Brace for higher natural gas rates effective next month
HOME HEATING: Rate increase of 80 per cent translates to only 12 per cent increase on most household bills
The average B.C. household will soon be shelling out an extra $82 a year in heating bills after FortisBC received approval for an 80-per-cent rate increase from the B.C. Utilities Commission.
The hike in the price of natural gas — scheduled to take effect Oct. 1 — is due to an unexpected spike in demand in North America and declining production.
“The hotter-than-normal summer, for most of Canada and the U.S., has resulted in higher-than-expected continental demand for electricity, which is often generated by natural gas,” said Dennis Swanson, FortisBC vice-president of energy supply. “This, combined with a slowdown in natural gas production, has led to an increase in prices during the past few months.”
The dramatic increase in the cost of natural gas, however, translates to a more modest increase on the average bill, spokesman Michael Allison said.
“To put it into perspective, it’s an actual overall bill increase of 12 per cent,” he said. “That’s because the cost of gas is only one charge on a customer’s bill.”
In the Lower Mainland, for example, customers are also levied a basic charge, a storage and transport charge, and a delivery charge, which in total, on an average bill, make up more than five times the cost of gas. Those fees will stay the same.
The increase, which was given the green light by the utilities commission last week, means the cost of gas rises from $1.141 per gigajoule to $2.050 per gigajoule.
The change will result in the average B.C. household paying about $82 more per year, says FortisBC, based on an average annual use of 90 gigajoules.
The increase could hit strata corporations hard. Strata corporations often shoulder the cost of hot water and gas fireplace use, which are usually powered by natural gas.
“It will have a substantial impact on strata buildings,” said Tony Gioventu, executive director of the Condominium Home Owners Association of B.C.
Many strata corporations are already looking at monitoring the use of gas fireplaces to make sure residents don’t abuse their use by running them continuously as a substitute for heating their units, he said.
Gioventu recommended strata corporations look into what kind of programs are available to put gas fireplaces onto timers or retrofitting incentives to help reduce gas consumption.
He also suggested stratas make sure water boilers are operating as efficiently as possible to soften the increase on a building’s gas bill.
“If they can’t increase their efficiencies, then it will have an impact on strata fees,” he said.
FortisBC said commodity prices for natural gas have been declining since 2007, hitting a low in early spring. Despite the recent uptick, natural gas prices are still near their lowest levels in a decade. In 2008, prices hit a decade-long high at just under $10.
The last time FortisBC hiked the natural gas rate was in April 2014, from $3.27 per gigajoule to $4.64 per gigajoule. Since then, the rate has steadily decreased to $1.141.
FortisBC customers who participate in its “customer choice” program will not see a change in their bills.