As the temperature falls in N.B., so has the cost of keeping warm
Robert Jones | CBC News | Posted: November 6, 2020 10:00 AM | Last Updated: November 6, 2020
On the eve of winter in New Brunswick, natural gas and furnace oil prices are at 8 and 14-year lows
On the eve of another winter heating season, New Brunswick residents who rely on natural gas, oil and even electricity are benefiting from lower costs to stay warm than they did last year, in some cases lower than anything they have experienced in the last decade.
Natural gas prices charged by New Brunswick's main gas utility, Liberty, are currently below $8 per gigajoule for the first time in any November in eight years. Notably for gas users, it's a price not expected to jump through the winter months, said Liberty vice-president Gilles Volpe.
"We're predicting the price of natural gas to be very stable through the winter," he said.
That's a big change for New Brunswick natural gas customers, including about 8,500 residential customers who have been stung by surprise price spikes in previous winters.
Dwindling gas supplies from Nova Scotia and limited infrastructure in the U.S. to move replacement supplies past Boston caused unpredictable cold weather pricing that Volpe believes is now under control.
He said long-term supply contracts signed by Liberty and expanded natural gas infrastructure coming into the region should end the worst of the price swings that have hit customers in the past.
"The whole northeast seems to be stabilizing significantly with the extra capacity that's being built in the pipelines that remove the bottlenecks and creates stability in the price," said Volpe.
"As we've progressed through the summertime and as our forecast gets better and better as we get closer to winter, we've been able to see that we've got a much lower price. Our current forecast shows that it's going to remain at $7.92 cents per gigajoule for the whole winter."
That's 40 per cent cheaper than gas prices Liberty was charging customers last January, February and March.
Liberty has also applied to the Energy and Utilities Board to freeze distribution charges for homeowners for next year, which, if approved, will result in total blended residential charges to Liberty customers this coming January, including distribution and commodity charges combined, that are 20 per cent lower than last January.
But it's not just natural gas customers who will be saving money.
On Thursday, New Brunswick's Energy and Utilities Board cut the legal maximum price consumers can be charged for heating oil to 73.7 cents per litre plus HST, following a decline in trading prices in the U.S.
That's 31 cents per litre less than prices New Brunswick households were facing one year ago.
There are no guarantees markets will remain as favourable to consumers in the months ahead, but it's the lowest maximum price posted in New Brunswick leading into winter in 14 years and oil users with household tanks do have some limited ability to stock up.
Winter savings will be less obvious and dramatic for households that heat with electricity, but costs are improving there as well.
Earlier this year, NB Power asked the Energy and Utilities Board to delay its 2020 rate increase until March 31, 2021, effectively freezing prices this winter at last winter's level. The utility has said it is in response to economic anxiety caused by the COVID-19 pandemic.
"There remains that uncertainty as to the trajectory the pandemic will take and what the future economic impacts may be and I think NB Power's customers are rightly concerned about that," said NB Power lawyer John Furey at a September hearing about sparing customers a rate hike this winter.
"This is an issue of balancing the financial interests of the utility, the impacts on the utility versus the need to provide relief to NB Power's customers during this time period."
The EUB agreed to the request, which will save the average customer just under $6 on a $300 winter power bill.
More significantly, New Brunswick households heating with electricity continue to drive down their own bills by switching in large numbers to high-efficiency heat pumps, which can use one-third of the power than an electric baseboard heater.
Last winter, NB Power estimated up to 14,000 heat pumps are being installed in the province annually.
Saint John Energy has more than 6,000 units rented to customers around the province and vice-president Ryan Mitchell said most people are using them to lower their winter electric bill.
"A heat pump is between three and four times more efficient than electric baseboard heat and about 80 per cent of heat pump customers are displacing electric baseboard heat," said Mitchell.