How Much Does Natural Gas Cost in Ontario?

Natural gas prices in Ontario are based on competitive market prices, and are influenced by supply and demand, weather, storage, pricing and availability of alternative energy sources, exploration and production levels, and market participants' views of future trends. The price per cubic metre (m3) varies depending on the location, type of supply plan, and quantity consumed.

The Different Components of Your Natural Gas Bill

The natural gas bill for an Ontario residential consumer contain several components:

• Customer Charges: This is a fixed charge approved by the OEB that applies to all consumers, regardless of whether they have consumed natural gas that month. It covers the administrative costs related to natural gas accounts, including meter reading, emergency response services, maintenance, and customer services
• Delivery: This includes the costs of transport, storage, and distribution. These costs may be itemized separately on your bill. The OEB approves of them annually. If you are on a natural gas contract with a gas marketer, transportation may or may not be included. Check the details of your contract for more information.
• Gas Supply Charge: This is the cost of the gas that you have consumed. If you purchase your gas from your local utility, the rate will have been approved by the OEB. If you purchase your gas from a gas marketer, the rate will be what was specified in your contract.

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Ontario Natural Gas Prices Compared to Other Provinces

Source:Government of Manitoba

Natural gas prices in Ontario are among the lowest in Canada. Though not a significant natural gas producer, Ontario has access to natural gas from both western Canada and from the United States, and has been increasingly sourcing lower cost unconventional gas from the United States.

Evolution of Natural Gas Prices

Source: OEB

Wholesale natural gas prices dropped sharply in 2011 and 2012 compared to previous years, with the development of shale gas exploitation in the US and subsequent reduced demand for Canadian natural gas exports. However, as the particularly cold winter of 2013-2014 demonstrated, natural gas prices are closely linked to weather, and can rise quickly when temperatures drop and demand exceeds expectations. Because of this unforeseen demand, the major gas utilities (notably Enbridge) were required to purchase gas on the spot market at high prices, which now must be paid back by the consumer. Regulated rates for natural gas shot up 78% when it was adjusted in April 2014, but with a recent decision by the Ontario Energy Board to spread out the cost of the shortfall over two years, rates are not expected to rise so dramatically in the future.

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