Natural Gas Service in Alberta

Purchases and deliveries of natural gas to Alberta’s consumers may involve one company that performs both the purchasing and delivery functions, or two separate companies – one that supplies the natural gas and the other that owns the distribution pipeline system and delivers the gas to consumers.

Natural Gas Purchasing

Organizations in Alberta that purchase natural gas supplies for eventual sale to end-use consumers are as follows:

• Gas Alberta Inc. purchases natural gas supplies on behalf of its utility customers and maintains a diversified gas supply portfolio, including daily and monthly indexed supplies and direct purchases from producers. The Company also carries out a prudent hedging program to minimize price volatility and lower its gas costs. Gas Alberta sets monthly pooled gas rates to recover its total cost of natural gas.

• Direct Energy Regulated Services (DERS) is a regulated retailer that purchases daily and monthly indexed supplies for sale to consumers in franchise areas owned by ATCO Gas North and ATCO Gas South. Consumers may contract with DERS under their default gas rate that is regulated by the Alberta Utilities Commission (AUC).

• Apex Utilities Inc. (AUI) is a regulated retailer that purchases and delivers natural gas to consumers in its franchise areas. Consumers may contract with AUI under their default gas rate that is regulated by the AUC.

• Since 1998, competitive retailers have been offering their natural gas products to consumers in Alberta where customer choice is allowed, such as franchise areas served by ATCO Gas and AUI. These retailers offer both fixed-price supplies and market-priced supplies (including a premium) at rates they believe will be attractive to Alberta’s consumers.

Gas Rate Comparisons

The following charts show the monthly gas rate set by Gas Alberta versus the regulated retailers and published gas price indices. The weighted average rate for DERS and AUI is determined using a percentage of the Alberta market supplied by each regulated retailer.

The following chart illustrates historical and future pricing for gas deliveries in Alberta along with fixed-price rates offered by competitive retailers in Alberta.

Natural Gas Deliveries

Member-owned Utilities

Gas Alberta’s utility customers own the gas distribution systems that deliver natural gas to consumers in their individual franchise areas. They are responsible for connecting and disconnecting consumers, operating and mainlining their gas distribution systems, installing meters and secondary pipelines, and providing meter reading services.

Our customers have elected to provide more market-based supplies to their consumers, as compared to “customer choice” regarding natural gas providers as offered by investor-owned utilities to their consumers. In addition to the cost of natural gas provided by Gas Alberta, these utilities recover their distribution and operating costs through their monthly billing process.

The majority of Gas Alberta’s customers set their monthly rates with the approval of their locally elected boards or councils.

Investor-owned Utilities

ATCO Gas North and ATCO Gas South are investor-owned utilities that own and operate the gas distribution systems in their franchise areas that deliver to their consumers the natural gas supplied by DERS. AUI carries out both the purchasing and delivery functions for consumers in their franchise areas.

The following chart summarizes the monthly rates charged by the investor-owned utilities to deliver natural gas to their consumers. These rates are designed to recover the utilities’ natural gas delivery costs and other expenses, and are approved by the Alberta Utilities Commission (AUC).