Orders

ORDER NUMBER

G-52-23

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

Pacific Northern Gas Ltd.

First Quarter 2023 Gas Supply Costs for PNG-West and Granisle Service Areas

 

BEFORE:

B. A. Magnan, Panel Chair

T. A. Loski, Commissioner

A. Pape-Salmon, Commissioner

 

on March 16, 2023

 

ORDER

WHEREAS:

 

A.      On March 7, 2023, Pacific Northern Gas Ltd. (PNG) filed with the British Columbia Utilities Commission (BCUC) its 2023 First Quarter Gas Supply Costs and Gas Cost Variance Account (GCVA) balances for its PNG-West and Granisle service areas, based on five consecutive days of forward natural gas and propane price forecasts ended February 17, 2023 (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-364-22A dated December 15, 2022, the BCUC approved the current natural gas commodity rates, GCVA Commodity rate rider and Company use GCVA rate rider for PNG-West and the current propane commodity rate and associated GCVA Commodity rate rider for Granisle, effective January 1, 2023;

D.      By Order G-364-22A, the BCUC also approved the current Company Use gas cost delivery rate and the Company Use gas commodity price used for price deferral accounting purposes for PNG-West, effective January 1, 2023;

E.       For PNG-West, PNG forecasts the R/C Ratio to be 1.657, 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 March 31, 2024 are more than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG recommends changes to the current gas commodity rates for the PNG-West service, effective April 1, 2023;

F.       For PNG-West, PNG recommends increasing the current GCVA Commodity credit rate rider of $0.021/GJ to a debit rate rider of $0.035/GJ and decreasing the current Company use GCVA gas cost debit rate rider of $0.013/GJ to a debit rate rider of $0.012/GJ;

G.      For PNG-West, PNG recommends retaining the current Company use gas cost delivery rate of $0.200/GJ and retaining the Company use gas commodity price used for price deferral accounting purposes of $4.779/GJ;

H.      For Granisle, PNG forecasts the R/C Ratio to be 1.112, 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 March 31, 2024 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 from $20.236/GJ to $20.424/GJ, effective April 1, 2023;

I.         For Granisle, PNG recommends decreasing the current GCVA Commodity rate rider from a debit rider of $4.709/GJ to a debit rider of $2.016/GJ; and

J.        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 April 1, 2023, are warranted.

 

NOW THEREFORE pursuant to section 61(4) of the Utilities Commission Act, the BCUC orders the following, effective April 1, 2023:

 

1.       In the PNG-West service area, the natural gas commodity rates are changed to:

2.       In the PNG-West service area, the GCVA commodity rate rider is changed to a debit rider of $0.035/GJ and the Company Use GCVA rate rider is changed to a debit rider of $0.012/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 $20.424/GJ and the GCVA commodity rate rider is changed to a debit rider of $2.016/GJ.

5.       PNG must notify all customers that are affected by the rate changes 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 March 2023.

 

BY ORDER

 

Original signed by:

 

B. A. Magnan

Commissioner