Terasen Gas announced last week the company was applying to the B.C. Utilities Commission for a rate increase to off-set the higher cost of production and delivery. If successful, the new rates will kick in on July 1.
"International events and increased global demand for energy have created a great deal of uncertainty and speculation leading to increased prices for natural gas, propane and crude oil," explained Randy Jespersen, president of Terasen Gas.
It could have been worse, he added.
"Although we have to increase prices now, our strategy of hedging and gas storage has helped shield our customers from the full impact of rising commodity prices."
Typical residential customers in the Lower Mainland, Fraser Valley, Interior, North and Kootenay regions will see rate increases of about 4.3 per cent. Small commercial customers will also see an increase of about 4.6 per cent. There is no change for Vancouver Island, the Sunshine Coast or Fort Nelson regions.
Whistler and Revelstoke, which are on propane systems, will also see an increase in their commodity costs.
The rate change was prompted by a proposed 7.5 per cent increase in the commodity cost of natural gas and higher propane costs. Delivery costs will remain the same.
About two-thirds of a gas bill is for the commodity cost of natural gas and propane, which is influenced by the market, and about a third is for the cost of delivery.
The average Whistler customer, based on consumption of 80 gigajoules a year of propane, will see their annual bill increase from $1,404 to an estimated $1,498 or 6.6 per cent. The basic monthly charge will remain unchanged at $7.50 and bundled delivery and commodity costs per gigajoule increased from $14.60 a month to $15.65.
Even with the price increase, Terasen says gas appliances and heating systems are still cost-competitive with electricity, and can even lower costs if you have high-efficiency furnaces and appliances.
The issue of a propane price increase for Whistler could be moot if Terasen Gas decides to go ahead with the construction of a natural gas pipeline from Squamish this summer. A decision is expected in the next month, as the work on the pipeline has to coincide with the highway construction if it is going to be cost-effective for customers.
It is not known what the overall costs of a pipeline will be to customers, but Terasen said their goal is to remain competitive with electricity.