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Frequently Asked Questions about the April 2014 Union Gas Rates

Union Gas wants you to understand natural gas pricing and why natural gas remains your best energy value. Union Gas buys the gas you use and gas transportation services in a highly competitive open market and passes the actual cost of these to you without mark up. And, the Ontario Energy Board (OEB) reviews and approves our gas rates before they can take effect, ensuring that the rates we pass onto you are fair and reasonable.

The OEB approved changes to Union Gas’ rates effective Apr. 1, 2014. These new rates remain in effect through June 30, 2014, and incorporate applicable temporary charges and credits that don’t affect the annual impacts on your bill.

Please go to Rates to view the rates specific to your area.

  • Are my rates changing?

    Yes, rates are increasing for all Union Gas residential customers. The details include:

    • An increase in natural gas commodity rates,
    • Adjustments to make up the difference between our forecast for natural gas and gas transportation market prices and actual costs from prior periods, and
    • An increase in delivery rates.

    As detailed below, average residential customers in southern Ontario who use 2,200 cubic metres (m³) of natural gas per year and buy gas from Union Gas will see an annual bill increase of about $200 depending on the amount of gas you use. Average residential customers in northern, northwestern and eastern Ontario who use 2,200 m³ of natural gas per year and buy gas from Union Gas will see an annual bill increase of about $190 depending on where you live and the amount of gas you use.

    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 natural gas 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.

    For customers in southern Ontario, the net natural gas commodity rate increased by about 9 cents/m3, resulting in an annual increase of about $200 per year.

    In northwestern, northern and eastern Ontario, the net natural gas commodity rate increased about 7 cents/m3, resulting in an increase of about $155 per year.

    Transportation costs - Transportation costs include all information on the "Transportation to Union Gas" and "Transportation price adjustment" lines on your bill.

    Transportation costs vary depending on where you live in Ontario due to changing fuel prices, pipeline tolls and available capacity to different parts of the province.

    For customers in southern Ontario, the transportation rate decreased about $2 a year to reflect the decreased cost of transporting natural gas to Ontario.

    In northern, northwestern and eastern Ontario, there’s an increase of about $30 in the net transportation rate to collect the difference between our forecast cost of transporting natural gas to Ontario and actual costs from prior periods.

    Delivery costs - Delivery costs include information on the "Delivery" and "Delivery price adjustment" lines on your bill.

    For customers in southern Ontario, there’s an increase of $2 a year in delivery rates to reflect the increased cost of delivering natural gas to your home through our safe and reliable distribution system.

    In northwestern, northern and eastern Ontario, the increase is $4 dollars a year.

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  • Why did Union Gas change its rates?

    Union Gas purchases natural gas and gas transportation services into Ontario from the market and we pass these costs through to our customers without mark up. These rate adjustments reflect an increase in the market prices we expect to pay for natural gas and to transport it to Ontario for the next year. There are also adjustments to make up the difference between our forecast for natural gas and gas transportation market prices and the actual costs from prior periods.

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  • Why's the price of natural gas changing?

    The price of natural gas can vary based on the amount of supply or demand for the product. Increased demand related to record cold temperatures across North America this winter has resulted in higher natural gas prices. It’s important to put this into context. This increase is related to an unusual weather pattern and is not expected to be sustained over the long term. Overall, the supply of natural gas is plentiful and experts predict prices will be relatively low well into the next decade.

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  • Why do you make price adjustments for prior periods?

    We base our natural gas and gas transportation rates on a forecast of what we expect to pay for gas and to transport it to Ontario through pipelines. These costs can differ from our forecast and adjustments are made quarterly to either refund or collect the difference so that customers pay the actual costs for these services and nothing more.

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  • Why do natural gas and gas transportation costs differ between geographic areas?

    The costs to serve different geographic areas vary. Natural gas for northern, northwestern and eastern Ontario comes from producers in Alberta and travels into Ontario through a single pipeline – the TransCanada Pipeline. Southern Ontario is supplied by a more diverse mix of natural gas producers and pipelines. As a result, the cost to purchase natural gas and transportation services for these different areas can differ. Union Gas purchases natural gas transportation services from the market and we pass these costs through to our customers without mark up.

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  • Why are rate change impacts reflected on a yearly basis?

    You told us that you 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 a yearly basis using a typical residential customer’s gas use of 2,200 m3 a year.

    When calculating natural gas use for a typical residential customer, we define this as three people living in a 15-to-20 year-old home that’s about 2,000 square feet. The home includes a mid-efficiency gas furnace that’s approximately 81 per cent efficient, a gas water heater and another gas-fuelled appliance such as a fireplace.

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  • What influences natural gas consumption?

    Weather – Weather’s the biggest factor affecting natural gas consumption. In cold weather, more gas is needed to heat your home.

    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.

    House size – It requires more energy to heat a bigger house and, the more people in a house, the higher the natural gas use. Every 100 square feet of house size larger than 2,000 square feet adds about 100 m3 of gas consumption annually on average.

    The age and energy efficiency of your house also affect natural gas consumption. Each person in addition to the average three people per house uses approximately 200 to 400 more cubic meters of gas a year. The number of gas appliances and frequency of use also influence consumption.

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  • I'm a Union Gas Equal Billing Plan customer – how will this rate change impact me?

    Your Equal Billing Plan (EBP) payment amount was established in September based on a forecast of the amount of natural gas you’ll use over the course of a year and what we expect gas prices to be during that same period. Periodically throughout the year, we review your EBP account to determine if your payment amount is set at the correct level and, if it’s not, we’ll adjust it up or down based on more current information, which includes rate changes.

    If you purchase your natural gas from a retail energy marketer, the rate charged by the marketer is taken into account when calculating your EBP amount.

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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 which your account is billed in.

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

    If you buy your natural gas from an energy marketer, the price you pay for gas depends on the terms of your energy marketer contract, and is excluded from this rate change.

    Residential customers who buy their natural gas supplies from an energy marketer will see an overall increase in the cost of the services they purchase from Union Gas of about $2 a year in southern Ontario, and an increase of about $34 per year in northern, northwestern and eastern Ontario.

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

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  • What's Union Gas doing to help me manage my energy costs?

    Our natural gas storage facilities allow Union Gas to buy gas when it is less expensive and use it in the winter when market prices are typically higher. That helped to moderate the impact of higher gas prices this winter.

    Union Gas also offers an Equal Billing Plan, which spreads your gas costs evenly through the year so you won’t get bigger bills in the winter and smaller ones in the summer. Find out more at uniongas.com/ebp.

    And conservation is one of the best long-term ways to reduce your energy costs. Union Gas provides information and practical tools that give you the power to take control and efficiently manage your energy use at uniongas.com/energyefficiency.

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