Union Gas and Enbridge Gas Distribution have applied to the Ontario Energy Board (OEB) for approval to amalgamate the two utilities into a single entity and an associated rate setting framework application. The OEB will undertake a public review of the applications and as part of that process we are providing utility customers and other stakeholders with information about the OEB's regulatory reviews and how they can participate.
There is no change to your gas bill or current rates as a result of the application to merge Union Gas and Enbridge Gas Distribution and the associated rate setting framework. If the OEB approves the merger, customers will benefit from predictable rates that are less than they otherwise would be in the absence of a merger and our continued outstanding quality of service and operational excellence.
Both utilities have been operating under various forms of regulation that encourage efficiency for over 15 years, which has resulted in significant productivity benefits for customers and shareholders. Combining the two utilities into one offers the next best opportunity to achieve additional efficiencies that would not be possible as separate entities. That's why we have applied to the Ontario Energy Board for approval to amalgamate the two utilities into a single entity using an established regulatory framework for Mergers, Acquisitions, Amalgamations and Divestitures.
The regulatory framework proposed for the amalgamation provides for predictable distribution over a 10-year period beginning in 2019, changing each year at about the rate of inflation. During the 10-year period, the utilities will explore potential savings than could be generated by optimizing systems and the workforce, and applying best practices from each utility. At the end of the 10-year term, any accrued efficiencies then serve to reduce customer delivery rates when they are re-set.
Union Gas and Enbridge Gas Distribution are committed to maintaining a high standard of operational excellence. An integral component of the regulatory framework is ongoing monitoring of performance against service quality indicators for customer service, operations, system reliability and safety.
We have not discussed or determined the brand of the integrated utility. This work will be completed following and subject to an acceptable regulatory approval.
A decision from the OEB on our application to amalgamate the two utilities and the associated rate setting framework could occur around the third quarter of 2018, for implementation beginning January 2019. The amalgamation framework covers a 10-year period from 2019 to 2028.
We understand that there are questions about what this means in terms of office locations, workforce changes and more. We don't have answers to all these questions yet. The first step is the regulatory filing, which has identified areas of potential opportunity that are worth further detailed investigation. Subject to and following an acceptable regulatory approval of the long-term framework, a Utility Integration Team will begin a detailed exploration of potential opportunities and determine an optimal approach to achieving efficiencies, while continuing our outstanding quality of service and operational excellence.
Union Gas and Enbridge Gas Distribution are strongly aligned in their charitable giving practices and we will continue to invest in all the communities in which we operate, including a strong and continued focus on United Way.
While the two utilities have submitted a joint application to the Ontario Energy Board for approval to integrate, no formal regulatory approval has been received. For now, Union Gas and Enbridge Gas Distribution are continuing to operate independently and there is no change to current contractual arrangements.