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Frequently Asked Questions about the July 2014 Rate Change

The Ontario Energy Board (OEB) has approved a temporary change in the rates Union Gas charges customers for natural gas delivery services for a six-month period from July 1, 2014 to December 31, 2014. In addition, the OEB is undertaking a review of the quarterly rate adjustment process, and as such, has deferred implementation of the regularly scheduled quarterly adjustment on July 1, 2014 for Union Gas, Enbridge and NRG. 

Natural gas remains your best energy value. It is even more affordable now than 10 years ago. Union Gas purchases natural gas in a competitive open market and passes the actual cost of the gas to our customers without mark-up. You pay what we pay for natural gas. The Ontario Energy Board (OEB) reviews and approves our gas rates every three months before they can take effect.

Please visit MyAccount business rates to view the rates specific to your area.

  • Are my rates changing in July?

    Yes. Union Gas is making a temporary change to the rates we charge customers for natural gas delivery services for a six-month period from July 1, 2014 to December 31, 2014. Rate changes for our business customers include:

    Rate M2  Rate 10
    • Increases in the gas price adjustment and delivery price adjustment rates.
    • Decreases in the transportation price adjustment and delivery price adjustment rates.

    These rates are in effect from July 1 through December 31, 2014. Please visit MyAccount business rates to view the rates specific to your area.

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  • What makes up the charges on my bill?

    Union Gas purchases natural gas and transportation services for our customers from the market and we pass these costs through to our customers without mark-up.

    Gas costs - Gas commodity costs include information on the "Gas used" and "Gas price adjustment" lines on your bill. The net natural gas rate reflects what we expect to pay for gas supplies during the next year, as well as an adjustment to make up the difference between our forecast cost of gas and actual costs from prior periods.

    Transportation costs - Transportation costs include information on the "Transportation to Union Gas" and "Transportation price adjustment" lines on your bill. Natural gas is transported into Ontario from a variety of locations across North America using different pipelines for delivery across the province, so your transportation costs vary and depend on where you are located in the province.

    Delivery costs - Delivery costs include the information on the "Delivery" and "Delivery Price Adjustment" lines on your bill and reflect the cost of delivering natural gas to your business, as well as, an adjustment to make up the difference between our forecast and actual gas costs in delivery rates from prior periods.

    Storage costs - Storage costs include the information on the "Storage" and "Storage Price Adjustment" lines on your bill and reflect the cost of storing natural gas so it’s available whenever you need it.

    Monthly Charge - The fixed monthly charge partially covers the cost of maintaining a safe and reliable natural gas distribution system. It includes things like meter reading, customer services and 24-hour emergency response.

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  • Why is Union Gas changing its rates?

    Union Gas operates under a five-year incentive regulation framework, which was approved by the Ontario Energy Board in 2014. Through this framework, there is an incentive to increase productivity, reduce costs and optimize revenues. In addition, our customers receive a share of company earnings that exceed a pre-set threshold in each year of the agreement. The current rate changes include a credit to customers for a portion of our 2012 earnings and a charge to customers for costs incurred in 2012, which were not recovered in approved 2012 rates. These changes were recently approved by the Ontario Energy Board for implementation on July 1, 2014.

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  • Didn't we just have a rate change in June?

    Customer rates were adjusted in June to reflect a change in the cost to store natural gas until it’s needed, and safely deliver it to customers through our distribution system.

    The current rate changes include a credit to customers for a portion of our 2012 earnings and a charge to customers for costs incurred in 2012, which were not recovered in rates. These changes were recently approved by the Ontario Energy Board for implementation on July 1, 2014.

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  • Why are the rates changing now, for things that happened in 2012?

    The regulatory review process took longer than anticipated. Our application for 2012 was approved in May 2014, for implementation in July.

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  • What’s the impact of this rate change on business customers in southern Ontario (Rate M2)?

    The Ontario Energy Board approved an increase to Union Gas' gas price adjustment and delivery price adjustment rates effective July 1, 2014. The impacts of this rate change are effective for a six-month period from July 1, 2014 to December 31, 2014.

    The total bill increase for a typical Rate M2 customer in southern Ontario using 23,871 m3 of natural gas for the period July 1 - December 31, 2014 will be $115.58.

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  • What's the impact of this rate change on business customers in northern Ontario (Rate 310)?

    The Ontario Energy Board approved a decrease to Union Gas’ transportation price adjustment and delivery price adjustment rates effective July 1, 2014. The impacts of this rate change are effective for a six-month period from July 1, 2014 to December 31, 2014.

    The total bill decrease for a typical Rate 310 customer in northern Ontario using 38,833 m3 of natural gas for the period July 1 – December 31, 2014 will be $786.49.

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  • What's the impact of this rate change on business customers in eastern Ontario (Rate 610)?

    The Ontario Energy Board approved a decrease to Union Gas’ transportation price adjustment and delivery price adjustment rates effective July 1, 2014. The impacts of this rate change are effective for a six-month period from July 1, 2014 to December 31, 2014.

    The total bill decrease for a typical Rate 610 customer in eastern Ontario using 38,833 m3 of natural gas for the period July 1 – December 31, 2014 will be $786.49.

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  • What’s the impact of this rate change on business customers in northwestern Ontario (Rate 110)?

    The Ontario Energy Board approved a decrease to Union Gas’ transportation price adjustment and delivery price adjustment rates effective July 1, 2014. The impacts of this rate change are effective for a six-month period from July 1, 2014 to December 31, 2014.

    The total bill decrease for a typical Rate 110 customer in northwestern Ontario using 38,833 m3 of natural gas for the period July 1 – December 31, 2014 will be $786.49.

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  • What's the impact of this rate change on business customers in the Fort Frances area (Rate 210)?

    The Ontario Energy Board approved a decrease to Union Gas’ transportation price adjustment and delivery price adjustment rates effective July 1, 2014. The impacts of this rate change are effective for a six-month period from July 1, 2014 to December 31, 2014.

    The total bill decrease for a typical Rate 210 customer in the Fort Frances area using 38,833 m3 of natural gas for the period July 1 – December 31, 2014 will be $786.49.

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  • Why do costs differ between northern and southern Ontario?

    For this rate change, this is mostly due to a difference in the average amount of natural gas used in 2012, compared to what was forecast. The volume of natural gas an average customer used in the south was less than forecast. As a result the recovery of 2012 costs was spread over a smaller volume per customer than expected, resulting in an increase. The opposite occurred in the north, where the average volume of gas consumed per customer increased.

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  • How often does Union Gas change its rates?

    You'll see two general types of natural gas rate changes during the calendar year. The first type occurs quarterly, on the first of January, April, July and October, to reflect changes in what Union Gas expects to pay for gas commodity and transportation services. This is shown as a change in the gas commodity and transportation rates on your bill and may also appear as a small change in delivery rates as Union Gas also uses natural gas to power our delivery system. These changes, which are passed through to you without mark-up, help ensure that you're billed at a rate that closely reflects the expected market price of gas.

    The second type of rate change occurs annually and reflects the overall costs to run a safe and reliable natural gas distribution system. On your bill, this may appear as a change in the delivery and storage rates or the monthly charge.

    All rate changes are approved by the OEB.

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  • How long will these rates remain in effect?

    These temporary rate changes will be implemented on July 1, 2014 for a six-month period ending December 31, 2014.

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  • What are price adjustments?

    Price adjustments refund or collect the difference between our forecast costs and actual costs from prior periods. The price Union Gas charges you for natural gas is based on a forecast of what the market price of gas will be during the next 12 months. This forecast is updated and approved by the OEB every three months to reflect changes in the market price of gas. Union Gas does not earn a profit on the sale of gas, so we track the difference between the price we charge for gas based on this forecast and the actual cost for gas we purchase during the same period. When forecast costs differ from actual costs, Union Gas applies a price adjustment to refund or collect the difference. This way, we can ensure that customers pay for the actual cost of gas, and not a penny more.

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  • What influences natural gas consumption?

    Weather – The weather affects your natural gas consumption. In cold weather, more gas is needed to heat your facility.

    Age, type and energy efficiency of facility/equipment – The age, type and energy efficiency of your facility and natural gas equipment can significantly affect natural gas consumption.

    Facility size – It requires more energy to heat a bigger space and, the more people in a space, the higher the natural gas use.

    Furnace efficiency – High-efficiency furnaces are about 60 per cent more energy efficient than conventional low-efficiency furnaces. Mid-efficiency furnaces are about 33 per cent more efficient than conventional furnaces.

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  • Does Union Gas make a profit on natural gas?

    No. Like a trucking company, Union Gas earns income on delivering and storing the product - natural gas - and not on the product itself. The rates we charge for delivery and storage services are regulated by the OEB and have remained relatively stable for a number of years. Gas commodity and transportation costs, which make up the majority of your bill, are passed through to you without mark-up.

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  • I noticed the same line twice on my bill. Am I being billed twice?

    No, the billing period doesn't begin and end on the first and last days of each month, but covers a period somewhere mid-month to mid-month. Consumption for the period prior to a rate change is billed at the old rate and consumption after a rate change is billed at the new rate. The number of days at each rate depends on the monthly cycle in which your account is billed.

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  • I buy natural gas from an energy marketer. How does this rate change impact me?

    If you purchase your natural gas supplies from an energy marketer, the price you pay for your gas depends on the terms of your contract.

    Please contact your energy marketer at the telephone number that appears on your bill with questions.

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  • Is natural gas my best energy value?

    Natural gas is clearly the best energy choice for Ontario businesses. It costs much less to heat your facility and water with gas compared to using electricity or fuel oil. There are many other benefits to using gas beyond price including efficiency, versatility, reliability and abundance of domestic supply that makes natural gas your best energy choice. Read more about the many benefits of natural gas.

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  • What is Union Gas doing to help customers manage high natural gas prices?

    Our natural gas storage facilities allow us to buy gas when it’s less expensive and use it in the winter when market prices are typically higher. That has helped to moderate the impact of higher gas prices.

    Conservation is one of the best long-term ways to reduce energy costs. We understand that in order to stay competitive you need to closely monitor your ongoing energy use, invest in energy efficiency, and take advantage of valuable rebates and incentives. Visit the Save Money & Energy section on uniongas.com to learn more.

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