Natural gas pipeline repairs could cost consumers

Last fall’s heavy rains exposed sections of Pacific Northern Gas pipeline

Northwestern natural gas consumers could very well see an increase in their bills based on repairs and rerouting of the Pacific Northern Gas (PNG) pipeline along a section of the Copper River east of Terrace.

Last October heavy rains and subsequent flooding and washouts along the Copper River Forest Resource Road, which runs adjacent to the river, exposed a large section of the pipeline that is otherwise buried.

The pipeline is PNG’s main one running west of Prince George servicing communities and businesses along Hwy16 to the coast. A smaller line branches off of the main one to service the Kitimat area.

Since October PNG has made temporary repairs and will undertake more work as it develops the design of a more extensive project to reroute and rebury the exposed section, says Joe Mazza, the utility’s vice president of operations and engineering.

“PNG has advanced the detailed design work at or near the site of the washout, but we have not made a final determination on the routing for the permanent repair,” he said.

Once that is determined, the utility will be filing its plan with the B.C. Utilities Commission (BCUC), the provincial body that regulates PNG’s expenditures and the rates it charges to industrial, commercial and residential consumers.

“Potential rate impacts are unknown at this time,” said Mazza adding that the goal of the utility is to limit any anticipated rate hikes.

As it is, PNG has already submitted a wide-ranging revenue application for both 2018 and 2019 outlining its anticipated costs and need for more money.

It’s been granted temporary new rates as of Jan. 1 pending a final determination by the utilities commission.

While PNG’s costs to deliver natural gas have increased, the cost of the gas itself has dropped with the result being lower overall rates as of Jan. 1 compared to the end of 2017.

As a regulated utility, PNG passes along the cost of natural gas to its customers and is not allowed to mark up the commodity. Natural gas costs are adjusted every three months.

Still, PNG customers in the northwest pay the highest overall rates for natural gas in the province since the utility began losing high volume industrial users more than a decade ago.

With fewer large customers, the cost of maintaining PNG’s pipeline has fallen mainly to small commercial and residential customers, resulting in delivery rates close to three times what they are in the Lower Mainland.

As of Jan. 1, northwestern residential users are paying a delivery charge of $13.157 per gigajoule of natural gas compared to Lower Mainland customers who are paying $5.113 per gigajoule.

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