Orders

ORDER NUMBER

G-162-20

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

Pacific Northern Gas Ltd.

Second Quarter 2020 Gas Supply Costs

for PNG-West and Granisle Service Areas

BEFORE:

B. A. Magnan, Panel Chair

C. Brewer, Commissioner

E. B. Lockhart, Commissioner

T. A. Loski, Commissioner

R. I. Mason, Commissioner

on June 19, 2020

ORDER

WHEREAS:

A.      On June 5, 2020, Pacific Northern Gas Ltd. (PNG) filed with the British Columbia Utilities Commission (BCUC) its 2020 Second Quarter Gas Supply Costs and Gas Cost Variance Account (GCVA) balances for its PNG-West and Granisle service areas, based on the average of five consecutive days of forward natural gas and propane price forecasts ending on May 29, 2020 (the Gas Cost Report);

B.      The BCUC established guidelines for gas cost rate setting in Letter L-5-01 dated February 5, 2001, and further modified the guidelines in Letter L-40-11 dated May 19, 2011 (together, the Guidelines). The Guidelines include two mechanisms that must be met in order to trigger a rate change:

                                I.            The ratio of the 12-month gas cost recovery revenues using current rates against the sum of the 12-month forecast gas supply costs and the GCVA balance at the end of the current quarter (R/C Ratio) must fall outside a dead band range of 0.95 to 1.05; and

                              II.            Indicative changes to gas cost commodity rates and GCVA rate riders required to reset the R/C Ratio to 1.00 over a 12-month period must exceed a $0.50/GJ absolute change threshold;

C.      By Order G-58-19, the BCUC approved the current gas commodity rates, GCVA commodity rate rider and Company Use GCVA rate rider for PNG-West effective April 1, 2019;

D.      By Order G-57-20, the BCUC approved the current propane commodity rate and associated GCVA commodity rate rider for Granisle, effective April 1, 2020;

E.       For PNG-West, PNG forecasts the R/C Ratio to be 0.712 which is outside the established 0.95 to 1.05 dead band range. Changes to the indicative gas cost commodity rates and GCVA rate riders required to reset the R/C Ratio to 1.00 by June 30, 2021 are greater than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG recommends a change to the current gas commodity rates for the PNG-West service area, effective July 1, 2020;

F.       For PNG-West, PNG recommends increasing the current GCVA commodity rate rider from a credit rider of $0.013/GJ to a debit rider of $0.093/GJ, and decreasing the current Company use GCVA gas cost rate rider from a debit rider of $0.098/GJ to a debit rider of $0.025/GJ, effective July 1, 2020;

G.     For PNG-West, PNG recommends retaining the current Company use gas cost delivery rate of $0.093/GJ and retaining the Company Use gas commodity price used for price deferral accounting purposes of $1.823/GJ;

H.      For Granisle, PNG forecasts the R/C Ratio to be 1.004, which is within the established 0.95 to 1.05 dead band range. Changes to the indicative propane cost commodity rate and GCVA rate rider required to reset the R/C Ratio to 1.00 by June 30, 2021 are less than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG recommends no changes to the current propane commodity rate for the Granisle service area;

I.        For Granisle, PNG recommends retaining the propane supply commodity cost recovery rate of $15.009/GJ;

J.        For Granisle, PNG recommends retaining the current GCVA commodity debit rate rider of $0.622/GJ; and

K.      The BCUC has reviewed PNG’s Gas Cost Report and views that the changes to the rates as recommended by PNG in the Gas Cost Report, effective July 1, 2020, are warranted.

NOW THEREFORE pursuant to section 61(4) of the UCA, the BCUC orders the following, effective July 1, 2020:

1.       In the PNG-West service area, the natural gas commodity rates are set as follows:

2.       In the PNG-West service area, the GCVA commodity rate rider is changed to a debit rider of $0.093/GJ and the Company Use GCVA rate rider is changed to a debit rider of $0.025/GJ.

3.       In the Granisle service area, no changes are required to the propane commodity rate and GCVA commodity rate rider.

4.       PNG must notify all customers that are affected by the rate change by way of a bill insert or bill message included with the next monthly billing.

DATED at the City of Vancouver, in the Province of British Columbia, this                  19^th                day of June 2020.

BY ORDER

Original signed by:

B. A. Magnan

Commissioner