centra 603 

By Amy Fendley The price of propane in Whistler is going down, so what’s up? On Dec. 23, 1998 Centra Gas Whistler Inc. applied to the British Columbia Utilities Commission to set the current rates as interim effective Jan. 1, 1999 and to reduce the commodity charge by $1.5613/GJ or 14.5 per cent effective April 1, 1999. That’s the application. In 1996, the cost of propane was increased by approximately 22 per cent for the average residential customer, and in September of that year the BCUC received numerous complaints from customers. According the BCUC statistics, the outlook for cost of sales from 1998 is $3,284,890 and the forecast cost of sales in 1999 is $2,841,555. The decline reflects the lower cost of propane today, a function of supply and demand. "Propane prices have bottomed out," said Lindsay Hall, vice president of finance for Centra Gas BC. "Prices are coming back down because there is more supply of propane than there is demand for, it’s a temporary imbalance and we’re simply giving some of it back." The price of bulk propane is not fixed, nor regulated. When there is a difference between the actual cost of propane and the cost recovered in rates it is recorded in a propane cost deferral account. The BCUC governs the activities of the players in the price-war game and ensures that the decisions made by companies such as Centra, which operates as a monopoly in Whistler, are overseen, therefore having ultimate control over what they can and can’t do. BCUC secretary, Robert Pellatt, explains what a price decrease means to a company like Centra Whistler. "Firstly, a decrease is less likely to receive any sort of challenge from the community," says Pellatt. "When there is a difference in costs incurred, it usually results in excess profits being deferred. The profits are then refunded. Centra Gas can only earn as much as they are allowed to earn and if there is too much it goes back to the customer." Centra Whistler currently has a contract with Link Petroleum Services Ltd. out of Edmonton. The contract in place is a two-year renewal of a previous agreement and is in effect until March 31, 2000. Although having a locked contract may seem binding, Centra Whistler is not concerned about getting stuck paying non-competitive prices as a result of fluctuating prices in the world market. "A contract of this nature is made up of two components," said Hall. "The commodity, which floats among a basis of three different indexes to determine its price; and transport, which is a fixed amount. The energy business affects everyone. When the price decreases it’s good, every business wants to keep its customers happy." Be it gas or propane, bulk prices have taken a nose dive. But how long they stay down remains to be seen. The BCUC held a pre-hearing conference and public information meeting at the Coast Whistler Hotel on Jan. 21 to discuss procedural matters regarding the Centra Whistler application to lower propane prices.


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