TORONTO, ONTARIO--(CCNMatthews - March 26, 2007) - Enbridge Gas Distribution (TSX:ENB) (NYSE:ENB), a regulated utility, announced today that it has received approval from the Ontario Energy Board (OEB) for its interim 2007 rates and its quarterly natural gas commodity adjustment.
Effective April 1, 2007, the Gas Supply, Customer and Delivery Charges will increase as a result of higher natural gas prices and higher costs to transport and distribute natural gas. A higher Gas Cost Adjustment refund will also be in effect for customers who buy their gas from the utility.
For typical residential customers(1) who buy their gas supply from Enbridge Gas Distribution, the Gas Supply, Customer and Delivery Charge changes will result in an increase of about $58 annually. The Gas Cost Adjustment refund will amount to about $63 during the next nine months.
Typical residential customers who buy their gas supply from marketers will see an increase of about $16 annually due to the Customer and Delivery Charge changes. The Gas Supply Charge for these customers will depend on their contract with their marketer.
The impact of the charges will vary based on the amount of natural gas used.
"Even with these changes, natural gas remains the most economical choice for heating your home and water," said Glenn Beaumont, Vice President, Planning & Opportunity Development, Enbridge Gas Distribution. "In the last five years, natural gas has been on average about 41 per cent less expensive than electricity."(2)
Gas Supply Charge and Gas Cost Adjustment Refund
The OEB approved a Gas Supply Charge increase to 32.9 cents/m3 from 31.5 cents/m3.
The Gas Cost Adjustment refund will increase from 0.9 cents/m3 to 3.9 cents/m3 from April 1, 2007 to Dec. 31, 2007 for customers who buy gas from the utility. The Gas Cost Adjustment reflects the difference between the actual natural gas costs incurred by the utility and the amount collected from customers through the Gas Supply Charge.
Enbridge Gas Distribution does not make a profit on the cost of natural gas. Customers who purchase natural gas directly from Enbridge pay the same as our costs to purchase the natural gas.
The OEB also approved an increase in the Customer Charge from $11.25 to $11.88 per month. The Customer Charge helps cover costs for emergency services, meter reading and customer services which are incurred regardless of the volume of natural gas a customer uses.
The Delivery Charge, which includes variable costs such as transporting natural gas to Ontario and additional operating costs not recovered through the Customer Charge, will increase by about $8 annually due to higher transportation and operating costs.
About Enbridge Gas Distribution
As a utility regulated by the OEB, Enbridge Gas Distribution earns an approved rate of return on the capital it has invested in the distribution system. This is included in the distribution charges. Enbridge Gas Distribution does not earn a profit on the price of natural gas.
About 60 per cent of customers buy their natural gas from Enbridge Gas Distribution. About 40 per cent of customers buy the natural gas they use directly from natural gas marketers and the price they pay for their Gas Supply Charge is based on their contract with their marketers.
Enbridge Gas Distribution delivers natural gas to about 1.8 million customers in Ontario communities including Toronto, Ottawa, Barrie and Niagara Falls. Enbridge Gas Distribution is a leader in delivering energy efficiency programs. For more information visit www.enbridge.com/gas.
Please see the attached backgrounder for more information about Enbridge Gas Distribution prices: http://www.ccnmatthews.com/docs/326ENB.pdf
(1) A typical residential customer uses 3,064 cubic metres of natural gas a year for home and water heating.
(2) Natural gas and electricity prices based on rates in effect as of April 1, 2007. Electricity rates based on Toronto Hydro rates. Costs have been calculated for the equivalent energy consumed and include all service, delivery and energy charges. GST is not included.
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