Enbridge Gas Distribution Inc.
TSX : ENB
NYSE : ENB

Enbridge Gas Distribution Inc.

September 23, 2005 12:01 ET

Enbridge Gas Distribution Adjusts Prices: Efficient, Reliable Natural Gas Continues to be the Best Choice

TORONTO, ONTARIO--(CCNMatthews - Sept. 23, 2005) - Enbridge Gas Distribution (TSX:ENB) (NYSE:ENB), a regulated utility, announced today that it has received approval from the Ontario Energy Board (Board) to adjust its prices effective October 1, 2005. The changes include an increase in the Gas Supply Charge, a new Gas Cost Adjustment refund and a decrease in the Delivery Charge. As of October 1, 2005 residential customers who buy the natural gas they use from the utility will pay 29.46 cents per cubic metre for the commodity, based on the combined effect of the Gas Supply Charge and the Gas Cost Adjustment refund.

The impact of the changes will vary based on the amount of natural gas used and whether customers buy their natural gas from the utility or a natural gas marketer. The changes will result in a $123 annual increase for a typical residential customer(1) who buys natural gas from Enbridge Gas Distribution, excluding the Gas Cost Adjustment refund. The change will result in a $7 annual decrease for a typical residential customer who buys natural gas from a marketer.

"North American natural gas prices have increased due to a tight balance between gas supply and demand," said Lino Luison, Vice President, Enbridge Gas Distribution. "While prices have increased, reliable natural gas supply is something that our customers can count on."

"Residential customers use most of their natural gas during the cold winter months," said Luison. "However, Enbridge Gas Distribution brings in natural gas, primarily from Western Canada, all year. During the spring and summer, we fill our natural gas storage facilities. The natural gas in storage is then used to help meet peak winter demand."

While there have been tight supply-demand balances during the past few years, a Natural Resources Canada report indicates that at current levels of demand, North America has more than 80 years of proven, discovered and undiscovered natural gas. This does not include Liquefied Natural Gas, which is playing an increasingly important role in the North American market, or Gas Hydrates. Enbridge Gas Distribution continues to work proactively with the energy industry to support the production of conventional and non-conventional natural gas resources and the required infrastructure to deliver the natural gas to the market to help reduce price volatility.

Although natural gas prices have increased, natural gas continues to be the best choice for Ontario consumers. Over the past five years, natural gas has been on average about 40 per cent less expensive than electricity.(2)

Gas Supply Charge

As a result of an increase in market prices, the Gas Supply Charge which makes up about 68 per cent of the bill(2) will increase by approximately 13.5 per cent. The utility's new residential Gas Supply Charge will increase to 35.32 cents per cubic metre from 31.10 cents per cubic metre.

The utility's Gas Supply Charge is passed on to customers without mark-up. The price customers pay is the same as Enbridge Gas Distribution's costs to purchase the natural gas. The Gas Supply Charge is based on a forecast of what the Company expects to pay for natural gas supply for the next 12 months. This forecast is reviewed quarterly and, if necessary, adjusted. If there is a difference between the forecast prices charged to customers and the actual amount paid by the Company, the difference is collected from or reimbursed to customers through a Gas Cost Adjustment.

Customers who buy their natural gas from a marketer will continue to pay the price specified in their contract with their marketer.

Gas Cost Adjustment Refund

A new Gas Cost Adjustment refund of 5.86 cents per cubic metre will be in place from October 1, 2005 to December 31, 2005. This replaces the Gas Cost Adjustment refund of 4.10 cents per cubic metre in place from July 1, 2005 to September 30, 2005. For the typical residential customer who buys their natural gas from the utility, the refund will amount to approximately $50.

The refund is a result of the difference between the actual natural gas costs incurred by the utility and the amount collected from customers through the Gas Supply Charge.

Delivery Charge

The total annual Delivery Charge, which includes the costs of transporting natural gas from western Canada and delivering it through the distribution network to customers' homes, will decrease by approximately $7 for a typical residential customer. This decrease is due to lower transportation tolls.

As a utility regulated by the Ontario Energy Board, Enbridge Gas Distribution earns an approved rate of return on the capital it has invested in the distribution system. This is included in the distribution charges.

Enbridge Gas Distribution delivers natural gas to about 1.7 million customers in Ontario communities including Toronto, Ottawa, Barrie and Niagara Falls. Of those customers, about 60 per cent buy their gas supply from the utility. About 40 per cent of the utility's customers buy their gas supply directly from marketers.

Please see the attached backgrounder for more information about Enbridge Gas Distribution prices:

http://www.ccnmatthews.com/docs/923ENB1.pdf

(1) A typical residential customer uses 3,064 cubic metres of natural gas a year for home and water heating.

(2) Based on the annual bill for a typical residential customer who buys their natural gas from the utility. Updated based on annualized rates effective October 1, 2005.

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