January 23, 2013
NOTICE OF RATE CHANGE
Pending PUB conditions in Decision 29-2012, effective February 1, 2013, an expected rate of $34.50/GJ is in place.
The expected rate includes a gas distribution charge of $8.27 plus the landed cost of propane, which will be the cost to acquire necessary propane volumes (without any markups), and the transportation costs associated with trucking the propane to Inuvik. The commodity and truck transport cost is expected to be $26.23/GJ.
To arrive at this rate, Inuvik Gas held a formal request for proposals to obtain a competitive price under a transparent and open bidding process for the acquisition and transportation of propane to Inuvik.
NOTICE OF RATE CHANGE
In accordance with Decision 29-2012 of the Public Utilities Board released on December 6, 2012, Inuvik Gas has obtained approval of certain changes to its Terms and Conditions of Service and to its Residential and General Service Rates. New rates will be in effect commencing February 1, 2013. The new rate will include a gas distribution charge of $8.27 plus the Landed Cost of Propane, which will be the cost to acquire necessary propane volumes, plus the transportation costs associated with trucking the propane to Inuvik. Before the new rates take effect, Inuvik Gas will hold a formal request for proposal process to obtain a competitive price under a transparent and open bidding process for the acquisition and transportation of propane to Inuvik. Thereafter, and in advance of charging the new rates, Inuvik Gas will post the applicable Landed Cost of Propane on its website at http://www.inuvikgas.com/. Notably, the Landed Cost of Propane is simply a flow-through to customers without any markups. Inuvik Gas estimates that the total rate to take effect on February 1, 2013 will be approximately $37/GJ. Of this total estimated rate, transportation costs make up approximately $21/GJ.
Amendments to Terms and Conditions
As the necessary next step to address the need to conserve the depleting natural gas reserves from the Ikhil pool, Inuvik Gas obtained the Board's approval of certain amendments to its Terms and Conditions of Service. In particular, to address potential shortages that may arise in the course of SNG deliveries, or otherwise given the emergent situation, Inuvik Gas received approval of curtailment provisions setting out apportionment priorities. These matters are addressed in Section 10.2 of Inuvik Gas' Terms and Condition of Service, which are available on Inuvik's Gas' website.
The priority of curtailment was developed by IGL in consultation with the Town of Inuvik, including the office of the Mayor and the Senior Administrator Officer, as well as the Fire Chief. The provisions prioritize continued service to customers that are not able to use pure propane and/or fuel oil as an alternate fuel to natural gas or SNG in the event of shortage of supply or other capacity limitations affecting natural gas or SNG service. As amongst these customers, priority is given to residences, then General Customers that are not residences (i.e. businesses), and then Government Customers that are not residences, reflecting a prioritization of service to households ahead of service to businesses, ahead of service to government locations (provided these are not residences). Thereafter, amongst customers with the ability to use pure propane or fuel oil as an alternate fuel to natural gas or SNG, the same prioritization is followed. Circumstances impacting supply of Natural Gas that can be anticipated to result in a need for curtailment would likely involve a combination of a gradual or sudden loss of Ikhil natural gas supply during periods when synthetic natural gas deliveries are not available. The extent to which IGL will be able to provide advance notice of curtailment will depend on the circumstances.
A Copy of the Public Utilities Board's Decision 29-2012 is available on the Public Utilities Board's website at http://www.nwtpublicutilitiesboard.ca/doc2012.htm. Any questions or concerns can be directed to Inuvik Gas by calling 867-777-3422. Additionally, Inuvik Gas will be providing ongoing updates in respect of the implementation of the SNG service on its website.
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