Each quarter Enbridge and Union Gas apply to the Ontario Energy Board (OEB) to change their natural gas delivery and commodity rates. The purpose is to be more reflective of true market rates. Through a process known as QRAM (Quarterly Rate Adjustment Mechanism), the utilities present evidence to the OEB that support a rate change for the next three months based on past and future performance. Typically, the OEB accepts and approves the supporting evidence quickly and the new rates are applied to the next billing period.
For the third quarter of 2018, the OEB was unable to approve the rate adjustment proposed by Enbridge and Union Gas – no explanation was given for the delay. Instead, the OEB accepted a proposal from the utilities to NOT adjust rates for the third quarter, and to defer the setting of the new rates to the fall. This may result in a higher Utility Gas Price Adjustment on winter natural gas bills.
The rate change delay may be related to the cap-and-trade cost that every natural gas user in Ontario began to pay as of January 1, 2017. Currently a charge of about 3.5 cents per cubic meter is buried in the delivery line item on your utility bill. The Ontario Energy Board reviews and approves cap-and-trade costs as well as commodity, transportation, storage and delivery charges.
oeb natural gas rates and your bill
