The British Columbia (BC) Utilities Commission has agreed to open a portion of the province’s residential natural gas market to competition, allowing homeowners to sign long-term fixed price contracts for natural gas with companies other than Terasen Gas. The company filed its unbundling proposal with regulators in April (see Daily GPI, April 20).
The Commission released its decision Monday following several weeks of public hearings and submissions from Terasen, natural gas marketers and stakeholders.
“Opening the market to competition for supplying natural gas gives residential customers additional choice and control over their energy costs,” said Doug Stout, Terasen Gas vice president of marketing and business development. “The role of Terasen Gas in this process is to ensure the program provides customers the opportunity to realize value and meets the needs of the various stakeholders.”
Gas marketers will be allowed to start offering long-term, fixed price contracts for the natural gas commodity starting in May 2007. Consumers can choose to remain with Terasen or sign with a marketer, in which case they will begin receiving gas at the marketer’s rate starting in November 2007. Terasen Gas, which owns the pipes carrying the gas, will continue delivering the gas, charging for delivery and providing all billing and other services to all customers. A similar program for small and mid-size commercial customers was launched in BC in 2004. Ontario opened its residential market to competition in the late 1980s; Alberta opened its market in the 1990s, while Manitoba allowed gas marketers in starting in 2000.
Under the program, gas marketers will be allowed to offer residential consumers fixed price contracts for the gas commodity for terms of one to five years. Customers can choose to sign with a marketer or continue to receive gas at Terasen commodity rates, which are reviewed every three months with the BCUC and can fluctuate up or down depending on the market price of natural gas. Under BCUC regulations, Terasen is not allowed to mark up the price of the natural gas commodity or offer fixed prices for more than one year.
The choice of natural gas suppliers will only be available to Terasen residential customers in the Lower Mainland, Fraser Valley, Interior and the Kootenays (excluding Fort Nelson and Revelstoke). Due to the different regulatory agreements in place, it will not be available on Vancouver Island, the Sunshine Coast, Powell River or Whistler.
Before gas marketers can offer customers long-term contracts, Terasen must make changes to its billing system. The bill format will change slightly to include additional information including a listing of all charges, the name of the supplier (Terasen or a gas marketer), and the contract rate for the gas commodity. Delivery charges are set separately by Terasen Gas and approved by the BCUC.
Terasen Gas will also launch an information campaign beginning in 2007 to educate consumers about the choices they will have and what they need to consider when offered a long-term contract from a marketer.
Terasen Gas, a subsidiary of Kinder Morgan Inc., delivers natural gas and piped propane to approximately 900,000 homes and businesses in 125 communities throughout BC. Terasen Gas is the common name of four companies: Terasen Gas Inc., Terasen Gas (Vancouver Island) Inc., Terasen Gas (Whistler) Inc. and Terasen Gas (Squamish) Inc.
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