OEB-approved five-year agreement to benefit customers and company
CHATHAM, ON, Oct. 7, 2013 /CNW/ - Today, the Ontario Energy Board (OEB) approved a new five-year incentive regulation framework for Union Gas, which the company will use to determine the rates it will charge customers for natural gas delivery services beginning January 1, 2014.
The framework parameters were determined through a settlement process and a negotiated agreement with key stakeholders who represent the interest of the company's customers and regularly participate in rate applications.
Through the new framework, delivery rates are determined at the beginning of each year using a pre-set formula that allows for an annual inflation increase based on Gross Domestic Product (GDP), less a productivity expectation for the company, resulting in an annual change of less than half40 percent of inflation.
The framework includes the pass-through of certain costs, including those associated with major capital investments, along with a number of other regulatory and financial features. The structure also includes an earnings sharing mechanism through which the company will share earnings with its customers beyond certain thresholds.
"We are very pleased to have arrived at this negotiated settlement with our stakeholders and to have received approval from our regulator," said Steve Baker, president of Union Gas. "This multi-year agreement will allow the company to continue to grow and invest in our Ontario natural gas infrastructure while offering rate stability and lower than inflation rate changes to our customers."
About Union Gas
Union Gas Limited is a major Canadian natural gas storage, transmission and distribution company based in Ontario with 100 years of experience and service to customers. The distribution business serves about 1.4 million residential, commercial and industrial customers in more than 400 communities across northern, southwestern and eastern Ontario. One of Canada's Top 100 Employers for 2013, Union Gas is a Spectra Energy (NYSE: SE) company with assets of $5.8 billion and approximately 2,200 employees. For more information, visit uniongas.com or find us on Twitter: twitter.com/uniongas, Facebook: facebook.com/uniongas and YouTube: youtube.com/user/uniongas.
About Spectra Energy
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's premier pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 22,000 miles of natural gas, natural gas liquids, and crude oil pipelines, approximately 305 billion cubic feet (Bcf) of natural gas storage, as well as natural gas gathering and processing, and local distribution operations. The company also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. The company's longstanding values are recognized through its inclusion in the Dow Jones Sustainability World and North America Indexes and the CDP Global 500 and S&P 500 Climate Disclosure and Performance Leadership Indexes. For more information, visit www.spectraenergy.com.
SOURCE: Union Gas Limited
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