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Frequently Asked Questions about the July 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 Ontario Energy Board (OEB) approved a temporary change in the rates Union Gas charges customers for natural gas delivery services starting July 1 until Dec. 1, 2014. In addition, the OEB deferred implementation of the July 2014 quarterly rate change while it reviews the OEB rate adjustment process. 

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

  • Are my rates changing?

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

    • A $15.5 million credit to customers to share a portion of the company’s 2012 earnings, and
    • A $13.3 million charge to make up for costs incurred in 2012 which were not recovered from customers in the 2012 rates.

    For customers in northern and eastern Ontario, this amounts to an average monthly decrease of about $2.40, or $14 over the six-month period from July until December 2014.

    For residential customers in southern Ontario, this amounts to an average increase of about $0.50 a month, or about $3 over a six-month period.

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  • Why are my rates changing in July?

    Union Gas operates under a five-year incentive regulation framework that was approved by the OEB in 2012. Through the framework, 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 rates. These changes were approved by the OEB for implementation on July 1, 2014.

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  • What is the incentive regulation?

    The incentive regulation establishes natural gas distribution rates for a period of up to five years and uses a formula to determine the distribution rates utilities will charge in each year of the term. This OEB-approved formula is benefiting both customers and shareholders. In fact, customers pay about the same for delivery services today as they did five years ago – about $1 a day.

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  • Why are the rate changes being made now for what 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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  • Why is there a rate decrease in the north and an increase in the south?

    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 increased.

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

    Customers in northern and eastern Ontario who buy their natural gas supplies from an energy marketer will see an average cost decrease in the cost of the services they purchase from Union Gas of about $2.40 a month, or $14 over a six-month period, while residential customers in southern Ontario will see an average monthly increase of about $0.27, or $1.60 over a six-month period.

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  • Why did the OEB delay the July quarterly rate change?

    The OEB is reviewing the quarterly rate adjustment process and, for that reason, has deferred implementation of the July rate change for Union Gas, Enbridge and NRG.

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  • Does that mean the rates I'm paying for natural gas supplies won't change in July?

    Yes, the price you're paying for natural gas supplies and transportation services, which were adjusted in April 2014, will remain in place until the OEB completes its review.

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

    Natural gas remains the most economical source of energy for your home and costs significantly less than electricity, propane or oil. In fact, you’re saving between $1,400 and $2,000 each year by using natural gas to heat your home and water compared to these other fuels, and long-term forecasts suggest that natural gas will continue to be the most economical source of energy for homes and business.

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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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