Frequently Asked Questions about July 2016 Rates

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.

The OEB approved changes to Union Gas’ rates effective July 1, 2016. These new rates remain in effect through September 30, 2016.

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

Are my rates changing in July?

Yes. On July 1, 2016 Union Gas is changing the rates we charge our customers for natural gas supplies, transportation and delivery services. Rate changes for our business customers include:

Rate M2  Rate 10
  • Increases in the gas commodity, transportation, delivery and delivery price adjustment rates
  • A decrease in the gas price adjustment rate
  • Increases in the gas commodity, transportation price adjustment, delivery and delivery price adjustment rates
  • A decrease in the gas price adjustment rate

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. Storage and delivery rates are reviewed and approved by the Ontario Energy Board which conducts an open review process with participation from consumer groups and Ontario municipalities.

These rates are in effect from July 1 through September 30, 2016. Please visit MyAccount business rates to view the rates specific to your area.

What makes up the charges on my bill?

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 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.

Why is Union Gas changing its rates?

This rate change is mainly driven by increases in the prices we expect to pay to buy and deliver natural gas to your business during the next year.

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.

These changes also reflect a change in the cost to safely deliver natural gas to customers through our distribution system. Delivery rates are reviewed and approved by the Ontario Energy Board which conducts an open review process with participation from consumer groups and Ontario municipalities.

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 commodity, transportation, delivery and delivery price adjustment rates, and a decrease to the gas price adjustment rate, as of July 1, 2016.

The total annual bill increase will be $813.04 for a typical Rate M2 customer in southern Ontario using 73,000 m3 of natural gas a year.

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

The Ontario Energy Board approved an increase to Union Gas’ gas commodity, transportation price adjustment, delivery and delivery price adjustment rates, and a decrease to the gas price adjustment rate, as of July 1, 2016.

The total annual bill increase will be $686.77 for a typical Rate 310 customer in northern Ontario using 93,000 m3 of natural gas a year.

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

The Ontario Energy Board approved an increase to Union Gas’ gas commodity, transportation price adjustment, delivery and delivery price adjustment rates, and a decrease to the gas price adjustment rate, as of July 1, 2016.

The total annual bill increase will be $689.95 for a typical Rate 610 customer in eastern Ontario using 93,000 m3 of natural gas a year.

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

The Ontario Energy Board approved an increase to Union Gas’ gas commodity, transportation price adjustment, delivery and delivery price adjustment rates, and a decrease to the gas price adjustment rate, as of July 1, 2016.

The total annual bill increase will be $683.05 for a typical Rate 110 customer in northwestern Ontario using 93,000 m3 of natural gas a year.

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

The Ontario Energy Board approved an increase to Union Gas’ gas commodity, transportation price adjustment, delivery and delivery price adjustment rates, and a decrease to the gas price adjustment rate, as of July 1, 2016.

The total annual bill increase will be $680.73 for a typical Rate 210 customer in the Fort Frances area using 93,000 m3 of natural gas a year.

Why is the price of natural gas increasing?

Natural gas, like other commodities, is publicly traded and as a result the market price can vary in response to the amount of supply and demand for the product across North America. Natural gas is abundant, due in large part to the increasing supply of natural gas in areas close to Ontario and as a result, the price our customers pay has steadily declined and is lower today than it was 10 years ago. Although weather-related price fluctuations can happen, long-term forecasts indicate that natural gas will continue to be most economical source of energy for homes and businesses.

Why is the cost of natural gas transportation increasing?

The rates we charge customers for transportation are based on what we expect to pay companies like TransCanada Pipelines to transport natural gas from where it is purchased, such as western Canada, to our distribution network in Ontario. This rate change reflects an increase in what Union Gas expects to pay for transportation services. There are also adjustments for the difference between what we expected to pay for transportation services in the prior period and the actual costs of these items. We pass this cost through to our customers without mark-up.

Why are delivery rates changing?

These rates, recently approved by the Ontario Energy Board, will recover the costs related to safely and reliably delivering natural gas to your business in 2016. We work hard to keep our delivery rates low and it’s important to note that customers pay about the same for these services as five years ago.

Why do costs differ between northern, eastern and southern Ontario?

The costs to serve different geographic areas vary. Natural gas for northern and eastern Ontario comes from producers in Alberta and travels into Ontario through a single transmission 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 gas transportation services for these different areas can differ.

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, as well as, differences between forecast and actual costs for prior periods. 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 markup, 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.

How long will these rates remain in effect?

These new rates will remain in effect for three months - from July 1 through September 30, 2016.

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.

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.

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 markup.

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.

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.

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, fuel oil or propane. 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.

What is Union Gas doing to help me manage my energy costs?

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.

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 to learn more.