Gas Cost Variance Account
SaskEnergy's commodity rate (the Gas Consumption Charge
on your bill) is designed to recover the cost of gas sold to customers
without any mark-up. The actual cost of the natural gas and revenues
from the commodity rate are intended to offset each other. In theory,
this sounds simple. However, in reality natural gas prices continually
change and therefore the cost of buying natural gas varies each month
which means that we don't know the total cost of gas for a particular
period of time until after the fact. Consequently, regulatory practice
in Canada allows natural gas distribution companies to use a Gas Cost
Variance Account (GCVA) to balance the fluctuations in costs and
revenues over time.
The GCVA accumulates the difference between actual
commodity sales revenue and actual gas costs each month. The intent and
use of the GCVA ensures that SaskEnergy does not earn a profit on the
sale of natural gas nor incur a loss. It also helps us provide customers
with stable rates over the short term. Over the long-term customers pay
exactly the cost of acquiring the natural gas supply. To ensure
independence, the GCVA is audited by the Provincial Auditor.
Where the actual cost for natural gas exceeds the amount
recovered from commodity sales, customers owe the balance to SaskEnergy.
Where the actual cost for natural gas is less than the amount recovered
from commodity sales, SaskEnergy owes the balance to customers. That
balance, positive or negative, is reflected in the next commodity rate
View an example of how the GCVA works.
Please call 1-800-567-8899 with any questions you may