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Natural Gas Commodity Rate Adjustments
Natural gas utilities apply to the Board quarterly for a rate adjustment to reflect any differences between how much the utility estimates it will pay for natural gas in the next 12 months (called a “forecast”) and the actual costs paid. In Ontario, distributors must pass through to the customer the actual cost for purchasing the natural gas, with no markup.
Called a Quarterly Rate Adjustment Mechanism, or QRAM, this ongoing procedure reduces the risk of large, one-time adjustments (debits or credits) for the consumer.
Rate adjustments are normally implemented on January 1, April 1, July 1 and October 1, following the Board’s review of the utility’s application.