FortisBC transportation and natural gas customers benefit from changes
SURREY, BC, Nov. 28, 2013 /CNW/ - FortisBC, a subsidiary of Fortis Inc.
(TSX: FTS) commends the B.C. government for changes announced today
that will help to increase FortisBC's ability to rapidly and
cost-effectively supply liquefied natural gas (LNG) to the B.C.
The changes include updates to the greenhouse gas reduction regulation
and directions to the BC Utilities Commission (BCUC), including the
exemption of the planned expansion of FortisBC's Tilbury LNG facility
from a certificate of public convenience and necessity review by the
"Today's direction from government allows FortisBC to better support the
province in the development of natural gas for the transportation
sector. This announcement will also result in increased LNG supply,
creating opportunities for industrial users and remote communities,
bringing economic development and new jobs to B.C." said John Walker,
president and CEO of FortisBC.
"Government's announcement, also positions FortisBC to move forward
immediately with plans to expand our Tilbury LNG Facility. This project
contemplates an investment of up to $400 million," said Walker.
The investment in the FortisBC Energy Inc. gas utility would be subject
to FortisBC Board approval and additional regulatory and environmental
permits and approvals, including the B.C. Oil and Gas Commission. The
expansion is expected to include a second tank and a new liquefier,
both to be in service by mid-2016. The expansion will add approximately
one million gigajoules of LNG storage, as well as 30,000 to 60,000
gigajoules of liquefaction capacity per day. It will also provide 300
person-years of construction jobs and about $4 million a year in taxes
paid to various levels of government over time. FortisBC expects to
finance the expansion as part of its natural gas regulated rate base.
"Government wanted to get out of the way and allow the transportation
fuel component of the LNG industry develop quickly," said Bill Bennett,
minister of energy and mines and minister responsible for core review.
"This $400-million investment in FortisBC's Tilbury LNG Facility will
build B.C.'s marketplace for the world's cleanest fuel, LNG, and create
over 300 person-years of employment in the Lower Mainland."
As part of government's direction, the BCUC will set the LNG dispensing
rate at $4.35/gigajoule. This will help the transportation sector
transition to adopt LNG as a fuel source and allow Northern and remote
communities to switch to LNG, away from fuels like diesel.
Today the government also announced changes to its greenhouse gas
reduction regulation. Key changes to benefit FortisBC customers
an increase to the allowed capital per station for building LNG or
compressed natural gas (CNG) fuelling stations that will meet the needs
of customers with larger fleets;
an increase in the incentive funding for safety training and upgrades to
LNG or CNG vehicle maintenance facilities; and
the expansion of incentives to rail and mining vehicles.
FortisBC expects that its gas utility customers will benefit from the
additional volumes moving through the pipeline system to serve the
expanded LNG facility. Better year-round, utilization of FortisBC's
infrastructure, especially during the summer months when heating
requirements are reduced, helps to keep natural gas delivery rates
FortisBC Energy Inc. is a regulated utility focused on providing safe
and reliable energy, including natural gas and propane. FortisBC Energy
Inc. employs almost 1,800 British Columbians and serves approximately
945,000 customers in 125 B.C. communities. FortisBC Energy Inc. is
indirectly wholly owned by Fortis Inc., the largest investor-owned
distribution utility in Canada. FortisBC Energy Inc. owns and operates
approximately 46,000 kilometres of natural gas transmission and
distribution pipelines. 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.
FortisBC Energy Inc. may include forward-looking statements in this
media 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" "contemplate" and similar
expressions have been used to identify the forward-looking statements.
The forward looking statements in this media release include, but are
not limited to, statements regarding: increased supply of LNG; job
creation; taxes and the size of the investment in Tilbury Facility.
These statements reflect management's current beliefs and are based on
information currently available to the Company's management. Certain
material factors or assumptions have been applied in drawing the
conclusions contained in the forward-looking statements, which include
but are not limited to receipt of applicable regulatory approvals and
requested rate orders; absence of equipment breakdown, absence of
environmental damage and health and safety issues, absence of adverse
weather decisions and natural disasters, no significant operational
disruptions or environmental liability as a result of a catastrophic
event or environmental upset ability to obtain and maintain applicable
permits, the adequacy of the corporation's existing insurance
arrangements, the First Nations settlement process does not adversely
affect the corporation, the ability to maintain and renew collective
bargaining agreements on acceptable terms, the ability to arrange
sufficient and cost effective financing, no material adverse ratings
actions by credit rating agencies, the competitiveness of natural gas
pricing when compared with alternate sources of energy; continued
population growth and new housing starts; the availability of natural
gas supply; access to capital; interest rates and the ability to hedge
certain risks. These factors or assumptions are subject to inherent
risks and uncertainties surrounding future expectations generally that
could cause actual results to differ materially from historical results
or results anticipated by the forward-looking statements. Such risk
factors include, but are not limited to, regulatory approval and rate
orders risk; operational disruptions and environmental risk; price
competitiveness risk; changes in economic conditions; natural gas
supply risks; capital and credit ratings risk, interest rate risk and
counterparty credit risk. 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 the Company's Management
Discussion & Analysis.
Tilbury LNG Facility
LNG is natural gas that has been cooled to a low temperature of -162°C
to become a liquid. FortisBC uses LNG to supplement gas supply during periods of peak demand
as well as for transportation customers. In operation since 1971, our
LNG facility on Tilbury Island in Delta, B.C. is located near the
FortisBC transmission pipeline system just a few kilometres from
From the Tilbury LNG Facility, LNG is delivered by tanker truck to the
LNG dispensing station on a customer's property or at a commercial
fuelling station along a regional corridor.
The current Tilbury LNG Facility can liquefy 5,000 gigajoules of natural
gas per day.
Since LNG takes up 1/600th of the volume of gas, the tank, with a volume
of 28,000 cubic metres, holds the equivalent of 17 million cubic metres
(600,000 gigajoules) of natural gas — enough gas to keep a community of
12,000 warm for about 45 very cold days.
LNG dispensing rate
The LNG dispensing rate has been set at $4.35/gigajoule. This is
intended to cover the cost of the transportation of the gas to the
facility, liquefaction and dispensing. Customers will also pay the
natural gas commodity cost per gigajoule.
Environmental benefits of natural gas for transportation
Converting fleets and vehicles to natural gas not only helps the
province meet its greenhouse gas reduction goals but also helps improve
air quality in the communities in which they serve.
Natural gas burns cleaner than gasoline or diesel, which can result in
less pollution and greenhouse gases.
Carbon dioxide (CO2) emissions, the principal greenhouse gas that contributes to global
warming, are reduced by 20 to 30 per cent.
Natural gas vehicles emit virtually no particulate matter, the harmful
microscopic component of air pollution that penetrates deeply into the
Businesses converting their fleet to natural gas will help meet the
province's requirements for greenhouse gas reductions under the B.C.
Greenhouse Gas Reduction Targets Act.
Natural gas for transportation also helps achieve B.C.'s energy
objectives defined under the Clean Energy Act.
More stable fuel costs: historically, natural gas commodity prices have been shown to be more
stable, compared to the fluctuation of prices for diesel and gasoline.
Natural gas fuel costs have historically been 25 to 40 per cent less
Fewer emissions: natural gas is a cleaner burning, lower carbon fuel than diesel or
Quieter: operators of natural gas waste hauler trucks report they are quieter
than comparable diesel trucks.
For further information:
Corporate Communications Advisor