Enbridge Gas Distribution Inc., a wholly owned regulated
natural gas distribution utility of
) recently received approval from the Ontario Energy Board (OEB)
for new rates effective Oct 1, 2013.
ENBRIDGE INC (ENB): Free Stock Analysis
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PEMBINA PIPELN (PBA): Free Stock Analysis
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Per the regulatory ruling, Enbridge Gas Distribution's gas supply
charge will decrease from 14.0 cents per cubic metre (¢/m3) to
12.3 ¢/m3. Along with this, a cost adjustment refund on gas
supply of 0.8 ¢/m3 will take the charge down to 11.5 ¢/m3.
As a result, residential customers who buy both their gas supply
and transportation from Enbridge Gas Distribution will witness an
annual decrease of approximately $83 in their bills. This is
primarily due to decreased commodity and transportation costs.
Similarly, residential customers who avail only transportation
services from Enbridge Gas Distribution will see an annual
decrease of about $39. This is primarily due to decreased costs
to transport natural gas.
Canada-based Enbridge Inc. is a leading energy transportation and
distribution company. As a transporter of energy, Enbridge
operates the world's longest crude oil and liquids pipeline
system in Canada and the United States. The company is also
involved in natural gas transmission and midstream businesses in
other countries. As a distributor of energy, Enbridge owns and
operates Canada's largest natural gas distribution company. It
provides distribution services in Ontario, Quebec, New Brunswick
and New York State.
We remain apprehensive about the company's midstream natural gas
business, which is sensitive to changes in natural gas
supply-demand fundamentals and commodity cycles associated with
gas processing margins.
Enbridge carries a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. equity market
over the next 1 to 3 months.
Meanwhile, one can look at
Oiltanking Partners LP
Pioneer Southwest Energy Partners L.P.
Pembina Pipeline Corporation
) as good buying options. These oil production and pipeline
operators - sporting a Zacks Rank #1 (Strong Buy) - have solid
secular growth stories and the potential to rise significantly
from the current levels.