LETTER NO. L-37 -94 SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. CANADA V6Z 2N3 TELEPHONE: (604) 660-4700 ROBERT J. PELLATr 8C TOLL FREE: 1-800-663-1385 COMMISSION SECRETARY FACSIMILE: (604) 660-1102 VIA FACSIMILE November 30, 1994 Mr. David M. Masuhara Vice President, Legal and Regulatory Affairs BC Gas Utility Ltd. 1111 West Georgia Street Vancouver, B.C. V6E4M4 Dear Mr. Masuhara: Re: BC Gas Utility Ltd. Use of Financial Derivatives to Mana~e Gas Purchase Costs The Commission has reviewed your letter of November 18, 1994 entitled "Utilities Commission Act Section 85.3 Filing of Supplementary Material" which was filed in response to inquiries from Commission staff about the use of financial derivitives to manage gas purchase costs. The proposal to file a "gas price management implementation strategy" during the second quarter of 1995 is satisfactory to the Commission. Such a filing should: 1) form part of the 1995/96 Gas Contracting Plan to be approved by the Commission prior to the start of 1995/96 gas price negotiations. 2) discuss the use of hedging with respect to gas price, index price basis differential, and exchange rate. The Commission does not consider that the public interest requires the material contained in your November 18, 1994 letter to be kept confidential and accordingly it will be maintained in our central files. Yours truly, Robert J. Pellatt PHGllm BCG/CorlFinancial Derivatives
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