Yes. On July 1, Union Gas changed the rates our customers pay. Rate changes include:
- Increase in the gas commodity and gas price adjustment rates, and
- Small increase in the delivery rates that vary with consumption.
- An increase or decrease in the market price of natural gas, depending on location,
- Increases in the gas price adjustment, transportation price adjustment, storage and delivery rates, and
- A decrease in the transportation rate
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 buys 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.
These rates are in effect from July 1 through September 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.
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 is now included in the "Gas used" charge and therefore there is no longer 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.
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 changes in market prices, which are passed through to our customers without mark-up. In addition, there are adjustments for the difference between our forecast for natural gas and natural gas transportation market prices and actual costs, from prior periods.
The combined impact of these changes for business customers in southern Ontario is an increase of about $1,311 per year.
The combined impact of these changes for business customers in northeastern Ontario is about $1,689 a year and there is a decrease in northwestern Ontario of about $77 per year.
The southern, northeast and northwest areas of the province are each served by different natural gas supply basins and transportation pipelines. We buy these services from the market and pass the cost through to our customers. Because the market costs for these services can vary by location, the costs our customers pay can also differ by location.
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.
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.
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.
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. For other services purchased from Union Gas (natural gas transportation, storage and delivery), business customers will see an overall increase in the cost of the services they purchase from Union Gas of between $4.70 and $170 a year.
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.
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.
No, this rate adjustment is related to changes in the market price of natural gas supplies and is not related to the Ontario government's cap-and-trade program.
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.
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.