The cost of using Enbridge Gas New Brunswick’s distribution network to have natural gas delivered to you includes features such as: customer charge, demand charge, and various types of rate blocks. Your rates depend on which rate class you fit into.
According to the new rates and tariffs regulation for the Gas Distribution Act, 1999, Enbridge Gas New Brunswick is mandated to use a “cost of service method” for the fixing of distribution rates and tariffs or apply the “market-based rate method,” whichever is lower.
- “Cost of service” means the method of fixing rates based on the cost of providing distribution services to our customers.
- “Market based” means the method of fixing rates based on providing target annual savings compared to the alternative fuel source (electricity or no.2 oil, depending on the rate class).
The majority of residential customers, for example, are charged market-based rates.
- If rates for residential customers were based solely on the cost to serve them, they would be far too high. Market-based rates provide residential customers savings compared to electricity and heating oil.
- A typical residential customer, for example, will continue to see an annual savings of up to 38% compared to oil heating costs and up to 20% compared to electric heating costs.
For large commercial and industrial customers, their rates have decreased because they now have cost-of-service rates.
- However, rates are likely remain higher than mature jurisdictions across North America because the costs associated with operating and maintaining the distribution system in New Brunswick are borne by a smaller number of customers. Mature markets have established distribution systems, some of which have been around for 160 years, and serve thousands to millions of customers.
- Natural gas is still the lowest cost source of energy available in New Brunswick (and is a cleaner, more reliable and safe energy choice for homes and businesses too!).
How long will the current distribution rates and tariffs be in place?
- Under a cost of service model, distribution rates (for all classes) would typically reviewed and set on an annual basis. The application process currently in place would remain unchanged and EGNB would be required to submit an application to the EUB for any proposed rate changes (which will most likely be for January, 2014).
What if the cost of the commodity goes up (or down)?
- Changes in the commodity will not affect rates that are set according to the cost of service method. That includes the majority of commercial and industrial customers.
- For customers in rate classes where the market-based rates are applied, there may be changes as the result of increases or decreases to the commodity cost. We monitor the natural gas commodity price regularly, along with oil and electricity prices and if there are any changes, we will adjust our market-based rates accordingly, with approval from the Energy and Utilities Board, to ensure typical customers are seeing their target annual savings over the alternative energy cost.
What are the current Distribution Rates & Tariffs?Enbridge Gas New Brunswick has consistently brought cost savings to its customers and intends to do so for years to come.