Union Gas Applies for Rate Reduction to Reflect Lower Natural Gas Prices
CHATHAM, Ontario – Union Gas has applied to the Ontario Energy Board for a decrease in the rates it charges customers. If approved, a typical residential customer* will see a decrease of about $170 per year over current rates.
Union Gas’s request to lower its rates reflects the lower cost of natural gas -- which the company purchases on behalf of its customers and passes through without mark-up.
“Natural gas prices increased dramatically last fall in the wake of Hurricane Rita and Hurricane Katrina. Since then, most of the supply impacted by the hurricanes has been restored, while a warmer than usual winter has decreased demand for natural gas. These factors have combined to deliver a significant decrease in natural gas prices which are being passed on to customers,” said Steve Baker, vice president, Union Gas.
Union Gas forecasts the price it expects to pay for the natural gas it supplies to its customers over a 12-month period. Rates are adjusted on a quarterly basis -- following Ontario Energy Board approval -- to reflect ongoing changes in market prices. If Union Gas’s actual natural gas costs are above or below the approved rates, future rates are adjusted to collect or refund the difference to customers.
The company also provides storage and transportation services to other utilities and energy market participants in Ontario, Quebec and the United States. Union Gas is a Duke Energy company.
*A typical residential customer in Union Gas’s service territory uses 2,600 cubicmetresof 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. The savings for a customer who buys their gas supply from a marketer would depend on their contract rate.