ORDER NUMBER
G-246-23
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473 and
Pacific Northern Gas (N.E.) Ltd.
Third Quarter 2023 Gas Supply Costs Report
for Fort St. John/Dawson Creek and Tumbler Ridge Service Areas
BEFORE:
B. A. Magnan, Panel Chair
E. B. Lockhart, Commissioner
T. A. Loski, Commissioner
E. Brown, Commissioner
on September 14, 2023
ORDER
WHEREAS:
A. On September 8, 2023, Pacific Northern Gas (N.E.) Ltd. [PNG(NE)] filed with the British Columbia Utilities Commission (BCUC) its 2023 Third Quarter Gas Supply Costs and Gas Cost Variance Account (GCVA) balances for its Fort St. John/Dawson Creek (FSJ/DC) and Tumbler Ridge (TR) service areas, based on five consecutive days of forward gas price forecasts ended August 29, 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 $0.50 per gigajoule ($/GJ) absolute change threshold.
C. By Order G-365-22 dated December 15, 2022, 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, 2023;
D. By Order G-53-23 the BCUC also approved the current gas commodity rates, GCVA commodity rate rider and Company Use GCVA rate rider for FSJ/DC and TR service areas, effective April 1, 2023;
E. For FSJ/DC, PNG(NE) forecasts the R/C Ratio to be 1.025 which is within the established 0.95 to 1.05 dead band range. Changes to the indicative gas cost commodity rates and the GCVA rate riders required to reset the R/C ratio to 1.00 by September 30, 2024, are less than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG(NE) PNG recommends no change to the current gas commodity rates for the FSJ/DC service area, effective October 1, 2023;
F. For FSJ/DC, PNG(NE) recommends retaining the current GCVA commodity credit rate rider of $0.276/GJ and retaining the current Company use GCVA gas cost credit rate rider of $0.025/GJ;
G. For FSJ/DC, PNG(NE) recommends retaining the current Company Use gas cost delivery rate of $0.081/GJ
and retaining the Company Use gas commodity price used for price deferral accounting purposes of $4.646/GJ;
H. For TR, PNG(NE) forecasts the R/C Ratio to be 0.808, 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, 2024 are greater than the $0.50/GJ threshold set out in the Guidelines. Based on the foregoing, PNG(NE) recommends a change to the current gas commodity rate for the TR service area, effective October 1, 2023;
I. For TR, PNG(NE) recommends changing the current GCVA commodity credit rate rider from $1.109/GJ to $$0.827/GJ and changing the current Company use GCVA gas cost credit rate rider from $0.577/GJ to $0.611/GJ, effective October 1, 2023;
J. For TR, PNG(NE) recommends retaining the current Company Use gas cost delivery rate of $0.575/GJ and
retaining the Company Use gas commodity price used for price deferral accounting purposes of $6.011/GJ; and
K. The BCUC has reviewed the Gas Cost Report and determines that the changes to the rates as recommended by PNG(NE), effective October 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 FSJ/DC service area, no changes are required to the natural gas commodity rates.
2. In the FSJ/DC service area, no changes are required to the GCVA commodity rate rider and the Company use GCVA rate rider.
3. In the FSJ/DC service area, no changes are required to the Company Use gas cost delivery rate and the Company Use gas commodity price.
4. In the TR service area, the gas commodity rate is changed to $4.008/GJ.
5. In the TR service area, the GCVA commodity rate rider is changed to a credit rider of $0.827/GJ and the Company Use GCVA rate rider is changed to a credit rider of $0.611/GJ.
6. In the TR service area, no changes are required to the Company Use gas cost delivery rate and the Company Use gas commodity price.
7. PNG(NE) 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.
8. PNG(NE) is directed to file revised tariff pages with the BCUC within 15 days of the date of this order.
DATED at the City of Vancouver, in the Province of British Columbia, this 14th day of September 2023.
BY ORDER
Original signed by:
B. A. Magnan
Commissioner