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Majority of FortisBC customers will see a decrease in their natural gas bills
Mar 21, 2016
Customers are benefiting from a mild winter, record storage and decreased demand
SURREY, BC – FortisBC has received approval from the BC Utilities Commission (BCUC) to decrease the cost of gas for customers starting April 1. In Revelstoke, piped propane customers will see an increase.
“North American natural gas prices over the winter have been lower than expected due to a continued strong production and reduced demand from warmer than normal weather,” said Cynthia Des Brisay, vice president of energy supply and resource development. “As a result, the market is experiencing high natural gas storage levels for this time of year, which has further dampened the expected cost of gas over the summer period. These factors have resulted in savings that FortisBC is passing on to customers.”
“Propane prices, on the other hand, are higher due to stronger crude oil prices, increased propane exports and reduced storage levels,” added Des Brisay.
FortisBC customers will see the following changes to their bills effective April 1, 2016:
Lower Mainland, Vancouver Island, Whistler, Fraser Valley, Interior, North and the Kootenays
- Customers will see a decrease to their cost of gas rate of $0.578 per gigajoule (GJ), meaning the cost of gas rate will change from $1.719/GJ to $1.141/GJ.
- These changes will result in a decrease of approximately $52 per year for residential customers, based on the average use of 90 GJ per year.
- Customer Choice program participants will not be affected by changes to the cost of gas rate.
- Customers in Fort Nelson will not see any changes to their cost of gas rates.
- Customers will see an increase to their cost of propane rate of $0.887 per GJ. For residential customers, this means the cost of propane rate will change from $5.998/GJ to $6.885/GJ.
- These changes will result in an increase of approximately $44 per year for residential customers in Revelstoke, based on the average use of 50 GJ per year.
In addition to the cost of natural gas and propane, there are other line items that customers will see displayed on their FortisBC natural gas billing statement. These charges reflect the cost of buying and transporting natural gas to our system and the delivery of gas through our system to homes. The delivery charge and storage and transport change very little and usually only annually. In addition, other fees and taxes are also collected on behalf of some municipalities and the provincial and federal government.
Every three months, FortisBC reviews the cost of natural gas and propane rates with the BCUC in order to make sure rates passed on to customers cover the cost of purchasing the gas and propane on their behalf. Factors affecting the market price of natural gas and propane in North America include weather, supply and demand, and economic conditions. Propane prices are also influenced by global oil markets.
For more information about rates, customers can visit www.fortisbc.com/Rates
Backgrounder on your natural gas bill
Below is a detailed explanation of the charges you will find on your bill:
Delivery charges reflect the costs of safely and reliably delivering gas to customers through our distribution system. This helps cover the cost of maintaining our natural gas distribution system, make a modest profit and invest in our business and improvements to meet customers’ needs. Delivery charges are reviewed by the BC Utilities Commission (BCUC) annually. Delivery charges are made up of two components: the basic charge and the delivery charge.
The basic charge is a flat daily fee that partially recovers the fixed costs of our system, whether or not you are using any gas but are connected to the system.
The delivery charge is based on consumption and pays for the cost of delivering gas through the system to your home or business.
Commodity charges reflect the costs of buying and transporting gas on behalf of customers. We do not mark up these costs, you pay what we pay. The commodity charges are made up of two components: storage and transport, and the cost of gas.
Storage and transport reflects the prices we pay to other companies to store and transport gas through their pipelines and infrastructure to our system. These costs are passed onto you without a markup.
The Cost of gas is the market cost of natural gas or propane that FortisBC pays. Similar to storage and transport, the cost of gas is passed on to you without a markup. Factors like weather, supply and demand and economic conditions affect the market price of natural gas and propane in North America.
Other charges and taxes
In addition to the above charges, we collect the following fees and taxes on behalf of three levels of government.
The municipal operating fee is collected on behalf of certain local governments and is paid by those who consume natural gas or propane in a municipality.
Carbon tax is collected on behalf of the provincial government and is paid by those who consume natural gas or propane in the province.
The Clean Energy Levy is a tax that is collected on behalf of the provincial government and is paid by those who consume natural gas or propane in B.C.
GST is our goods and services tax that is collected on behalf of the federal government and applies to the supply of most goods and services in Canada.
FortisBC is a regulated utility focused on providing safe and reliable energy, including natural gas, electricity and propane. FortisBC employs more than 2,200 British Columbians and serves approximately 1.1 million customers in 135 B.C. communities. FortisBC owns and operates two liquefied natural gas storage facilities and four regulated hydroelectric generating plants, approximately 7,200 kilometres of transmission and distribution power lines, and approximately 47,500 kilometres of natural gas transmission and distribution pipelines. FortisBC Inc. and FortisBC Energy Inc. do business as FortisBC. FortisBC is indirectly, wholly owned by Fortis Inc., a leader in the North American electric and gas utility business. 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.