FortisBC has filed an application with the B.C. Utilities Commission (BCUC) that seeks to peg the rate for propane in Revelstoke to the rate of natural gas in B.C., which would bring the cost to Revelstoke residential and commercial users down significantly.
Revelstoke is the only remaining community on a propane network in B.C. When the propane system was built here, it wasn’t linked to a pipe network because it was deemed to be too costly to extend the gas network to Revelstoke. Propane is shipped in, then fed into the pipe network at an industrial park facility.
Previously, Fortis had proposed building a new facility in Revelstoke that would replace propane with natural gas. The plan was to ship in liquid natural gas then convert it in the new facility. However, in early 2018, when prices fluctuated and brought natural gas closer to propane prices, Fortis announced it was shelving the proposed facility.
“We decided not to submit an application to the BC Utilities Commission because we decided it was too expensive and also the price between propane and natural gas started to fall,” said Fortis BC representative Blair Weston at an April 2018 council meeting.
At the same meeting, Weston said FortisBC was considering making an application to the BCUC to apply for a ‘postage stamp’ rate for Revelstoke. The concept is that Revelstoke cuustomers would pay the same commodity rate as other natural gas customers in B.C. This would create an immediate reduction in propane rates for Revelstoke residents. Fortis would make up the difference by charging a slightly higher rate to all other customers in B.C.
FortisBC files BCUC application
Now, FortisBC has filed an application with the BCUC asking for the change.
In a report on the proposed change, FortisBC says the change would reduce rates and add stability to energy costs; historically, natural gas prices are less volatile than propane rates.
“Commodity prices for propane have historically been more volatile and higher than natural gas prices on an energy equivalent basis. As a result, Revelstoke propane customers have had less predictable and higher energy costs relative to [FortisBC’s] natural gas customers,” Fortis BC states in its application. “The proposed rate setting mechanism will provide Revelstoke customers with propane rate stability that matches the stability of [FortisBC’s] natural gas customer rates, and can provide propane commodity rate relief.”
How much cheaper?
According to FortisBC’s calculations in the application package, an average residence would see a $407 annual reduction, or about 45%. The savings would be higher for commercial customers.
The report says the average Lower Mainland residential customer would be subsidizing the reduced rate by $0.98 annually.
The application also argues the change would increase the number of gas customers in Revelstoke because the lower rates would encourage customers on heating oil to convert to propane, saying this would lead to a reduction in greenhouse gases.
Currently, the application is in an early stage. FortisBC is scheduled public notices in early September. The process allows for interveners in the application to register by Sept. 26. The application process is scheduled to run through the fall. In its application, Fortis BC proposes to implement the new system in 2020.
This story is an overview of the situation painted in broad brush strokes. The changes proposed in the FortisBC application are actually technical and complex. In fact, the application reviews different pricing scenarios. For more background and technical information, see Fortis BC’s application package here.
Delegation opposes the change
At Revelstoke city council’s Aug. 27 meeting, Revelstoke resident Cornelius Suchy, who owns a biomass energy research company, appeared before council to argue against the change. He argued that reducing the cost of natural gas would subsidize the price of fossil fuels, making the transition to renewable energy more difficult. He also argued the new rates would impact the viability of the Revelstoke Community Energy Corporation. The presentation was informational. For more, see his presentation to council here.