Yes, rates are increasing for residential customers in Ontario. The details include:
- An increase in the natural gas commodity rate,
- An increase in delivery rates, including the introduction of the Ontario government's cap-and-trade program, and
- Changes in transportation and storage rates, depending on where you live.
The biggest impact on your rates is due to the introduction of the Ontario government's cap-and trade-program, which adds about $74 dollars to the average customer's gas bill.
Gas costs - Gas commodity costs include information on the "Gas used" and "Gas price adjustment" lines on your bill. Also, in southern Ontario, the cost of transportation to Ontario will now be included in the "Gas used" charge and therefore there will no longer be a separate "Transportation to Union Gas" line item on customer bills. The net natural gas rate reflects what we expect to pay for gas supplies and transportation services during the next year as well as any adjustments to make up the difference between our forecast cost for gas and actual costs from prior periods.
For customers in southern Ontario, the net increase for gas supplies and transportation is about $36 a year. In the North West zone, the net annual increase for gas supplies is about $9, and about $94 in the North East zone.
Transportation costs - Transportation costs include all information on the "Transportation to Union Gas" and "Transportation price adjustment" lines on your bill and reflect the cost of transporting natural gas to Ontario from its North American sources.
Transportation costs vary depending on where you live due to changing fuel prices, pipeline tolls and available capacity on pipelines serving different parts of Ontario.
For customers in southern Ontario, the transportation cost is now combined included in the "Gas used" line on your bill. In the North West, the net transportation cost increased about $11 to $44 annually, depending where you live. In the North East rate zone, the net annual transportation cost decreased by about $71 to $99 dollars, depending where you live.
Delivery costs - Delivery costs include information on the "Delivery" and "Delivery price adjustment" lines on your bill and reflect the cost of delivering natural gas to your home or business through our safe and reliable distribution system. The Ontario government's new cap-and-trade program costs are also included in delivery costs.
For all customers in Ontario, there's an increase of about $80 to $86 a year, depending where you live, to safely and reliably deliver natural gas to customers. This includes an increase of about 3.3 cents per cubic metre of gas used for the Ontario government's new cap-and-trade program. Visit uniongas.com/capandtrade for more details.
This rate change is mainly driven by three factors: an increase in delivery rates - mainly due to the Ontario government's cap-and-trade legislation - an increase in the gas supply rate plus changes in the storage and transportation rates.
The combined impact of these changes is an overall increase of about $122 a year in southern Ontario and between $56 and $163 a year in northwestern and northeastern Ontario rate zones.
Delivery rates remain in effect for all of 2017. Rates for natural gas, transportation and storage services are adjusted every three months (January, April, July, October) to reflect ongoing changes in market prices.
Union Gas will not be adjusting customer’s equal billing amounts in January, as unusually warm weather across much of Ontario over the past four months resulted in customers using less natural gas than forecast, largely offsetting this rate increase. We will continue to review equal billing accounts and may adjust them should this change.
The rates we charge customers for natural gas and gas transportation services is based on a forecast of the prices we expect to pay to buy these items from the market. The actual market costs can differ from our forecasts and adjustments are made quarterly (January 1st, April 1st, July 1st and October 1st) to either collect or refund the difference so that you only pay the actual costs for these services and nothing more.
Different areas of the province are served by a different mix of natural gas transportation pipelines and gas supply sources. This means the cost for Union Gas to purchase gas supplies and the service to transport the supplies into our distribution system in Ontario varies by location.
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 is changing its rates 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 currently in one of the four previous rate zones (Northern, Eastern, Western and Fort Frances) will be divided geographically 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 ensures that customer costs are better aligned with the true cost of the natural gas and transportation services they use.
Overall, this results in a net reduction in rates. However, impacts vary by where customers are located and range from a decrease of $50, to an increase of $61 for a typical residential customer.
This is because a portion of the gas supply is being purchased in southwestern Ontario at an all-in cost that includes transportation to Ontario.
The relatively larger bill increase for customers in Northern Ontario moving into the new North East rate zone relates to changes in what we expect to pay for natural gas supplies, storage and transportation services for this area.
Overall the introduction of new rate zones results in a net reduction in rates, however impacts vary by where customers are located and means an increase for a typical Northern Ontario customer moving into the new North East zone.
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 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.
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. Natural gas consumption for the period prior to a rate change is billed at the old rate and gas consumption after a rate change is billed at the new rate. The number of days at each rate depends on the monthly billing cycle of your account.