Fortis小蓝视频 has been given approval by the 小蓝视频 Utilities Commission (小蓝视频UC) to jack natural gas prices up 17.5 per cent on January 1.
This is despite the fact Western Canadian natural gas prices have been at historic lows in 2024.
The hike will increase the average residential customer’s gas bill by $14.25 per month, based on consumption of 7.5 gigajoules of gas, according to Fortis小蓝视频.
“We understand that rate changes may be difficult for some of our customers, and we want to assure you that these rate adjustments are aimed at better serving your energy needs,” Michelle Carman, Fortis小蓝视频’s vice-president of customer service and external communications, said in a press release.
The rates are interim, the company notes. The 小蓝视频UC is currently reviewing Fortis小蓝视频’s 2025-27 rate setting proposal, which could affect the final rates, Fortis小蓝视频 says.
“This marks the first increase since 2022, as overall gas rates fell in both 2023 and 2024 for most customers,” Fortis小蓝视频 notes in the release.
North American natural gas prices do not account for the rate spike. In fact, American and Western Canadian natural gas prices reached historic lows in 2024, according to the Energy Information Administration (EIA).
According to the EIA, the Western Canadian benchmark daily spot price for natural gas price averaged US$1.04 per million British thermal units (MMBtu) in 2024 through October, reaching as low as US$0.31/MMBtu in September.
Capital investment in upgrades to Fortis小蓝视频’s natural gas infrastructure in 小蓝视频 appear to be what is largely driving the higher prices. That includes the Pattullo Gas Line replacement and upgrades to its Coastal Transmission System.
It’s not clear to what extent the investments in renewable natural gas (RNG) production also account for increasing the cost of supplying natural gas to British Columbians, though Fortis小蓝视频 does note that the stream of RNG in the natural gas system will increase from one per cent to two per cent.
Fortis小蓝视频 also explains that in 2023 it was able to keep prices low through arbitrage – buying natural gas on the market when prices are low, and using its storage capacity to sell on the open market when prices are higher.
“To help reduce costs for our customers, Fortis小蓝视频 purchases gas in the summer when prices are lower and stores it so that gas is available to our customers in winter months when they need it.,” Fortis小蓝视频 explained.
“We sell surplus gas back to the market to further offset costs and pass those savings on to our customers. In 2023, we were able to sell a large amount of surplus gas, which allowed us to reduce rates for our customers in 2024. Rates in 2025 reflect a return to a normal range for sales of surplus gas.”
