Natural Gas Hike of 40%? Implications for homeowners in Kitchener, Waterloo, Cambridge, and Guelph?
March 14, 2014
A proposed increase in natural gas rates to consumers was all over the news this morning. Not only was it the first thing I heard on the radio, but there it was on the front page of our local paper. How much will it really affect us? While the answer varies, for most homeowners in the tri cities the answer is very little. I’m not trying to trivialize the actual dollars that residents will be out, I’m just trying to put it into perspective.
First, this is an application for the price increase. It has to be approved by the authorities before it takes effect. It was interesting to note that another supplier of natural gas also applied for a rate increase, but it was 50% of this one. It might be interesting to find out what could possibly justify a rate increase that is double what your competitor is asking for. This increase is being proposed roughly over a month after representing to the public that their storage capacity would “mute any price increase”.
Secondly, people should recognize that the applicant (Enbridge) is not the company that delivers natural gas in any of our markets. Union Gas delivers in Waterloo, Cambridge, and Guelph, while Kitchener Utilities delivers in Kitchener. So, unless you have chosen to enter into a supply contract with Enbridge, this proposal will not affect you. As mentioned earlier, Union Gas has also applied for an increase – roughly half of Enbridge’s.
Third, this increase is in contrast to some historically low gas prices. Even with these proposed increases, prices are significantly lower than the rates we were paying ten years ago. Yes, it is inconvenient, but most utilities offer equal billing plans.
Finally, it is the price of natural gas that is looking to be affected. While it is the majority of the monthly bills that we receive, around 40% of what we pay for monthly are other costs. Take a look at your bill and see how much goes toward transportation, storage, delivery, and the famous “monthly charge”.
Don’t be confused, I’m not ecstatic about having to pay more to heat my house. It’s just unfortunate that the media has not chosen to offer some perspective. Our gas bills might go up. We wanted deregulation – occasionally it delivers bad news.
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