Canada is one of the world’s top three producers of natural gas. Natural gas is one of the cleanest sources of energy. Not so long ago, natural gas was considered a nuisance by energy companies because at that time the technology had not been developed to process the gas and transport it to the market. However, when companies finally figured out ways to process and transport natural gas to consumers, the natural gas industry boomed.
The natural gas industry in Canada has gone through many changes. The biggest of these changes was when the industry was deregulated. The deregulation of natural gas in Ontario happened in 1985. Unfortunately, at that time only large industries were able to take advantage of this deregulation.
In 1992, the deregulation of gas for residential and small businesses was approved by the Ontario Energy Board. This meant that small consumers were now able to purchase their gas from other companies and not just from the regulated utility.
Consumers now had the option of purchasing gas from the utility or from one of the different marketers available. The utility is not allowed to make profit from gas, which would make them seem like the best choice to buy gas from. Unfortunately, the rates that the utility have can change at any time.
In addition to changing rates, the utility can also say that the price of taking the gas to your home was more than the price that they charged you. When this happens, the amount that they lost delivering the gas can be included in your future bills.
Marketers on the other hand offer contracts where a consumer can pay a fixed rate for a fixed period of time. These contracts can be short or long term. Marketers also offer to provide gas at variable rates. Most marketers will even guarantee that their rates will be a certain percentage lower than what the utility offers.
The opening of the natural gas market in Ontario led to many brokers offering gas. The marketers of gas had their own contracts and this initially led to consumers becoming confused and getting locked-in to contracts.
This situation led the Ontario Energy Board to come up with strict rules that marketers need to follow when offering gas to consumers. Knowing what these rules are can help consumers make the correct decision about where to buy their gas.
Before natural gas was deregulated in Ontario, consumers could only purchase their gas from the utility. The utility transports and markets the gas. When deregulation was approved by the OEB, the utility still transported the gas but consumers can now select from the different marketers.
This is important when deciding to buy your gas from a marketer. The way gas is transported to your home or business will not change. What will change is that the name of the company that markets your gas will appear on the bill together with the type of plan you have with the marketer.
Today with the open market there are many different options to choose from. Being that there is competition between marketers themselves and utilities. Many marketers are very innovative with their procurement. As always the world around us in constant motion, so we have to be informed of all new opportunities. The main concern every business should take care of is that they’re well educated with all the options.