A Fairer Natural Gas Supply

In Ontario, deregulation began October 31st, 1985. Initially only industrial and very large commercial users were able to take advantage of directly sourcing their gas requirements from a supplier other than the regulated utility. By 1992, the Ontario Energy Board (the OEB) approved deregulation for small volume users (residential and small commercial).

The initial program offerings of retail gas brokers were in the form of a rebate or savings on the gas commodity portion of a user’s gas bill. This was called a buy/sell arrangement where the gas utilities purchased the gas supply for the broker’s customers directly from the gas broker and then effectively sold the gas back to the gas user. The rate that the gas utilities charged customers on a buy/sell arrangement was regulated by the OEB and was slightly lower than the rate charged to someone who purchased their gas directly from the gas utility. The benefit to someone who purchased gas from a gas broker was in the form of the rebate on the gas commodity costs that brokers gave to their customers.

In the fall of 1997, an arrangement called ABC (Agency Billing and Collection) service was introduced that allowed the gas brokers to offer a fixed price that would appear directly on their customer’s gas bills. Also, the name of the gas broker supplying the gas was identified on the gas bill. ABC service resulted in a variety of price offerings and terms being introduced to the marketplace. In the spring of 1999, the OEB required gas marketers to be licensed and adhere to a code of conduct.

As natural gas deregulation evolves in Ontario, we will update you with any new developments.