Yes, rates are increasing for all customers. The details include:
- Changes in the market price of natural gas and transportation services, 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 the Union South zone, 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 the Union South zone, the net increase for gas supplies is about $55 a year. In the Union North West zone, there is a net annual increase of about $71 for gas supplies, and there is a net annual increase of about $53 in the Union 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 the Union South zone, the transportation cost is included in the "Gas used" line on your bill. In the North West zone, the net transportation cost increased by about $2 annually. In the North East zone, the net transportation cost decreased by about $20 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 were previously included in delivery costs but Union Gas removed the provincial cap-and-trade charges effective Oct.1, 2018.
For all residential customers in Ontario, there's a small increase between about seventy cents and one dollar and twenty-five cents a year in delivery costs; 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 increases in the Union North West and Union North East zones are between $0.09 and $0.18 a year depending where you live. There is no change for customers in the Union South zone.
The current rate change reflects an increase in the price we expect to pay to buy natural gas supplies from the market in the coming year. Union Gas buys natural gas supplies from the market and we pay other pipelines 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 on 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.
These customer rates will remain in effect from Jan. 1 through Mar. 31, 2019.
Because natural gas is a commodity, the market price will fluctuate with changes in the amount of readily available supply or in the level of demand for the product. Natural gas market prices have increased significantly over the last two months as demand has increased related to unseasonably cold weather across North America.
Different areas of the province are served by a different mix of natural gas transportation pipelines and gas supply sources, and as such, the cost for Union Gas to purchase gas supplies and the services to transport the supplies into our distribution system in Ontario from the market for our customers, varies 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 can vary by location, the costs our customers pay can also differ by location. This has resulted in a relatively higher bill impact in north western Ontario. It's important to note that the increase in the Union North West zone follows four successive decreases in 2018. Including this current increase, the total annual bill increase for a household in the Union North West zone will still be about $40 less than a year ago.
No, this rate change is part of an adjustment we make every three months, following Ontario Energy Board (OEB) approval, to reflect changes in the market price we expect to pay for natural gas supplies and transportation services. There are no changes Union Gas customers pay as a result of the planned merger between Union Gas and Enbridge Gas Distribution.
In September 2018, the Ontario Energy Board approved the amalgamation of Union Gas and Enbridge Gas Distribution into one utility effective Jan. 1, 2019. The legal name of the combined utility will be Enbridge Gas Inc. Union Gas will continue to operate as Union Gas and we will transition to the Enbridge name and brand over time. Our customers can continue to count on the same great level of service we've always provided and there will be no immediate change to the services you receive.
Equal billing payments 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. Periodically throughout the year, we review your equal billing account to determine if the payment is set at the right level. If it is not, we adjust it up or down based on the more current information, which includes your actual gas use and all rate changes. A final true up between what was paid and the actual cost occurs each August.
If you buy natural gas from an energy marketer, the price you pay for your 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 change ranging from a decrease of $18.24 to an increase of $0.69 or $3.64 a year depending on location.
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.
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.
In October 2018, the federal government confirmed that Ontario will be subject to a carbon-pollution pricing program under the Greenhouse Gas Pollution Pricing Act. Union Gas will bill, collect and remit a federal carbon charge from our customers for the natural gas they use (except for facilities that hold an exemption certificate issued by the federal government). This new charge will show as a separate line item on your bill beginning in April 2019. The federal carbon charge for the gas you use will be 3.91 cents per cubic meter. This charge is expected to increase annually in April. For the average Ontario household, it will add about $86 to your annual gas bill. Your total cost will depend on how much gas you use.
Union Gas is committed to improving energy efficiency through a range of products, services and incentive programs to help customers lower their energy use and save money. Learn more about Union Gas energy savings programs at uniongas.com/savemoney.