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Role of OEB Related to Electricity and Natural Gas Rates
The OEB reviews and approves rates:
- that natural gas utilities propose to charge consumers for natural gas distribution and natural gas purchased from the utility
- to be charged for electricity distribution and transmission (the “delivery”)
Regulated firms must submit an application to the OEB for proposed rate increases or decreases. In reviewing applications, the OEB undertakes a public process involving interested stakeholders, such as consumer advocates and environmental representatives, who wish to express any views or concerns. Read more about public hearings.
The OEB does not regulate the prices charged for competitive services:
- these include contracts offered by natural gas marketers, water heater rentals and repair or maintenance services. These products and services are available from a number of companies competing for your business
Natural Gas Rates
Private natural gas utilities who own pipeline assets and are considered to be a monopoly, are required by legislation to submit the rates they propose to charge their customers to the OEB for review and approval. Currently, there are two large and one small private natural gas utilities in Ontario regulated by the OEB: Union Gas Limited, Enbridge Gas Distribution Inc. and Natural Resource Gas Limited. The OEB does not regulate the rates of Kingston Utilities or the City of Kitchener’s natural gas operations.
Natural gas “commodity” rates are approved by the OEB and can change every three months to reflect a forecast of market prices. The market price of natural gas varies depending on numerous factors, including North American supply and demand, and quarterly rate adjustments help reduce the risk of large, one-time adjustments to the consumer. Natural gas “delivery” costs are also approved by the OEB.
While the OEB approves the price of natural gas consumers purchase from the utilities the utilities do not profit on natural gas purchases and sales. The delivery rates include the cost of transporting and distributing natural gas to customers, as well as other operating expenses such as meter reading, billing, credit and collections, etc.
Electricity Rates
The Ontario Energy Board is responsible for approving the rates that local utilities can charge their customers for the distribution and transmission of electricity ("delivery"). The commodity price of electricity is also set by the Ontario Energy Board.
On May 1, 2006, the price you pay for electricity was changed to better reflect the price paid to generators. The new prices are based on an OEB forecast of the price of electricity over the next 12 months and any accumulated difference between the amount consumers paid for electricity and the amounts paid to generators in the previous period.
Every six months, the prices you pay for your electricity may change based on an updated OEB price forecast and any difference between the amount consumers paid for electricity and the amount paid to generators. Read the Regulated Price Plan FAQ...
Government regulation requires all electricity distributors to use a standardized format for bills they send to their low-volume consumers, such as residential consumers and small businesses. The format has fewer line items and includes a glossary of terms, messages about conservation, and historical consumption data so consumers can track their electricity use. This bill format is the same for all electricity utilities across the province.