TORONTO, ONTARIO--(CCNMatthews - Sept. 27, 2004) - Enbridge Gas Distribution, a regulated utility, announced today that it has received approval from the Ontario Energy Board to adjust its prices effective October 1, 2004.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 $9 annual decrease for a typical residential customer(1) who buys natural gas from Enbridge Gas Distribution and a $25 decrease for a customer who buys natural gas from a marketer.Gas Supply ChargeThe 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 does 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 1.8 per cent.The utility's new residential gas supply price will be 28.57 cents per cubic metre. The current price is 28.06 cents per cubic metre. For the typical residential customer this represents a Gas Supply Charge increase of $16 on the total annual bill.The Gas Supply Charge reflects what the Company expects to pay for natural gas supply for the next 12 months. This forecast is reviewed quarterly and, if necessary, adjusted up or down. 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.Customer ChargeThe Ontario Energy Board approved an increase in the Customer Charge with a corresponding reduction in the variable Delivery Charge. The Customer Charge will increase from $10 to $11.25 per month.The increase in the Customer Charge and decrease in the Delivery Charge will reflect a more accurate breakdown of charges. The Customer Charge comprises fixed costs, such as meters and the call centre, which are incurred regardless of the volume of natural gas a customer uses. The Delivery Charge includes variable costs such as transporting natural gas from Western Canada and other operating costs not recovered through the Customer Charge.This change does not increase the total amount of money that Enbridge Gas Distribution collects from its customer base.Delivery ChargeThe total annual Delivery Charge will decrease by approximately $40 for the typical residential customer. This includes the decrease due to the realignment of costs to the Customer Charge and a decrease in the unit delivery costs.Enbridge Gas Distribution previously had a Delivery Charge that varied by season. To help reduce customer confusion, Enbridge Gas Distribution will implement an annual Delivery Charge instead of the existing seasonal charges. The summer/winter seasonal rates will be blended into one annual set of rates.As a regulated utility, Enbridge Gas Distribution earns an approved rate of return, or profit, on the capital it has invested in the distribution system. This is included in the Delivery Charge and has not changed.Fair and reasonable rates"Enbridge does not make a profit on the price of natural gas. Neither Enbridge nor our customers are pleased when gas supply prices go up," said Arunas Pleckaitis, Vice President, Enbridge Gas Distribution. "We don't control the price of natural gas. However, we continue to work with the natural gas industry to help ensure a positive environment for continued investment that will bring natural gas from traditional and non-traditional sources to market to help meet growing demand while addressing price volatility."Natural gas continues to be the best choice for Ontario consumers. Over the past five years, natural gas has been on average about 43 per cent cheaper than electricity.(2)Enbridge Gas Distribution delivers 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.cdn-news.com/database/fax/2000/927enb.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 October 1, 2004.
For more information please contact:
Enbridge Gas Distribution
Lisa McCarney
Manager, Media and External Relations
(416) 495-5662
Email: lisa.mccarney@enbridge.com
Website: www.enbridge.com