The severe winter is driving the price of natural gas higher for householders served by Enbridge Gas Distribution.
The higher price will mean a $400 a year increase in gas costs for a typical household that uses 3,000 cubic metres a year, says Enbridge’s Jamie LeBlanc. That household is now paying about $1,000 a year.
The new price doesn’t apply to householders with fixed price contracts from energy retailers.
The Ontario Energy Board must approve the increase, which Enbridge hopes will take effect April 1.
The brutally cold weather across North America is responsible for the price jump, LeBlanc said in an interview.
“Because it’s been cold across North America, the price of natural gas has been quite high, particularly the latter part of January and most of February” LeBlanc said.
“Based on our data, it’s been one of the three coldest winters in the last 25 years. It’s been 22 per cent colder in the GTA this year than it was last year.”
Stocks of gas in storage have been depleted, and gas companies are buying more gas on the open market with more volatile prices.
The current wholesale price is about double the normal level, he said, and on some days this winter it has spiked much higher.
For customers who buy their gas directly from Enbridge, the company sets a price every three months. It isn’t supposed to make a profit or loss on the sale of the gas itself; its profit comes from charging a fee for delivering the gas on its pipelines.
Because Enbridge didn’t anticipate such a cold winter, it underestimated the price of gas at the January setting, and is now trying to recover its costs.
LeBlanc said about $250 of the $400 increase comes from making up for under-pricing during the winter.
The remainder comes from Enbridge’s estimate of prices going forward for the next three months.
Natural gas price set to soar | Toronto Star
The higher price will mean a $400 a year increase in gas costs for a typical household that uses 3,000 cubic metres a year, says Enbridge’s Jamie LeBlanc. That household is now paying about $1,000 a year.
The new price doesn’t apply to householders with fixed price contracts from energy retailers.
The Ontario Energy Board must approve the increase, which Enbridge hopes will take effect April 1.
The brutally cold weather across North America is responsible for the price jump, LeBlanc said in an interview.
“Because it’s been cold across North America, the price of natural gas has been quite high, particularly the latter part of January and most of February” LeBlanc said.
“Based on our data, it’s been one of the three coldest winters in the last 25 years. It’s been 22 per cent colder in the GTA this year than it was last year.”
Stocks of gas in storage have been depleted, and gas companies are buying more gas on the open market with more volatile prices.
The current wholesale price is about double the normal level, he said, and on some days this winter it has spiked much higher.
For customers who buy their gas directly from Enbridge, the company sets a price every three months. It isn’t supposed to make a profit or loss on the sale of the gas itself; its profit comes from charging a fee for delivering the gas on its pipelines.
Because Enbridge didn’t anticipate such a cold winter, it underestimated the price of gas at the January setting, and is now trying to recover its costs.
LeBlanc said about $250 of the $400 increase comes from making up for under-pricing during the winter.
The remainder comes from Enbridge’s estimate of prices going forward for the next three months.
Natural gas price set to soar | Toronto Star