Union Gas Files an Application for 2016 Demand Side Management Deferral Account Clearing

enerline logoInformation for Union Gas South Customers

On Nov. 30, 2018, Union Gas applied to the Ontario Energy Board (OEB) to dispose of its 2016 Demand Side Management (DSM) deferral and variance account balances (EB-2018-0300).

The proposed adjustment includes the actual cost of delivering the 2016 DSM programs (versus the forecast cost built into 2016 rates), revenue recovery attributable to consumption reduction due to DSM conservation measures (LRAM), as well as incentives Union Gas earns when meeting OEB-approved DSM targets. The proposed adjustment does not include any gas cost-related deferrals that are managed under the QRAM process or other non-commodity deferral balances.

Union Gas has proposed to recover approximately $2.7 million from south contract customers related to 2016 balances in the DSM deferral and variance accounts.

Once the OEB completes its review and provides their final decision on this application, clearance of these balances will result in an amount being applied to the bills of customers who received contract rate delivery services in 2016. Union Gas has proposed the disposition of the DSM deferral and variance account balances be implemented on Apr. 1, 2019 to align with other rate changes. This is dependent on the timing of the OEB's decision. Further information will be provided when a decision is received from the Board.

How to Estimate the 2016 DSM Delivery Adjustment

To estimate your 2016 DSM delivery adjustment, multiply the proposed rate adjustment that applies to your service (shown below) by the actual volume of natural gas your business consumed in 2016.

Union Gas South Customers

Rate Class

Proposed Unit Rate for 2016 DSM Delivery Adjustment
(cents/m3)

Rate M4

0.2470

Rate M5

0.3507

Rate M7

0.2239

Rate M9

0.0000

Rate M10

0.0000

Rate T1

(0.0393)

Rate T2

(0.0003)

Rate T3

0.0000

For more information, find the full application (EB-2018-0300) posted on our website.

2017 Demand Side Management Deferral and Variance Accounts

The OEB audit process for the 2017 DSM programs is in its initial stages and as such we don't know the timing of its completion. However, once completed, Union Gas will apply to the OEB to dispose of the 2017 DSM Deferral and Variance Account balances. Further information will be provided when that application is filed.

Enbridge Gas Distribution and Union Gas amalgamate into one single utility effective Jan. 1, 2019

On Oct. 15, 2018, we announced that Enbridge Gas Distribution and Union Gas would amalgamate into one single utility effective Jan. 1, 2019. It has since been determined that the legal name of the newly combined utility will be Enbridge Gas Inc. Starting Jan. 1, 2019, the new legal name will be reflected on customer invoices and any new contracts. Existing contracts in the Union Gas Limited name will remain valid.

There will be no immediate change to our existing services and our customers can continue to count on the same great level of safe and reliable service we've always provided. Both utilities have been leaders in delivering exceptional energy value for consumers through an unrelenting focus on safety, operational efficiency and reliability of service. Combining and leveraging our strengths strongly positions us to continue to deliver what's important to our 3.5 million customers - the safe and reliable delivery of the affordable energy they use every day. We will keep you apprised of future changes and if you are interested to know more about Enbridge, visit www.enbridge.com.

Federal Carbon Pricing Program Update

On Oct. 23, 2018, the federal government confirmed that Ontario will be subject to the federal carbon pricing program, which is comprised of two components:

  1. Beginning Jan. 1, 2019: An output-based pricing system ("OBPS") for industrial facilities producing greenhouse gas ("GHG") emissions above a certain threshold; and
  2. Beginning Apr. 1, 2019: A federal carbon charge applied to fossil fuels (including natural gas) used within a jurisdiction subject to the federal carbon pricing program.

Federal Carbon Charge

As part of the federal carbon pricing program, there are costs associated with GHG emissions from natural gas used in homes and businesses. The federal carbon charge will assign a value to each tonne of GHG emissions, measured in carbon dioxide equivalent ("tCO2e"), beginning at $20/tCO2e (3.91 cents/m3 for marketable natural gas) on Apr. 1, 2019 and increasing annually in April by $10 to $50/tCO2e (9.79 cents/m3 for marketable natural gas) in 2022.

Note: Partial relief of the federal carbon charge has been proposed to apply to natural gas and propane that is exclusively used in the operation of certain commercial greenhouses. More details will be provided as they become available.

OBPS

Industrial facilities with total emissions above the threshold of 50,000 tCO2e per year (equivalent to about 26.7 million m3 of natural gas usage per year) and undertaking a primary activity which has an output-based standard specified will be required to register as a mandatory participant.

Facilities with total emissions above 10,000 tCO2e per year (equivalent to about 5.4 million m3 of natural gas usage per year) may be able to voluntarily opt-in. Additional details regarding voluntary participation are expected to be released in the near future by the federal government.

Under the OBPS, registered facilities will have a facility-specific annual emission limit which is based on the relevant output-based standard for the product it produces and its level of production. A facility registered under the OBPS and with the Canada Revenue Agency ("CRA") will be subject to a carbon price on the portion of its emissions that exceed its annual output based emission limit.

Customers registered under OBPS and with the CRA will be exempt from the federal carbon charge. Union Gas' facility carbon charge will be applicable to all customers, as these charges are costs that Union Gas will incur to deliver gas to its customers. Union Gas will require businesses to provide confirmation of the facilities that are registered under OBPS and with the CRA in order to have the federal carbon charge excluded from their bill.

Registration

On Oct. 31, 2018 the Government of Canada released further registration details and requirements. The Environment and Climate Change Canada registration process opened on Nov. 1, 2018. Details of the CRA registration process are not known at this time.

Learn more about the federal carbon pricing program from the Government of Canada.

If you have any questions about this edition of Enerline, please contact your account manager.