Homeowners brace for higher natural gas rates

Homeowners and small businesses expecting natural gas rate cuts on Wednesday at midnight got an unhappy surprise, substantial increases instead.

Enbridge Gas New Brunswick announcedon Tuesdaythat it was cutting natural gas delivery costs to its residential and small business class by 14 per cent from its 2013 rates, starting on May 1.

That generated headlines across the province that rates were declining, but the company hasn't been allowed to charge those 2013 rates for months

David Young, an analyst with the New Brunswick Energy and Utilities Board, said the actual change in distribution rates to homeowners Wednesday at midnight is an increase from actual rates Enbridge had been charging in February, March and April.

"Homeowners will see an increase in what they're paying from $4.92 to $10.00 [per gigajoule]," said Young.

Prior to February, Enbridge had been charging residential and small business customers $11.68 per gigajoule for distribution charges before being ordered to lower it to $4.92 in February by the EUB.

The company was calling the new $10 charge a reduction from old rates, instead of an increase from current rates.

"It's how you try and explain the decision," said Gilles Volp, the general manager of Enbridge Gas new Brunswick.

"Yes it goes up on May 1 from where they currently are."

Worse still for consumers, Volp says Enbridge is also increasing the price it charges for gas in May, the twelfth commodity price increase in the last 21 months.

The new rate of $15.72 per gigajoule, is triple the price of gas from two years ago.

That means homeowners and small business customers of Enbridge will pay a combined distribution and gas charge of $25.72 per gigajoule in May, 31 per cent more than they paid in April.

Volp said Enbridge lost $6 million selling gas over the winter as it absorbed price shocks in the market place that other companies passed along to consumers immediately and now must raise prices to recoup that money.

"It will probably be at this level ... throughout the rest of the year," Volp said.