8-K

ENBRIDGE INC 8-K Report (Apr 1, 2011)

Filed April 1, 2011For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

This Form 6-K filing from Enbridge Inc. on April 1, 2011, primarily concerns an announcement by its subsidiary, Enbridge Gas Distribution Inc., regarding approved rate adjustments by the Ontario Energy Board (OEB) effective April 1, 2011. The key takeaway for investors is that Enbridge Gas Distribution's natural gas transportation and supply rates are set to increase for most customers. While the supply cost component is projected to decrease, higher transportation costs are driving the overall increase in customer bills. For investors, this indicates a regulatory environment where costs are being passed through to consumers, which may impact the subsidiary's revenue stability. The filing highlights that Enbridge Gas Distribution does not earn a profit on the price of natural gas itself, with supply costs being a direct pass-through. The increase in transportation costs, however, could affect customer usage patterns or satisfaction, but the company emphasizes natural gas's continued cost-effectiveness compared to other heating sources. The filing also provides context on the scale of Enbridge Gas Distribution's operations, serving approximately 1.9 million customers.

Key Highlights

  • 1Enbridge Gas Distribution received OEB approval for new rates effective April 1, 2011.
  • 2Typical residential customers purchasing supply and transportation from Enbridge Gas Distribution will see an approximate annual increase of $28.
  • 3Customers purchasing only transportation from Enbridge Gas Distribution (buying supply from marketers) will see an approximate annual increase of $41.
  • 4The primary driver for the bill increase is higher natural gas transportation costs.
  • 5The Gas Supply Charge is decreasing, and a refund on Gas Supply is being applied, resulting in a lower effective Gas Supply Charge.
  • 6Enbridge Gas Distribution does not profit from natural gas supply costs, which are passed through directly to customers.
  • 7Natural gas is presented as an economical heating choice, historically 50% cheaper than electricity and 49% cheaper than oil on average.
  • 8Enbridge Gas Distribution is Canada's largest natural gas distribution company, serving about 1.9 million customers.

Frequently Asked Questions

The main purpose of this Form 6-K filing is to report a press release from Enbridge Gas Distribution Inc., a subsidiary of Enbridge Inc., announcing approved rate changes by the Ontario Energy Board (OEB) that take effect on April 1, 2011. These changes affect the cost of natural gas for its customers.

The filing indicates that the costs for transporting natural gas are passed on to customers without mark-up. While the supply costs are also a pass-through, the increase in transportation costs is being passed directly to customers. This suggests that the subsidiary's revenue from transportation services may increase due to higher volumes or regulatory-approved rates, but the core profitability model for supply remains a pass-through without profit.

No, the filing explicitly states that Enbridge Gas Distribution does not earn a profit on the price of natural gas supply. Gas supply costs are passed through to customers without mark-up. The increase in customer bills is primarily driven by higher costs for transporting natural gas to the franchise area, which are also passed through.

For a typical residential customer who buys both gas supply and transportation from Enbridge Gas Distribution, the annual increase is approximately $28. For those who buy their gas supply from a marketer and only obtain transportation services from Enbridge Gas Distribution, the annual increase is about $41. The actual impact also depends on individual gas consumption levels.