Enbridge applies to hike rates for homes, businesses

New Brunswick's natural gas utility says it is confident a new round of distribution rate hikes for residential and commercial customers in January will not worsen its fight to retain clients because the price of natural gas itself has been coming down.

"It's not as big a problem as it was this time last year," said Enbridge Gas New Brunswick's general manager Gilles Volpé about customer defections. "The price of the commodity right now is much lower than we anticipated."

Residential customers are going to see a slight increase but they're still going to be paying 20 per cent less than electricity.- Gilles Volpé , general manager

​Enbridge has applied to increase distribution charges to residential customers 30.4 per cent in January to $9.45 per gigajoule. It's the second significant increase in eight months. Residential distribution charges previously jumped 49.2 per cent in May, but the utility says because natural gas itself is cheaper this year, homeowners' total bills will rise only slightly, maybe 10 per cent this January from last January.

"Residential customers are going to see a slight increase but they're still going to be paying 20 per cent less than electricity," said Volpé.

A larger concern for Enbridge has been among its smaller commercial customers who have been leaving natural gas in large numbers over the last two years, many attracted to the lower price of propane.

706 lost customers

In new filings with New Brunswick's Energy and Utilities Board as part of its current rate application, Enbridge detailed the loss of 706 natural gas customers over the last two years, most of those critical small commercial clients.

Rates for that group were cut 16 per cent in May to try and make natural gas a more attractive fuel and Enbridge set up a $500,000 "customer retention" fund to pay those who were on the verge of switching to stay with natural gas.

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Enbridge says it expects to pay out all of that retention money and although about half of rate discount introduced in May will be eliminated in January under the current application. Volpé believes those lower natural gas prices will prevent others from leaving. 

"The price gap between natural gas and propane has shrunk considerably. That's stopping the flow of conversions away from natural gas," said Volpé.

Conversions continuing

But Saint John propane dealer David Salesse says he's still doing natural gas conversions and can only see that continuing if distribution rates go up.

"It's non-stop. I'm doing oil-to-propane, electric-to-propane besides doing natural gas. I mean it all speaks for itself," said Salesse, who said he switched a small apartment building on Friday from oil to propane even though natural gas pipes run past its front door.

"I haven't stopped converting since I started a year ago.  Whether they [Enbridge] get nothing at all [in rate increases] I'll still be going full bore."