Gas marketers coming to Island

August 7, 2015  | Tannis Braithwaite | Parksville Qualicum Beach News

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If you use natural gas to heat your home or run your appliances, you can expect a gas marketer to soon appear on your doorstep.

Effective January 1, B.C.’s local gas distribution company, FortisBC, amalgamated its various operating companies into a single entity. As a result, programs previously available only on the Mainland will soon be available on Vancouver Island.

One of these programs, known as ‘Customer Choice,’ provides customers with the option of buying their gas commodity from the gas distributor, FortisBC, or from a third party gas marketer.  Either way, the gas will continue to be delivered by FortisBC.

Why choose one over the other?

FortisBC makes its money by delivering gas to you. It doesn’t make any money on the gas itself. Like the gas marketers, FortisBC buys gas from gas producers. The amount you pay FortisBC for the gas you use is the same amount FortisBC pays the producers. Because gas markets are dynamic, the amount FortisBC pays for gas varies over time, and so does the rate you pay for the gas you purchase from FortisBC. Every three months the B.C. Utilities Commission sets the rate FortisBC can charge for gas at a level designed to allow FortisBC to recover the full cost of its gas purchases and no more.  That is, the rate is set so FortisBC breaks even.

If you purchase your gas from FortisBC, the rate you pay for gas goes up when the market goes up and goes down when the market goes down.

If you don’t want your rate changing, you must buy your gas commodity from a third party gas marketer.

Unlike FortisBC, the gas marketers are permitted to offer consumers a fixed rate under contracts lasting from one to five years.  If you enter into a contract with a gas marketer, you will pay the agreed upon rate for the entire duration of your contract, regardless of how the price of natural gas changes in the market.  Either way, the price you pay to have your gas delivered will continue to be set annually by the B.C. Utilities Commission.

What should you do?  Whether you are likely to benefit financially from a fixed rate contract depends on what the market does in the future. FortisBC’s current rate of $2.48/GJ is substantially lower than the $3.89/GJ to $6.39/GJ currently being offered by gas marketers.  This is because FortisBC can raise your rate if its costs increase.  The gas marketers won’t be able to do that, so they need to charge you more now to hedge against possible future increases. They also need to make a profit because their business is selling you gas commodity, whereas FortisBC’s business is delivering you gas commodity.

No one can predict the future, but natural gas prices are currently near historic lows and it’s probably safe to say that they aren’t likely to go much lower in the future.  Most predictions are for prices to stay relatively flat at least in the medium term.

Decide for yourself whether you’d rather live with a variable rate or secure a fixed rate, even if the fixed rate is currently higher

Of course, predictions have a way of turning out to be wrong.

All you can really do is decide for yourself whether you’d rather live with a variable rate or secure a fixed rate, even if the fixed rate is currently higher.

Gas marketers are required to follow a Code of Conduct which is reviewed regularly and set by the B.C. Utilities Commission. Mechanisms have been built into the Code of Conduct to attempt to guard against potential customers feeling pressured into buying gas from a marketer. If you have a complaint about the conduct of a gas marketer or a dispute with respect to your contract with a gas marketer, you may be able to obtain assistance from the BC Utilities Commission’s Customer Choice Program.

More information on this topic is available on the FortisBC website and the B.C.Utilities Commission website under the “Customer Choice Program”.

Tannis Braithwaite is the Executive Director and a lawyer with the B.C. Public Interest Advocacy Centre.

BC Hydro, provincial and federal governments oppose anti-poverty and seniors’ organizations’ application to intervene in Site C legal cases

For Immediate Release | BCPIAC

Vancouver – BC Hydro and the federal and provincial governments are opposing the participation of anti-poverty and seniors’ groups in Site C Dam Project legal cases.

Active Support Against Poverty, BC Old Age Pensioners’ Organization, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC and Together Against Poverty Society have applied to intervene in support of the Peace Valley Landowner Association (PVLA) challenges in BC Supreme Court and Federal Court of the approval of BC Hydro’s Site C Project, in order to represent the interests of low and fixed income residential ratepayers.

The Site C Project is currently projected to cost almost $9 billion, costs which will eventually have to be paid by BC Hydro ratepayers or taxpayers. The groups are asking for one hour of time in the PVLA’s BC Supreme Court case in order to explain how the flaws in the Site C approval process could result in significant rate increases to low-income ratepayers who are already having difficulty paying electricity bills.

“We plan to focus on the need for a thorough review by the BCUC of the need for and cost of the Site C Project, as recommended by the federal/provincial Joint Review Panel, to ensure that low-income people, including seniors and people with disabilities, aren’t required to pay unnecessary costs for electricity service,” said Sarah Khan, a lawyer with the BC Public Interest Advocacy Centre who is representing the groups.

Over the past decade, BC Hydro residential rates have increased by more than 41%, and will rise another 6% on April 1, 2015, for a total increase of 47% over 11 years.  BC Hydro’s rates could increase by another 10.5% between 2016 and 2018. These increases have not been matched by corresponding increases in BC’s welfare rates or minimum wage.

Because of government and BC Hydro opposition, a full day hearing has now been set to decide whether the groups and other intervenors will be allowed to participate before the BC Supreme Court.

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Low income residential ratepayers’ groups apply to intervene in Site C legal cases

For Immediate Release | BCPIAC

Vancouver, BC – Groups representing the interests of low and fixed income residential ratepayers have just applied to the Federal Court to intervene in support of the Peace Valley Landowner Association (PVLA) challenge to the federal approval of BC Hydro’s Site C Dam Project. The groups also plan to apply for intervenor status in the PVLA’s BC Supreme Court challenge against the provincial approval of the Project.

Active Support Against Poverty, BC Old Age Pensioners’ Organization, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC and Together Against Poverty Society are represented by lawyers with the BC Public Interest Advocacy Center (BCPIAC), and if granted intervenor status, will highlight the perspective of BC Hydro ratepayers who are having difficulty paying their electricity bills amidst rising electricity rates.

We’ll focus on the need for a thorough review by the BCUC of the need for and cost of the Site C Project

“We’ll focus on the need for a thorough review by the BCUC of the need for and cost of the Site C Project, as recommended by the federal/provincial Joint Review Panel, to ensure that low-income people, including seniors and people with disabilities, aren’t required to pay unnecessary costs for electricity service,” said Sarah Khan, a lawyer with BCPIAC who is representing the groups.

Over the past decade, BC Hydro residential rates have increased by more than 41%, and will rise another 6% on April 1, 2015, for a total increase of 47% over 11 years.  BC Hydro’s rates could increase by another 10.5% between 2016 and 2018. These increases have not been matched by corresponding increases in BC’s welfare rates or minimum wage.

Gudrun Langolf, Vice President of the Council of Senior Citizens Organizations of BC said that “Between 15 – 20% of BC Hydro’s residential customers are low-income.  Since the Site C Project is currently estimated to cost $8.775 billion, we want to ensure that people who can least afford further rate increases aren’t left paying the bill for a project that hasn’t had a thorough economic review”.

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