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ORDER NUMBER
G-365-22
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473 and
Pacific Northern Gas (N.E.) Ltd.
Fourth Quarter 2022 Gas Supply Costs
for Fort St. John/Dawson Creek and Tumbler Ridge Service Areas
BEFORE:
B. A. Magnan, Panel Chair
C. M. Brewer, Commissioner
E. B. Lockhart, Commissioner
T. A. Loski, Commissioner
on December 15, 2022
ORDER
WHEREAS:
A. On December 7, 2022, Pacific Northern Gas (N.E.) Ltd. [PNG(NE)] filed with the British Columbia Utilities Commission (BCUC) its 2022 Fourth 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 November 18, 2022 (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-376-21 dated December 16, 2021, 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, 2022;
D. By Order G-163-22 dated June 16, 2022, the BCUC approved the current gas commodity rates, GCVA commodity rate rider and Company Use GCVA rate rider for FSJ/DC and TR service areas, effective
October 1 1, 2022;
E. For FSJ/DC, PNG(NE) forecasts the R/C Ratio to be 1.367 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 December 31, 2022 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 rates for the FSJ/DC service area, effective January 1, 2023;
F. For FSJ/DC, PNG(NE) recommends decreasing the current GCVA commodity debit rate rider from $0.227/GJ to a credit rate rider or $0.271/GJ and increasing the current Company Use GCVA gas cost rate credit rider from $0.006/GJ to a rate rider of $0.000/GJ;
G. For FSJ/DC, PNG(NE) requests approval to increase the current Company Use gas cost delivery rate of $0.073/GJ to $0.081/GJ and increase the Company Use gas commodity price used for price deferral accounting purposes from $3.840/GJ to $4.646/GJ;
H. For TR, PNG(NE) forecasts the R/C Ratio to be 1.325, 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 December 31, 2023 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 January 1, 2023;
I. For TR, PNG(NE) recommends decreasing the current GCVA commodity credit rate rider from $0.302/GJ to a credit rate rider of $0.427/GJ and decreasing the current Company Use GCVA gas cost credit rate rider from $0.349/GJ to a credit rate rider of $0.799/GJ, effective January 1, 2023;
J. For TR, PNG(NE) requests approval to decrease the current Company Use gas cost delivery rate of $0.656/GJ to $0.575/GJ and increase the Company Use gas commodity price used for price deferral accounting purposes from $5.137/GJ to $6.011/GJ, effective January 1, 2023; and
K. The BCUC has reviewed the Gas Cost Report and determines that the changes to the rates as recommended by PNG(NE), effective January 1, 2023, are warranted.
NOW THEREFORE pursuant to section 61(4) of the Utilities Commission Act, the BCUC orders the following, effective January 1, 2023:
1. In the FSJ/DC service area, the changes are required to the natural gas commodity rates:
| Customer Rate Class |
Commodity Rate (per GJ) |
| Residential (RS1) |
$5.171 |
| Small Commercial Firm (RS2) |
$5.197 |
| Large Commercial Firm (RS3) |
$5.046 |
| Small Industrial (RS4) |
$4.885 |
2. In the FSJ/DC service area, the GCVA commodity rate rider is changed to a credit rate rider of $0.271/GJ and the Company Use GCVA rate rider is changed to a rate rider of $0.000/GJ.
3. In the FSJ/DC service area, the Company Use gas cost delivery rate is changed to $0.081/GJ and the Company Use gas commodity price is changed to $4.646/GJ.
4. In the TR service area, the gas commodity rate is changed to $6.011/GJ.
5. In the TR service area, the GCVA commodity rate rider is changed to a credit rider of $0.427/GJ and the Company Use GCVA rate rider is changed to a credit rider of $0.799/GJ.
6. In the TR service area, the Company Use gas cost delivery rate is changed to $0.575/GJ and the Company Use gas commodity price is changed to $6.011/GJ.
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.
DATED at the City of Vancouver, in the Province of British Columbia, this 15th day of December 2022.
BY ORDER
Original signed by:
B. A. Magnan
Commissioner