Frequently Asked Questions about the April 2018 Union Gas Rates

The Ontario Energy Board (OEB) approved changes to Union Gas’ rates effective Apr.1, 2018. These new rates remain in effect through June. 30, 2018, and incorporate applicable temporary charges and credits that don’t affect the annual impacts on your bill.

Note that temporary charges and credits are excluded from the annual impacts table on the back page of your rate notice and explains what may appear as discrepancies between the information in the paragraphs and the tables.

Please go to Rates to view the rates specific to your area.

Are my rates changing?

Yes, rates are decreasing for all customers. The details include:

  • A decrease in the market price of natural gas and delivery rates,
  • A decrease in transportation and storage rates depending where you live, and
  • Price adjustments from prior periods.

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 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. Also, in southern Ontario, the cost of transportation to Ontario is included in the "Gas used" charge and therefore there is no longer a separate "Transportation to Union Gas" line item on customer bills.

For customers in southern Ontario, the net decrease for gas supplies is about $39 a year. In the North West zone, the net annual decrease is about $44 for gas supplies, and there is a net annual decrease of about $58 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 included in the "Gas used" line on your bill. In the North West rate zone, the net transportation cost decreased by almost $2 annually. In the North East rate zone, the net transportation cost decreased by nearly $7 annually.

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 cap-and-trade program costs are also included in delivery costs. Visit uniongas.com/capandtrade for more details.

For all customers in Ontario, there's a minor decrease of less than $1 a year; depending where you live, to safely and reliably deliver natural gas to your home or business.

Storage costs - Storage costs include information on the "Storage" and "Storage price adjustment" lines on your bill and reflect the cost of storing natural gas.

Storage cost decreases in northern and eastern Ontario range between $1.48 and $13.47 a year depending where you live. There is no change for customers in southern Ontario.

Why is Union Gas decreasing the rates customers pay for natural gas?

The largest contribution to the current change is a decrease in the price we expect to pay for natural gas supplies in the coming year. Union Gas buys natural gas supplies from the market and we pay other pipeline companies to transport the gas supply from where it is produced into our distribution system in Ontario. 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 the actual costs from prior periods.

Why do customer rates differ by location?

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 vary by location, the costs our customers pay can also differ by location.

How long will these rates remain in effect?

These rates will remain in effect from Apr. 1 through June 30, 2018.

Why are natural gas prices decreasing?

Because natural gas is a commodity, the market price can fluctuate with changes in the amount of readily available supply or in the level of demand for the product. We adjust customer prices for market fluctuations every three months to reflect changes in the market price. Over the long term, the price our customers pay has declined and is lower today than 10 years ago.

Is this rate change related to the Ontario government’s cap-and-trade program?

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.

How will this rate change impact Equal Billing Plan customers?

We are currently in the process of reviewing our customers' monthly equal billing plan installments. This may result in an adjustment to some customer's payments starting in April.

Equal Billing Plan (EBP) payment amounts are set each year in September based on a forecast of the amount of natural gas you would use in a year, and where natural gas prices are expected to be during the year. We check periodically throughout the year to see if the actual amount of gas you used and the cost are on track with our estimate. If there is a significant change, we will adjust your monthly installment up or down mid-year. This prevents a large adjustment in August at the end of the EBP term.

How does this rate change impact customers who buy natural gas from an energy marketer?

If you buy natural gas from an energy marketer, the price you pay for your gas supplies 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), residential customers will see an overall decrease between $0.51 and $21.15 a year, depending on location.

Why does Union Gas make adjustments for the cost of natural gas and gas transportation services from prior periods?

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 (Jan. 1, April 1, July 1 and Oct. 1) to either refund or collect the difference so that you only pay the actual costs for these services and nothing more.

I noticed the same line twice on my bill. Am I being billed twice?

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.

What is cap and trade and how do I find out more information about it and how it impacts my Union Gas bill?

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 carbon units (also known as emission allowances or credits) for the natural gas used by its customers and recovers this cost on natural gas bills. Visit cap and trade section 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.

What is Union Gas doing to help me manage my energy costs?

Union Gas provides a range of tools and education to give you the power to take control and manage your energy use. For more information visit uniongas.com/savemoney.