LETTER NO. L-1l-96 ~r\ COl.t.; ~\ ~ ~<$) ct ~': ~ ~: ~ .i T ~-ct ~ """';""'" .~~ . . .-; :: ~ .. ~ '" """~ Z C, ". 0 SIXTH FLOOR, 900 HOWE STREET, BOX 250 ?:~ ~~ VANCOUVER, B.C. CANADA V6Z 2N3 /' ., 'GIIIJ'.. r_ TELEPHONE: (604) 660-4700 ROBERT J. PELLATT '/.>-: ..' ". .' . ". '., <?;.J BC TOLL FREE: 1-800-663-1385 COMMISSION SECRETARY /~S·~~~~\ FACSIMILE: (604) 660-1102 February 29, 1996 Mr. Marcel Reghelini Manager, Regulatory Mfairs & Rates Centra Gas British Columbia Inc. 1675 Douglas Street P.O. Box 3777 Victoria, B.c. V8W3V3 Dear Mr. Reghelini: Re: 1995/1996 Reference Price Calculation Methodology Spot Purchases made in Substitution for Baseload Purchases As you would know, the very high NYMEX prices for January, 1996 caused the commodity portion of the price for deliveries under some baseload contracts to be higher than local spot prices. The Commission understands that some spot purchases were arranged to replace gas which could have been purchased under baseload contracts, in order to reduce gas costs overall. (It should also be noted that the supply contracts for spot gas need to be filed in a timely fashion for Commission approval.) All spot gas purchases were excluded from the reference price calculations which were filed for January, 1996. This is consistent with the definition of "baseload gas" in the July 7, 1995 Buy/Sell Review Decision. However, the Commission has reviewed the matter in light of current circumstances and has concluded that spot purchases that were made in substitution for baseload purchases should be viewed as part of baseload purchases and should be included as such in the reference price calculation. (Spot gas purchased for other reasons should continue to be excluded.) To the extent that an LDC has made such spot purchases during the 1995/1996 gas year, it is hereby requested to include the appropriate quantity and cost of spot gas in its reference price calculations for the months involved and to refile the calculations. Yours truly, JBW/cms cc: Mr. David M. Masuhara, Vice President, Legal and Regulatory Affairs BC Gas Utility Ltd. Mr. c.P. Donohue, Manager of Regulatory Affairs Pacific Northern Gas Ltd. CG/Cor/95-96RefPrcFctrs
LETTER NO. L-1l-96 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 February 29, 1996 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: 1995/1996 Reference Price Calculation Methodology Spot Purchases made in Substitution for Baseload Purchases As you would know, the very high NYMEX prices for January, 1996 caused the commodity portion of the price for deliveries under some baseload contracts to be higher than local spot prices. The Commission understands that some spot purchases were arranged to replace gas which could have been purchased under baseload contracts, in order to reduce gas costs overall. (It should also be noted that the supply contracts for spot gas need to be filed in a timely fashion for Commission approval.) All spot gas purchases were excluded from the reference price calculations which were filed for January, 1996. This is consistent with the definition of "baseload gas" in the July 7, 1995 Buy/Sell Review Decision. However, the Commission has reviewed the matter in light of current circumstances and has concluded that spot purchases that were made in substitution for baseload purchases should be viewed as part of baseload purchases and should be included as such in the reference price calculation. (Spot gas purchased for other reasons should continue to be excluded.) To the extent that an LDC has made such spot purchases during the 199511996 gas year, it is hereby requested to include the appropriate quantity and cost of spot gas in its reference price calculations for the months involved and to refile the calculations. Yours truly, Rot)ert J. Pellatt JBW/cms cc: Mr. c.P. Donohue, Manager of Regulatory Affairs Pacific Northern Gas Ltd. Mr. Marcel Reghelini, Manager, Regulatory Affairs & Rates Centra Gas British Columbia Inc. BCG/Cor/95-96RefPrcFctrs
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