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Enbridge gets hefty “interim” rate increase

Enbridge Gas has been granted a 40 per cent increase in the rates it charges customers for natural gas starting April 1 – but only on an interim basis.

The new rates will boost the gas bill of a typical household to $1,400 a year, from $1,000.

But the Ontario Energy Board, in the light of a storm of comment it received after Enbridge sought the rate hike, says it’s going to take a second look, and may temper future rate decisions.

The board notes that for most householders, gas consumption drops sharply in the summer with the end of heating season, so the impact of the rate increase will be muted in the immediate future.

That gives the board some breathing room to consider whether, for example, the rate increase should be phased in over a longer time period – called “rate mitigation” in the jargon of energy regulators.

“The board is of the view that rate mitigation may be warranted in this case to smooth the bill impact to consumer,” the board said.

“Prior to making this decision, the Board needs a better understanding of the ramifications of the proposal for delayed smoothing.”

For example, if the gas company can’t recover its expenses quickly, it may incur higher financing costs. Under the rules, it’s allowed to get those costs back from consumers, so they might not end up any better off.

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Enbridge gets hefty “interim” rate increase