Oil companies want to raise home delivery charges in N.B.

New Brunswick's Energy and Utilities Board begins hearings Thursday to consider whether provincial heating oil companies should be allowed an interim rate increase on home delivery.

Energy and Utilities Board hearings begin to consider immediate increase in oil prices

The New Brunswick Energy and Utilities Board begins hearings Thursday to consider an application by heating oil companies in the province to increase home delivery rates.

If approved, it could add $25 to the cost of a 500-litre delivery, but home heating companies say they are struggling with fewer people using oil to heat their homes.

If the interim increase is granted, the higher rates could be in place as early as the first week of November.

The rates wouldn't be permanent until the EUB conducts a full hearing on the issue in December.

After decades of relying on oil, the Saint John City Market is just one example of a building that has switched to natural gas.

Many homes are also switching, which, according to EUB spokesperson David Young, has led to a decrease of 30 per cent in demand for heating oil over the past seven years.

"The actual original motion came from the Canadian Oil Heat Association, so it may represent a number of people and then the other letters are in support saying, 'Yes we agree.'"

Ten separate heating oil companies are asking for an industry-wide increase, allowing them to charge 4.4 cents per litre more for delivery.

Heating oil companies also applied for an increase in delivery charges in April 2011, arguing that charges had been frozen since 2006.

This year, companies are making a much stronger case with an independent consultant, hired by the EUB, endorsing their call for higher prices.

New Brunswick's largest heating oil company, Irving Oil Ltd., is not among the 10 on record asking for the increase, however, if it goes ahead, all heating oil companies will benefit.

Heating a home with oil in New Brunswick is about 20 per cent more expensive than heating with electricity, and about 30 per cent more expensive than natural gas.

Oil heat is about 50 per cent more expensive than heating with a pellet stove, and about double the price of heating with a wood stove.


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