OEB issues Rate Adjustment for Union Gas Limited

    TORONTO, Dec. 13 /CNW/ - Today the Ontario Energy Board (the Board)
approved changes to the rates Union Gas Limited (Union) charges its customers
effective January 1, 2008. The new rates reflect three decisions of the Board
that affect Union's 2008 rates. These decisions are an Interim Rate Order
stemming from Union's Incentive Rate Mechanism case, the 2006 Deferral Account
Disposition and Earnings Sharing, and the Quarterly Rate Adjustment Mechanism
(QRAM). The 2007 interim rate order comes first and is immediately superseded
by the January 2008 QRAM.
    Consumers' bills will change depending on the amount of natural gas used,
type of consumer and the location of the consumer. The combined impact of all
the decisions will result in an annual increase of between $29 and $30 for
residential system gas consumers using 2,600 cubic meters (m(3)) a year in the
Fort Frances, Northwestern, Northern and Eastern rate zones. In the Southern
rate zone, the combined impact of all the decisions will result in an annual
decrease of about $63. The Board will continue to review the natural gas
commodity rates for system gas customers every 3 months and make an adjustment
to rates, if necessary. The increase in the Northern rate zones, and the
decrease in the southern rate zone, is due to a larger variance in Union's
forecast gas cost in the Southern rate zone, which resulted in larger credit
for consumers in the southern rate zone.
    This quarterly rate adjustment to the natural gas commodity price
reflects a decrease in the forecast average price of natural gas over the next
12 months. Natural gas utilities forecast the price of natural gas on a
quarterly basis to determine what they expect to pay for the natural gas they
supply to their customers over a twelve-month period. Supply disruptions
caused by unforeseen events, the price of oil on the world market, and severe
or abnormal weather can impact the market price of natural gas.
    The Board also approved a natural gas price adjustment for system gas
customers for the 12-month period starting January 1, 2008. The adjustment is
a credit that represents the difference between the actual and forecasted cost
of natural gas.
    The combined effect of the approved natural gas commodity price and the
gas price adjustment results in the effective rate consumers will pay for the
period January 1st to March 31st as follows.

    Rate Zone        Natural Gas Price      Gas Price       Effective Price
                     cents/m(3)             cents/m(3)      cents/m(3)
    Eastern          27.1908                -3.1266         24.0642
    Northwestern     26.5699                -3.1266         23.4433
    Northern         26.9039                -3.1266         23.7773
    Fort Frances     26.3264                -3.1266         23.1998
    Southern         27.1908                -4.4170         22.7738

    Consumers who purchase their gas commodity from a natural gas marketer
will see an increase between $3 and $8 to their overall annual bill resulting
from changes to transportation, storage and delivery charges resulting from
the 2007 interim rates case. These rate changes do not have any impact on the
price of the natural gas commodity direct purchase consumers pay as a result
of a contract with a natural gas marketer.
    Full rate schedules are available on the Board's web site.

    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)

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