The Ontario Energy Board announced plans Wednesday for some changes to its natural gas regulations, including a new multi-year incentive rate plan and an examination of whether to regulate gas storage rates and services to ensure optimal service to power generators.

“We believe that all stakeholders will benefit from a more predictable and longer-term treatment of rates,” said board Chairman Howard Wetson. “Utilities will benefit because they can make longer-term decisions and customers will benefit through downward pressure on rates.”

The board issues a report on the proposed changes Wednesday that follows a year-long Natural Gas Forum in which regulators heard from a large number of industry representatives, including utilities, marketers, associations, storage developers, consumers and others.

Based on industry input, the board determined that a multi-year incentive rate plan with terms of three to five years and annual rate adjustments was appropriate. The board will determine the methodology for the annual adjustments through a generic hearing process. Also to be determined will be the base rates of each individual utility. The board decided not to allow earnings sharing mechanisms.

Regulators said utilities should continue providing regulated gas supply services, but the costs of regulated supply should be reviewed “in order to make it easier for consumers to compare their options in the marketplace.” The board is not in favor of utilities entering into long-term supply agreements, but is open to long-term transportation contracts with pipeline companies.

Regarding storage regulation, the board said it needs to review the impact of gas-fired generation on storage and storage services in the province, which is home to Union Gas’ Dawn Hub, one of the largest gas storage operations on the continent. The board said it wants to “ensure the infrastructure assets, services and rates are aligned to effectively serve” the rising demand from gas-fired power generation in the province. Union Gas said it was too early in the process to determine what regulatory changes could take place or how its services will be affected.

For more details, go to https://www.oeb.gov.on.ca/.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.