On April 30, 2010 the New Brunswick Energy and Utilities Board (EUB) approved Enbridge Gas New Brunswick’s application to increase the maximum allowable delivery rate for all customers, excluding those in the LFO rate class.
The approved delivery rates took effect May 1, 2010.
For a break down of the current natural gas dlivery charges, click here.
The delivery rate is one of 3 charges that make up the total cost of natural gas on your bill. The delivery rate is what you pay, per consumption, to use the company’s pipeline system that distributes natural gas to you.
Delivery rates are regulated by New Brunswick Energy and Utilities Board (EUB) and can only be changed with the approval of the EUB.
The effect of the rate change will vary based on the amount of natural gas you use and your rate class.(Not sure which rate class you are in?)
For typical residential customers*, this change would result in an increase of approximately $83 in annual delivery charges.
However, it is important to note that this is only one of 3 charges that make up the total cost of natural gas on your bill.
Your total annual cost of natural gas includes the Customer Charge, the Commodity Charge (which changes based on North American market conditions), and the Delivery Charge (which is regulated by the EUB and can be adjusted in response to changes in market conditions).
Despite changes to any of the 3 charges that make up the total cost of natural gas, typical residential customers* will continue to see 20% target annual savings compared to the previous fuel source.***
More information on the rate change for each rate class.
The increase to the maximum delivery rate will be set for a minimum of one year.
Enbridge Gas New Brunswick continually monitors market conditions and may apply to the EUB to raise or lower the delivery rate in response to any changes, just as we have done in the past. These adjustments may be applied for at any time to maintain an acceptable level of savings over the alternative energy sources, without exceeding the maximum allowable rate.
Since the commodity price of natural gas has gone down, an increase in the delivery charge helps us to recover as much of our operating costs as possible, while still ensuring that our customers see the target annual savings for their rate class.
It is important to remember that Enbridge Gas New Brunswick is not yet a mature utility and our customer base is not large enough to support the recovery of all of our costs due to the significant investment required to develop the natural gas distribution system in the province.
This change in the delivery rate will reduce the difference between Enbridge Gas New Brunswick’s actual costs and the amount currently recovered through rates.
Enbridge Gas New Brunswick is complying with the rate formula approved by the EUB.
To keep energy costs manageable for customers, Enbridge Gas New Brunswick calculates and sets the delivery rates with the goal of providing target annual savings against other energy sources, such as oil and electricity. In fact, savings is built into the rate formula approved by the EUB.
Enbridge Gas New Brunswick continually monitors market conditions and may apply to the EUB to raise or lower the delivery rate in response to any changes, just as we have done in the past. These adjustments may be applied for at any time to maintain an acceptable level of savings over the alternative energy sources, without exceeding the maximum allowable rate.
Provinces such as Ontario and Alberta have established and mature natural gas distribution systems. Enbridge Gas New Brunswick services a smaller customer base and have only been installing infrastructure in the province for less than 10 years.
We are still developing the natural gas distribution system in the province and we are not at the point yet where we are able to recover our costs. Our delivery rates allow us to recuperate some of these costs, while committing to providing energy that is less expensive than what typical customers would otherwise pay for oil and electricity in New Brunswick.
In Nova Scotia, natural gas is currently available in only 3 municipalities and in selected areas within those communities. The lower capital investment means lower costs to recover from the customer base. Though natural gas is more expensive in New Brunswick, it is more accessible for those homes and businesses who want to convert because the pipeline is expanded to areas where there is demand.
In New Brunswick, natural gas has been and will continue to be a competitive energy source when compared to the other energy sources in the Province. This, with the many other benefits, has positioned natural gas as the premier source of energy in the communities we serve.
Yes. Overall, natural gas continues to provide the best value for your energy dollar. Although the delivery charge for natural gas is increasing, if you’ve been using natural gas to heat your home and water for the last year, you are definitely ahead. That’s because you’ve paid approximately 20% less than if you’d used electricity or oil.***
The fact that it’s a clean and efficient source that is so versatile and safe makes it a superior energy source for New Brunswickers.
* Typical Residential Customer: rate class SGSRE consuming 111 GJ per year or rate class SGSRO consuming 86 GJ per year.
**The Enbridge Utility Gas commodity charge, which is a forecasted 12-month balanced price used for residential and commercial customers decreased from $9.00/GJ in May, 2009 to $7.75/GJ in May 2010.
***Target annual savings by rate class: SGSRO, SGSRE, SGSC 20%; GS, CGS 15%; and LFO 10%. Individual savings depend on factors such as consumption, efficiency gains and/or fuel cost.