TORONTO, ONTARIO--(CCNMatthews - June 23, 2005) - Enbridge Gas Distribution, a regulated utility, announced today that it has received approval from the Ontario Energy Board (Board) to adjust its prices effective July 1, 2005. The changes include increases in the Gas Supply Charge and the Delivery Charge and a new Gas Cost Adjustment refund. As of July 1, 2005 residential customers who buy the natural gas they use from the utility will pay 26.99 cents per cubic metre for the commodity, based on the combined effect of the Gas Supply Charge and the Gas Cost Adjustment refund.
The impact of the changes will vary based on the amount of gas used and whether customers buy their natural gas from the utility or a natural gas marketer. The changes will result in a $108 annual increase for a typical residential customer(a) who buys natural gas from Enbridge Gas Distribution, excluding the Gas Cost Adjustment refund. The change will result in a $7 annual increase for a typical residential customer who buys natural gas from a marketer.
"Our April decrease reflected a short-term dip in natural gas price forecasts," said Lino Luison, Vice President, Enbridge Gas Distribution. "Prices are now back to what we had seen earlier this year."
"While we don't control the cost of natural gas, we do try to minimize volatility for customers through quarterly adjustments and our gas purchasing practices," added Luison. "We also proactively encourage the continued investment needed to bring new gas supplies to market to help reduce price volatility."
Gas Supply Charge
The utility's Gas Supply Charge is passed on to customers without mark-up. Customers pay the same price that Enbridge Gas Distribution pays for the natural gas supply on the competitive market. As a result of an increase in market prices, the Gas Supply Charge will increase by approximately 12 per cent.
The utility's new residential Gas Supply Charge will be 31.10 cents per cubic metre. In April, the Gas Supply Charge decreased to 27.80 cents per cubic metre from 31.06 cents effective January 1, 2005.
The Gas Supply Charge is based on a forecast of what the Company expects to pay for natural gas supply for the next 12 months. This forecast is reviewed quarterly and, if necessary, adjusted. If there is a difference between the forecast prices charged to customers and the actual amount paid by the Company, the difference is collected from or reimbursed to customers.
Customers who buy their natural gas from a marketer will continue to pay the price specified in their contract with their marketer.
Gas Cost Adjustment Refund
A new Gas Cost Adjustment refund of 4.10 cents per cubic metre will be in place from July 1, 2005 to December 31, 2005. This replaces the Gas Cost Adjustment refund of 4.51 cents per cubic metre that was in effect from April 1, 2005 to September 30, 2005. The refund is a result of the difference between the actual natural gas costs and the amount collected from customers through the Gas Supply Charge. For the typical residential customer who buys their natural gas from the utility, the refund will amount to approximately $46.
The total annual Delivery Charge, which includes the costs of transporting natural gas from western Canada and delivering it through the distribution network to customers' homes, will increase by approximately $7 for a typical residential customer. This increase is due primarily to commodity-related costs. These include the cost of storing natural gas and ensuring that there is enough gas in the distribution system to meet demand at all times.
As a regulated utility, Enbridge Gas Distribution earns an approved rate of return on the capital it has invested in the distribution system. This is included in the Delivery Charge.
Natural gas continues to be the best choice for Ontario consumers. Over the past five years, natural gas has been on average about 40 per cent less expensive than electricity.(b)
Enbridge Gas Distribution delivers natural gas to about 1.7 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 the utility's customers buy their gas supply directly from marketers.
Please see the attached backgrounder for more information about Enbridge Gas Distribution prices.
(a) A typical residential customer uses 3,064 cubic metres of natural gas a year for home and water heating.
(b) Based on the annual bill for a typical residential customer who buys their natural gas from the utility. Updated based on annualized rates effective July 1, 2005.
For more information please contact:
Enbridge Gas Distribution
Manager, Media and External Relations