LETTER NO. L-48-07 SIXTH FLOOR, 900 HOWE STREET, BOX 250 ROBERT J. PELLATT VANCOUVER, B.C. CANADA V6Z 2N3 COMMISSION SECRETARY TELEPHONE: (604) 660-4700 Commission.Secretary@bcuc.com BC TOLL FREE: 1-800-663-1385 web site: http://www.bcuc.com FACSIMILE: (604) 660-1102 Log No. 19279 VIA E-MAIL June 21, 2007 Regulatory.Affairs@terasengas.com Mr. Scott Thomson Vice President, Finance and Regulatory Affairs Terasen Gas Inc. 16705 Fraser Highway Surrey, BC V4N 0E8 Dear Mr. Thomson: Re: Terasen Gas (Vancouver Island) (“TGVI”) 2007 Price Risk Management Plan (November 2007 – October 2010) On May 14, 2007 TGVI filed its Price Risk Management Plan (“PRMP”) Application for the period November 2007 to October 20010. The PRMP is based on similar objectives to last year’s strategy and forms the basis of the Application. They are identified as follows: 1. Remain competitive with alternate fuel sources primarily electricity. 2. Dampen impacts of commodity price volatility on customer rates. 3. Reduce the risk of regional price disconnects. It is recognized that TGVI is unique in that a natural hedge is in place through the revenue deficiency recovery period as a result of the royalty revenue mechanism. The remaining net gas at risk for 2007/2010 is at a relatively low level after storage and the royalty hedge are taken into account. Therefore, the Commission accepts TGVI’s Application to: • Extend the Price Risk Management Plan over a three-year period from November 2007 to October 2010. • Execute fixed price contracts to hedge Sumas winter and AECO summer price exposures. • Implement hedges according to the pre-defined Hedging Implementation Schedule outlined in Section 6.4. • TGVI will execute hedges to the pre-defined Hedging implementation Schedule attached. Yours truly, Original signed by Robert J. Pellatt RB/cms Attachment TGVI/Cor/L-48-07_Price Management Plan 2007-Nov2007-Oct2010
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