Public Utilities Board approves 8.7% increase for natural gas

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The cost of natural gas is set to increase by about 8.7% for the average residence starting Aug. 1.

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The Public Utilities Board approved an application of Centra Gas Manitoba Inc. to increase primary gas rates from $0.1045/m3 to $0.1323/m3, which will cost the average user about $58 per year.

Darren Christle, the PUB secretary and executive director, said the rate increase has everything to do with the world market and the cost of natural gas to Manitoba Hydro, which owns Centra Gas.

“It is completely based on the price of the commodity that Centra Gas pays for it,” he said. “They don’t actually make a profit on the molecules. If the price goes up or if the price goes down, the increase or the savings are passed on to the residential or commercial users.”

It is because of these market fluctuations the rates are adjusted quarterly and the PUB will be looking at them again in November.

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Hydro rates have gone up and down over the years, including hitting $.0762/m3 in February 2018, and previously as high as $0.1127/m3 in Feb 2017 — records on the Crown utility’s website do not go back further. This would be the highest rate recorded in those stats.

Scott Powell, the communications director for Manitoba Hydro, said the increase in price has been driven by supply and demand around the world. He pointed to below average storage levels in natural gas storage, the demand from rebounding North American economies and a strong demand for liquified natural gas imports as factors.

“You put all of those factors together and you’ll see that upward pressure on pricing,” said Powell. “Because we don’t make any money on Primary Gas, it’s a flow through cost for us. Whatever we pay, that’s the cost that gets passed on to the customer through the PUB and our rates.”

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Twitter: @JoshAldrich03

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