SURREY, B.C. - The BC Utilities Commission (BCUC) provided Terasen Gas with its decisions on the natural gas and propane commodity rates Terasen Gas passes on to customers. Effective April 1, 2008, natural gas customers will see rates increase while propane rates will remain the same.

 

Terasen Gas purchases natural gas and propane on behalf of its customers and passes its cost on without mark-up. Natural gas and propane are commodities 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.

 

“Natural gas remains competitively priced when compared to other energy sources,” said Jan Marston, vice president, gas supply and transmission. “Our purchasing and hedging strategies have allowed us to soften the increase we have to pass on to our customers. These are the first natural gas commodity increases in more than two years,” said Marston.

 

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

The two main supply constraints impacting the price of natural gas include a larger than anticipated drawdown of storage inventories resulting from the colder than average winter in the east and the lower than forecast volume of liquefied natural gas being imported into North America.

 

The increase means a typical residential customer in the Lower Mainland, Fraser Valley, Interior, North and the Kootenays will see their total annual bill rise by approximately 11 per cent, or $127 to $147 per year depending on consumption levels. This proposed cost of gas increase to $8.29 per GJ will not impact the commodity rates for those customers participating in the Customer Choice program.

 

Vancouver Island, the Sunshine Coast, and Powell River are covered by a separate regulatory agreement that includes a rate structure different from the one that applies to other BC communities served by Terasen Gas. Customers in this region will see their total annual bills increase by approximately 3.5 per cent, or $33 per year depending on consumption levels.

 

Total annual bills for Fort Nelson customers will increase by 17 per cent or $239 per year depending on consumption levels. This rate change results from a commodity rate increase and a slight decrease in delivery rates for Fort Nelson customers from the February interim delivery rates.

 

The BCUC decision indicated that propane rates for Revelstoke and Whistler customers will remain the same at this time.

 

The cost of the natural gas or propane commodity accounts for the majority of the typical residential gas bill. The delivery charges which account for the remaining portion have remained relatively flat over the past six years.

 

Terasen Gas earnings come from the delivery charges – what the company charges to bring the natural gas to a home or business. Delivery rates are reviewed by the BCUC once a year in December with any changes coming into effect the following January. Every three months, Terasen Gas reviews natural gas and propane commodity prices with the BCUC in order to ensure the flow-through rates customers are charged are sufficient to cover the cost of purchasing the gas.

 

 

Backgrounder with residential customer rates by region attached.

Media contact:
Ruth Sulentich
Community Relations Manager
(250) 868-4517
ruth.sulentich@terasengas.com

 

 

 

 

A gigajoule is a measure of energy. One gigajoule is equivalent to 278 kilowatt hours of electricity. One gigajoule of gas can heat a typical 2,000 square foot home for one day during the winter.