Direct Energy Regulated Services

Direct Energy Regulated Services

September 30, 2009 12:09 ET

Direct Energy Regulated Services Announces Natural Gas Rates for October

CALGARY, ALBERTA--(Marketwire - Sept. 30, 2009) - Direct Energy Regulated Services has announced default natural gas rates for October 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 October regulated natural gas rate is increasing from the September rate of $2.341 per GJ to $3.303 per GJ.

- This rate reflects a market price for October supplies of approximately $3.016 per GJ as reported by the NGX, and incorporates an adjustment of $0.287 per GJ for September and prior months.

- The typical residential gas bill for October based on an average 10 GJ of consumption would be approximately $90 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 October regulated natural gas rate is increasing from the September rate of $2.358 per GJ to $3.439 per GJ.

- This rate reflects a market price for October supplies of approximately $3.016 per GJ as reported by the NGX, and incorporates an adjustment of $0.423 per GJ for September and prior months.

- The typical residential gas bill for October based on an average 10 GJ of consumption would be approximately $80 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 10 GJs (including rebates, where applicable)?

- October 2009, a typical residential bill will be $90

- October 2008, a typical residential bill was $89

- September 2009 (based on 3 GJ), a typical residential bill was $63

In the South Service Territory, how will a typical bill this month compare to previous months based on 10 GJs (including rebates where applicable)?

- October 2009, a typical residential bill will be $80

- October 2008, a typical residential bill was $90

- September 2009 (based on 5 GJ), a typical residential bill was $51

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/directenergy930.jpg.

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 October was $3.016 per GJ.

- The market price last month at the time of filing was $2.543 per GJ.

- Last month's actual market price was approximately $2.746 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 September 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 October 2009 regulated natural gas rate applications on DERS' website at www.directenergyregulatedservices.com.

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