Natural gas is subject to a two part billing process, one of which is the commodity charge, which essentially goes to the price the distribution companies pay for natural gas on the open market.
That price is reset every quarter in B.C. and could result in a price increase or decrease, subject to market factors and a review by the Provincial Utilities Commission.
The charge reflects the increases or decreases the companies pay prior to customer distribution and does not reflect company mark-up.
Right now natural gas prices on the open market have gone up considerably following a brutal winter in many parts of North America and warm summer speculation.
The hike is translated into an increase demand for natural gas, either for heating or air conditioning purposes, and that’s the explanation for the current consumer price hike of 25 to 35 percent, according to a commission spokesperson.
However, there’s also a delivery charge put forward by delivery companies in revenue requirement applications, and in the case of Pacific Northern Gas, there’s now one under a Utilities Commission review.
Pacific Northern Gas serves a broad area in the northern part of the province and rates can vary. That’s because when it puts a rate application before the commission, it is done through three separate components. One for the northwest and two for the northeast, meaning rates in Fort St. John and Dawson Creek, which are in the same component, could be different than those in Tumbler Ridge.