Understanding Your Ontario Natural Gas Bill

 

Let’s work through understanding the charges on your natural gas bill so you are empowered to make an educated decision when it comes to saving money on your commercial facility’s natural gas cost.

The more you know, the easier decision making becomes!

Ontario’s natural gas bill can be divided into two parts, 1) Delivery portion, 2) Supply portion. If you buy natural gas from Enbridge, Union or EPCOR, your natural gas rates are set by the Ontario Energy Board and you pay your utility for both the delivery portion and the supply portion. If you buy your natural gas from an energy supplier, the supply portion of your bill is open for negotiation and rates are set by the supplier, while the delivery portion of the bill continues to be set and billed by your gas utility.

Explanation of charges

The second page of your natural gas bill from the utility provides greater detail about your natural gas charges, including meter reading information and gas supply data.

 1. Customer charge

This is a fixed admin charge for all natural gas accounts. It includes all customer service and equipment maintenance services. The utility bills this charge to the customers each billing period, regardless of whether or not gas is consumed. The Ontario Energy Board approves the Customer Charge annually.

2. Delivery Charges

The utility bills delivery charges, which cover transportation, delivery, distribution, and storage costs. Natural gas is transported to Ontario from the production points in Western Canada and United States. Natural gas is then delivered to Ontario consumers through the utility’s distribution system. The storage cost is the third component of delivery charges that is the cost to store natural gas.

For Union gas the storage charge is a separate line item and for Enbridge customers this charge is rolled into the transportation charge. In conclusion, the delivery charge includes all operating costs and is set by the Ontario Energy Board.

As per the Ontario Energy Board, ‘The Ontario Energy Board approves utility’s delivery charges. The delivery charges for Enbridge and Union are adjusted once a year using a five-year incentive regulation framework. These annual adjustments are done using a pre-set formula that is based on inflation.’

3. Gas supply charge

The supply charge is the cost of natural gas based on the amount you use. If you choose to buy natural gas from your utility, rates are approved by the Ontario Energy Board and are set every three months. If you decide to work with an energy retailer for the supply of natural gas at your facility, rates are based on the retailer contract. This portion of your bill is negotiable and this is where competition in the market lives and breathes.

Below are two sample natural gas bills, courtesy of the Ontario Energy Board. The first bill on the reader’s left is for a customer that buys their natural gas from their utility. The bill on reader’s right is for a customer that buys their natural gas from an energy retailer/marketer as negotiated and procured by Dream Energy Solutions

 

Is the Energy Retailer Contract Right for you?

 

2 Natural Gas bills. (Left) Bill provided when purchased from the utility, (Right) Bill provided by an energy broker/retailer.
2 Natural Gas bills. (Left) Bill provided when purchased from the utility, (Right) Bill provided by an energy broker/retailer.

 

Sample bill copy credit: Ontario Energy Board

Now that you are familiar with the natural gas rates and charges, you are in good shape to open dialogue with us to and gauge if the gas rates we procure for your business work for you and lead to savings. The Ontario Energy Board, provides a bill calculator, and we encourage you to use it to your advantage along with the savings proposal generated by your energy broker or retailer. Keep in mind, the Ontario Energy Board bill calculator is an estimation and you should use it as a placeholder and make sure to ask your energy broker to give a full savings breakdown while building your proposal.

When you decide to buy gas from a retailer, the supply rate is where the savings magic happens but that is not the only rate you should look at; Transportation rate is also charged. Therefore, when comparing rates make sure you compare the commodity rate (supply rate) plus the transport rate that your retailer says you will be paying to the utility.

If you choose to buy from a natural gas retailer, your gas delivery and the utility charges for delivery won’t change. Your bill will still be delivered by your distribution utility, including the Delivery and Transportation Charge – approximately 1/3 of your bill is for charges pass through by the provider and billed by the utility while the remaining 2/3, which is the Gas Supply Charge is open for negotiation and supplier charged. The transportation charge is set by the retailer/marketer in Union Gas South territory and can also be the responsibility of the retailer in the Enbridge territory.

The 2/3 part of your bill which is open for negotiation and is also the supply charge aka portion of your bill is used as the base for savings references when used for comparison purposes. The market is ripe for natural gas savings and it is always a good time to re-evaluate your options and make sure you are not leaving any money on the table.

For a complimentary, no obligation quote, contact us at info@dreamenergysolutions.ca or call us at 833-YOUR-NRG today!

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