New Brunswick natural gas distributor Enbridge Gas Distribution Inc. has had a difficult time convincing potential customers to switch to natural gas, and the provincial government should consider changes to its provincial rules to ensure its gas program will succeed, a company executive said this week.

The Enbridge Inc. subsidiary had expected to have nearly 8,000 gas customers by now, said Jim Schultz, president. He addressed attendees of the Canadian Energy Research Institute conference in Calgary on Tuesday. Instead, the company has been able to sign up fewer than 2,000 in three years time. Enbridge won its franchise for New Brunswick in 1999 and anticipated serving 23 communities within five years (see Daily GPI, Sept. 8, 1999). There are about 760,000 residents in New Brunswick.

“It’s lower than we anticipated,” Schultz said of the small customer base. Enbridge’s efforts have been hampered, he said, by New Brunswick rules governing gas distribution in the province. Number one, said Schultz, is the lack of convenience for customers.

Enbridge Gas was selected as the provincial gas distributor and began construction of its distribution mains in 2000. Since the onset, natural gas has been offered as an unbundled commodity in the province, whereby the transportation and marketing functions are separated. Gas transportation through the Maritimes & Northeast Pipeline transmission line and laterals is regulated by the Canadian government; Enbridge Gas’s distribution system is provincially regulated, as are natural gas marketers.

In the province, Enbridge Gas may only sell the gas — it may not be involved in gas sales, appliance sales or other services that many customers need to make a switch from fuel oil. Five licensed gas marketers operate in New Brunswick currently.

“Homeowners and businesses don’t want to go to three different businesses to get gas,” Schultz said. New Brunswick needs to give distribution facilities the ability to sell appliances and services “until the market has matured,” he added.

Enbridge was awarded a 20-year franchise in 1999. Schultz said that it will take a long time to obtain the 70,000 customers the company had anticipated by the end of the contract. Along with not being able to sell additional services, Schultz blamed the low turnover to gas on a lack of skilled tradesmen in the province. He also said there were not enough gas distributors and limited gas supply.

Said Schultz, “Enbridge entered into this market cautiously optimistic, but we were clear if the model did not work, we would look to the government for changes.”

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