Last Updated: Thursday 7 December 2000 TOP STORIES

BC Gas seeks price increase of 30%

Company asks B.C. to protect 'the needy' Glenn Bohn Vancouver Sun BC Gas applied Wednesday for a 30 per cent hike in residential prices for natural gas, to be effective on New Year's Day, and called on the provincial government to shield pensioners and the poor from the price jump.

BC Gas president John Reid said Victoria is making hundreds of millions of dollars in wellhead royalties from natural gas tapped in B.C., "but we do not make any money out of these gas prices and we are not in a position to provide aid to the needy."

"In this province," said Reid, "we are experiencing the highest gas prices in the country and our government is enjoying the royalty windfall while offering nothing to residents who cannot afford to heat their homes."

In the last two weeks, gas prices have soared, based on forecasts of a colder-than-normal winter and low levels of gas storage in North America.

Natural gas wholesale prices in the United States spiked almost 20 per cent Wednesday into record territory.

If the B.C. Utilities Commission approves the proposed rate increase in the next few weeks -- as it has approved past applications based on rising prices of the unregulated commodity -- the annual average residential bill in the Lower Mainland will have doubled in just two years, to almost $1,500 from $737.

Last week Premier Ujjal Dosanjh announced the creation of a $500-million fund drawn from the surplus created by an unanticipated increase in royalties due to higher energy prices. The provincial government is also predicting an additional $625-million budget surplus in the current fiscal year.

Jenny Shaw of the West End Seniors Network Society expects landlords will use the latest in a series of increases in the price of natural gas as the justification to jack up rents even more.

"I don't know what the seniors are going to do," Shaw said in an interview. "I really fear for their well-being."

Shaw noted that the premier announced on Tuesday an additional $180 million for the health-care system -- money that came from unexpected provincial revenues from natural gas royalties and electricity exports.

"This is going to become a health issue for most seniors," said Shaw, 61, the executive director of an advocacy group for the estimated 10,000 seniors who live in Vancouver's West End. "Even people who own their own houses will be forced to turn down the heat."

During a BC Gas news conference Wednesday at the Hotel Vancouver, company executives blamed soaring natural gas prices on a booming western U.S. economy. Western states are consuming enormous amounts of electricity generated by natural gas-fired plants, and those electricity plants can pay fantastic prices for natural gas, journalists were told.

However, Reid said prices that BC Gas charges for delivering gas to customers has remained "close to flat" during the last three years.

"What is incredibly higher is the price of the gas we deliver to our customers. And the price we pay on behalf of our customers is the price we charge without markup," the company president said.

Reid noted that profits from higher gas prices do not go to BC Gas shareholders, management or employees, but later conceded that the company expects to make $60 million in profits this year.

Reid suggested that the B.C. government target a gas-price relief program to low-income people.

"BC Gas employees hear from these people every day: pensioners, people on disability pensions, low-income single parents," he said. Victoria is collecting 25-per-cent royalties and is making "hundreds of millions of un-budgeted dollars," he said.

In a letter to Dosanjh this week, the B.C. Chamber of Commerce asked the government to return "some of the massive windfall it will reap from higher energy prices this year," by giving residents an unspecified "energy rebate."

Don Zadravec of the B.C. energy and mines ministry said the government recognizes that rising natural gas prices are putting pressure on residents, especially those on low and fixed incomes.

"We're looking at ways we might be able to help," he said, while refusing to be more specific about whether the program would help low-income people or everyone.

"But, at the same time, we have to address demands to continue to improve health care and keep the budget balanced."

The West End Seniors Network Society was one of the groups whose representatives met Monday with BC Gas officials. They met at the Vancouver office of the B.C. Public Interest Advocacy Centre, a non-profit group whose lawyers represent consumers, seniors, renters and other groups at B.C. Utility Commission hearings into proposed utility projects and rate changes.

"We're trying to discuss strategies with BC Gas, to see how we can approach the provincial government for assistance," Shaw said.

Lawyer Richard Gathercole, the advocacy centre's executive director, said the government should use some of its natural gas royalties and BC Hydro electricity export profits to help those hurt by higher natural gas prices.

He suggested that BC Gas could also make a contribution, perhaps through some kind of rate structure change or an energy-efficiency retrofit program like Hydro's PowerSmart program.

Gathercole said BC Gas can't just say: "We're sorry. Government should look after it. Our shareholders shouldn't be hit at all . . . They need to be making some gesture."

http://www.vancouversun.com/newsite/news/001207/5004702.html

-- Martin Thompson (mthom1927@aol.com), December 07, 2000