Enbridge Gas Distribution Working with Natural Gas Customers

Re: With natural gas rates rising 44 per cent, we need national energy debate, July 22.

Enbridge Gas Distribution recognizes the concerns expressed regarding the impact of high natural gas prices on our customers.

As a result, we have been proactively communicating to help customers manage their costs. Information about the anticipated increase and tips on how to lower and manage costs this coming winter were included in June and July bills. Information about the winter warmth program and our home weatherization retrofit program which provide assistance to low-income households was also included.

t is important to note that, while the price of natural gas (which makes up about two-thirds of a typical customer's total annual bill) has increased, higher natural gas prices do not benefit Enbridge Gas Distribution. The reason for this is that we don't earn a profit on the price of the natural gas. As a natural gas distribution company, we earn our profit on delivering the natural gas through our pipes to customers. Our delivery prices are regulated by the Ontario Energy Board.

Our natural gas prices are based on a 12-month forecast of natural gas prices in the North American market. Natural gas is traded in a competitive market and prices are determined by North American supply and demand.

Enbridge Gas Distribution and other Canadian gas distribution companies purchase their natural gas from the western Canadian supply basin, as well as from other regions in Canada and the United States.

New sources of natural gas supply exist in both the United States and Canada. Ontario is well connected to supply basins in both countries. Energy regulators recognize that natural gas bound for eastern Canada does not always come from western Canada and may increasingly come from other sources.

Let me conclude with some comparisons. While our prices go up and down to reflect changes in the North American market, natural gas is still a good energy choice.

On a five-year average, it is still about 42 per cent less expensive than electricity and 34 per cent less expensive than oil for home and water heating.