Carbon taxes and more expensive renewable natural gas to cost northwestern B.C. residents. (Shutterstock)

Carbon taxes and more expensive renewable natural gas to cost northwestern B.C. residents. (Shutterstock)

Northwestern natural gas users can look forward to continuing price hikes

Carbon taxes to increase April 1 and in years following

Northwestern B.C. residents who burn natural gas for heating and other uses should prepare themselves for price hikes as government taxation and other measures framed around climate change take hold.

Based on increases in the carbon tax beginning this April, and set to increase annually thereafter, the tax pegged to the amount of gas consumed will eventually outstrip the cost of the fuel itself.

As of right now, natural gas costs $4.95 per gigajoule and the carbon tax is $2.25 gigajoule. That’s a figure decided upon by the province in adding tax of $45 per tonne for every tonne of carbon dioxide emitted.

But the tax is set to increase to $2.50 a gigajoule April 1, the equivalent of $50 a tonne of carbon dioxide emitted.

B.C. introduced its carbon tax first and there are expectations the provincial levy will mirror federal plans to keep increasing the tax which, by 2030, will be $170 per tonne or the equivalent of $8.50 a gigajoule.

That’s close to double the current cost of natural gas.

But Pacific Northern Gas (PNG), the region’s natural gas utility, is also asking the BC Utilities Commission to approve another set of price hikes, this time on the cost of the fuel.

That is because the company is purchasing renewable natural gas (RNG) — also called biomethane and the industry term for natural gas derived from organic waste, animal manure or wood waste — from an Alberta provider to blend with the traditional fuel pumped in from northeastern B.C. gas fields.

RNG is more expensive than traditional natural gas but there’s a growing emphasis on the fuel as it is considered carbon neutral by converting waste into fuel rather than having that waste decay and emit methane.

For now, PNG is calling its biomethane sales plan voluntary, but it also has its eye on what might be mandated by the provincial government requiring energy utilities to carry set percentages of the fuel within their systems.

“PNG is introducing RNG into its portfolio as a way to help reduce greenhouse gases emissions from its operations as well as provide customers opportunities to reduce their carbon footprint through the purchase of RNG,” said company vice president Gordon Doyle.

“The acquisition of RNG supports the BC government’s CleanBC plan and associated climate objectives.”

Under CleanBC, the provincial name for its overall plan for the province to become carbon neutral, the objective is to hit 15 per cent of RNG content.

“[At] a 15 per cent blend of low carbon energy, and a premium of low carbon energy over the current natural gas commodity rates plus carbon tax, residential customers would face an increase of approximately 15 to 27 per cent in their delivered gas costs,” PNG notes in its application to the utilities commission.

It also acknowledges that its customers from Vanderhoof west along Hwy 16 to Prince Rupert already pay the highest all-in costs for natural gas in the province because its main pipeline lacks large-scale industrial users, leaving domestic customers to pay maintenance and other expenses.

PNG is asking the utilities commission to approve a sliding scale of voluntary biomethane use beginning at two per cent of total volume consumed. The cost of that is pegged at $2 per month.

Even if customers do not buy into any voluntary purchase plan, they’ll still be paying more because all customers will be charged associated costs, said Doyle.

“This [$2 a month] cost is in addition to costs paid by all PNG customers to pay for transmission of RNG and PNG’s own consumption of RNG. Those costs are forecast to be approximately $3 per month for an average residential user.”

PNG also anticipates some customers, again voluntarily, will want to increase the amount of biomethane in their natural gas and has proposed volume options of 10, 15, 25, 50 and 75 per cent up to 100 per cent.

But it is forecasting demand, and subsequent revenues, will be in the five per cent blend range and so will offer that option as a standard introduction to RNG. That’s based on a customer survey done in 2019.

The utility does recognize the impact of higher natural gas costs and is planning to expand its energy efficiency programs aimed at reducing all-around energy costs. It does some of this in conjunction with BC Hydro aimed at mostly lower-income households.

That’s planned for early 2023 at the same time PNG hopes it will have regulatory approval to start pumping RNG through its pipeline.

What those enhanced programs will entail has not yet been released.

“PNG is considering incentives that are aligned with those currently available to PNG customers through the CleanBC Better Homes program that includes rebates for energy-efficient doors, windows and for increasing a home’s insulation,” said Doyle.

“PNG is also evaluating its ability to offer rebates on certain natural gas equipment.”