Terasen Gas adjusts delivery rates effective January 1, 2010

Customers have some of the lowest total annual rates in years

SURREY, BC, Dec. 18 /CNW/ - Terasen Gas has received decisions from the British Columbia Utilities Commission (BCUC) that will affect delivery rates for customers in most service regions effective January 1, 2010. This announcement summarizes the impacts of all of the decisions used to establish customers' rates effective January 1, 2010. Commodity and midstream rates were set earlier this month.

"Our new delivery rates will ensure that Terasen Gas can continue to maintain safe, reliable and cost-effective natural gas delivery, and help communities and the Province meet Climate Action goals by providing means to integrate alternative energy solutions with our traditional natural gas services as well as to provide expanded energy efficiency offerings that our customers are looking for," said Randy Jespersen, President and CEO of Terasen Gas Inc. "Furthermore, we received a decision increasing our regulated rate of return and equity component in our capital structure which helps Terasen Gas maintain a strong credit rating and attract investment for infrastructure to help meet B.C.'s current and future energy needs."

Delivery rates represent the costs associated with delivering natural gas and propane to customers including pipeline maintenance, emergency services, customer care and a regulated rate of return to the company's shareholder, Fortis Inc. Delivery rates make up approximately 40 per cent of a residential customer's annual bill. Terasen Gas purchases and stores both natural gas and propane on behalf of its customers. These costs are then passed on without mark-up to customers through the commodity and midstream rates which make up approximately 60 per cent of a residential customer's annual bill.

In the decisions, the BCUC also accepted Terasen Gas's plans to pursue alternative energy systems and continue to develop energy solutions, such as biogas, geothermal and district energy systems, and advance compressed and liquefied natural gas as cleaner transportation fuel alternatives. It is now one of the first utilities in North America to provide alternative energy services to customers and will move forward in building upon its history of innovation in developing initiatives that expand energy efficiency and conservation programs for residential, commercial, affordable housing and rental customers.

Rates will change as follows on January 1, 2010:

    
    Lower Mainland, Fraser Valley, Interior, North and the Kootenays:
    -   Residential customers will see an increase to their overall annual
        bill of between $81 and $101 or approximately 10 per cent, due to a
        three per cent delivery rate increase and a previously determined
        seven per cent midstream rate increase. Both rate changes will also
        apply to customers participating in the Customer Choice program as
        these customers only purchase the gas commodity from licensed gas
        marketers.

    Revelstoke:
    -   Residential customers will see an increase to their overall annual
        bill of $144 or approximately 16 per cent, due to a delivery rate and
        propane rate increase.

    Whistler
    -   Customers will see a decrease to their overall annual bill of $232 or
        12 per cent, due to a slight delivery rate increase and a significant
        commodity rate decrease as a result of cost savings from their
        conversion to natural gas.

    Fort Nelson
    -   Customers will see an increase to their overall annual bill of $95 or
        approximately eight per cent due, to an increase in the commodity
        rate and a slight decrease in a delivery component of rates, as
        determined by the BCUC in previous applications.

    Vancouver Island
    -   Rates will remain frozen until 2012 due to the BCUC's approval of
        Terasen Gas (Vancouver Island) Inc.'s negotiated settlement for its
        revenue requirement and rate design application.
    

With these adjustments to the delivery rate, customers will be enjoying lower rates than over the same time last year. Customers are encouraged to visit terasengas.com for energy saving tips and to learn how they can become more energy efficient, helping to lower their monthly bills and benefit the environment.

For more information on rate changes, refer to the Backgrounder attached.

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 more than two million gas and electric customers and has total assets approaching $12 billion. 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 www.fortisinc.com or www.sedar.com

BACKGROUNDER - Estimated Changes in Annual Bills

Rates for typical natural gas residential customers

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.

    
    -------------------------------------------------------------------------
                     Lower Mainland & Fraser Valley     Interior & North
                          Based on 95 GJ/year          Based on 75 GJ/year
                    ---------------------------------------------------------
                     Jan 1,    Oct 1,    Jan 1,    Jan 1,    Oct 1,    Jan 1,
                      2009      2009      2010      2009      2009      2010
    -------------------------------------------------------------------------
    Basic monthly
     charge         $11.99    $11.84    $11.84    $11.99    $11.84    $11.84
    -------------------------------------------------------------------------
    Delivery
     charge/GJ       $2.85     $2.80     $3.15     $2.85     $2.80     $3.15
    -------------------------------------------------------------------------
    Midstream
     charge/GJ       $1.02     $1.02     $1.73     $0.98     $0.98     $1.70
    -------------------------------------------------------------------------
    Charges for gas
     used/GJ         $7.54     $4.95     $4.95     $7.54     $4.95     $4.95
    -------------------------------------------------------------------------
    Estimated total
     annual bill    $1,227      $974    $1,075      $996      $796      $877
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                   Kootenays
                                              Based on 80 GJ/year
                                 --------------------------------------------
                                   Jan 1, 2009    Oct 1, 2009    Jan 1, 2010
    -------------------------------------------------------------------------
    Basic monthly charge              $11.99         $11.84         $11.84
    -------------------------------------------------------------------------
    Delivery charge/GJ                 $2.85          $2.80          $3.15
    -------------------------------------------------------------------------
    Midstream charge/GJ                $1.05          $1.05          $1.76
    -------------------------------------------------------------------------
    Charges for gas used/GJ            $7.54          $4.95          $4.95
    -------------------------------------------------------------------------
    Estimated total annual bill       $1,059           $846           $931
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                   Fort Nelson
                                              Based on 140 GJ/year
                                 --------------------------------------------
                                   Jan 1, 2009    Oct 1, 2009    Jan 1, 2010
    -------------------------------------------------------------------------
    Minimum monthly charge
     (includes the first 2 GJs)       $23.48         $19.20         $21.22
    -------------------------------------------------------------------------
    Charge on the next 28 GJ/month     $9.88          $7.74          $8.35
    -------------------------------------------------------------------------
    Charge on excess of 30 GJ/month    $9.82          $7.68          $8.29
    -------------------------------------------------------------------------
    Estimated total annual bill       $1,427         $1,128         $1,223
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                    Whistler
                                              Based on 90 GJ/year
                                 --------------------------------------------
                                   Jan 1, 2009    Jul 1, 2009    Jan 1, 2010
    -------------------------------------------------------------------------
    Basic monthly charge               $7.50          $7.50          $7.50
    -------------------------------------------------------------------------
    Charge for gas used per GJ        $23.84         $19.76         $17.18
    -------------------------------------------------------------------------
    Estimated total annual bill       $2,236         $1,869         $1,637
    -------------------------------------------------------------------------
    

SOURCE TERASEN GAS

For further information: For further information: Media Contact: Kirsten Walker, Communications Specialist, Terasen Gas Inc., Phone: (604) 592-7507, Email: kirsten.walker@terasengas.com

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