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From: Some Guy on 3 Dec 2009 08:57
According to this, Union Gas is supposed to refund the over-payments
they billed customers for from some un-specified "prior periods" prior
to October, but I don't understand how they can perform this refund on
an equitable, individual basis by simply applying a change to the
current rates.

In other words, if lately I use less gas than normal (or even no gas)
then how exactly am I going to realize this refund from "prior periods"
???

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http://www.uniongas.com/business/rates/faqs/

Frequently Asked Questions about the October 2009 Rates

The Ontario Energy Board (OEB) approved changes to Union Gas� rates
effective October 1, 2009.

Please go to Rates to view the rates specific to your area.

http://www.uniongas.com/business/rates/

Are my rates changing in October?

Yes. Union Gas is changing the rates we charge our customers. Rate
changes were approved for all Union Gas residential customers in Ontario
and include:

A reduction in the rates Union Gas charges customers for natural
gas; and

A gas price adjustment to refund the difference between forecast
costs and actual costs from prior periods.

Changes to the rates reflect what we expect to pay for natural gas
supplies as part of our quarterly rate adjustment process to reflect
ongoing changes in the market price of gas.

The proposed rate change represents an approximate 11 per cent decrease
in the total annual bill for an average residential customer who
purchases natural gas from Union Gas. That means an average annual
decrease of 95 to 113 dollars, depending on location. The rates will
remain in effect from Oct. 1 through Dec. 31, 2009.

As detailed below, customers living in southwestern Ontario who purchase
natural gas from Union Gas will see a price decrease of about $95 a year
compared to rates in effect from July 1 to Sept. 30, 2009, depending on
the amount of gas used. Customers living in Northern and Eastern rate
zones who purchase gas from Union Gas will see a price decrease of about
$113 a year compared to rates in effect from July 1 to Sept. 30, 2009.

This marks the fourth time this year that Union Gas has reduced rates,
which amounts to a total decrease of approximately 45 per cent since
January 2009 or about $615 for an average customer in southwestern
Ontario.

Gas supply costs - Gas supply costs include information on the �Gas
Commodity Rate� and �Gas Price Adjustment� lines on your bill.

For customers in southwestern Ontario, the net natural gas supply rate
decreased by about $104 per year to about 11 cents/m3. This decrease
consists of an annual decrease of about $17 in the gas commodity rate to
reflect a decrease in Union Gas� forecast cost to purchase gas for the
next 12 months, and an annual decrease of about $87 in the gas price
adjustment rate to reflect the difference between forecast costs and
actual costs from prior periods.

In the Northern, Eastern and Northwestern rate zones, the natural net
gas supply rate decreased by about $108 per year, to about eight
cents/m3 depending on the delivery zone. This consists of an annual
decrease of about $17 in the gas commodity rate to reflect a decrease in
Union Gas� forecast cost to purchase gas supplies for the next 12
months, and a decrease of about $91 in the gas price adjustment to
reflect the difference between forecast costs and actual costs from
prior periods.

Transportation costs - Transportation costs refer to information on the
�Transportation to Union Gas� and �Transportation Price Adjustment�
lines on your bill.

For customers in southwestern Ontario, the transportation to Union Gas
rate increased by about $9 annually to reflect what Union Gas expects to
pay for transportation services for the next 12 months.

In the Northern rate zone, there�s an annual decrease of about $5 in the
transportation price adjustment rate to refund the difference between
what we expected to pay for transportation services and the actual cost
to buy those services from prior periods.

Why is the natural gas commodity rate adjusted each quarter?

We review and adjust our rates every three months to reflect ongoing
changes in the market price of natural gas. Making adjustments quarterly
brings forecast costs more in line with our actual costs. When actual
costs differ from forecast, future rates are adjusted to refund or
collect the difference from customers. These steps ensure you�re billed
at a rate that closely reflects the market price of gas, help minimize
large out-of-period adjustments and smooth out peaks and valleys related
to daily changes in the market price of gas.

What are price adjustments?

Price adjustments refund or collect the difference between forecast
costs and actual costs from a prior period. The price Union Gas charges
you for natural gas is based on a forecast of what the market price of
gas will be for the next 12 months. This forecast is updated and
approved by the OEB every three months to reflect changes in the market
price of gas. Union Gas is not allowed to earn a profit on the sale of
gas, so we track the difference between the price we charge for gas
based on this forecast, and the actual cost of gas we purchase during
the same period. When forecast costs differ from actual costs, Union Gas
applies a price adjustment to refund or collect the difference. This
way, we can ensure that customers pay the actual cost of gas.

Why are rate change impacts reflected on a yearly basis?

Customers told us they wanted to know the specific unit price and the
dollar impact associated with the unit price for rate changes. It�s
consistent and easier to compare price changes by using yearly dollar
impacts. Each time rates change, we provide the effect of the rate
change on the yearly gas bill using a typical residential customer�s gas
use of 2,600 m3 a year.

You quote annual savings, but change rates every three months. What will
I save from now until your next rate change?

The average residential customer will save about $29 to $35 from October
through December. Savings will depend on your location and amount of
natural gas used.

What assumptions are used to calculate typical natural gas use?

When calculating natural gas use for a typical residential customer, we
define this as three people living in a 15 to 20 year-old house that
measures about 2,000 square feet. The home includes a mid-efficiency gas
furnace that�s approximately 81 per cent efficient, water heater and
another gas-fuelled appliance such as a fireplace.

Factors that influence natural gas consumption include:

Weather � Weather is the biggest factor affecting natural gas
consumption. In cold weather, more gas is needed to heat your home.

Furnace Efficiency � High-efficiency furnaces are about 60 per cent more
efficient that conventional low-efficiency furnaces. Mid-efficiency
furnaces are about 33 per cent more efficient than conventional
furnaces.

Home Size � It requires more energy to heat a bigger home and, the more
people in a house, the higher the use of natural gas. Every 100 square
feet of home size larger than 2000 square feet adds about 100 m3 of gas
consumption annually on average.

The age and energy efficiency of your home also affect natural gas
consumption. Each person in addition to the average three people per
home uses approximately 200 to 400 more cubic meters of gas. The number
of gas appliances and frequency of use also influence consumption.

Does Union Gas make a profit on natural gas?

No. Like a trucking company, Union Gas earns income on delivering and
storing the product � natural gas � and not on the product itself. The
rates we charge for our delivery and storage services are regulated by
the OEB and have remained relatively stable for a number of years. Gas
commodity and transportation costs, which make up the majority of your
monthly bill, are passed through to you without mark up.

Will my Equal Billing Plan rate be adjusted to reflect this rate
reduction?

Your Equal Billing Plan (EBP) payment amount was established in
September based on a forecast of the amount of natural gas you�ll use
over the course of a year and what we expect gas prices will be during
that same period. We review your EBP account each September and
periodically throughout the year to determine if your payment is set at
the correct level, and we�ll adjust it up or down based on more current
information, which includes all rate changes.

If you purchase your gas from a retail energy marketer, the rate charged
by the marketer is taken into account when calculating your payment
amount.

Will the price of natural gas continue to decline?

Natural gas, like other commodities, is publicly traded and any
significant event that impacts either supply or demand, such as extremes
in weather across North America, can impact the market price. We can�t
predict what the market price of gas will be in the future because of
the number of forces that can influence market prices.

I noticed the same line twice on my bill. Am I being billed twice?

No, the billing period doesn�t begin and end on the first and last days
of each month, but covers a period somewhere mid-month to mid-month.
Consumption for the period prior to a rate change is billed at the old
rate, and consumption after a rate change is billed at the new rate. The
number of days at each rate depends on the monthly cycle in which your
account is billed.

I buy natural gas from an energy marketer. How does this rate change
impact me?

If you purchase natural gas from an energy marketer, the price you pay
for the gas commodity depends on the terms of your contract with the
energy marketer, and is excluded from this rate change.

Residential customers in northern and eastern Ontario who buy natural
gas from a retail energy marketer will see a decrease of about $5,
depending on location, to refund the difference between our forecast
costs for transportation services and our actual cost for those services
in prior periods.

If you have questions, please contact your retail energy marketer
directly at the phone number that appears on your bill.

Is natural gas my best energy value?

Absolutely, natural gas is a cost competitive energy choice and costs
significantly less than electricity or fuel oil for space and water
heating. With Union Gas rates at their lowest level in 10 years, natural
gas continues to be the best energy choice for consumers.

Do you disconnect customers who can�t pay their bills?

We understand that occasionally some customers encounter difficulties
paying their utility bills. We deal with every case on an individual
basis and work with customers to find the best possible solution. We
also work with many social service agencies, church groups,
municipalities and elected officials to offer our customers solutions.
Disconnecting service from an existing customer is only used as a tool
of last resort.
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