The press recently announced an 80% increase in natural gas prices and while the cost per GJ of natural gas will be rising from $1.14 to $2.05 as of October 1, 2016 it is important to look what kind of impact this has on the homeowners overall gas bill.
Your natural gas bill includes the cost of natural gas, delivery charges, meter charge, GST, municipal charges, clean energy levy, and carbon tax. This means that when the cost of gas was at $1.14/GJ the landed cost to the Vancouver Island homeowner was $9.82/GJ. As October 1, 2016 the cost of natural gas will rise $0.91 which will increase the landed cost to $10.73/GJ or 9%. With the average Vancouver Island homeowner using 45GJ/year this increase equates to approximately $3.00 per month. Keep in mind that cost here on the island has dropped by 26% since January 2015.
Why have Vancouver Island natural gas rates decreased 26% since 2015? The 26% decrease has been a result of Fortis BC amalgamating entities thereby equalizing costs across British Columbia. This amalgamation was rolled out in three stages with the final stage to be implemented in January 2017. Although the exact gas rate decrease in January 2017 has yet to be announced we are hoping to see a further discount of approximately 8%.
It should also be noted that Fortis does not mark up the cost of gas so this minor price change is a direct reflection of the current commodity prices. Despite minor market fluctuations, the huge abundance of natural gas here in BC and North American has experts projecting the price of natural gas to remain low through 2025. According to the Alberta Energy Regulator–”the loss of traditional export markets, warmer-than-normal temperatures and increased U.S. production are going to put downward pressure on natural gas prices.”
Compared to electricity, natural gas is approximately 1/3 the cost which makes a natural gas furnace more cost effective to run than a heat pump and puts electric baseboards to shame. Unfortunately, the media has opted to sensationalise what equates to a minor price adjustment.
The chart below shows the new October 1 rates compared to the cost of electricity. You can also dig deeper and compare appliance operating costs in our region by using our energy calculator.
*October increase in kWh: 3.53 ¢/kWh to 3.86 ¢/kWh,
increase = 0.33 ¢/kWh (1/3 of a cent)