Orders

ORDER NUMBER

G-273-21

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

Pacific Northern Gas Ltd.

Third Quarter 2021 Gas Supply Costs

for PNG-West and Granisle Service Areas

BEFORE:

B. A. Magnan, Panel Chair

T. A. Loski, Commissioner

R. I. Mason, Commissioner

on September 16, 2021

ORDER

WHEREAS:

A.      On September 8, 2021, Pacific Northern Gas Ltd. (PNG) filed with the British Columbia Utilities Commission (BCUC) its 2021 Third 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 August 27, 2021 (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-326-20, the BCUC approved the current Company Use gas cost delivery rate and the Company Use gas commodity price used for price deferral accounting purposes effective January 1, 2021;

D.      By Order G-72-21, the BCUC approved the current gas commodity rates, GCVA commodity rate rider and Company Use GCVA rate rider for PNG-West effective April 1, 2021;

E.       By Order G-72-21, the BCUC approved the current propane commodity rate and associated GCVA commodity rate rider for Granisle, effective April 1, 2021;

F.       For PNG-West, PNG forecasts the R/C Ratio to be 0.771 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 September 30, 2022 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 October 1, 2021;

G.      For PNG-West, PNG recommends increasing the current GCVA commodity rate rider from a debit rider of $0.155/GJ to a debit rider of $0.262/GJ and decreasing the current Company use GCVA gas cost rate rider from a debit rider of $0.034/GJ to a debit rider of $0.026/GJ, effective October 1, 2021;

H.      For PNG-West, PNG recommends retaining the current Company use gas cost delivery rate of $0.094/GJ and retaining the Company Use gas commodity price used for price deferral accounting purposes of $2.705/GJ;

I.         For Granisle, PNG forecasts the R/C Ratio to be 0.838, which is outside 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 September 30, 2022 are more than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG recommends a change to the current propane commodity rate for the Granisle service area;

J.        For Granisle, PNG recommends increasing the propane supply commodity cost recovery rate from $15.882/GJ to $20.985/GJ;

K.       For Granisle, PNG recommends decreasing the current GCVA commodity debit rate rider from $2.319/GJ to $0.733/GJ; and

L.       The BCUC has reviewed the Gas Cost Report and determines that the changes to the rates as recommended by PNG, effective October 1, 2021, are warranted.

NOW THEREFORE pursuant to section 61(4) of the Utilities Commission Act, the BCUC orders the following, effective October 1, 2021:

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 $0.262/GJ and the Company Use GCVA rate rider is changed to a debit rider of $0.026/GJ.

3.       In the PNG-West service area, no changes are required to the Company use gas cost delivery rate and the Company use gas commodity price.

4.       In the Granisle service area, the propane commodity rate is changed to $20.985/GJ and the GCVA commodity debit rate rider is changed to $0.733/GJ.

5.       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            16^th          day of September 2021.

BY ORDER

Original signed by:

B. A. Magnan

Commissioner