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Pricing Conventions

Businesses can buy:
- full requirement gas contracts with all of the delivery and compressor fuel charges added or
- naked price contracts based on NYMEX quotes, and pay all of the other charges quoted separately.

Electricity can be either a fixed price for every kWh used regardless of timing, or a business can buy a block of electricity to best match their time of use. Business customers can buy from wholesale companies such as Coral (Shell Trading), Sempra, CNE, Direct Energy, Enmax, Epcor, CEG, and Nexen.

Natural Gas

Local Supplier: Union Gas

The local Supplier charges residences and business for the delivery of natural gas and for other costs related to the operating and maintenance of the overall system. While natural gas will always be delivered by the natural gas utility, consumers and businesses have the option of buying the product (natural gas)from the local utility or from a gas marketer.

Buying from A Natural Gas Marketer

• The price is set out in a contract with the natural gas marketer.
• Price is determined by the natural gas marketer and not by the Ontario Energy Board.
• Prices are normally set at higher amount then the current market rate however the price is usually fixed for a 1 to 5 year period
• The price payable per cubic meter (m3), is shown on the "Gas Supply" line of the natural gas bill (contract price)
• Usually the price is fixed for a number of years, but it may change depending on the terms of your contract.
• If the contract has to be terminated a penalty fee will apply.
• The natural gas utility will continue to bill you for Delivery and system maintenance costs.

Purchasing Natural Gas from Local Utility

• Gas prices normally change every three months
• Prices are directly related to the open market each quarter
• Utility natural gas rates are approved and regulated by the *Ontario Energy Board.

*The Ontario Energy Board is a regulatory body that ensures fair practices among the utilities and ensures that they are not making a profit on the purchase of the gas commodity.

Electric

Is Your Business a Designated Consumer?

If your business is a Designated Consumer, (using less than 250,000 kWh/yr, it is eligible for the Regulated Price Plan (RPP):

• 5.0¢/kWh for the first 750 kWh/month /account or multi-res suite;
• 5.9¢/kWh for remaining monthly use.

This price is set until November 2008, but is not a fully fixed price. If the spot market is more than this, the deficit created will be built into the next price revision. If a deficit exists when a business signs a term contract with a marketer and leaves the Regulated Price Plan, they will be charged their pro-rata portion of the deficit. If you are not Designated, you are paying the spot market rate for electricity. If you have an interval meter, you are paying based your actual hourly use. Otherwise, you are paying the Standard Supply Service (SSS) price from your utility. You will receive the Provincial Benefit as an additional credit/surcharge

What Makes Up an Electricity Bill

Large volume users not eligible for the RPP can compare marketer's offers to the utility spot price. These are our best estimates. Business users will have to check with the utility for exact rates for a given period.

Marketer prices only cover the electricity supply cost.

Transmission, Debt Retirement and System Operation charges, will be charged by your utility at the regulated rate regardless of the electricity supplier. The portion of your bill over which you have choice is about 60% of the total charge per kilowatt hour. That 60% goes to whomever you choose to supply your electricity.

Businesses can stay with the utility and pay a variable rate, or go with a deregulated energy marketer and choose a fixed or variable contract with terms between 1 and 5 years.

In Ontario, the Ontario Energy Board regulates utility rates. Utilities can't offer fixed contracts; only marketers can. If you are a designated consumer the utility will charge you a set rate for a defined period.

Regulated Price Plan (RPP) Settlement

If you sign an electricity contract in Ontario you will be subject to the regulated price plan (RPP) settlement. This sets a rate for a defined periond (ie 6 months) to give the user a more balanced billing which avoids market volitility. When a customers leaves the RPP for a contract, they will have an additonal charge or credited depending on the exact price and usage in that time.

Sample Chart of Pricing