Union Gas Receives Ontario Energy Board Approval for Rate Changes Effective October 1, 2018

enerline logoInformation for Union Gas North Customers

Union Gas recently received approval from the Ontario Energy Board (OEB) for rate changes effective Oct. 1, 2018. These changes were proposed to the OEB earlier this month as part of the Quarterly Rate Adjustment Mechanism (QRAM) and approved as filed (EB-2018-0253).

October 2018 QRAM

QRAM is the mechanism Union Gas uses to review and adjust our rates for changes in natural gas prices. This is done every three months to reflect ongoing changes in the market price of natural gas and to adjust for the difference between the forecasted price of natural gas and actual price from prior periods.

As a reminder, Union Gas applied to the OEB for a change in the rates our customers pay for natural gas effective Jul. 1, 2018 as part of the QRAM process. The OEB's decision was not going to be available in time for us to implement the changes for July 1 so these rate changes were deferred. Any resulting deferral impacts from the discontinued July QRAM are included as part of the Oct. 1, 2018 rate adjustment.

2015 Demand Side Management Deferrals

Earlier this year, Union Gas also received approval from the OEB to dispose of its 2015 Demand Side Management (DSM) deferral account balances (EB-2017-0323). Clearing these balances will result in a one-time delivery adjustment being applied to October 2018 bills for all customers who received contract rate delivery services in 2015. For more information on these deferrals see the July 26, 2018 edition of Enerline.

Cap and Trade

The Ontario government has cancelled its cap-and-trade regulation and has developed a plan to wind down the program. Union Gas has received direction from the OEB to remove the provincial cap-and-trade charges for natural gas used effective Oct.1, 2018. Union Gas was also instructed to request interim disposition of any projected net credit amount in the aggregate balance of the cap-and-trade related variance and deferral accounts as of Sept. 30, 2018.

Therefore, Union Gas is removing the provincial cap-and-trade charges previously included in the delivery line of applicable customers' bills effective Oct. 1, 2018. The October bill will also include an interim adjustment to true-up any costs and credits related to the cap-and-trade program from prior periods. Final disposition of cap-and-trade related variance and deferral accounts will occur following a review by the OEB.

The federal government is expected to implement a carbon pricing system in Ontario beginning on Jan. 1, 2019. It is anticipated that, as a natural gas distribution company, Union Gas will have an obligation to bill and collect these federal charges from all customers who have not registered and received exemption certificates under the proposed Output-Based Pricing System. Visit this site for federal government carbon pricing information. Union Gas will provide more information on the new program as it becomes available.

Delivery Rates

The following changes to bundled delivery rates reflect quarterly updates to gas costs in delivery rates (compressor fuel, unaccounted for gas, and carrying costs of gas in inventory) as well as the removal of the provincial cap-and-trade charges. This can be found on the "Delivery" line of the invoice.

 

Approved Delivery Rate Change   (cents/m3)

Customer-Related Cap-and-Trade Change (cents/m3)*

Facility-Related Cap-and-Trade Change (cents/m3)

Total Approved Average Delivery Rate Change (cents/m3)

Rate 20 0.0040 (3.3181) (0.0240) (3.3381)
Rate 25 0.0000 (3.3181) (0.0240) (3.3421)
Rate 100 0.0001 (3.3181) (0.0240) (3.3420)

* if applicable

For contract rate classes, Union Gas will dispose of the cap-and-trade deferral and variance account balances as a one-time adjustment with the October 2018 bills (received in November 2018). The one-time adjustment disposition is consistent with how Union Gas disposes of non-commodity deferral accounts to contract customers. A customer's one-time adjustment will be calculated based on their actual volume of gas consumed during the years in which the costs and credits were incurred.

Rate 01 and Rate 10 Customers

Rate 01 and Rate 10 will also be changing effective Oct. 1, 2018. Customers can find current information on these rates on our website or in the notice included with their October bill.

Balancing Transaction Fees

Balancing transaction fees will be updated effective Oct. 1, 2018. For current rates, please see the Balancing Transaction Fee Schedule.

Full details of this application (EB-2018-0253) can be found on the Union Gas website.

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