News » Whistler

Propane prices could jump 22 per cent

Terasen’s proposed rate increase being reviewed by B.C. Utilities Commission



Whistlerites may be facing a 22 per cent increase in the price of propane, which Terasen Gas estimates could cost households an additional $448 a year.

Terasen has filed an application with the B.C. Utilities Commission (BCUC) that, if successful, would result in increases to the commodity rates for natural gas and propane.

Taking effect July 1, the increases would mean that customers in areas such as the Lower Mainland and the Fraser Valley would see their annual bills rise by about 11 per cent — that could mean between $142 and $164 each year, depending on consumption.

But because Whistler residents use propane, they’ll be paying more than residents of the Lower Mainland.

Scott Webb, a spokesman for Terasen Gas, said that an average bill for Whistler residents is currently $2,058 per year, but with the proposed increase, that could rise about 22 per cent to $2,506.

But that’s not all — the Province of British Columbia recently introduced a carbon tax that could bring an annual gas bill in Whistler to $2,607.

The carbon tax, which is also expected to take effect July 1, will begin at a rate of $10 per tonne of associated carbon emissions and rise by $5 a year for the next four years, reaching a peak of $30 per tonne by 2012, according to the 2008 B.C. budget.

Webb said propane is more expensive than natural gas because it is more closely associated with oil than natural gas, and the cost of oil has risen significantly in recent months.

“It is a substantial increase for sure,” Webb said. “It’s largely dictated because propane is tied directly to the price of… crude oil.”

A news release from Terasen Gas said there are numerous factors affecting the price of natural gas and propane, including weather, supply and demand, international events and market speculation.

“A colder winter has resulted in a greater drawdown of storage inventories combined with lower than forecasted levels of imports to help restore those storage levels,” Cynthia Des Brisay, Vice President Gas Supply and Transmission, said in the release.

“In addition, a temporary disruption to a natural gas production platform in the Gulf of Mexico, coupled with the anticipation of a strong hurricane season, which could further affect production in the region, are impacting prices.”

Though the price increase will be higher for Whistler residents using propane than people in the Lower Mainland using natural gas, Webb pointed out that next year Whistler residents should be switching to natural gas.

Terasen Gas is currently constructing a natural gas pipeline from Squamish to Whistler. Webb said the pipeline is supposed to be completed in March 2009, while conversions to natural gas is slated to be completed by June 2009. Once the gas line and conversions are done, Whistler residents will be paying a gas rate similar to that paid by people in the Lower Mainland.

Webb also stressed that Terasen Gas profits come from delivery charges — namely, what the company charges to bring natural gas or propane to homes or businesses. Delivery rates are reviewed by the BCUC once a year, in December, with any changes coming into effect the following January. Every three months Terasen reviews natural gas and propane commodity prices with the BCUC in order to ensure the flow-through rates customers are charged are sufficient to cover the cost of purchasing the fuel.

Terasen ships propane to Whistler in railway cars, although trucks have been used during peak demand periods.

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