Ontario Energy Board Decision to Result in Approximately $30 Million Charge in Fourth Quarter
November 27, 2012
CHATHAM, ON – Spectra Energy Corp (NYSE: SE) today announced that its subsidiary, Union Gas, has received a decision from the Ontario Energy Board (OEB) that certain revenues realized from the optimization of upstream transportation contracts must be reclassified as gas supply costs, with 90% of those revenues refunded to customers. This highly irregular decision will result in a charge of approximately $30 million to Spectra Energy’s earnings before interest and taxes in the fourth quarter of 2012, related to 2011 and 2012.
“We are very disappointed in the OEB’s unexpected retroactive change to the incentive regulation framework which was approved in 2007 and under which customers have benefited from no delivery rate increase for five years,” said Steve Baker, president, Union Gas. “Retroactive rate making creates regulatory uncertainty and an environment that is neither predictable nor supportive of economic development, and can have far-reaching effects on the province’s ability to attract capital and jobs.”
About Union Gas Union Gas Limited is a major Canadian natural gas storage, transmission and distribution company based in Ontario with over 100 years of experience and service to customers. The distribution business serves about 1.4million residential, commercial and industrial customers in more than 400 communities across northern, southwestern and eastern Ontario. Union Gas' storage and transmission business offers a variety of storage and transportation services to customers at the Dawn Hub, the largest underground storage facility in Canada and one of the largest in North America. It offers customers an important link in the movement of natural gas from Western Canadian and U.S. supply basins to markets in central Canada and the northeast U.S. Union Gas, one of Canada's Top 100 Employers for 2011, 2012 and 2013, and one of Canada’s Greenest Employers for 2012, is a Spectra Energy (NYSE: SE) company with assets of $5.8 billion and approximately 2,200 employees. For more information, visit uniongas.com.
Andrea Stass (519) 436-5490 (713) 627-4747 (24-hour media line)Roni Cappadonna (713) 627-4778