March 4, 2022
Pacific Northern Gas cares about providing value and keeping natural gas service rates affordable as we safely and reliably deliver natural gas to our customers.
We understand that many residential customers in Tumbler Ridge are concerned about the recent 11 per cent rate increase that took effect on January 1, 2022. This increase translates into an average residential bill impact of approximately $84.00 annually.
PNG is working hard to keep rates stable for customers in Tumbler Ridge, and we have been committed to finding solutions to address concerns. This includes the current process PNG has underway to analyze and assess options for how rates are set in Tumbler Ridge in the future.
Customer bills include two main components: commodity prices and delivery rates. The commodity charge reflects the gas customers have consumed during the billing period. PNG doesn’t mark up these costs, and customers pay what we pay. The delivery charges cover the costs of maintaining the natural gas system to ensure safe and reliable service. Any rate changes proposed by PNG are subject to review and approval by the British Columbia Utilities Commission (BCUC), the regulatory body that sets rates for all utilities in British Columbia. Commodity rates are reviewed and approved quarterly, and delivery charges are reviewed and approved annually.
Tumbler Ridge is approximately 120 km from the nearest PNG pipeline and is not directly connected to PNG’s integrated pipeline system. As a result, customers in Tumbler Ridge receive natural gas from a small natural gas processing facility owned and operated by PNG and are treated as a standalone region for regulatory and rate setting purposes.
PNG’s processing plant removes impurities from raw natural gas collected and supplied from regional gas fields. Our gas processing plant is connected to PNG’s Tumbler Ridge distribution network via a 40 km transmission pipeline.
The nature of how Tumbler Ridge is supplied with natural gas results in higher rates compared to those paid by customers in Fort St. John and Dawson Creek. The small customer base served by the Tumbler Ridge natural gas distribution system means that even small expenditures to maintain the reliability of the system can have a noticeable effect on our delivery rates.
The recent rate increase is primarily related to increased expenditures to maintain the safety and integrity of the natural gas system supplying Tumbler Ridge.
To provide greater rate certainty and to reduce the higher rates Tumbler Ridge customers pay because of their location in the PNG service territory, PNG has been in the process of analyzing and evaluating two approaches that could help reduce the rates paid by customers in Tumbler Ridge. This process will provide a better understanding of the potential benefit to Tumbler Ridge customers, as well as the magnitude of any adverse rate impacts to Fort St. John and Dawson Creek customers.
The first option is the amalgamation of Tumbler Ridge into our broader northeast service area. The second approach is the harmonization of gas commodity costs across all PNG service territories. Both would mean that costs are distributed over a greater number of customers, which would result in greater rate stability for Tumbler Ridge customers.
This month, PNG will begin stakeholder engagement to explore these options. The feedback from this engagement will be considered in the development of a potential request to be filed with the BCUC this year with a proposal to potentially lower Tumbler Ridge rates.
PNG will keep stakeholders and Tumbler Ridge customers updated when new information becomes available.
As we move through this process, we encourage customers to take advantage of PNG’s Smart Energy Solutions offers, which help to lower consumption, increase energy efficiency and save money. Customers can learn more about PNG’s energy efficiency programs at www.png.ca/smartenergysolutions.
PNG is committed to doing our best to keep rates stable for our valued Tumbler Ridge customers, and for all PNG customers across northeastern and northwestern B.C.