The company that distributes natural gas in Thunder Bay and Northwestern Ontario has applied for a rate increase related to the cost of complying with Ontario's cap-and-trade system.
Union Gas and two other natural gas distributors in the province are asking the Ontario Energy board to approve cap-and-trade compliance plans which would raise natural gas rates by six to seven dollars a month for the average residential customer.
Although the application still requires formal approval, a spokesperson for Union Gas says the increase will be imposed on an interim basis as of January l, 2017.
Cap-and-trade is aimed at reducing greenhouse gas emissions.
Union Gas manager of media relations Andrea Stass said that under the program, "Union Gas has to purchase emission credits for the greenhouse gases that our customers produce...and in turn we collect that back from customers on their bill."
The provincial government has said that money raised through the system will be reinvested in green technology and green infrastructure.
In a public notice. the Ontario Energy Board says gas distributors will incur new costs by complying with the provincial regulations, but the board will accept feedback from the public as it considers whether the companies' plans to recover costs from customers are reasonable.
The OEB says other customers, including businesses, may also be affected.
Details of the rate application, and how to provide input, are available on the OEB website. Information is also available on the Union Gas website.
According to Stass, the plan that Union Gas has submitted to the OEB includes an interim charge of 3.3 cents per cubic metre of gas consumed, and that cost will be included in the delivery charge on customers' bills. She said in the Thunder Bay area, the additional annual charge will be about $74.
