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Enbridge Distribution Customers to See a Gas Cost Increase

Enbridge Distribution Customers to See a Gas Cost Increase

Enbridge Gas Distribution announced last Wednesday it has received approval from the Ontario Energy Board to adjust its prices Jan.1, resulting in a C$70 annual increase for the typical residential customer buying gas from the distributor, excluding a gas cost adjustment refund, and a C$6 annual decrease for a typical residential buying gas from a marketer.

These new rates include an increase in the gas supply charge, a gas cost adjustment refund, a decrease in the delivery charge, as well as a one-time rate adjustment refund.

The Toronto, ON-based distribution company said that based on a forecast of higher commodity prices over the next 12 months, its gas supply charge would increase by about 9%. The utility's new residential gas supply price will be C31.06 cents per cubic meter, up from C 28.57 cents per cubic meter.

The forecast will be reviewed quarterly and, if necessary, adjusted. If there is a difference between the forecast prices charged to customers and the actual amount paid by the company, the difference is collected from or reimbursed to customers. A gas cost adjustment refund of 1.28 cents per cubic metre will be in place from Jan. 1, 2005 to Sept. 30, 2005, returning to customers excess collections over the past six months. For the typical residential customer, the refund will amount to C$27.

The total annual Delivery Charge, which includes the costs of transporting natural gas from Western Canada and delivering it through the distribution network to customers' homes, will decrease by C$6 for the typical residential customer. This decrease is due to lower operating costs and a reduction in the cost of transporting natural gas from Western Canada.

Enbridge customers will also see a one-time rate adjustment refund on their January bills. The adjustment will be about C$14 for the typical residential customer, reflecting a decrease in the delivery charge for the period between Oct. 1 and Dec. 31 due to lower operating costs and sharing of fiscal 2004 earnings achieved by the company that were above the regulated rate of return.

Enbridge pointed out that over the past five years, natural gas has been on average about 40% less expensive than electricity. The distribution company delivers natural gas to about 1.7 million customers in its franchise area. Of those customers, about 60% buy their gas supply from the utility with the remainder buying their gas supply directly from marketers.

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