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Greater Victoria, BC News

ARTICLE

Date ArticleType
4/1/2013 Published Article
Natural Gas on Vancouver Island – Making sense of BCUC’s decision

In 2012 FortisBC Energy Utilities submitted a common rate proposal to the BC Utilities Commission (BCUC) to amalgamate its three separate natural gas utilities into a single entity serving the province. The amalgamation would also introduce “postage-stamp rates” for natural gas in British Columbia, meaning users throughout the province would pay the same rates for natural gas. The BCUC rejected the proposal, continuing the discrepant rate structure in BC where newer natural gas users pay higher rates than longtime users. This issue holds significant impact for residential, commercial and municipal natural gas users on Vancouver Island as they are charged some of the highest rates in the province.

The Government of British Columbia initiated the Vancouver Island Natural Gas Pipeline project in 1988 and fair natural gas rates were assured through a rebate program. As part of the service provision, the provincial government required that a number of industrial users convert to natural gas. The provincial contribution to infrastructure made through the royalty rebate program is about to expire once funds run out. When this happens, Vancouver Island residents can expect rates to increase by roughly 25 percent; commercial and municipal rates are expected to rise somewhere between 30 and 40 percent. Municipalities use natural gas to heat properties such as public recreation centres, or to fuel service vehicles running on natural gas.

The commission rejected Fortis’ proposal because rate decreases for customers on Vancouver Island and in Whistler would be at the expense of customers on the Mainland. However this decision is unfair to Vancouver Island and Whistler, which have to pay more than other communities for resources jointly owned by the province. When compared with other provincial utilities such as electricity and telecommunications, natural gas should be equally accessible to all regions regardless of location or age of infrastructure (i.e., length of use).

Natural gas is an important source of clean energy and is used for a variety of commercial, municipal and residential purposes. There is growing interest in using natural gas as a transportation fuel and the use of natural gas has been considered as a fuel in the production of electricity on Vancouver Island. In order for Vancouver Island to remain competitive with other regions within BC it needs to have the same natural gas rates as the rest of the province.

Bruce Carter
CEO, Greater Victoria Chamber of Commerce

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