Significant decrease in our transportation service rates

In December 2017, TransCanada PipeLines (TCPL), Énergir, Union Gas and Enbridge Gas Distribution signed an agreement to update gas transportation rates from 2018 to 2020. TCPL submitted the new rates to the National Energy Board (NEB) on December 15, 2017, and the NEB has approved the provisional application of these rates pending the regulatory review of this request.

The proposed changes result in a 9.7% reduction in the base price of Énergir's transportation service, which will drop from 3.808 ¢/m³ to 3.439 ¢/m³. Énergir has thus filed a request to modify transportation prices with its own regulator, the Régie de l’énergie. In practice, the reduction will be applied to your consumption starting on February 1, 2018.

Énergir continues to move forward with its rate reform!

In mid-December, Énergir held meetings with the Régie de l’énergie about phase 2 of the rate reform, which deals with the revision of the supply, transportation, load balancing services, as well as the interruptible service offering. A discussion paper was also submitted to the Régie de l’énergie on phase 4 to initiate discussions on the distribution rate reform. We'll keep you posted on the progress of this filing.

Natural gas market news

After a very mild start to the winter, the wave of very cold weather that hit Québec and the rest of the continent over the holidays generated volatility in the natural gas market.

The extreme cold snap led to a record withdrawals from storage sites. During the first week of January, the Energy Information Administration (EIA) reported a withdrawal of 359 BCF, which is higher than what we saw during the 2014 polar vortex. 

During two or three days in early January, the daily price in Dawn fluctuated between C$6 and C$9 per gigajoule. In addition, our customers with interruptible service who used make-up gas to avoid an interruption had to pay a high markup cost to cover transportation between Dawn and the Énergir franchise during this period. Remember that the value of this section is strongly influenced by high demand from the northern U.S. during peak periods. 

On January 29, 2018, natural gas at Dawn was trading at about C$4.40/GJ for the rest of the winter and dropped to about C$3.25/GJ for the injection season. It is therefore clear that an increase in continental production has the effect of limiting increases in natural gas prices.

Value of transportation between AECO and Empress

In Western Canada, the price difference between AECO and Empress is relatively high. The value of transportation between these two points is currently higher than the tariff, which is a major change compared with what we've seen in recent years. The excess transportation capacity between these two points was gradually reduced due mainly to production growth in the Montney Formation and the strong demand at Empress. This path is, therefore, increasingly in demand.

It should be noted that, last December, TransCanada launched a transportation capacity offer for this segment as of October 1, 2018, and will be adding more capacity in 2020 and 2021.

On the futures market, the difference between AECO and Empress is gradually fading away, dropping from C$1.18/GJ in 2018 to C$0.10/GJ in 2021.

Modifications to the cap-and-trade (C&T) system and extension to 2030

On November 29, 2017, the Québec government published two orders in council that amended the C&T system, extending it to 2030 and setting annual emissions caps for the period from 2021 to 2030.

Among other changes,voluntary membership in the C&T system will be offered in 2019 to establishments that emit between 10,000 and 25,000 tonnes of GHGs per year, which would ensure that these establishments are eligible for free emission units from the government.

Did you know?
The 10,000-tonne GHG threshold corresponds to consumption of approximately 5.2 million m3 of natural gas.

You may be eligible for the voluntary participation option even if you consume a lesser amount of natural gas, because the emissions from all your fuels and fuel products must be considered.

The option of voluntary participation in the C&T system could be applicable to certain Énergir customers who do not already have emitter status under the C&T system. Customers who opt for voluntary participation would, for the establishment in question as a whole, stop paying Énergir's C&T system rate as of the date the status change became effective. They would thus be required to themselves cover each tonne of CO2 equivalent of verified and reported emissions.However, the establishments referred to could also become eligible for free emission units from the government, which could represent savings of up to several hundreds of thousands of dollars per year. Interested establishments must, however, meet certain conditions:
  • To participate as of 2019, eligible emitters have until May 1, 2018 to indicate their intention to the MDDELCC and until September 1, 2018 to complete their registration.
  • Emitters who register their establishments on a volunteer basis must notify their Énergir's Major Industries advisor to ensure an efficient transition.

For further information on the voluntary participation option and on the other amendments to the C&T system, please refer to the specifications regarding Order in Council 1125-2017 found on the carbon market official page, or contact the MDDELCC's Direction générale de la réglementation carbone et des données d’émission at 418 521-3868, ext. 7700.

February 2018 C&T system rate : 3.471 ¢/m³

Network extension projects being developed

Last December, Énergir filed two investment applications with the Régie de l'énergie for the construction of pipelines. A few highlights:

Thetford Mines (RCM of Appalaches) and Saint-Éphrem-de-Beauce (RCM of Beauce-Sartigan)

  • Length: 52.3 km
  • Expected to connect close to 45 industrial, institutional and commercial customers.
  • Total annual consumption of these customers at maturity estimated at more than 3,221,000 m3.
  • Estimated cost of project: $27.9 million, $23.4 million of which comes from the federal and provincial governments.
  • Decision expected by the end of March 2018; start of construction work in June 2018 and commissioning in December 2018.

(RCM of Portneuf)

  • Length: 14.5 km
  • Expected to connect close to 30 industrial, institutional and commercial customers.
  • Total annual consumption of these customers at maturity estimated at more than 1,763,000 m3.
  • Estimated cost of project: $9.5 million, $7.1 million of which comes from the provincial government.
  • Decision expected by the end of March 2018; start of construction work in June 2018 and commissioning in November 2018.

Heat recovery at Kruger's Crabtree plant

During our meetings with customers last fall, we discussed the most popular energy efficiency measures, including that of heat recovery in the industrial sector. The Kruger Products plant in Crabtree is a good example of a customer that participated in this type of program to reduce consumption.

There were already two heat recovery systems on one of the plant's paper machines but, despite that, the exhaust gases were still hot (up to 350° F). So Kruger decided to use this residual energy to pre-heat process water, the thermal power plant make-up water, and even the outdoor air of some of the plant's ventilation systems.

The main issue in these types of projects is to determine the energy needs required to recover waste heat. After an in-depth analysis of heat flows in the plant, Kruger rose brilliantly to the challenge. In the end, the project was carried out with a payback period of less than six years, generating close to 9% in energy savings for Kruger.

You would like to develop this type of project ? Learn more about our Feasability study program.

Upcoming training
Further to the last Blue Bulletin, next spring, there will be an advanced training course on recommissioning buildings (RCx) (in French only). For further information and to register, please visit the CIET website. CIET

Changes to the implementation of energy efficiency measures program

Major changes will be coming into effect on February 1, 2018 for our Implementation of energy efficiency measures and Feasibility study grant programs:
  • $/m3 up by $0.05
  • Reporting any additional costs for the solution
  • Keeping track of the energy savings

Learn more about the program

New Major Industries zone

In order to better serve your needs and provide you with a maximum of relevant information as quickly as possible, we have created a brand-new section in our website called Major Industries zone. This section contains many resources such as a map of our gas network, the conditions of service and rates, and it also provides readers with a host of information on our energy efficiency programs as well as the prices for natural gas.

Be sure to check it out