Terasen Gas applies to reduce natural gas commodity rates

September 8, 2007

Terasen Gas asked the BC Utilities Commission (BCUC) today for a reduction in its natural gas commodity rates for customers in the Lower Mainland, Fraser Valley, Interior, North and the Kootenays.

The proposed decrease would drop the commodity price of natural gas by approximately 9.6 per cent, or $0.736 per gigajoule. The decrease works out to an annual savings of about 5.8 per cent to 5.9 per cent, or approximately $70 to $81 per year on the total annual gas bill for a typical residential customer depending on consumption and the region in which they live.

If approved, the commodity decrease will take effect October 1, 2007.

Terasen Gas purchases natural gas on behalf of its customers and passes its cost on without markup. Natural gas is a commodity traded on the open market like oil, coffee or lumber. Factors affecting the price of natural gas include weather, supply and demand, international events and market speculation.

Terasen Gas uses several tactics and strategies to ensure a reliable supply of gas at a reasonable price for customers including:

• purchasing gas from a variety of sources
• locking in the price of gas through the use of contracts
• placing gas in storage when the price is lower for use at a later date when the demand and price are higher
• purchasing a portion of the supply from the spot market

Terasen Gas earnings come from the delivery charges – what the company charges to bring the natural gas to a home or business. Every three months, Terasen Gas reviews natural gas commodity prices with the BCUC in order to ensure the rates we charge customers for natural gas are sufficient to cover the cost of purchasing the gas.

The rate reduction does not apply to customers on Vancouver Island, Sunshine Coast and Powell River, nor does it apply to customers in Fort Nelson. All these areas are covered by a different regulatory agreement. Because residents of Revelstoke and Whistler use propane, their rates are not affected.

Terasen Gas is mainly composed of the operations of Terasen Gas Inc. and Terasen Gas (Vancouver Island) Inc., both indirect wholly owned subsidiaries of Fortis Inc. Fortis Inc., the largest investor-owned distribution utility in Canada, serves almost two million gas and electric customers and has approximately $10 billion of assets. Its regulated holdings include Terasen Gas and electric utilities in five Canadian provinces and three Caribbean countries. Fortis Inc. owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at http://www.fortisinc.com/ or http://www.sedar.com/. 

Media contact:        
Joyce Wagenaar
Corporate Communications Manager
Phone: (604) 592-7682
E-mail: joyce.wagenaar@terasengas.com