LETTER NO. L-40-02 ROBERT J. PELLATT SIXTH FLOOR, 900 HOWE STREET, BOX 250 COMMISSION SECRETARY VANCOUVER, B.C. CANADA V6Z 2N3 Commission.Secretary@bcuc.com TELEPHONE: (604) 660-4700 web site: http://www.bcuc.com BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 Log No. 1658 VIA FACSIMILE (604) 691-6863 September 26, 2002 Mr. C.P. Donohue Director, Regulatory Affairs & Gas Supply Pacific Northern Gas Ltd. 950 - 1185 West Georgia Street Vancouver, B.C. V6E 4E6 Dear Mr. Donohue: Re: Pacific Northern Gas Ltd. Pacific Northern Gas (N.E.) Ltd. Gas Cost Flow-Through and Gas Cost Reconciliation Account Guidelines Further to your September 20, 2002 letter recommending that the current Gas Supply Charges and Gas Cost Variance Account riders for PNG-West, PNG(NE) and Granisle continue at their present levels effective October 1, 2002, the Commission accepts your recommendation. The Commission recognizes that PNG has no gas in storage for 2002/03, is limited in its hedging capability, and that current expectations indicate gas costs in the next 12 months are likely to be significantly higher than expected revenue. PNG should therefore monitor its forecast gas costs on an ongoing basis and to apply for changes to gas commodity rates prior to January 2003 if necessary. In early December 2002, PNG/PNG(N.E.) will file its Fourth Quarter 2002 Report regarding gas commodity rates as of January 2003. In that filing, based on experience gathered over 2001 and 2002, PNG is invited to include an assessment of the effectiveness of the quarterly reporting Guidelines that were established by Commission Letter No. L-5-01, and any suggestions to improve and streamline the setting of gas commodity rates and management of the gas cost variance account balances. For example, what changes, if any, should be made to the content or the timing of the filings? Would formal reviews at six month intervals (e.g. for January and July rates) be sufficient? The Commission looks forward to receiving your views on this matter. Yours truly, Original signed by: Robert J. Pellatt cms PNG/Cor/GCVA Rpt – October Rates
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