Frequently Asked Questions about the October 2014 Union Gas Rates

Union Gas wants you to understand natural gas pricing and why natural gas is 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 take effect, ensuring that the rates we pass onto you are fair and reasonable.

The OEB has approved a change to the rates you pay for natural gas supplies and gas transportation services on an interim basis starting Oct. 1, 2014.

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

  • Are my rates changing?

    Yes, rates are decreasing for all customers who buy their natural gas from Union Gas. The details include:

    • A decrease in the price of natural gas supplies, and
    • Adjustments to make up the difference between our forecast cost for natural gas and gas transportation services and actual costs from prior periods.

    For residential customers in southern Ontario, this means an average decrease of about $80 a year, or about nine per cent, on their natural gas bill.

    Residential customers in northern and eastern Ontario will see an average decrease of about $50 a year, or about five per cent, on their natural gas bill.

    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 for gas and actual costs from prior periods.

    These rate adjustments reflect a decrease in the market prices Union Gas expects to pay for natural gas in the next year and adjustments from prior periods. The proposed rate decrease for gas supplies is the same for customers in southern, northern and eastern Ontario.

    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.

    The differences in the costs to buy natural gas transportation services to bring gas into different areas results in a smaller overall increase for customers in northern and eastern Ontario.

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  • Why is Union Gas changing its rates?

    Union Gas buys natural gas and gas transportation services from the market and passes these costs through to you without mark-up. These rate changes reflect a decrease in the market price we expect to pay for gas over the next 12 months. There are also adjustments to make up the difference between our forecast for gas and gas transportation services and the actual costs from prior periods.

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  • How long will these rates remain in effect?

    These rates will remain in effect from Oct. 1 to Dec. 31, 2014.

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  • Why is the price of gas decreasing?

    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 last winter resulted in higher natural gas prices which have since declined. 

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  • Why do you make price adjustments from prior periods?

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

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  • Why is the proposed reduction larger for customers in southern Ontario than in northern or eastern Ontario?

    The proposed rate decrease for natural gas supplies is the same for customers in southern, northern and eastern Ontario. However, there are differences in the costs to buy transportation services to bring gas into these different areas. In northern and eastern Ontario, this resulted in a smaller overall decrease.

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  • How does the cost of natural gas compare to other energy sources?

    Natural gas is by far the most affordable home energy choice. Heating your home and water with gas saves you between $1,600 and $2,000 every year compared to using electricity, oil or propane. And that low price is the same, 24/7 – there’s no penalty for cooking food or drying laundry during the weekday.

    Although natural gas prices increased last winter due to the extreme cold, this is not expected to continue in the long term. Access to new, plentiful sources of natural gas here in North America means natural gas will continue to provide the best value for your energy dollar for years to come.

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  • What influences natural gas consumption?

    Weather – Weather's the biggest factor affecting natural gas use. 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 about 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 an 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 – including this rate reduction.

    In addition, we review your EBP account throughout the year to determine if your rate’s set at the correct level and, if it’s not, we’ll adjust it up or down based on current information. This can include changes in the amount of gas you use related to weather or 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 buy my gas from an energy marketer. How will 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, and is excluded from this rate change. Residential customers who purchase their natural gas supplies from an energy marketer will see an overall decrease in the cost of services they purchase from Union Gas of about $1 a year in southern Ontario, and an increase of about $15 per year in northern and eastern Ontario.

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

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