Terasen Gas receives BCUC approval to lower natural gas commodity rates

    SURREY, BC, Sept. 12 /CNW/ - Terasen Gas has received approval from the
B.C. Utilities Commission (BCUC) to lower natural gas commodity rates for the
majority of customers in B.C. The rate decreases will take effect October 1,
    "In response to changing market prices since our rate filings with the
BCUC last week, we have updated our applications, requesting lower commodity
rates for our customers," said Cynthia Des Brisay, Terasen Gas Vice President,
Gas Supply and Transmission. "As a result of this additional information, the
BCUC approved our request for larger commodity rate reductions than those
outlined in our original filings."
    "We are pleased to offer these rates at a time of year when cooler
weather approaches and consumers' energy needs generally increase," said Des
    In the Lower Mainland, Fraser Valley, Interior, North and the Kootenays
the decrease is $2.24 per gigajoule (GJ) and works out to an annual savings of
about 15 per cent or between approximately $213 and $247 per year, depending
on consumption. The cost of gas decrease to $7.54 per gigajoule will not
affect the commodity rate for customers participating in the Customer Choice
    In the Fort Nelson area, the decrease is $2.07 per gigajoule, and works
out to a savings of approximately 17 per cent, or $332 on the total annual gas
bill, based on an average annual consumption of 160 GJ per year.
    Changes do not apply to customers on Vancouver Island, the Sunshine Coast
and Powell River, since they are covered by different regulatory agreements.
Propane rates for Whistler and Revelstoke are also unaffected.
    Terasen Gas purchases natural gas on behalf of its customers and passes
the cost on without mark-up. Natural gas is a commodity traded on the open
market like oil, gold or lumber. Its price is affected by weather, supply and
demand, international events and market speculation.
    Favourable North American market conditions, including strong production
levels in the US, a cooler summer across most of the continent and a hurricane
season that has not resulted in significant gas production disruptions to date
have enabled storage balances to rebound and prices to fall from the highs of
early July.
    Terasen Gas uses several tactics and strategies to ensure a reliable
supply of natural gas at a reasonable price for our 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 during the summer for use at a later date when
        the demand and price are typically higher, and
    -   purchasing a portion of the supply from the spot market.

    "We encourage customers to use energy wisely all year round and currently
have an application before the BCUC to expand our programs aimed at helping
customers save energy and money, while reducing greenhouse gas emissions,"
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
    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.
    Natural gas is competitive with electricity and remains the best energy
source for space and water heating and overall home comfort.

    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
http://www.fortisinc.com/ or http://www.sedar.com/.

    Natural Gas Customers
                      Lower Mainland   Interior and North
                    and Fraser Valley        Based          Kootenays Based
                  Based on 110 GJ/year   on 95 GJ/year       on 110 GJ/year
                   Current    Oct. 1   Current    Oct. 1   Current    Oct. 1

    Basic monthly
     charge         $11.13    $11.13    $11.13    $11.13    $11.13    $11.13

     charge/GJ      $2.728    $2.728    $2.728    $2.728    $2.728    $2.728

     charge/GJ      $1.326    $1.326    $1.303    $1.303    $1.382    $1.382

    Charges for
     gas used/GJ    $9.780    $7.536    $9.780    $7.536    $9.780    $7.536

    Estimated total
     annual bill    $1,655    $1,408    $1,445    $1,232    $1,661    $1,414

                     Fort Nelson
                 Based on 160 GJ/year
                   Current    Oct. 1

     (includes the
     first 2 GJs)   $25.77    $21.62
    Charge on the
     next 28
     GJ/month      $11.706    $9.633
    Charge on
     excess of
     30 GJ/month   $11.663    $9.590
     total annual
     bill           $1,901    $1,569

    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 and Marketing Communications, Terasen Gas Inc., (604) 592-7682,

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