Natural gas heating bills to rise by $55 a month

Michael Friscolanti
National Post
January 29, 2001

The cost to heat a home in Ontario with natural gas will jump by an average of $55 a month — and the increase could last from three to five years, an energy analyst says.

“That’s going to be a big shock to a lot of people,” said Ian MacLellan, the vice-president of marketing at energyshop.com, an independent information service for energy consumers, who added that about 500,000 consumers, including 250,000 in Toronto, will see the increase on their February bill.

“That’s a big chunk.”

Mr. MacLellan, one of seven speakers at a forum presented yesterday by Enbridge Consumers Gas, said other providers, such as Union Gas, will soon be forced to raise their prices, too.

The looming increase comes only days after provincial regulators in gas-rich Alberta approved a 50% fee hike.

Panellists at yesterday’s forum said the main reason for escalating gas prices is simple: high demand versus a depleting supply.

Natural gas prices have risen 63% during the past six months and Enbridge has had to shift that cost to consumers, said Stephen Letwin, the company’s vice- president of energy, distribution and services.

“One of the reasons natural gas prices have increased so dramatically is that more and more businesses and families are making natural gas their energy source, putting a strain on supply and driving costs up,” Mr. Letwin said.

However, unlike Mr. MacLellan, Enbridge officials would not speculate on what the increase might be.

A particularly cold winter has not helped to keep prices down either, said Marie Rounding, president and chief executive officer of the Canadian Gas Association, which represents the country’s major gas distributors.

“Increases for the rest of the winter will be dictated by weather,” she said, adding that a vicious cold spell could push prices higher.

But Ms. Rounding said natural gas prices tend to be cyclical, and that they should start to dip as companies increase natural gas production. But when that dip will begin is still questionable.

Ms. Rounding believes it will take between 12 and 24 months, while Tom Adams, the executive director of Energy Probe, a group that promotes resource conservation, said it could drop by 50% in the next 15 months.

In the meantime, Enbridge is trying to encourage customers to cut costs by offering a $15 rebate on the purchase of any programmable thermostat and a $100 rebate for people who switch to high-efficiency heating systems.

 

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