Terasen Gas receives BCUC approval on changes to natural gas and propane commodity rates



    SURREY, BC, June 16 /CNW/ - 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:
    
    -   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
    

    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.

    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.

    Backgrounder with residential customer rates by region attached.


    
    Natural Gas Customers

                          Lower Mainland      Interior and
                       and Fraser Valley             North         Kootenays
                            Based on 110       Based on 95      Based on 110
                                 GJ/year           GJ/year           GJ/year
    -------------------------------------------------------------------------
                        Current   July 1  Current   July 1  Current   July 1
    -------------------------------------------------------------------------
    Basic monthly
     charge              $11.13   $11.13   $11.13   $11.13   $11.13   $11.13
    -------------------------------------------------------------------------
    Delivery charge/GJ   $2.728   $2.728   $2.728   $2.728   $2.728   $2.728
    -------------------------------------------------------------------------
    Midstream charge/GJ  $1.326   $1.326   $1.303   $1.303   $1.382   $1.382
    -------------------------------------------------------------------------
    Charges for gas
     used/GJ             $8.287   $9.780   $8.287   $9.780   $8.287   $9.780
    -------------------------------------------------------------------------
    Estimated total
     annual bill         $1,491   $1,655   $1,304   $1,446   $1,497   $1,661
    -------------------------------------------------------------------------


                       Fort Nelson Based
                          on 160 GJ/year
    -------------------------------------
                        Current   July 1
    -------------------------------------
    Minimum monthly
     charge (includes
     the first 2 GJs)    $22.39   $25.77
    -------------------------------------
    Charge on the next
     28 GJ/month        $10.017  $11.706
    -------------------------------------
    Charge on excess
     of 30 GJ/month      $9.974  $11.663
    -------------------------------------
    Estimated total
     annual bill         $1,631   $1,901
    -------------------------------------

    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.
    





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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