BCUC Approves FortisBC Energy Inc. Common Rates for the Fort Nelson Service Area
VANCOUVER – On October 6, 2022, the British Columbia Utilities Commission (BCUC) issued Order G-278-22 approving FortisBC Energy Inc.’s (FEI) application to implement common delivery rates and cost of gas rates for the Fort Nelson service area, and to set Fort Nelson’s midstream rates at 5 percent of FEI’s midstream rates, effective January 1, 2023.
These changes result in bill savings for FEI’s Fort Nelson small and large commercial customers, and a bill increase of approximately 15 percent for Fort Nelson residential customers in 2023, before any rate smoothing. To minimize the bill impacts on FEI’s Fort Nelson residential customers, FEI is directed to phase in the delivery rate change for residential customers over five years, resulting in an estimated total bill increase of approximately $5 or 0.5 percent for 2023.
The BCUC conducted an open and transparent review process and found that common rates between the Fort Nelson and the rest of FEI’s service area promote regulatory efficiency, as well as fairness and consistency across FEI’s service areas. Common rates also provide a benefit to Fort Nelson ratepayers by reducing the fluctuation of rates, thereby supporting long-term rate stability.
Although FEI is approved to implement the same common delivery and cost of gas rates for the Fort Nelson service area as the rest of FEI, the BCUC has approved a separate midstream rate for the Fort Nelson service area. This rate is set at 5 percent of FEI’s Mainland and Vancouver Island midstream rates. Midstream rates cover transportation and storage costs for gas. This distinction in rates takes into account Fort Nelson’s proximity to gas supply in its service area and its own unique gas supply arrangement.
FEI, one of the largest natural gas distribution companies in Canada, owns and operates natural gas pipelines and natural gas distribution facilities in British Columbia (BC). Its distribution network serves approximately 95 percent of natural gas customers in BC. FEI comprises two service areas: Mainland and Vancouver Island form one service area; and Fort Nelson forms the other. The Fort Nelson service area represents a small portion of FEI’s overall customer base with approximately 2,400 customers, and with annual consumption of less than 5 petajoules of natural gas. Although the Fort Nelson service area is not a stand-alone legal entity, it is currently the only regional FEI service area in BC with its own revenue requirement, rate base and rates.
About the BCUC
The BCUC is an independent regulatory body, responsible for regulating BC’s energy utilities, as well as its compulsory automobile insurance rates, and intra-and provincial pipelines rates. The BCUC is also responsible for administering BC’s Fuel Price Transparency Act. It is the BCUC’s role to balance the interests of customers with the interests of the businesses it regulates. The BCUC carries out fair and transparent reviews of matters within its jurisdiction and considers public input where public interest is impacted.
Krissy Van Loon