Rising natural gas prices have prompted Enbridge Gas to issue a public notice that an unusually large hike to natural gas bills is on the way.
According to a letter sent to the Ontario Energy Board (OEB), the price of gas is set to go up between 21 and 47 per cent for different regions of the province on April 1, though Enbridge plans to spread out some of that increase over time.
This could add as much as $189 to an average annual gas bill, the letter states — the equivalent of $15.75 per month.
“Enbridge Gas has forecast that the gas commodity portion of the bill will increase by more than 25 per cent,” according to the letter sent last Friday. The company “is planning to include a plan to mitigate the increase to an acceptable level.”
The OEB, which regulates the natural gas and electricity sectors, requires Enbridge to file a notice one month before requesting an increase to natural gas rates if the hike is greater than 25 per cent.
Environmental lawyer Kent Elson, who follows the OEB closely, says mitigation measures typically mean the price increase will be spread out over time.
“They just hold off on passing on some of the rate increases so that customers don’t see a big spike. It’s smoothing that they will do, which they call ‘rate mitigation,’” he said.
Spokesperson Kendra Black declined to elaborate on Enbridge‘s plans to mitigate the price increase, saying it would be part of its application to the OEB on March 11.
Enbridge Gas, which has a monopoly on natural gas distribution in Ontario, groups its customers into four regions, each of which has a different pricing structure. Residential customers in the GTA, for example, will have the highest hike to their bill ($189), while those in the Sault Ste. Marie and Thunder Bay areas will have the lowest hike ($136). Enbridge Gas does not mark up gas prices. It makes money from the customer and delivery charges that are determined by the OEB.
The Enbridge letter describes how the rising market price for natural gas has driven up both the immediate cost for customers and a portion of the bill that compensates Enbridge if previous cost estimates were too low.
On top of this is the annual increase to the federal government’s carbon pollution price, set to go up by 2.9 cents per m3 of natural gas next month. The average annual consumption of a customer is 2,200 — 2,400 m3 of natural gas, according to the letter, and the carbon price will add $63 to $69 to an annual bill.
About 80 per cent of Canadians receive more in quarterly carbon rebate payments than they spend on the carbon levy, according to the Parliamentary Budget Office.
The natural gas price hike comes on top of a previously announced increase of between four and 10 per cent, implemented on Jan. 1.
The letter makes no mention of possible tariffs, which could affect both Canadian exports to the United States, if U.S. President Donald Trump follows through on his threats. Retaliatory tariffs, promised by Prime Minister Justin Trudeau, could affect natural gas prices, as the majority of natural gas in Ontario is imported from the United States.
“The fact that we import more than 70 per cent of our gas from the United States certainly makes us vulnerable to attacks by President Trump. So in terms of energy security, we should be reducing our reliance on gas,” said Jack Gibbons, chair of the Ontario Clean Air Alliance.
“The rising gas prices are another reason we would be phasing out gas-fired electricity and investing in heat pumps to lower our energy bills,” he added.
Natural gas prices are particularly volatile and more than tripled in price from 2020 to 2022, before dropping back down again to almost the same level last year.
“This speaks to the volatility of fossil fuels and natural gas as a commodity, the price of which rises and falls due to factors that are beyond our control,” said Keith Brooks, programs director at Environmental Defence. “We saw fossil fuel inflation coming out of the pandemic before it subsided. And now prices are spiking again — just as we’re entering a period of economic uncertainty.”
Natural gas is mostly comprised of methane, a particularly potent greenhouse gas that causes 86 times more warming than carbon dioxide, as well as being linked to childhood asthma. It’s also ubiquitous in Ontario, providing the lion’s share of heating for buildings, an increasing proportion of electricity generation, and more than half of the province’s carbon emissions.
Because Ontario doesn’t have a direct pipeline to the Canadian West, most of its natural gas is imported from the United States. Most of this gas is produced by fracking, a controversial process that has been linked to groundwater pollution and increased emissions.
“It’s very highly polluting gas because fracking is a problematic extraction process,” Brooks said. “And even though the impacts happened far away from here, we are responsible for them by being the ultimate consumer.”
