Ontario's natural gas costs have surged since April 1st, with households spending an average of $189 more per year
Due to the rise in natural gas prices, Enbridge has issued a notice warning that natural gas bills are about to experience a significant increase.
According to a letter submitted by Enbridge to the Ontario Energy Board (OEB), natural gas prices in different regions of the province will increase by 21% to 47% from April 1st, but the company plans to implement partial increases in stages to reduce the impact.
The letter pointed out that this price increase may increase the average annual natural gas bill by up to 189 Canadian dollars, or 15.75 Canadian dollars per month.
Anqiao Natural Gas expects the price of natural gas in the bill to increase by more than 25%. The company plans to take mitigation measures to keep the price increase within an acceptable range.
The Ontario Energy Commission is responsible for regulating the natural gas and electricity industries, requiring Anqiao to submit a price adjustment application one month in advance if the natural gas price increases by more than 25%.
Environmental lawyer Kent Elson pointed out that so-called mitigation measures usually mean spreading price increases over a longer period of time.
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He said, "They will postpone the implementation of some price increases to avoid customers seeing a significant increase all at once. This strategy is called 'rate mitigation'
Enbridge spokesperson Kendra Black declined to provide detailed information on how the company will alleviate the price increase, stating that this will be included in the formal application submitted to OEB on March 11th.
Which regions are most affected?
Enbridge Gas monopolizes natural gas supply in Ontario and divides customers into four pricing regions.
Among them, Toronto (GTA) users saw the highest increase, with bills increasing by $189 CAD. Sault Ste. Marie and Thunder Bay users: the lowest increase, with bills increasing by $136.
The company emphasizes that its revenue comes from delivery fees paid by customers, which are set by OEB.
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Reasons for price increase
Enbridge pointed out in the letter that the rise in natural gas prices in the global market has led to an increase in fees paid by customers. In addition, the "cost adjustment" section in the bill has also been added to compensate for the deviation in the previous price forecast.
In addition, the Canadian federal government's carbon pollution pricing is raised annually, with an additional increase of 2.9 cents per cubic meter starting from April. The average annual natural gas consumption of ordinary households is 2200 to 2400 cubic meters. The carbon tax will result in an additional bill increase of 63 to 69 Canadian dollars.
According to data from the Canadian Congressional Budget Office, approximately 80% of Canadians receive more from quarterly carbon tax refunds than they pay for their carbon taxes.
This price increase is another increase based on the 4% -10% price increase implemented on January 1st.
It is worth noting that the letter did not mention the possible impact of tariffs. The tariffs imposed by the United States and retaliatory tariffs imposed by Canada will push up natural gas prices.
More than 70% of Ontario's natural gas comes from the United States, and we are highly dependent on the United States for energy security. Trump's policies may make us more vulnerable, "said Jack Gibbons, President of the Ontario Clean Air Alliance
He believes that this round of gas price increases further highlights the necessity of gradually phasing out natural gas power generation and investing in heat pumps to reduce energy bills.
Why are natural gas prices so unstable?
From 2020 to 2022, natural gas prices have tripled. In 2023, prices will fall back to levels close to those of 2020. Prices will rise again in 2024.
Keith Brooks, Program Director of Environmental Defence, a Canadian environmental protection organization, said, "This reflects the extreme volatility of the fossil fuel and natural gas markets, with prices affected by global market and economic uncertainty
Natural gas is mainly composed of methane, which has a greenhouse effect 86 times that of carbon dioxide, and is associated with health problems such as childhood asthma. In Ontario, natural gas accounts for the majority of building heating and is also a source of electricity production and over half of the province's carbon emissions.
Due to the lack of natural gas pipelines connecting Ontario to western Canada, most natural gas relies on imports from the United States. These natural gases are mainly extracted through hydraulic fracturing, which is controversial due to groundwater pollution and high emissions. Brooks said, "The natural gas pollution from hydraulic fracturing extraction is enormous. Although the pollution occurs in distant places, as end consumers, we need to take responsibility
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