Natural gas users can expect to see more savings on their gas bills as of April.
FortisBC will decrease the commodity rate from $3.781 to $2.486 per gigajoule which will mean a reduction of $58 per year for an average residential customer on Vancouver Island using approximately 45 gigajoules.
Fortis says the decrease, which is effective April 1 for all natural gas and propane customers, will result in the cheapest commodity rate in 10 years.
“Compared to a year ago, natural gas prices are lower coming out of this past winter due to reduced overall demand for natural gas to heat homes and generate power,” said Cynthia Des Brisay, Fortis’ vice-president of energy supply and resource development, in a news release. “At the same time, supplies of natural gas have increased, allowing storage levels to return to normal levels. This combination of factors is leading to the lowest commodity rate our customers have seen in the past decade.”
Des Brisay said the drop in oil prices has kept the price of propane stable.
“Oil price have declined as well, driven by increased North American oil supplies and reduced international demand,” she said. “This drop in oil prices has helped to lower propane prices, benefitting our propane customers.”
FortisBC says it reviews natural gas and propane purchase rates with the BC Utilities Commission every three months to ensure rates passed on to customers cover the purchase cost of gas. Factors that affect the market price of natural gas and propane in North America include weather, supply and demand, and the state of the economy. Propane prices are also influenced by oil markets around the world.
This latest cut in natural gas costs comes on the heels of a 25 per cent reduction to Fortis rates to be phased in over three years.
The first portion, a 13 per cent cut, was introduced in January across Vancouver Island.
Those rate cuts were announced after the BC Utilities Commission approved an application by FortisBC to amalgamate its three utilities and equalize the price for natural gas across B.C.
The commission had originally denied Fortis’ attempt to amalgamate FortisBC Energy, FortisBC Energy Vancouver Island, and FortisBC Energy Whistler in 2013 but reversed its decision on Feb. 26 of last year.
Vancouver Island users had been paying more for natural gas than the rest of the province and Fortis said that establishing a common rate would level the playing field and allow commercial and industrial users to be more competitive as they would pay the same natural gas rates as their off-Island competitors.