TORONTO, ONTARIO--(CCNMatthews - Feb. 23, 2006) - Warmer than normal weather in January 2006 meant that residential customers used less natural gas to heat their homes than anticipated. In January, it was between 22 per cent and 30 per cent warmer than expected in the areas that Enbridge Gas Distribution serves. As a result, a typical residential customer(1) who buys their natural gas from Enbridge Gas Distribution used about 120 cubic metres less natural gas in January than expected and saved approximately $66 in heating costs for the month.
Weather has an impact on natural gas costs in two ways. Locally, the temperature outside determines how hard furnaces work to keep homes at the desired temperature inside. Milder than normal weather means that furnaces don't have to work as hard to keep homes warm. That results in less natural gas use and lower costs.
Weather also impacts North American natural gas prices. Enbridge Gas Distribution's prices are based on North American natural gas prices.
"Warmer than expected weather in key Canadian and United States heating regions has resulted in a decline in North American gas prices since the historical highs in fall of 2005," said Lino Luison, Vice President, Enbridge Gas Distribution. "Natural gas market prices respond to supply and demand. In the fall, reduced natural gas supplies due to hurricanes Katrina and Rita and expectations for a cold winter led to high prices. Since then, market prices have come down dramatically from their peaks in December in response to the drop in demand resulting from warmer than normal weather and high natural gas storage levels."
As a result of the recent decrease in North American natural gas prices, Enbridge Gas Distribution will apply to the Ontario Energy Board for a decrease in rates effective April 1, 2006. Enbridge Gas Distribution's anticipates the new gas supply rates will be similar to its prices in October 2005. Enbridge reviews and adjusts its prices every three months to reflect changes in the North American market. Enbridge does not make a profit on the price of the natural gas it sells to customers. If Enbridge's forecast gas supply prices are under or over its actual costs, Enbridge collects or refunds the difference to customers.
Enbridge Gas Distribution delivers natural gas to about 1.8 million customers in Ontario communities including Toronto, Ottawa, Barrie and Niagara Falls. Of those customers, about 60 per cent buy their gas supply from the utility. About 40 per cent of Enbridge's customers buy their gas supply directly from marketers.
(1) A typical residential customer uses 3,064 cubic metres of natural gas a year for home and water heating. Savings are based on the annual bill for a typical residential customer who buys their natural gas from the utility and are based on rates effective January 1, 2006. The savings for a customer who buys their gas supply from a marketer would depend on their contract rate.
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