Direct Energy Regulated Services Announces Natural Gas Rates for June 2012

CALGARY, Alberta, May 31, 2012 /CNW/ - Direct Energy Regulated Services has announced default natural gas rates for June 2012. 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 June regulated natural gas rate is increasing from the May rate of $1.448 per GJ to $2.765 per GJ.
• This rate reflects a market price for June supplies of approximately $2.066 per GJ as reported by the NGX, and incorporates an adjustment of $0.699 per GJ for May and prior months.
• The typical residential gas bill for June based on an average 3 GJ of consumption would be approximately $60 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 June regulated natural gas rate is increasing from the May rate of $1.331 per GJ to $2.748 per GJ.
• This rate reflects a market price for June supplies of approximately $2.066 per GJ as reported by the NGX, and incorporates an adjustment of $0.682 per GJ for May and prior months.
• The typical residential gas bill for June based on an average 3 GJ of consumption would be approximately $48 in the South.

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?

• June 2012, a typical residential bill will be $60
• June 2011, a typical residential bill was $66
• May 2012 (based on 6 GJ), a typical residential bill was $64

In the South Service Territory, how will a typical bill this month compare to previous months based on 3 GJs?

• June 2012, a typical residential bill will be $48
• June 2011, a typical residential bill was $55
• May 2012 (based on 6 GJ), a typical residential bill was $49

How does this month's rate compare to previous months?
The graph below shows regulated natural gas rates each month for the past year.
http://www2.directenergy.com/intranet/images/June%20Graph.png

How much natural gas does a typical residential customer use?
http://www2.directenergy.com/intranet/images/avg%20chart.png

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 June was $2.066 per GJ.
• The market price last month at the time of filing was $1.520 per GJ.
• Last month's actual market price was approximately $1.810 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 January and prior months.

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 June 2012 regulated natural gas rate applications on DERS' website at www.directenergyregulatedservices.com

SOURCE Direct Energy

Emily Richardson, Public Relations of Direct Energy Regulated Services, [phone], [email protected]

http://www.directenergy.com