Terasen Gas applies for increases in natural gas and propane commodity rates



    SURREY, BC, June 9 /CNW/ - 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:

    
    -   purchasing gas from a variety of sources
    -   locking in the price of gas through the use of futures contracts
    -   placing gas in storage when the price is lower for use at a later
        date when the demand and price are higher
    -   purchasing a portion of the supply from the spot market
    

    "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.

    Terasen Gas delivers natural gas and propane through three companies that
make up the Terasen Gas group: Terasen Gas Inc., Terasen Gas (Vancouver
Island) Inc. and Terasen Gas (Whistler) Inc. The companies share common
Terasen Inc. ownership and are indirect wholly owned subsidiaries of Fortis
Inc. Fortis Inc., the largest investor-owned distribution utility in Canada,
serves two million gas and electric customers and has more than $10 billion of
assets. 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.





For further information:

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

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