You may want to scale back that Canada Day barbecue you were planning. Starting July 1, the price of natural gas in Ontario could jump as much as 23 per cent.
On June 16, the province’s regulator for electricity and natural gas, the Ontario Energy Board (OEB), approved Enbridge Gas Inc.’s application for a price increase. The natural gas distribution company said that the ongoing Russian conflict paired with strong domestic demand and increased global demand for U.S. liquefied natural gas exports has resulted in historically high natural gas market prices. North American production hasn’t been able to keep up with demand as natural gas storage levels currently sit below the five-year average.
All of Ontario’s Enbridge Gas customers and Union Gas customers—which amalgamated with Enbridge in January 2019—will be affected by the price increase; a total of 3.8 million. Customers should expect to see the increase reflected in their next billing cycle following July 1. How much a customer’s bill will increase depends on the amount of natural gas they use and which rate zone they fall under.
Enbridge customers are broken up into four rate zones: Enbridge Gas Distribution, which includes the Greater Toronto Area, Niagara, and Ottawa; Union South, which stretches from Windsor to Mississauga and Mississauga to Orillia; Union North West, which includes Kapuskasing to Kenora; and Union North East, which stretches from Orillia to Kapuskasing, North Bay to Sault Ste. Marie, and Port Hope to Cornwall.
Based on the average annual consumption of 2,200 cubic metres to 2,400 cubic metres of natural gas, the rate zones will see between an 18 to 23 per cent jump in prices. At that level of consumption, Enbridge Gas Distribution customers should expect an annual bill increase of $247.53, Union South $251.81, Union North West $239.99, and Union North East $244.25.
These prices would have been higher but the OEB approved a rate mitigation plan proposed by Enbridge. The company is using a 24-month period to pass the increased cost of natural gas on to customers, as opposed to the usual 12-month period. This will temporarily shield Enbridge customers from the full impact of the skyrocketing market prices, keeping bill increases to about $5 a month over the July 1 through September 31 adjustment period, says Andrea Stass, a spokesperson for Enbridge, in an email.
Without the rate mitigation plan, a customer’s annual natural gas bill would have jumped between 21 to 29 per cent, an increase of $270 to $315, depending on the rate zone, says the OEB.
With OEB review and approval, Enbridge adjusts the cost of its natural gas every three months to reflect market prices. The next adjustment is in October, but don’t expect a sudden decrease in your bill. Stass says Enbridge anticipates high natural gas market prices to continue for some time.