Centra applying for another rate increase 

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One of the key determining factors in deciding whether or not to go ahead with the pipeline is the price difference between natural gas and propane. Historically, natural gas has been the cheaper option. Currently, however, the cost of natural gas in B.C has spiked dramatically, but Higgins said long-term projections still indicate the price spread between the two commodities will remain at around $3 with natural gas being the cheaper.

"One of the decision points is definitely the price spread between the cost of propane and the cost of natural gas but you can’t really go by what is happening now on the spot market," said Higgins.

"When you make these decisions you have to look at what are the analysts saying in terms of the spread between the price of propane over the long term and, at the moment, they are still saying it is going to be around a $3 spread between natural gas and propane, with natural gas being the lower priced," he said.

"If that changes in any sort of forecast we get it may impact the decision to build a pipeline."

Higgens said Centra uses the 15-year forecasts of consultants Gilbert Lausten Jung Associates out of Alberta.

Centra is currently weighing up four different options, including the pipeline, for servicing Whistler’s needs beyond April this year.

The four options include:

• do nothing and stop accepting customers;

• put more propane tanks in Function Junction;

• build another propane storage plant somewhere else in the resort; or

• construct the natural gas pipeline from Squamish to Whistler and make the switch from piped propane.

Each option is being assessed against ability to accommodate continued growth; cost; the rate impacts as customers bear the cost; likelihood of attaining approval and; compatibility with local government and provincial goals.

If Centra chooses to do nothing, the Nesters and Function plants will operate indefinitely but no new consumers, like the Hyatt Hotel, could be added to the system.

Gas rates under this model would not be impacted.

If more tanks are added in Function, this will allow growth through the 2002-2003 heating season only. Any future energy needs would have to be met with either electricity or bottled propane. Rate impacts would also be minimal under this option except for commodity price fluctuations.

If another storage facility is built in Whistler, demand could be met for the next 15 years. Of all the options, this would have the highest long-term rate impact. Rail car and truck traffic on Highway 99 would also increase by about 45 per cent over the next 15 years.

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