LETTER NO. L-42-95 SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. CANADA V6Z 2N3 TELEPHONE: (604) 660-4700 ROBERT J. PELLATT BC TOLL FREE: 1-800-663-1385 COMMISSION SECRETARY FACSIMILE: (604) 660-1102 September 7, 1995 VIA FACSIMILE Mr. R. Brian Wallace Bull, Housser & Tupper Barristers & Solicitors 3000 Royal Centre, P.O. Box 11130 1055 West Georgia Street Vancouver, B.c. V6E3R3 Dear Mr. Wallace: Re: BC Gas Utility Ltd. Complaint - By-Pass Rate-FMC Corporation The Commission has now reviewed all of the evidence submitted on this matter in response to Commission Letter No. L-23-95, including your submissions of July 5, and August 21, 1995. The Commission is not persuaded by the arguments presented that the Canfor and Husky rates, which are based on 1987 economics, are pertinent to FMC's application now. In the Commission's view, the only economics which could apply at present would involve FMC's current avoided costs for a new bypass pipeline. Since the parties agree that such a calculation would result in a rate above the current FMC tariff rate, the Commission hereby dismisses the complaint. However, the Commission notes that the bypass agreements with Canfor and Husky expire in 1997. While the current rates would continue if the agreements are extended, there is nothing to pr~c1ude new agreements being negotiated. FMC may wish to approach these two customers to determine if they are prepared to consider negotiating a new bypass agreement commencing in 1997 which would include FMC. The Commission would expect such a new agreement to be based on current costs at that time, but there may be potential for FMC to achieve a bypass rate lower than the tariff rate while maintaining the current rates to Canfor and Husky. Should the parties decide to open such negotiations, the Commission directs BC Gas to provide whatever assistance it can reasonably provide, with a view to concluding the matter prior to November 1, 1997. Yours truly, obert 1. Pellatt PHG/yk cc: Mr. D.M. Masuhara, Vice President Legal and Regulatory Affairs BC Gas Utility Ltd. BCG/Cor/CompI.By-Pass Rate-FMC
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