Orders

BRITISH COL UMBIA UTILITIES COM MISSION ORDER NUMBER G -46-06 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 CANADA BC TOLL FREE: 1-800-663-1385 web site: http://www.bcuc.com FACSIMILE: (604) 660-1102 IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 and An Application by Terasen Gas Inc. for Approval of a Certificate of Public Convenience and Necessity Application for the Residential Unbundling Program pursuant to Section 45 of the Utilities Commission Act BEFORE: A.W.K. Anderson, Commissioner April 24, 2006 O R D E R WHEREAS: A. On November 25, 2002, the Government of British Columbia issued its energy policy, “Energy Plan for our Future: A Plan for BC.” Item 19 stated that “The Utilities Commission Act will be amended in spring 2003 to allow direct natural gas sales to low volume customers and require the licensing of gas marketers who serve these customers”; and B. On March 16, 2005, Terasen Gas Inc. (“Terasen Gas”) submitted its report entitled Commodity Unbundling Post Implementation Review and Next Steps (“Report”) that presented a review of the Commercial Unbundling Program to date and suggestions for improvement and refinements to enhance its effectiveness; and C. On April 8, 2005, the Commission held a workshop on the Commercial Commodity Unbundling Program at which Terasen Gas presented the Report and stakeholders were invited to provide their comments. Gas Marketers requested that the Residential Unbundling Program be introduced as soon as it is feasible; and D. Commission Order No. G-66-05 approved $300,000 in deferral account funding for Terasen Gas to complete market research and the review and validation of the business rules for the Residential Unbundling Program and also the timeline leading to a Certificate of Public Convenience and Necessity (“CPCN”) application by March 2006; and E. Commission Order No. G-110-05 approved additional deferral account expenditures of $1,053,800 for Terasen Gas to complete the scoping and business systems analysis work to enable the filing of a CPCN application for the Residential Unbundling Program with the Commission by March 2006; and F. On April 13, 2006, Terasen Gas submitted a CPCN application (the “Application”) for the Residential Unbundling Program, pursuant to Section 45 of the Utilities Commission Act, to implement effective November 1, 2007, unbundling for residential customers in its service territory (excluding Fort Nelson and . . ./2

BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-46-06 2 Revelstoke). The capital expenditure is expected to be $11.1 million. The Application also requests Commission approval of a deferral account mechanism for cost recovery of the implementation and operating costs, and changes to tariffs and agreements to support the Residential Unbundling Program. NOW THEREFORE the Commission orders as follows: 1. The Regulatory Timetable attached as Appendix A to this Order is established for this Terasen Gas proceeding. 2. The Terasen Gas Application will be examined through an Oral Public Hearing commencing at 9:00 a.m., Tuesday, June 27, 2006 on the 12 th Floor at 1125 Howe Street, Vancouver, B.C. 3. Terasen Gas will publish in display-ad format, the Notice of Workshop, Procedural Conference and Oral Public Hearing attached as Appendix B to this Order, in the Vancouver Sun, Province and such other news publications so as to provide sufficient coverage in the affected service areas of TGI. 4. The Application, together with any supporting materials, will be made available for inspection in Terasen Gas’ Surrey offices, other offices in its service territory (excluding Fort Nelson and Revelstoke) and at the Commission’s office in Vancouver, B.C. 5. Intervenors and Interested Parties should register with the Commission, in writing, by Wednesday, May 17, 2006 and advise whether they will attend the Workshop, Procedural Conference or Oral Public Hearing. Intervenors should specifically state the nature of their interest in the Application and identify generally the nature of the issues that they intend to pursue during the proceeding and the nature and extent of their anticipated involvement in the review process. DATED at the City of Vancouver, in the Province of British Columbia, this 28 th day of April 2006. BY ORDER Original signed by: A.W.K. Anderson Commissioner Attachment Orders/G-46-06_TGI_Residential Unbundling Program

SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. V6Z 2N3 CANADA web site: http://www.bcuc.com An Application by Terasen Gas Inc. for a Certificate of Public Convenience and Necessity for the Residential Commodity Unbundling Program REGULATORY TIMETABLE Action Commission Information Request No. 1 Registration of Intervenors and Interested Parties Participant Funding/Cost Award Budgets Intervenors Information Request No. 1 TGI response to Commission Information Request No. 1 TGI response to Intervenors Information Request No. 1 Commission Staff Draft Issues List Workshop* Procedural Conference* Oral Public Hearing Commences* * The Workshop, Procedural Conference and Oral Public Hearing all commence at the Commission’s Hearing Room at 9:00 a.m.: 12 th Floor 1125 Howe Street Vancouver, B.C. APPENDIX A to Order No. G-46-06 Page 1 of 1 TELEPHONE: (604) 660-4700 BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 Date Friday, May 12, 2006 Wednesday, May 17, 2006 Wednesday, May 17, 2006 Friday, May 19, 2006 Friday, June 2, 2006 Friday, June 9, 2006 Tuesday, June 13, 2006 Thursday, June 15, 2006 Friday, June 16, 2006 Tuesday, June 27, 2006

APPENDIX B to Order No. G-46-06 Page 1 of 2 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 CANADA BC TOLL FREE: 1-800-663-1385 web site: http://www.bcuc.com FACSIMILE: (604) 660-1102 A Submission by Terasen Gas Inc. (“Terasen Gas”) for a Certificate of Public Convenience and Necessity for the Residential Commodity Unbundling Program NOTICE OF WORKSHOP, PROCEDURAL CONFERENCE AND ORAL PUBLIC HEARING WORKSHOP PROCEDURAL CONFERENCE ORAL PUBLIC HEARING Date: Thursday, June 15, 2006 Friday, June 16, 2006 Tuesday, June 27, 2006 Time: 9:00 a.m. 9:00 a.m. 9:00 a.m. Location 12 th Floor, 1125 Howe Street 12 th Floor, 1125 Howe Street 12 th Floor, 1125 Howe Street Vancouver, B.C. Vancouver, B.C. Vancouver, B.C. THE APPLICATION On April 13, 2006 Terasen Gas submitted a Certificate of Public Convenience and Necessity Application for the Residential Unbundling Program pursuant to Section 45 of the Utilities Commission Act. The program will allow residential customers the option to contract directly with gas marketers for the commodity portion of their gas supply. In this Application Terasen Gas requests approval of the following: • Implementation of Commodity Unbundling for all residential customers in its service territory, excluding Fort Nelson and Revelstoke, effective November 1, 2007. • Capital Expenditures of $11.1 million to implement the Residential Unbundling Program. • Cost Recovery for implementation and operating costs for the Residential Unbundling Program using deferral account treatment. • Tariff and Agreement changes required to support the Residential Unbundling Program. THE REGULATORY PROCESS Terasen Gas will hold a Workshop to explain the application on Thursday, June 15, 2006. The Commission will hold a Procedural Conference regarding the regulatory process for the review of the Application commencing at 9:00 a.m. on Friday, June 16, 2006 and an Oral Public Hearing will commence at 9:00 a.m. on Tuesday, June 27, 2006 all on the 12 th Floor Hearing Room at 1125 Howe Street Vancouver, B.C. Following the Procedural Conference, the Commission may issue a further Procedural Order and a Revised Regulatory Agenda to registered parties.

APPENDIX B to Order No. G-46-06 Page 2 of 2 PUBLIC INSPECTION OF THE DOCUMENTS The Application and supporting material will be made available for inspection at Terasen Gas offices in its service territory excluding Fort Nelson and Revelstoke and the British Columbia Utilities Commission office at Sixth Floor, 900 Howe Street, Vancouver, B.C., V6Z 2N3. The Application will be available for viewing on Terasen Gas’ website at www.terasengas.com. INTERVENTIONS Persons who expect to actively participate in the proceeding should register as Intervenors with the Commission, in writing, by Wednesday, May 17, 2006, identifying their interest in the applications and indicating whether they plan to attend the Workshop, Procedural Conference and Oral Public Hearing. Intervenors should identify the issues that they intend to pursue and the nature and extent of their correspondence and filed documentation and should provide an e-mail address if available. Persons not expecting to actively participate, but who have an interest in the proceeding should register as Interested Parties with the Commission, in writing, by Wednesday, May 17, 2006, identifying their interest in the Application and indicating whether they plan to attend the Procedural Conference. Interested Parties will receive a copy of the Executive Summary from the Application, and all Orders and Decisions issued. FURTHER INFORAMTION For further information, please contact Mr. Robert J. Pellatt, Commission Secretary, or Mr. Robert Brownell, Senior Commodities Analyst, as follows: Telephone: (604) 660-4700 E-Mail: Commission.Secretary@bcuc.com Facsimile: (604) 660-1102 Telephone: (B.C. Toll Free) 1-800-663-1385