BC Gas said Monday that it has decided to withdraw its application for a rate hike that would have increased natural gas bills by approximately 2% in 2002. Due to a number of questions and regulatory issues relating to its pending Centra Gas BC acquisition, BC Gas CEO John Reid said it makes sense to hold back on the rate increase at this time.

“We need to gain a better understanding of how the acquisition of Centra will affect the costs and operations of BC Gas Utility and how the two utilities will work together,” Reid said. “This also works better with respect to the timing of the provincial government’s intention to announce an energy policy for BC at the end of February. When we have seen the direction that policy is taking the province with respect to gas and electricity, we will be better positioned to put our application in perspective of the province’s economic goals.”

The utility originally proposed the increase to pay for improvements to its delivery system, changes to customer service and billing operations, increased property taxes, and environmental restoration, following construction of the Southern Crossing Pipeline. BC Gas’ 188-mile Southern Crossing Pipeline, which was first proposed in April 1998, was finally put into service for winter 2000 service (see Daily GPI, Dec. 5, 2000). The rate increase would have increased the delivery charges by 7%, which works out to a 2% increase on a customer’s total gas bill.

BC Gas said it reduced rates for natural gas in October, but said the commodity price will be reviewed again in December which could lead to a further rate adjustment in January. The cost of the natural gas commodity makes up about two-thirds to three-quarters of a typical residential gas bill.

BC Gas Utility Ltd., a subsidiary of BC Gas, serves 762,000 residential, commercial and industrial customers in more than 100 communities in British Columbia.

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