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Ontario Natural Gas FAQ

  1. What costs make up my gas bill ?
  2. What choices do I have ?
  3. Why would I buy from a marketer ?
  4. How do I choose the best deal ?
  5. How long does it take to transfer to a gas marketer ?
  6. Who will the bill come from ?
  7. Is there a risk of not having gas supply ?
  8. I've signed a contract. Can I cancel it ?
  9. What happens if I move, or sell the house ?
  10. How do I complain about what happened to me ?
  11. What if my current contract hasn't expired yet ?
  12. Who is responsible for the transportation charge ?
  13. Does all of this apply to my business ?
  14. Gas terms explained.
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What costs make up my gas bill ?

Gas Supply -The gas commodity that flows through the pipes. The rate is set by the utility, or the gas marketer, you buy from.
Delivery -The cost of delivering the gas from a central pipeline to your home or business. This pays for the construction and maintenance of the pipelines and systems. It is a regulated rate payable to the utility.
Transportation
(in some areas)
-This is often a separate charge line and customers should note differences in this charge between marketers. It is the cost that your gas supplier has to pay to the pipeline company to get the gas from where it is pumped out of the ground. It is also a regulated rate payable to the utility.
Customer / monthly charge -This is a fixed monthly charge to compensate the utility for the cost of making sure that you always have access to gas. It pays for the cost of connecting and billing.

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What choices do I have?

Buy your gas from the utility.

You can continue to buy gas from your utility. If you do this, you will continue to pay the variable gas rate charged by the utility. This rate reflects the utility's cost of gas, plus their administrative costs in buying and supplying that gas. The utility is not allowed to make any profit from this gas supply. They just recover their cost. This rate is regulated by the Ontario Energy Board (OEB).

This utility rate can change at any time though most utilities have a quarterly schedule for doing this. To change rates they apply to the OEB and show that their costs are either higher or lower. The utility can also charge retroactively. If they find that it has cost more to serve you than they have collected from you, you will be charged the difference, either as a lump sum at the end of the period, or as a surcharge on gas over a period of several months.

Buy from a gas marketer
Marketers offer a variety of short and long term contract options. If you choose a fixed-price for your natural gas over a fixed period of time, you will know your future gas costs for that time period. If gas prices rise above your fixed-price during the term of your contract, you save money. However, if gas prices fall, your gas costs may be higher than they would have been with another option.

If you choose to purchase from a marketer, your gas will continue to be delivered to your home by the utility. The utility will also continue to provide you with emergency response services. There is no risk of being without gas.

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Why would I buy from a gas marketer ?

Either because you want to be sure what your gas price will be month to month, or because you think gas prices are going up. Marketers provide you with choice. You often have a choice between fixed or variable rates, short or long terms and sometimes other incentives or extras such as rebates, credits on your bill or air miles. Utilities cannot offer fixed term gas contracts. If you choose a variable term from a gas marketer, you will likely benefit from lower overheads and operating costs. Marketers offering a variable rate often give a guarantee of a certain percent below the utility's rate.

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How do I choose the best deal ?

  • Think about your budget, your risk tolerance and your goals.
  • Decide whether you want to wait for the lowest possible price but as a result risk having a higher price, or whether you want to know exactly what you are going to pay for your gas.
  • Think about, or consult expert advice, about where gas prices might go. If prices are likely to go up, then consider a fixed term contract.
  • Look at the price chart for your area here.
  • Look at the prices and incentives offered. Decide on the best deal for you, and sign up online.
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How long does it take to transfer to a gas marketer ?

It takes about 8-12 weeks to transfer your gas supply. The process is:
  • You cancel with your previous marketer, if you have one. See below.
  • You agree to an offer with the marketer
  • the marketer sends the contracts to the utility, often batching contracts received at month end
  • the utility "scrubs" the names, ensuring that the names and account numbers match, that you are not under contract with another marketer, that you have paid your bill and other quality control checks
  • about 4 - 6 weeks later, the utility sends the results back to the marketer saying that you can switch
  • you will then switch at the beginning of the next billing period
This means that the marketer won't be sure that they can have you for about 2 months, and might not take over your supply for even 3 months. The contracted price won't start till then either.

If you have a contract with a marketer, and it is coming to an end, you will receive a notice about 90 days before the end of the contract. You will be asked to notify the marketer of your intentions at least 60 days before the date stated. You have to cancel before you sign with a new marketer. This is particularly strict in the Union Gas Southern Ontario area. You usually have to go back to buying from the utility for a month before you can sign with another marketer.

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Who will the bill come from ?

At present, the bill will still come from the utility. Marketers have the option of taking over the billing for their customers, but none have done that yet for residential consumers. The marketer tells the utility how much to charge their customers, and utility forwards the money to the marketer. The name of your marketer will appear in the body of the bill, along with a contact phone number.

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Is there a risk of not having gas supply ?

No. The utility in your area is responsible for ensuring that you have a supply of natural gas, as long as you pay your bill. If the gas marketer that you choose happens to go out of business, you will still have gas supplied to you. You might revert to the utility's gas supply price, or you might be required to sign with a different marketer. However, you don't have to worry about being without gas.

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I've signed a contract. Can I cancel it ?

Maybe. Here are your opportunities. If you use over 50,000 M3/yr, these don't apply to you.

a) Within 10 days of signing.
You have 10 days to cancel after signing any contract.  You can notify the marketer in writing by letter or fax, and should keep a copy in your records.  If you "made the effort" on your own to sign up, this is the only cancellation option you have before the end of the contract.  This would cover situations in which you called into the marketer, if you responded to a direct mail offer or if you signed up on a marketer's, or Energyshop's web site.

b) If you signed through door-to-door or outbound telemarketing.
If you signed a contract with a door-to-door marketer, or as a result of a telemarketing call that you received, you have additional opportunities.  In these cases the marketer must re-affirm your intent to enter a contract with them.   This must be done between 10 and 60 days after your original contract signing.   The re-affirmation can be by a physical signature, by electronic submission over the internet or by recorded telephone call.   If you refuse to reaffirm, or if they cannot contact you, the contract will be cancelled.

c) At the end of the contract period.
You will receive a notice from your marketer about 60 - 120 days prior to the expiry of your contract.  It will tell you that your contract is expiring.  If you do nothing, the marketer can renew the contract for one year at a new rate.
d) If the contract was automatically renewed.
If that happens, you can cancel within 35 days of being sent the first bill after the renewed contract takes efect.

e) Termination Clauses
Most marketers have a termination clause in their contract.   Read the contract carefully.   These clauses include an exit fee.   Calculate the fee and see if it makes sense to cancel. Compare the exit fee to what you would save over the contract term by getting a new contract at a lower rate.

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What happens to the contract if I move and sell my home or business ?

These clauses differ greatly between marketers. Some contracts say nothing about this, and some say you must contact the marketer 30-60 days before you change posession of the home/business. They will then advise you what they will do for you/to you.


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How do I complain if I have a problem with a marketer ?

  • First, contact the marketer. They should have to first opportunity to respond. You can get their contact number from your bill. Failing that, check for the number on the Ontario Energy Board (OEB)web site.
  • Secondly, contact the Ontario Energy Board (OEB). They are responsible for the dispute resolution process to which all marketers in Ontario are required to belong.
    Ontario Energy Board toll free at 877-632-2727 or,
    in Toronto, call 416-314-2455
    or fax: 416-440-7656.
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What if my current contract hasn't expired ?

The Energyshop.com contract form has a place to record the expiry date of your contract. As long as it is not too far off, likely under 6 months, the marketer will take your contract and enroll you when they can.

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Who is responsible for the transportation charge ?

Transportation, which is typically about 15% of your bill, may be a regulated rate from your utility, or if you are in a contract with a marketer it may be the responsibility of the marketer. In the Union Gas Southern Ontario delivery area, all marketers are now responsible for transportation charges. In the Enbridge area if a customer has a contract with a natural gas marketer, that contract will determine whether the Transportation to Enbridge charge is shown with the marketer charges or with your Enbridge Gas Distribution charges.

Consumers switching to marketers will have their gas transported to Ontario through a variety of pipelines. This is a combination of pipelines from Alberta, Chicago, Texas Panhandle, New York State, etc.

Make sure that you ask your marketer how much they charge for transportation and compare this price along with the gas supply price.

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Do all the rules apply to my business ?

Most of the above information applies to businesses as well, except for the consumer protection act changes allowing 30 day cancellation periods and re-affirmation of the contract. Current licensing codes are for the protection of customers that consume 50,000 m3 or less annually.

Customers that consume more that 50,000 m3 of natural gas annually usually have very tailored contracts specific to their needs. Please contact Energyshop.com for more information.

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Gas Terms Explained.



m3 - Cubic Metre. The unit of measurement for sales of natural gas in Ontario and Manitoba.

GJ - GigaJoule. The unit of measurement for sales of natural gas in Alberta and New Brunswick, and in the wholesale market. ABM - Agent, Broker, Marketer. These are the three names for any company or individual who is in the business of selling gas or electricity to individual homeowners or businesses. Typically, they sign up customers to an energy supply term, then source that gas in one or more contracts with a gas producer. They charge you only for the commodity itself.

Agent - See ABM above.

Broker - See ABM above.

Commodity - The natural gas itself. This refers to any product that is essentially undifferentiated. This means that there is no difference in the product regardless of which company you buy from. Milk is generally said to be a commodity. As long as the product meets the provincial health guidelines for milk, there is really no difference between producers or sellers.

Default Supply - This is your supply of gas if you do nothing and don't choose a deregulated marketer. It will be provided by the local utility. The utility is obliged to pass along their costs of purchasing gas without marking it up, except for administrative costs.

Delivery - Gas is delivered to your home or business through a pipes. Delivery charges pay for the construction and maintenance of those fixed links, and any costs associated with bringing the product to you.

Marketer - See ABM above.

Spot Market / Spot Price - This is a North American market for purchasing natural gas. It's a commodity market where natural gas trades like soy beans or pork bellies. The price is set based on supply and demand for gas required immediately. The spot price is the price one day's worth of natural gas at that point in time. The price varies extensively in times of extreme heat or cold. In 2001, this gas spot price ranged from 52 cents / M3 to 7 cents / M3. This price doesn't have all that much to do with what a person or business can expect to pay. It is an indicator of the direction and magnitude of market moves. However, the utility and marketers price based on longer term prices.