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Fort Nelson faces Fortis rate hike as town struggles with natural gas crash

Rates would amount to $33-$59 increase in 2017 and 2018

Fort Nelson residents struggling with one of the worst natural gas downturns in a generation could soon have to pay more for the gas that heats their homes.

FortisBC is seeking to increase natural gas delivery charges for Fort Nelson customers by just under 7 per cent over each of the next two years, according to an application filed with the B.C. Utilities Commission (BCUC).

In the application, FortisBC says it needs to hike delivery charges to make up for a revenue shortfall brought on by a decrease in demand for natural gas.  

FortisBC spokesperson Michael Allison said the increases amount to $33 and $35 a year between 2017 and 2018.

Tannis Braithwaite, executive director of the BC Public Interest Advocacy Centre, pegged the hikes at around $59 and $35 over the next two years.

The proposed increase comes at a time when hundreds have been laid off from Fort Nelson's natural gas fields, as the industry scales back drilling due to low prices and market uncertainty.

Kristi Leer, spokesperson for the industry advocacy group Fort Nelson for LNG, said many in the community of 3,900 are already struggling to pay their bills.

"The increases will hit my home for sure, and the gas bills are already high," she said. Breadwinners in many families have been forced to find work elsewhere, while continuing to pay mortgages and bills on unsellable homes in Fort Nelson, she added. "People aren't able to afford anything, and they're stuck here. There's nothing for them to do and there's nowhere for them to go."

According to the BCUC filing, FortisBC is expecting a revenue shortfall of $103,000 beginning in 2017. The main driver has been decreased demand from commercial customers as well as capital costs.

Fort Nelson is the only jurisdiction in B.C. to have its own FortisBC service area, and has traditionally had lower natural gas rates than the rest of the province because it is closer to gas reserves. It also has an older transmission system which has already been paid off.  

Braithwaite said that while $103,000 isn't very much for a major utility, consumers would feel the back-to-back increases.

"It is significant," said Braithwaite, whose organization will represent low income people and seniors during the BCUC hearings. "It's significantly higher than inflation."

"One saving grace, but not so much for people in Fort Nelson, is the low commodity prices," she added. "I think people haven't realized how much the delivery charges are going up because the price of natural gas is going down. When you combine those two elements on your bill, the change to your bill is not that significant."

But if natural gas prices climb, "people are going to be seeing huge bills," she said.  

Allison said FortisBC only looks at rate increases as a last resort.

"We are sensitive to the challenges customers face with rising energy costs, so we do work hard to minimize any increases," he said. "We definitely don't take them lightly."

The BCUC is expected to hold hearings on the proposal through September. If approved, the increased delivery rates would go into effect in January 2017.