Author Topic: Gas bill ridiculousness . . .  (Read 10771 times)

GuitarStv

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Gas bill ridiculousness . . .
« on: July 12, 2013, 01:09:09 PM »
Got my natural gas bill from the only gas supplier in Ontario (Enbridge) today. Charges are as follows:

Customer charge - 20$
Delivery charge - 3.34$
Transportation charge - 2.30$
Gas Supply Charge - 4.98$


Checked online what all these charges are for.


Customer charge - "A fixed amount charged monthly per meter to recover a portion of the fixed costs that Enbridge incurs to keep our system available".
Delivery charge - The "cost to safely and reliably deliver the natural gas to your home"
Transportation charge - "The cost of transporting natural gas from Western Canada and the United States to Ontario"
Gas Supply Charge - The cost of the gas used.



So . . . I used 4.98$ of gas for the month.  I paid five times that for the privilege of buying gas.  The anti-moustachian part?  I could reduce my gas usage to 0 during the summer, but would still be charged at least 20$ a month.  Also, the actual gas fees are structured in such a way that the less gas you use, the more you pay for the fuel.

Really reduces the incentive to use a more fuel efficient furnace and water heater.

BC_Goldman

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Re: Gas bill ridiculousness . . .
« Reply #1 on: July 12, 2013, 02:02:55 PM »
I feel your pain although my experience isn't as bad as yours. My last utility bill was $45.82 for gas and electric. The gas portion was $6.97

$5.99 service charge
$0.41 distribution charge on 1.055 therms
$0.57 supply/commodity charge on 1.055 therms

So that single therm of gas I used for my stove/oven was less than a dollar but I paid an extra six for the 'privilege' of having gas. On the bright side, I was pretty happy about only using 1 therm of gas and 204 kwh of electricity in a 32 day billing period. My electricity is a hair under $0.18/kwh when you add up the metered charges and then there's also the monthly $2.44 fee for electric.

GuitarStv

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Re: Gas bill ridiculousness . . .
« Reply #2 on: July 12, 2013, 02:06:41 PM »
Would make sense to bill entirely based on usage . . . it would provide real incentive to reduce and be less wasteful.

BC_Goldman

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Re: Gas bill ridiculousness . . .
« Reply #3 on: July 12, 2013, 02:13:10 PM »
I totally agree.

GuitarStv

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Re: Gas bill ridiculousness . . .
« Reply #4 on: July 12, 2013, 03:06:22 PM »
I know that they have to repair their infrastructure whether or not you use it in a particular month and provide maintenance.  No issue with that.  I'm just saying that it should be calculated and charged as a percentage of the price paid for heating fuel.  The same way that property taxes are calculated as a fraction of the value of your home.  When you apply it as a fixed rate, it hurts anyone trying to conserve and actively discourages frugal behaviour.

I can't see the budgeting being complicated.  Let me work that out for them:

Calculation of gas and infrastructure = (Total maintenance fees/quantity of gas) + gas price

That wasn't hard!
« Last Edit: July 12, 2013, 03:09:02 PM by GuitarStv »

Spork

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Re: Gas bill ridiculousness . . .
« Reply #5 on: July 12, 2013, 03:17:48 PM »

just to play devil's advocate here:  Isn't the cost of the meter a fixed cost?  I mean they plop a meter there, drag gas lines to it, maintain it/read it -- and it costs the same whether you use it or not.

Now... I have no idea if $20 is a "fair" fixed cost or not...

It could be worse:  I can't get natural gas, only propane.  I have to pay for the equipment myself, then pay 2x the price for the gas.

LDoon

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Re: Gas bill ridiculousness . . .
« Reply #6 on: July 12, 2013, 03:30:54 PM »
Quote
I know that they have to repair their infrastructure whether or not you use it in a particular month and provide maintenance.  No issue with that.  I'm just saying that it should be calculated and charged as a percentage of the price paid for heating fuel.

Base connection fees make sense.  Trying to make it dependent as a percentage of heating fuel consumed only makes sense if somehow the connection is also variable.  Does your gas line somehow become smaller or less connected as your use declines? 

My point is that your connection is constant, and therefore the connection fee is constant.  The infrastructure and repair costs are independent of a person's use.

daverobev

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Re: Gas bill ridiculousness . . .
« Reply #7 on: July 12, 2013, 05:40:41 PM »
I hear you. Our Enbridge bill will be $22.60 til we turn on the heating. Half our Hydro One bill (about $30?) is 'delivery'. Same with our water bill; about $24 of the just under $60 bimonthly is standing charge.

It would be 'better' and 'more ecofriendly' to roll this stuff into the cost of the resource. But it is true, it does cost Enb money to have the system working, year round. They have to pay their staff, year round. 'Tis frustrating to see 20 dollars going out 'for nothing' though!

GuitarStv

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Re: Gas bill ridiculousness . . .
« Reply #8 on: July 18, 2013, 08:07:35 AM »
Quote
I know that they have to repair their infrastructure whether or not you use it in a particular month and provide maintenance.  No issue with that.  I'm just saying that it should be calculated and charged as a percentage of the price paid for heating fuel.

Base connection fees make sense.  Trying to make it dependent as a percentage of heating fuel consumed only makes sense if somehow the connection is also variable.  Does your gas line somehow become smaller or less connected as your use declines? 

My point is that your connection is constant, and therefore the connection fee is constant.  The infrastructure and repair costs are independent of a person's use.

No, my gas line doesn't become smaller as usage declines.  Yes, there are fees involved in providing gas to the house.  My point is that the infrastructure and repair costs should be higher for higher users.  More use means more stress on the system.  (Frankly, I'd be surprised if any maintenance had been done on my gas meter or connection since the house was built in 1980.)

My main concern is that charging this way is a tremendous disincentive to save.  Even in the winter months, I rarely get a bill for more than 25$ of gas (with 20$ extra tacked on).  Why would anyone conserve if there's little noticeable benefit?  It's like they're actively trying to promote waste.



andru365

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Re: Gas bill ridiculousness . . .
« Reply #9 on: July 18, 2013, 08:26:26 AM »
Enbridge Gas Distribution is a gas distribution company.  They make their money by distributing gas to their customers.  They make no money on the actual sale of the gas to you.

Whether you are a high volume or low volume customer doesn't matter to them, what matters is they are providing you with the ability to use as much or as little natural gas as you want.

Spork

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Re: Gas bill ridiculousness . . .
« Reply #10 on: July 18, 2013, 08:30:23 AM »
Quote
I know that they have to repair their infrastructure whether or not you use it in a particular month and provide maintenance.  No issue with that.  I'm just saying that it should be calculated and charged as a percentage of the price paid for heating fuel.

Base connection fees make sense.  Trying to make it dependent as a percentage of heating fuel consumed only makes sense if somehow the connection is also variable.  Does your gas line somehow become smaller or less connected as your use declines? 

My point is that your connection is constant, and therefore the connection fee is constant.  The infrastructure and repair costs are independent of a person's use.

No, my gas line doesn't become smaller as usage declines.  Yes, there are fees involved in providing gas to the house.  My point is that the infrastructure and repair costs should be higher for higher users.  More use means more stress on the system.  (Frankly, I'd be surprised if any maintenance had been done on my gas meter or connection since the house was built in 1980.)

My main concern is that charging this way is a tremendous disincentive to save.  Even in the winter months, I rarely get a bill for more than 25$ of gas (with 20$ extra tacked on).  Why would anyone conserve if there's little noticeable benefit?  It's like they're actively trying to promote waste.

It's a fixed cost.  If you had them trench through your yard, install a gas line and meter, read it once a month, then NEVER USE IT AT ALL.... Their base cost for you is exactly the same as a next door neighbor that keeps a 20,000 BTU torch burning 24x7.  The difference in the billing is the amount saved.  You: base cost only.  Neighbor: base cost + a metric asston of gas.

It's a basic principle of cost accounting.  It's their way of letting you know that you cost them a certain amount no matter how much gas you use.

And... I'll wager that there is a larger fixed cost for a larger gas line/meter.  An industrial site, for example, probably pays more than $20 a month, because the fixed cost is higher.  If you went by your theory, you'd be paying more per cubic foot of gas to cover the steel mill across town's monster infrastructure.

Kazimieras

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Re: Gas bill ridiculousness . . .
« Reply #11 on: July 18, 2013, 08:57:46 AM »
No, my gas line doesn't become smaller as usage declines.  Yes, there are fees involved in providing gas to the house.  My point is that the infrastructure and repair costs should be higher for higher users.  More use means more stress on the system.  (Frankly, I'd be surprised if any maintenance had been done on my gas meter or connection since the house was built in 1980.)

My main concern is that charging this way is a tremendous disincentive to save.  Even in the winter months, I rarely get a bill for more than 25$ of gas (with 20$ extra tacked on).  Why would anyone conserve if there's little noticeable benefit?  It's like they're actively trying to promote waste.

If you want to be fair it should actually be costed based on the infrastructure required to deliver gas to you, and not the amount of usage. A typical example would be the person near the main pipeline in the city would pay less for distribution than one that lives way out in a new development in the suburbs and required many extra kms of pipe to reach them. Remember that accounting is part math and part voodoo, the devil is in the details. In my city water consumption has dropped so significantly in the past 20 years (30% drop despite a 15% increase in population) that the city is having to raise prices to deal with the shortfall of revenue.

And yes there is a disincentive to save, welcome to life and how environmental impact is calcualted. I did the math on an energy star fridge and calculated it was cheaper for me to buy a non-certified fridge that used more power than pay for the premium on the energy star fridge. Heating via natural gas is a LOT cheaper than electric. And a newer furnace makes a huge difference. I upgraded mine from a 30 year old one to a new one and saw my full gas bill be chopped in half. Will it save a bit of money? Maybe - but the government gave me a energy credit for getting a more efficient machine.

GuitarStv

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Re: Gas bill ridiculousness . . .
« Reply #12 on: July 18, 2013, 09:12:24 AM »
I'm aware of what a fixed cost is.

It would just prefer to be billed by usage, rather than on a fixed cost basis (even if it meant that our charges were significantly higher per volume of gas).  I'd prefer this for many reasons:
- I would control the heating cost, and could lower my usage if the bill became too high.
- There would be incentive to conserve.
- The fixed fee is not reduced even though I submit my own gas readings online (which means nobody has to come out to my house)

As it is, in Ontario if you use huge amounts of natural gas you pay lower rates than someone who uses less gas . . . so I'm already subsidizing larger companies to create a disincentive to save.

Spork

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Re: Gas bill ridiculousness . . .
« Reply #13 on: July 18, 2013, 09:23:00 AM »
- I would control the heating cost, and could lower my usage if the bill became too high.
- There would be incentive to conserve.
- The fixed fee is not reduced even though I submit my own gas readings online (which means nobody has to come out to my house)

-You still can... on the variable portion.
-There still is... on the variable portion
-There is still a cost for reading the meter.  They have a computer that takes your reading.  They have people that write code.  There is probably still some annual check (to make sure you're not lying)....  plus maintenance, etc. 

I suspect your real issue is that you think the fixed costs are too high... and hellifiknow -- you might be right.  I have no earthly clue what it costs to pipe gas to a house. 

As it is, in Ontario if you use huge amounts of natural gas you pay lower rates than someone who uses less gas . . . so I'm already subsidizing larger companies to create a disincentive to save.

You're mixing fixed and variable again.  They pay lower rates on the gas.  I'd still suspect they pay higher rates on the delivery.

Costco also offers lower rates if you buy huge amounts of toilet paper.  Volume discounts are pretty normal for pretty much any commodity.

Brad_H

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Re: Gas bill ridiculousness . . .
« Reply #14 on: July 18, 2013, 09:52:46 AM »
My gas bill breakdown for Missouri Gas & Electric in Kansas City

Fixed Monthly Charge: $26.88
ISRS: $0.96
Cost of Gas Charge (6 CCF): $3.39
City Franchise Fee: $1.93
ISRS Tax: $0.06

Total Bill: $33.22

I hate this to a level that I don't really have words to express.