Cold will mean higher gas and hydro costs
Cold temperatures, long winter will lead to bigger bills this year.
This winter’s brutal weather has savaged your budget if you use electricity, or heat with natural gas.
The high demand for energy has pushed up prices for both forms of energy — some of which consumers will continue to pay even after the warm weather arrives.
Natural gas prices
Consumers saw the result of the higher demand for gas last week, when Enbridge announced its new rates for households who buy their gas directly from the utility.
Rates will jump 40 per cent on April 1, Enbridge announced. A typical household that now pays $1,000 a year for natural gas will pay about $1,400 annually under the new rates.
The increase reflects the higher price that natural gas producers are receiving because of the soaring demand.
After languishing below the 10-year average for the past four years, Alberta gas prices shot above that level early this winter.
Ontario gas utilities can draw on gas stored at the Dawn terminal near Sarnia, Ont., which was purchased earlier at lower prices. But those reserves were drawn down because of the high demand.
“This winter was so cold and so long that we have used much of the cheaper gas we purchased and have recently been buying more gas than normal at higher market prices,” said Enbridge’s Chris Meyer.
She said in recent years, Enbridge has bought gas for $4 to $5 (U.S.) per million British thermal units (BTU, a common method of pricing gas on commodity markets).
With stored gas running short, Enbridge had to buy more on the market, she said. “It typically cost about $20 (U.S.) per million BTU.”
High gas prices work their way through to your electricity bill as well, since natural gas-fired generators deliver an increasing proportion of Ontario’s electricity.
Gas-fired generation is more expensive than nuclear or hydro-electric power — and more expensive than the coal plants, now closed, that used to supply a significant portion of the province’s power….
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“…natural gas-fired generators deliver an increasing proportion of Ontario’s electricity.”