Terasen Gas receives BCUC decision on natural gas and propane commodity rates

    SURREY, BC, March 18 /CNW/ - The BC Utilities Commission (BCUC) provided
Terasen Gas with its decisions on the natural gas and propane commodity rates
Terasen Gas passes on to customers. Effective April 1, 2008, natural gas
customers will see rates increase while propane rates will remain the same.
    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 include weather, supply and demand,
international events and market speculation.
    "Natural gas remains competitively priced when compared to other energy
sources," said Jan Marston, vice president, gas supply and transmission. "Our
purchasing and hedging strategies have allowed us to soften the increase we
have to pass on to our customers. These are the first natural gas commodity
increases in more than two years," said Marston.
    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 anticipated demand and price are higher
    -   purchasing a portion of the supply from the spot market

    The two main supply constraints impacting the price of natural gas
include a larger than anticipated drawdown of storage inventories resulting
from the colder than average winter in the east and the lower than forecast
volume of liquefied natural gas being imported into North America.
    The increase means a typical residential 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 $127 to $147 per year depending on
consumption levels. This proposed cost of gas increase to $8.29 per GJ will
not impact the commodity rates for those customers participating in the
Customer Choice program.
    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 BC communities served by Terasen Gas. Customers
in this region will see their total annual bills increase by approximately
3.5 per cent, or $33 per year depending on consumption levels.
    Total annual bills for Fort Nelson customers will increase by 17 per cent
or $239 per year depending on consumption levels. This rate change results
from a commodity rate increase and a slight decrease in delivery rates for
Fort Nelson customers from the February interim delivery rates.
    The BCUC decision indicated that propane rates for Revelstoke and
Whistler customers will remain the same at this time.
    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 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.

    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 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.

    Background - Estimated change based on application for April 1, 2008

    Natural Gas 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  April  Current   April  Current  April  Current  April
                           1                1               1               1
     charge    $11.13  $11.13  $11.13  $11.13  $11.13  $11.13  $10.50  $10.50
     charge/GJ $2.750  $2.728  $2.750  $2.728  $2.750  $2.728       -       -
     charge/GJ $1.326  $1.326  $1.303  $1.303  $1.382  $1.382       -       -
    Charges for
     used/GJ   $6.926  $8.287  $6.926  $8.287  $6.926  $8.287 $13.775 $14.325
     bill      $1,344  $1,491  $1,177  $1,304  $1,350  $1,497    $943    $976

                  Fort Nelson
                  Based on 160
               Current  April 1
     the first
     2 GJs)     $19.42   $22.49
    Charge on
     the next
     GJ/month   $8.577  $10.066
    Charge on
     excess of
     GJ/month   $8.531  $10.023
     bill       $1,400   $1,639

    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: Ruth Sulentich, Community
Relations Manager, (250) 868-4517, ruth.sulentich@terasengas.com

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