The Energy and Utilities Board has started hearings into Enbridge Gas New Brunswick's proposal to raise natural gas distribution rates for homeowners, small businesses and a few institutions.
Enbridge asked the energy regulator to halt proposed rate hikes for a number of industrial customers. Enbridge and the provincial government are working on a deal that could change the way the natural gas company sets its prices.
Hearings into proposed natural gas rate hikes by Enbridge began in Fredericton. However, there have been discussions for several weeks between Enbridge and the provincial government.
"We've been able to bring Enbridge to the table and have meaningful discussions with them," said Energy Minister Craig Leonard.
Enbridge Gas confirmed on Tuesday the two sides have been in talks for the last four to six weeks.
In the legislature, Leonard again said he's working on his own pricing solution for natural gas customers.
But the plan may be of greater benefit to large industrial customers.
"We want to get those distribution costs under control, especially for our industries," Leonard said Wednesday.
The big problem is that Enbridge hooked up dozens of New Brunswick neighbourhoods for natural gas over the last decade — without commitments from homeowners to use it.
It's a gamble that failed when far fewer residential customers converted to natural gas than expected.
The average home in New Brunswick heated with natural gas pays about $1,000 a year in distribution charges to have the gas delivered, but the actual cost to Enbridge is about $5,000 per house because it laid so much pipe and attracted so few customers.
Substantial losses on homeowners and small businesses has forced Enbridge to charge its other customers, especially industry, millions more than the service actually costs.
Leonard said his plan is to get industrial gas rates down and let residential and small business rates continue to increase with the price of oil and electricity and give Enbridge more time to pay its bills.
This may mean residential and small business customers will have to pay the price for Enbridge's expansion mistakes.