BC Utilities Commission approves Terasen Gas rate increases

    SURREY, BC, Dec. 18 /CNW/ - The BC Utilities Commission (BCUC) has
approved increases to various Terasen Gas rates, including those for midstream
and delivery, for residential customers in several service areas. The rate
changes will take effect on January 1, 2008.
    Typical residential customers in the Lower Mainland, Fraser Valley,
Interior, North and the Kootenays service areas will see their total annual
gas bill rise by about 4 per cent, approximately $43 to $51 per year depending
on consumption levels. These changes are a result of the increased cost of
storing, transporting and managing the gas delivered to customers, plus costs
associated with the Customer Choice program. All residential customers in
these service areas are eligible to participate in Customer Choice.
    "Currently, we are under-recovering our costs for the storage and
transportation of natural gas. The majority of this increase is to help us
meet those costs which are referred to on a customer's bill as the Midstream,"
said Jan Marston, Vice President, Gas Supply and Transmission. "The Midstream
costs are passed on without mark-up and Terasen Gas does not earn revenue on
these costs: customers pay what we pay."
    The changes will also apply to those customers currently participating in
the Customer Choice program.
    No change has been requested for the cost of gas, which is also passed on
without mark-up and makes up about 60 per cent of a customer's monthly
    For January, residential customers in the Fort Nelson service area will
see their rates increase by approximately 0.5 per cent. However, effective
February 1, the BCUC has approved an interim rate increase of an additional 5
per cent, or approximately $70 per year depending on consumption levels.
Delivery volumes for the Fort Nelson service area have decreased over the past
four years resulting in a higher cost of service per customer. This marks the
first delivery rate increase for Fort Nelson residential customers since 2004.
    The average residential customer on Vancouver Island, the Sunshine Coast
and in Powell River will see their total annual gas bill increase by
approximately 0.4 per cent or $4 per year depending on consumption.
    Natural gas is a commodity traded on the open market like oil, coffee or
lumber. Factors affecting the price of natural gas include weather, supply and
demand and the price of other energy commodities. Natural gas commodity costs
are passed on without mark-up.
    Any change in Terasen Gas rates must be approved by the BCUC.

    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 almost two million gas and electric customers and has $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.

    Terasen Gas may include forward-looking statements in this release which
reflect management's expectations regarding the Company's future growth,
results of operations, performance, business prospects and opportunities.
Wherever possible, words such as "anticipate", "believe", "expects", "intend"
and similar expressions have been used to identify the forward-looking
statements. These statements reflect management's current beliefs and are
based on information currently available to the Company's management. By their
very nature, forward-looking statements are based on underlying factors or
assumptions which are subject to inherent risks and uncertainties surrounding
future expectations generally. Such risk factors or assumptions include, but
are not limited to, general economic, market and business conditions,
regulatory developments, gas distribution operating risks, natural gas prices
and supply, weather and competition. Terasen Gas cautions readers that a
number of factors could cause actual results, performance or achievements to
differ materially from the results discussed or implied in the forward looking
statements. These factors should be considered carefully and undue reliance
should not be placed on the forward looking statements. For additional
information with respect to certain of these risks or factors, reference
should be made to Terasen Gas's continuous disclosure materials filed from
time to time with Canadian Securities Regulatory Authorities. Terasen Gas
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or

    Backgrounder with residential customer rates by region attached.

    Background - Estimated change in annual bills

    Rates for Typical Natural Gas Residential Customers

              Lower Mainland  Interior & North   Kootenays   Vancouver Island
             & Fraser Valley    Based on 95      Based on    & Sunshine Coast
               Based on 110       GJ/year       110 GJ/year     Based on 59
                  GJ/year                                         GJ/year
              Current   Jan.1  Current  Jan.1  Current  Jan.1  Current  Jan.1
    charge     $10.94  $11.13  $10.94  $11.13  $10.94  $11.13  $10.50  $10.50
    charge/GJ  $2.773  $2.748  $2.773  $2.748  $2.773  $2.748
    Midstream  $0.860  $1.327  $0.851  $1.304  $0.913  $1.383
    Charges for
    gas used   $6.926  $6.926  $6.926  $6.926  $6.926  $6.926 $13.715 $13.775
    total annual
    bill       $1,293  $1,344  $1,134  $1,176  $1,299  $1,350    $939    $943

    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.

    Hot tips to help you save energy

    1.  Upgrade your furnace. If your furnace is more than 10 years old, it's
        likely a low-efficiency model. Consider upgrading to a high-
        efficiency furnace with an AFUE (annual fuel utilization efficiency)
        of 90 per cent or more. Terasen Gas offers rebate programs for people
        purchasing new ENERGYSTAR-qualified high-efficiency furnaces and
        boilers. Check out our ENERGY STAR(R) Heating System Upgrade program
        at www.terasengas.com

    2.  Tune up your furnace. Change or clean your furnace filters during the
        heating season. An occasional tune up will ensure things are running
        properly and will save you money over time.

    3.  Turn your thermostat down. Turning your thermostat down to 20 C
        during the day and 17 C at night can save as much as 15 per cent on
        your heating costs.

For further information:

For further information: Media contact: Joyce Wagenaar, Corporate
Communications Manager, Phone: (604) 592-7682, E-mail:
joyce.wagenaar@terasengas.com; Scott Thomson, Vice President, Regulatory
Affairs & Chief Financial Officer, Terasen Inc. and Terasen Gas, Phone: (604)
592-7784, E-mail: scott.thomson@terasengas.com

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