Direct Energy Regulated Services

Direct Energy Regulated Services

July 31, 2009 20:21 ET

Direct Energy Regulated Services Announces Natural Gas Rates for August

CALGARY, ALBERTA--(Marketwire - July 31, 2009) - Direct Energy Regulated Services has announced default natural gas rates for August 2009. These rates will apply to customers who have not chosen a competitive supplier within the ATCO Gas North and South service territories. The rates have been verified by the Alberta Utilities Commission.

North Service Territory

The North territory includes customers living in and north of the City of Red Deer.

- For customers in the ATCO Gas North service territory, the August regulated natural gas rate is increasing from the July rate of $1.925 per GJ to $2.917 per GJ.

- This rate reflects a market price for August supplies of approximately $2.998 per GJ as reported by the NGX, and incorporates an adjustment of ($0.082) per GJ for July and prior months.

- The typical residential gas bill for August based on an average 3 GJ of consumption would be approximately $56 in the North.

South Service Territory

The South territory includes customers living south of the City of Red Deer.

- For customers in the ATCO Gas South service territory, the August regulated natural gas rate is increasing from the July rate of $1.481 per GJ to $3.170 per GJ.

- This rate reflects a market price for August supplies of approximately $3.000 per GJ as reported by the NGX, and incorporates an adjustment of $0.172 per GJ for July and prior months.

- The typical residential gas bill for August based on an average 3 GJ of consumption would be approximately $46 in the South.

The Natural Gas Rebate Program (NGRP) expired on March 31, 2009. The Alberta Government reviewed the program and determined that the NGRP does not align with government priorities of energy efficiency and conservation and alters natural gas price signals by masking the true cost of natural gas used by consumers. The program will not be renewed for the 2009-10 fiscal year.

Further information on regulated gas supply and a complete list of competitive retailers can be found on the Alberta government's customer choice website at: www.ucahelps.gov.ab.ca.

Backgrounder

In the North Service Territory, how will a typical bill this month compare to previous months based on 3 GJs (including rebates, where applicable)?

- August 2009, a typical residential bill will be $56

- August 2008, a typical residential bill was $77

- July 2009 (based on 3 GJ), a typical residential bill was $52

In the South Service Territory, how will a typical bill this month compare to previous months based on 3 GJs (including rebates where applicable)?

- August 2009, a typical residential bill will be $46

- August 2008, a typical residential bill was $80

- July 2009 (based on 4 GJ), a typical residential bill was $38

How does this month's rate compare to previous months?

The graph below shows regulated natural gas rates each month for the past year.

To view the Regulated Gas Rates graph, please visit the following link: http://media3.marketwire.com/docs/de731aug.pdf

How much natural gas does a typical residential customer use?



Natural gas consumption for a typical residential customer - GJ
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
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20 17 15 9 6 4 3 3 5 10 15 19 126
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How does this month's market price compare to last month?

The regulated rate is based in part on the current market view of natural gas prices for the month, as reported by NGX:

- As of the time the rate application was filed, the market price for August was $3.000 per GJ.

- The market price last month at the time of filing was $3.281 per GJ.

- Last month's actual market price was approximately $3.312 per GJ.

Why are there adjustments this month?

The formula used to calculate the regulated rate accounts for any over- or under-recoveries of actual gas costs arising from differences in:

- normal and actual weather, which affects the volume of natural gas consumed; and

- forecast and actual market prices occurring in July and prior months.

When does the natural gas rebate program expire?

The natural gas rebate program (NGRP) expired on March 31, 2009. The Alberta Government reviewed the program determined that the NGRP does not align with government priorities of energy efficiency and conservation and alters natural gas price signals by masking the true cost of natural gas used by consumers. The program will not be renewed for the 2009-10 fiscal year.

Why do natural gas prices fluctuate?

Natural gas prices are set in an open and competitive market, and are influenced by many variables throughout North America and the world. These variables include supply and demand, production and exploration levels, storage injections and withdrawals, continental weather patterns, pricing and availability of competing energy sources, and market analysts' views of future trends in any of these or other variables. Natural gas prices in Alberta are not typically a function of localized weather.

Why are North and South regulated natural gas rates different?

DERS is required by the Alberta Utilities Commission to purchase natural gas for ATCO Gas' North and South systems separately. Each system has slightly different load, weather, and supply characteristics that result in a different mix of Monthly and Daily Index purchases.

For more information, please view the August 2009 regulated natural gas rate applications on DERS' website at www.directenergyregulatedservices.com.

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