Liberty Utilities says it has had the largest growth year in New Brunswick since 2014 as rates have fallen on average by more than a third, leading to a steady increase in customers.
Its 2021 approved rates and charges, and the lower forecasted cost of natural gas this year, have resulted in reductions in the total cost of natural gas for all customers, part of an ongoing trend towards lower costs over the past seven years.
Gilles Volpé, vice-president New Brunswick for Liberty, said in an interview rates have been coming down over the past few years thanks to lower distribution and commodity prices.
“If you were a natural gas customer back in 2014 you would be paying 35 per cent more than you are now,” Volpé said. “It has been gradual and that may be why we’re not getting the congratulations we should be getting. It adds up and it’s significant.”
The 35 per cent reduction is an average, with residential customers getting a little less of the break, and commercial and industrial customers a little more. But, overall, everyone is seeing a benefit and that is spurring growth.
“From our point of view, it has significantly increased the number of customers who want natural gas now,” Volpé said. “2020 was our largest growth year since 2014. It’s because, slowly but surely, people are realizing the cost-effectiveness of natural gas as an energy source.”
The more customers Liberty adds, the cheaper it is for everybody overall, he noted.
“Our operating costs don’t change that much. It costs $48 million to run a gas distribution company. If you have 12,000 customers paying for that, that’s one thing, but if you have 13,000 customers, everybody pays a little less. Part of how we can reduce rates is by adding more customers. Everybody benefits from that.”
On the commodity side, he said Liberty and its customers are benefiting from the natural gas surplus in North America and stable, long-term pipeline contracts. “We have been able to buy pipeline capacity to get that very stable and inexpensive natural gas and bring it to Atlantic Canada.”
Last year, Liberty asked the New Brunswick Energy and Utilities Board to lower distribution rates for all commercial customers, which would mean decreases of 2.6 per cent to 4.3 per cent in their total cost of natural gas in 2021 from 2020.
Liberty proposed to maintain the residential distribution rate at $10.40, but when taking the lower expected commodity price into account, residential customers would see a decrease of 1.9 per cent in their total cost of natural gas in 2021 as compared to 2020.