Terasen Gas applies for natural gas and propane commodity rate decreases

Rates maintained for Vancouver Island and Whistler

SURREY, BC, June 4 /CNW/ - Terasen Gas has now filed applications with the British Columbia Utilities Commission (BCUC) requesting decreases in the natural gas and propane rates it charges customers in the Lower Mainland, Fraser Valley, Interior, North, the Kootenays, and Revelstoke. An application has also been filed to decrease rates in Fort Nelson. If approved, the decreases would take effect July 1, 2010. Terasen Gas purchases natural gas and propane on behalf of its customers and passes on these costs without mark-up.

"We are pleased to be able to apply for a decrease to our natural gas commodity rates for most of our customers due to changing market conditions. Customers will benefit from some of the lowest commodity rates in years," said Cynthia Des Brisay, Vice President of Gas Supply and Transmission, Terasen Gas. "North American natural gas prices have declined as a result of mild spring weather in key consuming areas of the U.S. and record high storage levels for this time of the year. As well, the new shale gas developments are continuing to keep production levels stable despite the lower demand and pricing environment."

Factors affecting the market price of natural gas include weather, supply and demand, and economic conditions. Propane prices are closely linked to global oil markets and oil prices have decreased in the last quarter, leading Terasen Gas to apply for a propane rate decrease.

Terasen Gas' application does not apply to customers on Vancouver Island, the Sunshine Coast and in Powell River. These regions are covered by a separate, longer-term regulatory structure that provides a level of insulation from the fluctuations in the commodities market. For a two-year period, which started on January 1, 2010, residential and commercial commodity rates in this service area will remain unchanged, unlike commodity rates in most mainland service regions, which increased on April 1, 2010. Rates in Whistler will remain unchanged as the BCUC's final decision on Terasen Gas' 2010-2011 Revenue Requirements Application is pending.

Every three months, Terasen Gas reviews natural gas and propane commodity rates with the BCUC in order to ensure the rates passed on to customers cover the cost of purchasing the gas on their behalf. Terasen Gas earnings come from delivery charges - what the company charges to deliver natural gas and propane to customers. Delivery rates and midstream rates are reviewed by the BCUC every December with any changes coming into effect the following January.

Please see the backgrounder for a summary of the rate changes. For more information on natural gas and propane rate changes by region, and to learn more about Terasen Gas, visit terasengas.com.

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 approximately 2,100,000 gas and electric customers and has total assets exceeding $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 - Proposed Residential Natural Gas and Propane Commodity
                                                         Approximate annual
                                                         bill decrease for
                            Proposed        Per cent      average customer
                         commodity rate    decrease in      depending on
                           decrease*   commodity rate     consumption
    Lower Mainland,
     Fraser Valley,
     Interior, North, and
     the Kootenays          $0.633/GJ          11%        5% ($47 to $60)
    Whistler                No change       No change        No change
    Vancouver Island        No change       No change        No change
    Fort Nelson             $0.525/GJ           8%            6% ($74)
    Revelstoke              $1.801/GJ          11%            8% ($90)
    * Commodity rates for customers participating in the Customer Choice
    program will not be affected, as they purchase the gas commodity from a
    licensed gas marketer.

    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.


For further information: For further information: Media Contact: Marcus Wong, Corporate Communications Manager, Terasen Gas, Phone: (778) 571-3263, Email: marcus.wong@terasengas.com, Follow us at: www.twitter.com/terasengas

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