SURREY - Terasen Gas has now filed several 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 will take effect April 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 and 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.

 

“The price of natural gas has increased since October when we were able to offer customers a rate decrease during the cooler, winter months,” said Jan Marston, vice president gas supply and transmission. “There are two main supply constraints impacting the price of natural gas. The first is the colder than average winter in the east which has resulted in a larger than anticipated drawdown of storage inventories. As well, the volume of liquefied natural gas to be imported to North America is below original market forecasts.”

 

“Our purchasing and hedging strategies have allowed us to soften the increase we have to pass on to our customers. In fact, this is the first increase in the natural gas commodity rate since January 2006,” said Marston.

 

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

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 $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 could see their total annual bills increase by approximately 3.5 per cent, or $33 per year depending on consumption levels.

 

If approved, total annual bills for Fort Nelson customers could increase by 17 per cent or $240 per year depending on consumption levels.

 

“Over the past year, propane prices have been following the steep rise in crude oil. We’ve worked to mitigate the volatility for propane customers who could see their total annual bills increase by approximately 7 per cent or $124 in Revelstoke depending on consumption while total annual bills for customers in Whistler could increase by approximately 5 per cent or $105 per year,” said Marston.

 

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.

 

 

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