As FortisBC electricity rates heat up four per cent on Jan. 1, the utility company has announced natural gas prices will cool down four per cent the first day of the new year.
Depending upon gas consumption, this equates to paying around $4 less per month.
“Customers will see an overall decrease because the cost of gas has gone down,” said Joe Mazza, vice-president of energy supply and resource development with FortisBC. “It’s important to remember, however, that rates reflect more than just the price of the commodity. Our rates also factor in important infrastructure upgrades and maintenance to our system to ensure the safe and reliable delivery of energy to our customers.”
As an energy provider regulated by the British Columbia Utilities Commission (BCUC), FortisBC reviews its delivery, storage and transport rates each year and its cost-of-gas rate each quarter with the BCUC. The company says this review is done to ensure that rates charged to customers appropriately recover the costs related to delivering energy safely and reliably.
The overall monthly decrease of approximately four per cent is based on the average monthly natural gas consumption of 7.5 gigajoules (GJs).
How to read a residential gas bill
Daily or monthly basic charge; the basic charge is a flat fee that partially recovers the fixed costs of FortisBC’s system. This charge comes as long as the customer is connected to the system, whether or not the customer is using any natural gas.
Delivery charge; the delivery charge is based on consumption and pays for the cost of safely and reliably delivering gas to the FortisBC customer’s home or business. The company says this charge: helps cover the costs of maintaining its natural gas distribution system; provides a return to investors; and funds improvements to meet customers’ needs. Delivery charges are reviewed by the BCUC annually.
Storage and transport; Storage and transport reflects the prices FortisBC pays to other companies to store and transport gas through their pipelines and infrastructure. FortisBC says these costs are not marked up, and they are reviewed quarterly and set annually by the BCUC.
Cost of gas
Every three months, FortisBC reviews cost-of-gas rates with the BCUC to make sure rates passed on to customers cover the cost of the commodity purchased on their behalf. “We do not mark up the cost of gas, so customers pay what we pay,” the company states.
Factors affecting the market price of natural gas in North America include weather, supply and demand and economic conditions.
Other charges and taxes
Other charges and taxes include the BC carbon tax, Clean Energy Levy, goods and services tax and, in some municipalities, a municipal operating fee. These charges are set by various levels of government and collected by FortisBC on their behalf. FortisBC does not gain revenue from these charges.