TORONTO, ONTARIO--(CCNMatthews - Dec. 22, 2004) - Enbridge Gas
Distribution, a regulated utility, announced today that it has received
approval from the Ontario Energy Board (Board) to adjust its prices
effective January 1, 2005. These new rates include an increase in the
Gas Supply Charge, a Gas Cost Adjustment refund, a decrease in the
Delivery Charge as well as a one-time Rate 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. In total, the changes will result in a $70 annual increase
for a typical residential customer(1) who buys natural gas from Enbridge
Gas Distribution, excluding the gas cost adjustment refund. The change
will result in a $6 annual decrease for a typical residential customer
who buys natural gas from a marketer.
Gas Supply Charge
The utility's Gas Supply Charge represents the actual cost of the
natural gas and 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 9 per cent.
The utility's new residential gas supply price will be 31.06 cents per
cubic metre. The current price is 28.57 cents per cubic metre.
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 that marketer.
Gas Cost Adjustment Refund
A gas cost adjustment refund of 1.28 cents per cubic metre will be in
place from January 1, 2005 to September 30, 2005. The refund is a result
of the difference between the actual natural gas costs during the past
six months and the amount collected from customers through the Gas
Supply Charge. For the typical residential customer, the refund will
amount to approximately $27.
Delivery Charge
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 decrease by
approximately $6 for the typical residential customer. This decrease is
due to lower operating costs and a reduction in the cost of transporting
natural gas from Western Canada.
As a regulated utility, Enbridge Gas Distribution earns an approved rate
of return on the capital it has invested in the distribution system.
One-time Rate Adjustment
Customers will also see a one-time rate adjustment refund on their
January bills. The adjustment will be about $14 for the typical
residential customer. The adjustment reflects a decrease in the delivery
charge for the period between October 1, 2004 and December 31, 2004 due
to lower operating costs and sharing of fiscal 2004 earnings achieved by
the Company that were above the Board-approved rate of return.
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.(2)
Managing Energy Costs
Enbridge Gas Distribution is committed to providing fair and reasonable
rates and to keeping its distribution costs as efficient as possible.
Gas supply prices are based on market prices, which the Company does not
control. Enbridge minimizes price volatility for customers through the
use of financial instruments and quarterly rate adjustments.
Enbridge Gas Distribution also offers the following programs to help
customers manage their energy costs:
- The Equal Billing Program to spread annual gas costs out over 11
months to help make it easier to manage monthly costs. More than half of
residential customers take advantage of the program;
- Energy efficiency programs to help customers reduce gas use thereby
reducing their costs; and,
- The Winter Warmth Fund which provides direct financial assistance on
natural gas bills for low-income households struggling to make all their
financial commitments.
More information about these programs is available at
Enbridge Gas Distribution delivers natural gas to about 1.7 million
customers in its franchise area. 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:
http://www2.ccnmatthews.com/database/fax/2000/1222enb.pdf
(1)A typical residential customer uses 3,064 cubic metres of natural gas
a year for home and water heating.
(2) Based on the annual bill for a typical residential customer who buys
their natural gas from the utility. Updated based on annualized rates
effective January 1, 2005.
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