Managing Higher Energy Prices

The Key is Informed Consumers and Consumer Choice!

Attention: Business/Financial Editor, Environment Editor, Energy Editor, Home/Garden Editor

ONTARIO--(CCNMatthews - Dec. 16, 2005) - With higher natural gas prices, and further increases in electricity prices anticipated, Ontario households are now paying much more attention to energy prices and the various components of their energy bills. This heightened awareness will undoubtedly continue as we move into the winter heating season.

Informed consumers and consumer choice are key elements for effectively managing energy use and costs within this new, higher energy price environment. While the price of energy must ultimately reflect the true cost of supplying that energy, informed consumers still have a number of choices available to help them better manage their overall energy bills. By taking advantage of programs and services offered by local utilities and energy retailers, consumers can save money and help reduce overall demand.

Global events have recently helped push up the price of energy - crude oil, natural gas, gasoline and electricity - worldwide. On balance, as an energy-consuming province, Ontarians must now adapt to these higher prices.

Recent spikes in North American natural gas prices can be linked directly to a severe hurricane season, although these prices are expected to moderate somewhat as natural gas production is restored along the U.S. Gulf Coast. However, Natural Resources Canada and the U.S. Department of Energy are both forecasting continued high natural gas prices through the 2006 winter heating season. Electricity prices have also been under upward pressure, even more so in Ontario where prices are now beginning to better reflect the true cost of generating electricity.

What choices do households have in responding to higher prices? Essentially, consumers have two basic options for purchasing natural gas or electricity - pay the "default supply price" or sign a retail contract.

If they remain on default supply, the regulated utilities simply pass-through the actual cost of the natural gas or electricity to the consumer. With electricity, rates intended to reflect this cost are set and periodically adjusted by the Ontario Energy Board (OEB), an independent regulator specifically mandated to protect the interests of consumers and to keep our energy sector financially viable. With natural gas, this cost is determined by North American market forces and periodically adjusted, as required and approved by the OEB. What is important for consumers to remember is that, in either case, the Ontario Energy Board regulates the way utilities pass-through the energy costs and most charges included on a consumer's bill.

Alternatively, consumers can choose to purchase their natural gas or electricity from energy retailers, all of whom are licensed by the Ontario Energy Board and governed by consumer protection legislation and related codes of conduct. Prices offered by retailers are established in a competitive retail marketplace. Generally speaking, competitive retailers offer fixed-price, multi-year contracts, giving consumers the security of a fixed energy cost over the term of the contract. Several green electricity options are also now available from retailers, in addition to energy efficiency services, giving consumers even more choice in managing their energy costs. Consumers can find out more about their options for purchasing natural gas or electricity on the OEB website at www.oeb.gov.on.ca

The Ontario government's commitment to put smart meters into 800,000 homes by 2007 and into every home by 2010 should go even further in helping consumers better manage their future electricity bills. The Ontario Energy Board has already established rates for smart meters which will allow consumers to benefit from cheaper electricity during off-peak periods and on holidays and weekends. Although any major rollout of smart meters still appears to be several months off, some useful information on the government's smart meter initiative can be found on the Ontario Ministry of Energy website at www.energy.gov.on.ca

Ontario's energy industry is taking a strong leadership role in helping moderate the impact of higher energy prices on consumers. In addition to energy efficiency programs, the gas utilities purchase natural gas during the summer months, when the price has historically been lower, and place it in storage for use during the winter heating season. Electricity utilities have committed $160 million to developing conservation and demand management programs to help customers manage electricity costs.

Many utilities offer equal billing plans to spread the energy costs over the year, moderating the impact of high prices in any one season. Retailers are offering new products and services to respond to customer needs, and some retailers are expanding their product offerings to include energy efficiency services. By reviewing the information included along with your bill, or by checking out the various company/member links on the Ontario Energy Association's website (www.energyontario.ca), consumers can find a wealth of ideas and tips to help save energy.

Being energy efficient does not mean being uncomfortable. Caulking windows, installing programmable thermostats, changing to compact fluorescent lighting, purchasing high-efficiency appliances, undertaking a home energy evaluation...these are just some of the many things consumers can do to save on energy costs. In fact, by undertaking a home energy evaluation and making improvements in the energy efficiency of their home, a consumer may even find that they are eligible to receive grants through the federal government's EnerGuide for Houses program
http://oee.nrcan.gc.ca/residential/personal/home-improvement/grant/grants.cfm?attr=4 (due to the length of the URL, it may be necessary to copy and paste this into your web browser).

Informed consumers and consumer choice. The two go hand-in-hand in empowering consumers in today's new energy price environment. They also represent two of the key goals and deliverables of the 160-member Ontario Energy Association (OEA), a leading advocate for consumer awareness and choice.

Sincerely,

Shane T. Pospisil
President and CEO
Ontario Energy Association


IN: ENERGY, ENVIRONMENT, FINANCE