PNG rates on the decline

Northwest natural gas users are now benefitting from lower rates due to a continuing glut of the fuel in North America.

Northwest natural gas users are now benefitting from lower rates due to a continuing glut of the fuel in North America.

Pacific Northern Gas dropped the rate it charges for gas as of Oct. 1 as well as the rate it charges to deliver the product.

The combined commodity and delivery residential charge is now $14.464 a gigagjoule (GJ), a drop of nearly 10 per cent from the previous combined charge of $16.035 per GJ. A drop in the price of the gas itself amounting to just over 82 cents per GJ makes up more than half of the overall decrease.

But nearly 75 cents per GJ of the combined drop comes from a decision by its regulator, the BC Utilities Commission, to roll back what Pacific Northern Gas is allowed to charge customers to deliver the commodity.

The gas utility was permitted an interim rate increase as of Jan. 1 while the utilities commission studied its request for a permanent increase.

The rollback applies to the delivery rate from Jan. 1 onward and means Pacific Northern Gas customers will get a credit on their bills between now and the end of October.

Pacific Northern Gas official Janet Kennedy said the new delivery charge as of Oct. 1 means a savings to the average residential customer of $18.41 for the last three months of the year.

“Based on the expected average consumption of a residential customer of 22.8 GJs for the last quarter of 2013, [the new commodity rate] would result in a decrease in commodity charges of approximately $17 on average per residential customer,” she added.

Kennedy also said the new delivery rate as of Oct. 1 is still considered an interim one by the utilities commission and that it continues to study information leading to a permanent rate.

“A decision on this proceeding is expected in the first or second quarter of 2014,” she said.

By that time, PNG is also expected to have filed information leading to its request for a 2014 delivery rate. PNG passes along the amount it pays for gas from suppliers to its customers. It’s not permitted to any charge to what it pays.

The new combined rate of $14.464 per GJ does not include PNG’s basic charge applied to customers nor a series of taxes.

The provincial Liberal carbon tax alone amounts to an extra $1.49/GJ.