Ontario natural gas is the simplest distribution market in Canada: one near-total monopoly, two small alternatives in tight pockets, and an OEB-set commodity rate that resets four times a year.
3.9 million customers, more than 98% of the Ontario market. Formed by the OEB-approved merger of Union Gas and Enbridge Gas Distribution on January 1, 2019.
EPCOR Natural Gas (9,800 customers, Aylmer plus Southern Bruce) and NRG (7,000 customers, Aylmer area). Together, less than 2% of Ontario gas customers.
The commodity charge resets every three months under QRAM. The delivery charge is set annually by the OEB through formal rate cases. Two timelines, one bill.
What this means for your bill: you cannot switch your gas distributor, that is set by where you live. You can choose whether to take the commodity from Enbridge\'s sales service (the QRAM default) or from a licensed gas marketer at a fixed rate. The default is right for almost everyone.
Most gas-bill confusion in Ontario boils down to three patterns:
None of these are dumb. The Ontario gas bill simply has more moving parts than the marketing of it implies.
"Gas marketers offer big savings over Enbridge."
This pitch shows up at doorsteps and in mailers every year. It rests on two outdated ideas. The first is that the OEB still subsidises gas marketers through a rebate mechanism. That mechanism was stripped years ago. The second is that the QRAM commodity rate is a high, sticky number that a fixed contract can undercut. The QRAM rate is in fact a quarterly pass-through that closely tracks the AECO wholesale benchmark, with a Variance Account that trues up over- or under-recoveries within months.
The OEB\'s own consumer information pages caution gas customers to compare any marketer offer against the rolling QRAM average, not against the single highest quarter of a previous year. Industry tracking has consistently shown that the median 3 to 5 year fixed gas-marketer contract has ended up above the QRAM average over the contract term. A multi-year fixed rate is not a hedge against unknown wholesale moves; it is a wager against the regulator\'s ongoing forecast and a margin layered on top.
How the QRAM commodity rate is actually set
The Quarterly Rate Adjustment Mechanism is the single most important number on the average Ontario gas bill, and the least understood. Every January 1, April 1, July 1 and October 1, Enbridge Gas files a QRAM application with the OEB. The application sets a new sales-service commodity rate by zone (EGD, Union South, Union North), based on three inputs.
Input 1 · AECO forward strip
A forward-price curve at the AECO trading hub in Alberta, the standard North American natural gas benchmark for Canadian distributors. Enbridge takes the strip for the upcoming quarter as the wholesale anchor.
Input 2 · PGVA true-up
The Purchased Gas Variance Account collects the gap between what Enbridge actually paid for gas in the previous quarter and what it billed customers under the QRAM rate. Any over- or under-recovery is refunded or recovered in the next quarter.
Input 3 · Storage cycle
Ontario has the largest underground natural gas storage in North America (Dawn Hub, near Sarnia). Summer injections build inventory cheaply; winter withdrawals are dispatched into a tighter market. The QRAM blends the seasonal cost mix into the quarterly rate.
Two structural points are worth keeping in mind. First, Enbridge Gas does not make money on the commodity. The commodity charge is a regulated pass-through; Enbridge buys gas at wholesale and resells it to you at cost, with any gap reconciled through the Variance Account. The company\'s profit comes from the regulated delivery rate, which the OEB sets through annual rate cases and which barely moves between them. Second, the QRAM rate is the floor against which every marketer offer should be measured, not the ceiling. Recent quarterly resets have moved the EGD commodity rate from 13.7599¢/m³ down to 10.1745¢/m³, and Union South from 20.4037¢/m³ down to 17.641¢/m³. A 3 to 5 year contract signed at any of last year\'s headline rates would now look expensive.
Same company, three different commodity rates
Even after the 2019 merger, Enbridge Gas operates three legacy rate zones because the delivery infrastructure, storage profile and historical contracts differ. The OEB approves a separate commodity rate for each zone every QRAM filing.
| Zone | Coverage | Recent commodity rate | Typical annual m³ |
|---|---|---|---|
| EGD (Rate 1) | GTA + eastern Ontario ~2.4M customers |
10.1745¢/m³ | ~2,400 |
| Union South (Rate M1) | Southwestern Ontario ~1.1M customers |
17.641¢/m³ | ~2,200 |
| Union North (Rate 01) | Northern + NW Ontario ~400k customers |
Decreased this quarter | ~2,400 |
Commodity rate figures from the current QRAM filing on enbridgegas.com. Typical annual consumption based on Enbridge\'s residential detached-home averages by zone. Delivery, storage and transportation charges are billed separately and stay flat between annual OEB rate cases.
Five patterns that show up in OEB complaint data
The OEB publishes annual consumer-complaint summaries. The same handful of misunderstandings drive most of them.
The commodity (sales service) line resets every three months under QRAM. The delivery line is set annually by the OEB. Customers see the commodity drop and expect the whole bill to drop, then call to complain when the delivery line did not move.
Door-to-door scripts compare a fixed marketer rate to a single high-quarter QRAM number, never to the rolling QRAM average. Once the next QRAM lands, the comparison flips and the contract starts losing.
Ontario gas bills carry a separate storage and transportation charge that recovers the cost of Dawn Hub storage capacity. It does not vary with how much gas a household uses in a given month; it is a regulated flat allocation.
The federal carbon charge was phased out effective April 1, 2025. Any natural gas bill from after that date should no longer carry a separate carbon line. A few customers still receive a small balance-settlement entry; that is the legacy reconciliation, not an active tax.
You cannot. Enbridge Gas, EPCOR Natural Gas and NRG hold OEB-granted franchises over fixed geographic areas. The address picks the distributor; the only thing a household can switch is which company supplies the commodity (Enbridge sales service or a licensed gas marketer).
Find your gas zone and estimate your annual commodity cost
Pick your Enbridge Gas zone and the size of your home. The tool returns a typical annual consumption in cubic metres, the current QRAM commodity rate for your zone, and a rough annual commodity-line estimate. Delivery, storage and HST add on top.
Zone + cost estimator
Pick your zone and your home type. We apply the current QRAM commodity rate.
Note: This is the commodity line only. Delivery, storage, transportation and HST add roughly the same amount again on a typical detached-home annual bill.
Pick a zone and a home type to see your estimated annual commodity spend.
Annual consumption figures based on Enbridge\'s residential averages by zone. Union North commodity rate uses a recent placeholder pending publication of the current QRAM figure. Not a bill prediction; your actual usage depends on insulation, heating equipment and weather.
The QRAM is one of the most consumer-friendly defaults in any province
Most provinces let gas utilities pass commodity costs through on an annual or semi-annual reset. Ontario\'s QRAM does it every three months, and a Variance Account squares up any over- or under-collection in the very next quarter. That is unusually fast, unusually transparent and unusually friendly to customers in a falling-price environment. Recent quarters have seen sharp commodity-rate drops on both EGD and Union South as North American natural gas prices retreated. Those drops landed on bills within weeks of being filed.
Now place a fixed-rate gas marketer contract next to that mechanism. A typical 3 to 5 year deal locks a commodity price that the marketer believes will exceed the QRAM average over the term, plus their margin. The OEB\'s consumer pages have, for years, warned customers that the historical record of these contracts has been poor for the consumer. Industry research has consistently found that the median fixed gas-marketer offer ends up above the QRAM average, often by a wide margin. The mathematics in those studies are not subtle: the QRAM tracks wholesale at zero margin and reconciles quickly; a fixed contract layers a multi-year forecast plus a margin on top.
There is one further dimension. Because Enbridge Gas owns the pipes and meters in your neighbourhood, switching to a gas marketer changes nothing about how gas reaches you. The delivery, storage and transportation charges are identical. The only line that changes is the commodity. That makes a marketer offer a pure bet against the QRAM. It is rarely a good bet to make.
What to actually do, in order
- Identify your distributor and zone. Pull a recent gas bill: the rate zone (Rate 1, Rate M1, or Rate 01) appears next to the commodity line. EGD covers the GTA and eastern Ontario, Union South covers southwestern Ontario, Union North covers northern and northwestern Ontario.
- Check whether you are on sales service or a direct-purchase contract. Sales service is the QRAM default. A direct-purchase line on your bill means you are on a gas marketer contract. The contract end date should appear on the bill or in your annual disclosure statement.
- Read at least three QRAM filings. Enbridge Gas publishes them on enbridgegas.com. Compare the last four quarters of commodity rates to any fixed-rate offer you have received. If the offer is above the rolling four-quarter average, the contract is starting from a deficit.
- Verify any gas marketer\'s licence. Every gas marketer operating in Ontario must hold a licence from the OEB. The OEB publishes the full list. A salesperson who cannot show you a licence number is operating outside the rules.
- Use the cooling-off rules. If you do sign a fixed-rate gas contract, the 10-day cooling-off period and verification call rules apply. You can cancel without penalty inside those windows. The contract does not formally take effect until the verification call is completed.
- Default to sales service if in doubt. For most Ontario households, doing nothing (staying on Enbridge sales service under the QRAM) has historically been the right answer. The OEB resets the rate quarterly and your bill follows wholesale prices down as readily as up.
A textbook monopoly with a remarkably consumer-friendly default
Natural gas distribution is the most monopolistic part of the Ontario energy system. The pipes underneath your street were built once, are maintained by one company in your area, and cannot be paralleled by a competitor without enormous capital cost. That is why every gas distributor in Ontario operates inside an OEB-granted franchise area, why the delivery rate is set by formal annual rate cases, and why Enbridge Gas\'s market share sits above 98% after a quarter century of policy choices.
What makes Ontario unusual is what the regulator did with the commodity side of the same bill. The QRAM is one of the most consumer-friendly default-supply mechanisms in any North American gas market. It moves quarterly, it tracks wholesale at zero margin, and it reconciles its own forecasting errors within months. Most provinces and most US states do not get close to that combination. A household sitting on sales service in Ontario is, in effect, opted into a transparent quarterly pass-through that beats the median multi-year contract on price and that costs nothing to switch into or out of.
The structural lesson is uncomfortable for the contract-selling side of the industry. In Ontario, the regulated default is the strong product. The competitive product is a fixed bet against the regulator\'s ongoing forecast plus a margin. That is why the OEB\'s own consumer pages, repeatedly, advise households to verify marketer offers against the QRAM history before signing anything.
