Frequently Asked Questions about April 2017 Rates

The Ontario Energy Board (OEB) approved changes to Union Gas' rates effective Apr. 1, 2017. Please visit MyAccount business rates to view the rates specific to your area.

Are my rates changing in April?

Yes. On April 1, Union Gas increased the rates overall that we charge our customers. Rate changes include:

Rate M2

Rate 10

  • An increase in the gas price adjustment rate, and
  • Decreases in the gas commodity, delivery and delivery price adjustment rates

 

  • An increase or decrease in the market price of natural gas, depending on location,
  • Increases in the gas price adjustment, transportation and storage rates,
  • Decreases in the transportation price adjustment, delivery and delivery price adjustment rates

The new rates incorporate applicable temporary credits that don't 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. Storage and delivery rates are reviewed and approved by the OEB, which conducts an open review process with participation from consumer groups and Ontario municipalities.

How long will these rates remain in effect?

These rates are in effect from April 1 through June 30, 2017. Rates for natural gas used, transportation and storage services are adjusted once every three months (January, April, July, October) to reflect ongoing changes in market prices.

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

What makes up the charges on my 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 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. Also, in southern Ontario the cost of transportation to Ontario will now be combined included in the "Gas used" charge and therefore there will no longer be a separate Transportation to Union Gas line item on customer bills for southern Ontario customers.

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. For customers in southern Ontario, the transportation cost is now included in the "Gas used" line on your bill.

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 delivery rates from prior periods.

The Ontario government's new cap-and-trade program costs are also now included in delivery costs. Under the new legislation, Union Gas must buy emissions allowances for the natural gas used by applicable business customers and recovers this cost from consumers. Visit uniongas.com/capandtrade for more details.

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 when 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 increasing its rates?

Union Gas buys natural gas supplies from the market and we pay other pipeline companies to transport the gas into our distribution system in Ontario from where it's produced. We adjust the rates we charge our customers for these items quarterly to reflect changed in market prices, which are passed through to our customers without mark-up.

What’s the impact of this rate change on business customers in southern Ontario (Rate M2)?

The combined impact of these changes for business customers in southern Ontario is an increase of about $670 per year.

What’s the impact of this rate change on business customers in northeastern and northwestern Ontario (Rate 10 - North East and Rate 10 - North West)?

The combined impact of these changes for business customers in northeastern and northwestern rate zones is about $1,708 and $2,109 per year.

Why are the bill increases larger in northern Ontario than in southern Ontario?

Different areas of the province are served by different supply basins and transportation pipelines. We buy these services from the market and pass the costs though to our customers. As the market costs vary for these services varies by location, the costs can and do differ over time. This has resulted in a higher bill impact in northern Ontario than in southern Ontario.

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 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.

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.

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.

How does this rate change impact customers who buy natural gas from an energy marketer?

If natural gas is purchased from an energy marketer, the price paid for gas depends on the terms of the contract and is excluded from this rate change.

Why did Union Gas change customer rate zones in the north and east and how will that impact the rates customers pay?

North American natural gas markets are changing, with increasing natural gas production in areas closer to Ontario, and declining production from Western Canada.

As a result, Union Gas changed its rate zones to better reflect the mix of natural gas supply markets and transportation pipelines available to serve each area and the associated costs for these services. In this way, customer costs are better aligned with the natural gas supply and transportation services they use.

As of Jan. 1, 2017, customers in one of the four previous rate zones (Northern, Eastern, Western and Fort Frances) were divided into two new rate zones: North West (west of Kapuskasing, and between Sault Ste. Marie and Elliott Lake) and North East (from North Bay to Kapuskasing, Timmins, and from North Bay to Espanola). This change better reflects the mix of natural gas supply markets and transportation pipelines available to serve each area and customer costs are better aligned with the true cost of the natural gas supply and transportation services they use.

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 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.

What is cap and trade and how do I find out more information about it and how it impacts my Union Gas bill?

The Ontario government introduced the cap-and-trade program effective Jan.1, 2017 and it caps the amount of greenhouse gas (GHG) emissions that Ontario homes and businesses are allowed to emit, and lowers that limit over time. Under the legislation, Union Gas must buy allowances for the natural gas used by its applicable customers and recovers this costs on natural gas bills. Visit uniongas.com/capandtrade for more details. If you have questions or concerns about the program, please contact the Ministry of the Environment and Climate Change at 1-800-565-4923 or ontario.ca/capandtrade.

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.