SURREY, B.C. - Terasen Gas has now filed applications with the BC Utilities Commission (BCUC) requesting increases in the commodity rates it charges customers for natural gas and propane. If approved, the increases would take effect July 1, 2008. 

 

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 and propane include weather, supply and demand, international events and market speculation.

 

“There are several market factors affecting the supply and demand of natural gas in North America, causing prices to rise. A colder winter has resulted in a greater drawdown of storage inventories combined with lower than forecasted levels of imports to help restore those storage levels,” said Cynthia Des Brisay, Vice President Gas Supply and Transmission. "In addition, a temporary disruption to a natural gas production platform in the Gulf of Mexico, coupled with the anticipation of a strong hurricane season, which could further affect production in the region, are impacting prices."

 

“Despite the interim market expectations, our purchasing strategies have allowed us to soften the increase we have to pass on to our customers and to ensure that our rates remain attractive relative to electricity and other options,” said Des Brisay.

 

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

“Consumers’ energy needs are expected to decrease as warmer weather approaches. We always encourage customers to use energy wisely by making simple behavioural changes, and by choosing high efficiency equipment, both of which will help them better manage their energy use and cost,” said Des Brisay.

 

The proposed increase means a typical residential customer in the Lower Mainland, Fraser Valley, Interior, North and the Kootenays could see their total annual bill rise by approximately 11 per cent, or between $142 and $164 per year, depending on consumption levels. This proposed Cost of Gas increase to $9.78 per gigajoule (GJ) will not impact the commodity rates for those customers participating in the Customer Choice program.

 

If approved, total annual bills for Fort Nelson customers could increase by approximately 17 per cent, or $270 per year depending on consumption levels.

 

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 B.C. communities served by Terasen Gas. Customers in this region will not see a change in their rates at this time.

 

“Propane prices are impacted by different market factors but principally are driven by the cost of crude oil. Like natural gas, we use several tactics and strategies to ensure a reliable supply of propane at a reasonable price for customers. However, customers could see their total annual bills increase by approximately 23 per cent or $411 in Revelstoke, and approximately 22 per cent or $448 in Whistler per year, depending on consumption,” said Des Brisay.

 

The cost of the natural gas or propane commodity accounts for the majority of the typical residential 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 or propane 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.

 

As of July 1, customers will also see a carbon tax line item included on their bill, which Terasen Gas collects on behalf of the provincial government. For more information on the provincial government’s carbon tax, visit www.gov.bc.ca.

 

 

Media contact:
Joyce Wagenaar
Director, Corporate and Marketing Communications
(604) 592-7682
joyce.wagenaar@terasengas.com