J.D. Irving, Flakeboard, fear production, job cuts if price hike application by Enbridge Gas New Brunswick is approved, say businesses already 'crippled' by 500% rate rise since 2000, urge legislators to act

SAINT JOHN, New Brunswick , April 5, 2011 (press release) – Ganong Brothers, Atlantic Wallboard, and Flakeboard will not be submitting evidence to the Energy and Utility Board (EUB) hearings this May regarding another price hike application by Enbridge Gas New Brunswick.

Ganong Brothers, Atlantic Wallboard, and Flakeboard believe the Enbridge gas monopoly has reached the financial point of no return and there is no order the Board could grant in these proceedings that would deliver competitive natural gas rates to Enbridge’s customers.

Since 2000, Enbridge’s distribution costs (the cost to deliver natural gas) have risen almost 500% with EUB approval. During this same period, natural gas prices have actually fallen by about 60%. Today New Brunswickers are paying twice as much for the delivery of the gas as they are for the gas itself.

Many manufacturers in North America are paying gas delivery fees of, on average, 45 cents per unit of gas delivered. If Enbridge wins this rate hearing – and they have yet to lose one – the rate will be $11.35 (Block 1 rates) – up to 25 times the North American average. Our businesses are already crippled with a delivery rate of $6.43 per unit – another 75% rate hike will mean jobs. The Government must act immediately in the interest of New Brunswickers. A legislative change is urgently required to ensure competitive rates.

In the meantime one company is acting immediately to reduce costs to compensate for Enbridge’s delivery costs. Atlantic Wallboard of Saint John will adjust its work schedules to run 5 days per week for 2 months and then shut down for one month. The plant will shut for the months of June, September, and December. It should be noted that this is the company’s current plan, but it may change depending on the results of the May hearing.

We are doing everything we can to keep good people employed while reducing natural gas costs – this includes looking at the use of other possible fuel sources. It’s time legislators took responsibility for a competitive rate – not only for customers, but also to ensure the best opportunity for New Brunswickers to benefit from the natural gas resources discovered here at home. It is ridiculous that New Brunswickers will likely pay several times more for delivery of natural gas discovered here in N.B. than customers in Boston or New York will pay.

The formula the EUB uses to make decisions regarding Enbridge rates is flawed and a no-win for customers. The current formula allows the delivery cost of natural gas to be set based on the spread between the cost of natural gas and a barrel of oil. The two are not related. We have advocated for over 10 years, enlisting the help and expertise of North American experts at considerable expense, to no avail. The EUB is not empowered to solve this problem in the interest of customers and Enbridge has proven time and again that customers are not their priority. Legislators must act.

David Ganong
President
Ganong Bros, Limited

Kelly Shotbolt
President & CEO
Flakeboard Company

Jim Irving
President
J.D. Irving, Limited


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