Southern $16.12

In the Fort Frances, Northwestern, Northern, and Eastern areas, there has been an increase in transportation costs and storage costs. However, the prices for natural gas, delivery costs, the Gas Price Adjustment and the Transportation Price Adjustment have decreased resulting in an overall decrease to the annual bill.

In the Southern area, there has been an increase in transportation costs and the Gas Price Adjustment. However, the price for natural gas and delivery costs has decreased. With the increase and decrease combined, customers in this service area will see an overall increase to their annual bills.

Note: Natural gas rates are based on a forward looking forecast for the next 12 months. Forecasts are never perfect, so the billed price is normally either higher or lower than the actual market price. The difference is tracked in a special account and is adjusted with a credit or a charge in subsequent QRAM applications.

Natural Gas Prices:

Rate Zone

Natural Gas Price ¢/m3

Gas Price Adjustment ¢/m3

Effective Price ¢/m3

Fort Frances 9.3831 -1.4484 7.9347
Northwestern 9.4488 -1.4484 8.0004
Northern 9.5505 -1.4484 8.1021
Eastern 9.6312 -1.4484 8.1828
Southern 9.6231 -0.4178 9.2053

Enbridge Gas Distribution Inc.

April 1, 2016 Natural Gas Rates

The OEB approved Enbridge’s rates for April 1. Effective April 1, 2016, the Gas Supply Charge (including gas supply cost quarterly adjustment) = 11.3848 ¢/m3

Annual Rate Impact for an Average Consumer (using 2,400 m3/year) = $23

Natural Gas Price ¢/m3

Gas Cost Adjustment ¢/m3

Effective Price ¢/m3

9.1760 2.2088 11.3848

Natural Resource Gas Limited

April 1, 2016 Natural Gas Rates

The OEB approved the following commodity rates effective April 1, 2016. 

Gas Supply Charge (including quarterly adjustment) = 15.0229 ¢/m3

Annual Rate Impact for an Average Consumer (using 2,009 m3/year) = -$73.87

The main reason for the rate change is a decrease to the forecast price NRG expects to pay for natural gas over the next 12 months and a large credit to customers arising from the OEB’s Decision disallowing NRG to recover the penalty charges from its customers. Union Gas Limited charged NRG a penalty during the winter of 2014 for not returning the gas borrowed from Union by the required date.

Note: Natural gas rates are based on a forward looking forecast for the next 12 months. Forecasts are never perfect, so the billed price is normally either higher or lower than the actual market price. The difference is tracked and adjusted with a credit or a charge in subsequent QRAM applications.

 

Conserve and Pay Less

You can reduce the amount of your bill by using less natural gas.  Read more about conservation, energy efficiency and government rebates by visiting:

 

What the OEB Does NOT Regulate

The OEB does not regulate competitive products and services, which are available from a number of companies competing for your business. They include:

  • contracts offered by natural gas marketers
  • water heater rentals
  • repair or maintenance services for water heater rentals

 

 

 

 

Page last updated 2016-03-23

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Ontario Coat of ArmsONTARIO ENERGY BOARD
P.O. Box 2319
2300 Yonge Street
Toronto, Ontario, Canada
M4P 1E4

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