John Spears
Toronto Star
January 16, 2001

Turn down the thermostat, seal the cracks around the windows and be thankful you’re not in Alberta.

That’s about all homeowners can do in the short term if they heat with natural gas and are caught in the upward price spiral. Even those who have to replace their heating systems soon have no obvious alternative if they’re trying to flee the cost of gas.

“In terms of what do you do today, there’s not a lot you can do,” is the blunt assessment of Duncan Mathieson, oil and gas analyst with Scotia Capital Markets. “Go back to the 1980s. What did we do then? We insulated our homes, we made sure we weren’t wasting energy.” Tom Adams of Energy Probe agrees.

“You can fight back,” he says. “Arm yourself with a caulking gun. There’s no time like the present to get serious about energy conservation and home insulation. It can save you a ton of money right now.”

Gas has jumped to 24.4 cents a cubic metre in the Toronto area for homeowners. That’s up from 10.5 cents a cubic metre last winter, and as little as 6.6 cents in the winter of 1998.

Time to look elsewhere?

Well, consider heating oil. It retailed as low as 35.7 cents a litre last winter; now it’s at 57 cents. As for electricity, the other mainstream alternative, its future is cloudy.

Its price has been relatively stable since it soared 43 per cent between 1989 and 1993 – it even declined slightly. But local utilities are putting new rate increases through, egged on by the municipal governments that own them.

In addition, Ontario is set to throw the electricity market open to competition. But it hasn’t happened yet. One deadline for market opening has already passed last November.

No one knows when the market will be opened, or what will happen to prices if and when it finally does, but many observers predict price increases.

Historically, electricity has been a poor choice for home heating, notes Mathieson: “It’s never been a bargain to be on electric heating in Ontario.”

Add to that the capital cost of changing fuels – several thousand dollars for a new heating system – and switching for short-term gain gets even less attractive.

Mathieson says the price of natural gas makes the extra cost of high-efficiency furnaces an attractive proposition.

“If I were replacing a furnace, I’d be looking at high efficiency.”

Peter Dyne of the Consumers Association of Canada says you can fight market forces only for so long.

Governments and the gas industry did an effective job of selling gas heat over the past decade, and demand is pressuring supply. That’s not likely to change in a hurry, unless gas starts flowing in bigger quantities from such areas as the Arctic or the Atlantic offshore.

Consumers who signed long-term, fixed price contracts a couple of years ago are doing very well, Dyne notes.

But Adams says with prices at a peak, it’s probably not a good time to sign a long-term gas contract.

Enbridge Consumers Gas customers are paying less than the spot market price because Enbridge secured a good part of its winter supply months ago, at lower prices, says spokesperson Mike Campbell.

The utility that serves Alberta buys on the spot market, he says. Consumers without contracts are paying about 40 cents a cubic metre, he says. Enbridge’s current price is 24.4 cents.

Campbell says consumers have to take responsibility for getting the most out of their fuel. An old, badly maintained furnace won’t deliver peak efficiency any more than a badly tuned 20-year-old car, he says.