OEB issues Decision with Reasons regarding Cushion Gas



    TORONTO, June 27 /CNW/ - Today the Ontario Energy Board (the Board)
issued a Decision with Reasons on an application by Union Gas Limited (Union)
related to proceeds from the sale of cushion gas and whether there is any
basis on the evidence to allocate all or part of the gain to customers.
    In two previous decisions, the Board determined it has the jurisdiction
to allocate all or part of this gain to utility customers.
    In its Decision, the Board ruled there is no economic, legal or policy
principle that would justify allocating part of the gains of the cushion gas
sale to customers in this case. The Board found there was no evidence of any
harm to customers resulting from the sale, and that there are public interest
benefits as a result of the additional storage capacity created.
    Cushion gas is a structural feature of the operation of the gas pool. It
is the volume of gas required to maintain the minimum base pressure to operate
the storage reservoir. Because it is always necessary to maintain the base
pressure, cushion gas is treated as a capital asset. It is valued at cost for
accounting purposes and is paid for and owned by Union.
    In 2001 Union determined the existing storage reservoir could be operated
at a lower minimum operating pressure, resulting in more cushion gas than
required. As a result the excess could be sold.

    The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a viable and efficient energy
sector with informed consumers served by responsive regulatory processes that
are effective, fair and transparent.
    For more information on the Board, please visit our web site at
www.oeb.gov.on.ca or contact the Consumer Relations Centre at 416-314-2455 or
toll-free at 1-877-632-2727.





For further information:

For further information: Vanda Wall, Ontario Energy Board, (416)
440-8149


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