Northwest B.C. natural gas rates to drop April 1

But Terrace and area gas customers will still be paying some of the highest overall rates in the province

The area’s natural gas supplier is lowering its rates as of April 1 based on the continuing fall in the price of the commodity.

Pacific Northern Gas’s (PNG) reduction from $4.378 a gigajoule to $3.209 a gigajoule works out to nearly 27 per cent.

The utility will also end charging customers a separate amount that was placed in a special account meant to balance over time what the utility was paying for gas and what it actually cost.

Gas costs have been less than what the utility has estimated, meaning it will now start repaying customers out of that account in what will be an additional rate reduction, PNG official Verlon Otto said March 19.

All told, PNG says its new commodity rate, after receiving approval from the regulator BC Utilities Commission March 19, will be 34 per cent less on April 1 then it is now.

“Like other utilities, we look at the forward price for gas and it’s below our projections,” said Otto of the lower rates. “The price is a matter of supply and demand on the world market and right now, there’s a glut. There’s been a lot of media about oil and this is simply the same, there’s a glut of gas.”

“For the consumer, this is good news,” Otto added of the new rates.

He noted that the pricing situation is a lot different than even five years ago when the cost of a gigajoule of gas was more than $10.

PNG is a gas delivery utility and earns its income from delivering gas, not selling it. As a delivery utility, it is not permitted to mark up the price of gas it purchases and then provides to customers.

Provided a house uses 72 gigajoules of natural gas a year, which is the average consumption PNG uses in its calculations, its occupants will save $114.85 a year.

Even with the price of gas dropping, however, northwestern gas customers will still be paying some of the highest overall rates in the province.

That’s because residential, commercial and other northwestern gas users began shouldering more of the burden of paying to maintain PNG’s gas line through the area after large industrial gas users began closing down over the past two decades.

Without the income from those large users, including one pulp mill in Prince Rupert and another in Kitimat, rates to maintain the line for remaining users began to climb.

PNG’s northwest residential customers, for example, pay a delivery charge of $11.867 a gigajoule compared to Vancouver customers of Fortis, a large gas utility, who pay a combined delivery and storage rate of just $4.881 a gigajoule, approximately one-third of the rate paid in the northwest.

When all of PNG’s commodity and delivery rates are calculated, residential customers will pay $18.628 a gigajoule as of April 1.

That’s a reduction of 7.9 per cent from what the  total gigajoule cost is now.

The total rate includes the provincial government’s carbon tax of $1.49 a gigajoule.

For an average residential user, that tax amounts to $107.27 a year.

The one hope for lower northwestern PNG rates rests with a plan by its parent, AltaGas of Calgary, to pump gas through its northwest line for a small liquefied natural gas plant at Kitimat.

AltaGas is a partner in this project which would see gas liquefied on a barge for export.

Income from pumping gas through the PNG line would then go to maintaining the line and bring lower rates for existing PNG customers.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Local artists put their talent on display at the Terrace Art Gallery

Despite the winter weather, the event was filled with art enthusiasts as they perused local works

Extreme winter weather leads to Monday school and bus route closures

BC Transit, School District 82 and Coast Mountain College all announced closures

Disrespectful that Horgan won’t meet during northern B.C. tour: hereditary chief

Na’moks said he was frustrated Horgan didn’t meet with the chiefs

BC Green Party leader visits Wet’suwet’en camps at heart of pipeline conflict

Adam Olsen calls for better relationship between Canada and First Nations

Another snowstorm expected for Terrace and Kitimat area

Wind is expected up to 80 km per hour

VIDEO: Soldiers trade rifles for snow shovels to help dig out St. John’s

A state of emergency is set to extend into a fifth day

Warm ‘blob’ could be behind mass starvation of North Pacific seabirds: study

Unprecedented death toll raises red flag for North American marine ecosystems

ICBC to bring in ranking system for collision, glass repair shops

Change comes after the much-maligned auto insurer has faced criticism for sky-high premiums

‘It was just so fast’: B.C. teen recalls 150-metre fall down Oregon mountain

Surrey’s Gurbaz Singh broke his leg on Mount Hood on Dec. 30

B.C. woman crowned the fastest female marathon runner in Canadian history

Malindi Elmore ran an incredible 2:24:50 at the Houston Marathon

Alberta bulldog breeder ordered to refund B.C. buyer over puppy’s behaviour

Tribunal ruled a verbal agreement to send a new dog superseded the written contract

Man dies in backcountry near Nelson’s Whitewater Ski Resort

The victim was found unresponsive in a tree well Friday

Cariboo Memorial Hospital on the mend after cold weather wreaks havoc

Burst pipes and water leaks cause three different incidents

Most Read