BC Gas wants another rate hike

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Last Updated: Wednesday 22 November 2000 LOCAL BUSINESS

-------------------------------------------------------------------------------- BC Gas wants another rate hike

Consumers may be forced to eat fifth rate increase because commodity prices 'going through the roof' Rod Nutt Vancouver Sun BC Gas said Tuesday it will ask the B.C. Utilities Commission to approve another increase in the price of natural gas, the fifth hike in less than two years.

"The commodity price is going through the roof so we have to pass along the increase to the consumer," BC Gas official Verne Prior said. "The company won't benefit from the increase."

Prior emphasized that BC Gas is a distribution company and simply passes on the wholesale cost of gas in the market placer to the customer.

"We are a delivery system and have no control over the price and we don't profit from higher natural gas prices," he said.

Prior declined to speculate on the size of the rate-increase application, which will likely be made with the next couple of weeks.

"It will depend on a number of factors, including the weather forecast and the anticipated price of natural gas from our suppliers."

But B.C. Public Interest Advocacy Centre executive-director Richard Gathercole said last month that B.C. residents should brace themselves for a 20-per-cent increase in the price of natural gas Jan. 1.

A 20-per-cent increase would add about $200 a year to the average Lower Mainland householder's bill, pushing the bill to about $1,100 annually.

Natural gas consumers have already been dealt four significant price hikes since 1999, including a 33-per-cent increase last July.

While Prior wouldn't say how much BC Gas intends to seek in the form an increase, he did say the utility is currently asking the commission for a 3.4-per-cent increase on its delivery margin.

"The price of natural gas to the consumer is made up of two components. The company's cost of doing business, or delivery margin, and the commodity price of natural gas."

The utilities commission reviews the company's revenue requirement and then sets a rate of return on capital, which is effectively its pre-tax profit.

rnutt@pacpress.southam.ca

http://www.vancouversun.com/newsite/business/001122/4916736.html

-- Martin Thompson (mthom1927@aol.com), November 22, 2000


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