SURREY, B.C. - The B.C. Utilities Commission (BCUC) has approved changes to Terasen Gas’ natural gas and propane rates. The increases will take effect July 1, 2008.

 

“We purchase natural gas and propane on behalf of our customers and pass those costs on without mark-up,” said Cynthia Des Brisay, Vice President Gas Supply and Transmission. “Despite the interim market expectations, natural gas remains competitively priced when compared to other energy sources. As well, our purchasing strategies have allowed us to soften the increase we have to pass on to our customers.”

 

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

The increase means a typical residential natural gas 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 between $142 and $164 per year depending on consumption levels. This 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.

 

Total annual bills for Fort Nelson residential customers will 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 an increase in their rates.

 

Based on past consumption trends, consumers’ energy needs are expected to decrease as warmer weather approaches.

 

“Propane commodity prices have been volatile, following the rise in crude oil prices,” said Des Brisay. “The BCUC has approved lower than requested propane rates for the Revelstoke and Whistler regions, softening the increase in commodity prices passed on to customers.”

 

Residential customer rates will increase by approximately 17 per cent in Revelstoke, and 16 per cent in Whistler per year. This means residential propane customers will see their total annual bills increase by approximately $297 in Revelstoke, and approximately $323 in Whistler per year, depending on consumption.

 

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.

 

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. 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.

 

 Propane prices are impacted by different market factors but principally are driven by the cost of crude oil. Like natural gas, Terasen Gas uses several tactics and strategies to ensure a reliable supply of propane and strives to stabilize price through various physical and financial mechanisms for customers.

 

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 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.

 

 

Backgrounder with residential customer rates by region attached.

 

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

 

 

 

 

 

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