hi-enbridge

Enbridge Gas New Brunswick must cut distribution rates for homeowners and small businesses, effective Feb. 1.

Enbridge Gas New Brunswick has been ordered to slash natural gas distribution rates by nearly 60 per cent for about 9,000 homeowners and small businesses in the province.

The order, issued Thursday by the Energy and Utilities Board, will likely cut typical residential heating bills by about $100 a month and small business bills by double that amount.

"In this case, having considered the submissions of the parties, the board finds that it would be in the public interest to apply the rate [reduction]," EUB chairman Raymond Gorman announced.

The order takes effect on Feb. 1.

Enbridge had opposed the cut, which it says will cost the company $1.8 million over the next two months.

But Gorman said the EUB agreed with submissions by public intervener René Basque that natural gas customers had been promised better prices than they are currently paying and are entitled to relief.

"The board finds merit in much of the submission made by the public intervener," said Gorman.

Basque had argued at a hearing on Monday that Enbridge is required by government regulation to supply gas to residential and small commercial customers at a price 20 per cent better than electricity.

Runaway natural gas prices have eroded those savings completely this winter and Basque said that legally required Enbridge to cut is distribution charges to consumers to compensate.

Enbridge also had a moral obligation to honour the direct corporate promises it had made to customers it convinced to switch to gas, Basque said.

"EGNB has made a historical commitment to its residential customers to provide a target saving level of 20 per cent as an inducement for these customers to convert from the alternate fuel sources," he said.

“Without the implementation of a rate [reduction] at this point in time, EGNB will have failed its commitment to the residential customers." 

The EUB also rejected a request by Enbridge to let it increase rates to industrial and large commercial customers if homeowner rates were cut.

Gorman said that is an issue the company can raise at a full rate hearing, which is scheduled to begin in mid-February.