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Frequently Asked Questions about the April 2012 Rates
Natural gas remains your best energy value. Union Gas purchases natural gas in a highly 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. Union Gas is determined to provide customers with good value and does its best to buy gas at the lowest possible price. The Ontario Energy Board (OEB) reviews and approves our gas rates every three months before they can take effect.
The Ontario Energy Board (OEB) approved changes to Union Gas’ rates effective April 1, 2012. These new rates remain in effect through June 30, 2012.
Please visit MyAccount business rates to view the rates specific to your area.
Yes, your rates are decreasing. On April 1, Union Gas is changing the rates we charge our customers for natural gas. Rate changes for all Union Gas customers include:
Decreases in the natural gas commodity and gas commodity price adjustment rates,
Changes in the natural gas transportation and transportation price adjustment rates, and
Decreases in the delivery and delivery price adjustment rates.
The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed on your rate notice (included with your bill).
Union Gas purchases natural gas and gas transportation services for our customers from the market and we pass these costs to you without mark-up. We expect to pay less for natural gas for the next 12 months so your rate for natural gas has decreased.
These rates are in effect from April 1 through June 30, 2012. Please visit MyAccount business rates to view the rates specific to your area.
Union Gas purchases natural gas and gas 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 from different sources using different pipelines for delivery to different parts of the province, so your transportation costs vary and depend on where you are located in Ontario.
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.Union Gas purchases natural gas and natural gas transportation services from the market and we pass these costs through to our customers without mark-up. These rate changes reflect a decrease in what Union Gas expects to pay for natural gas supplies. In addition, there are adjustments for the difference between what we expected to pay for natural gas supplies and transportation services in a prior period and the actual costs of these items. All customers will also see a decrease in natural gas delivery rates to reflect the decreased costs to deliver natural gas to our customers.
The Ontario Energy Board approved a decrease to Union Gas’ gas commodity, gas commodity price adjustment, delivery and delivery price adjustment rates, and an increase to the transportation rate as of April 1, 2012. The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed below.
The total annual bill decrease will be $2,196.34 for a typical Rate M2 customer in southern Ontario using 73,000 m3 of natural gas a year.
The Ontario Energy Board approved a decrease to Union Gas’ gas commodity, gas commodity price adjustment, transportation price adjustment, delivery and delivery price adjustment rates as of April 1, 2012. The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed below.
The total annual bill decrease will be $3,220.95 for a typical Rate 310 customer in northern Ontario using 93,000 m3 of natural gas a year.
The Ontario Energy Board approved a decrease to Union Gas’ gas commodity, gas commodity price adjustment, transportation price adjustment, delivery and delivery price adjustment rates as of April 1, 2012. The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed below.
The total annual bill decrease will be $3,233.13 for a typical Rate 610 customer in eastern Ontario using 93,000 m3 of natural gas a year.
The Ontario Energy Board approved a decrease to Union Gas’ gas commodity, gas commodity price adjustment, transportation price adjustment, delivery and delivery price adjustment rates as of April 1, 2012. The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed below.
The total annual bill decrease will be $3,206.35 for a typical Rate 110 customer in northwestern Ontario using 93,000 m3 of natural gas a year.
The Ontario Energy Board approved a decrease to Union Gas’ gas commodity, gas commodity price adjustment, transportation price adjustment, delivery and delivery price adjustment rates as of April 1, 2012. The new rates incorporate applicable temporary charges and credits that do not affect the annual impacts listed below.
The total annual bill decrease will be $3,195.63 for a typical Rate 210 customer in the Fort Frances area using 93,000 m3 of natural gas a year.
Natural gas, like other commodities, is publicly traded and the market price varies in response to the amount of supply and demand for the product across North America. Natural gas is in plentiful supply and Union Gas’ rate change reflects, in part, a decrease in what we expect to pay for gas supplies during the next year.
The rates we charge customers for transportation are based on what we expect to pay companies like TransCanada Pipelines to transport natural gas from western Canada, where it is purchased, to our distribution network in Ontario. This change is an adjustment for the difference between what we expected to pay for natural gas transportation services in the prior period and the actual costs of these items. We pass this cost through to our customers without mark-up.
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.
These new rates will remain in effect for three months, from April 1 through June 30, 2012.
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.
Customers told us they want to know the dollar impacts of rate changes on an annualized basis. Each time rates change, we provide the effect of the rate change on the yearly natural gas bill using a typical customer’s gas use from their rate class.
Weather – Weather’s the biggest factor affecting natural gas consumption. In cold weather, more gas is needed to heat your facility.
Furnace efficiency – High-efficiency furnaces are about 60 per cent more energy efficient that conventional low-efficiency furnaces. Mid-efficiency furnaces are about 33 per cent more efficient than conventional furnaces.
Facility size – It requires more energy to heat a bigger space and, the more people in a space, the higher the natural gas use.
The age and energy efficiency of your facility and natural gas equipment also affect natural gas consumption.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.
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.
If you purchase your natural gas supplies from an energy marketer, the price you pay for your gas depends on the terms of your energy marketer contract, and is excluded from this rate change.
Please contact your energy marketer at the telephone number that appears on your bill with questions.
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.
At Union Gas 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 to learn more.
