Heating your home about to cost more
B.C. Gas seeking rate hike
Citizen staff
B.C. Gas has applied to the British Columbia Utilities Commission for a rate increase that would add about 16 per cent to the typical residential customer’s total gas bill — but the hike would still be less than the actual increase in the tost of natural gas says the utility.
The natural gas provider said in a news release the full impact of increased commodity prices would actually add almost 22 per cent to the typi-cal residential customer’s bill.
“We are asking to pass on only part of the increased cost of the commodity at this time so we can maintain the economic advantage of natural gas relative to electricity rates which remain frozen by provincial legislation,” said Randy Jes-persen, B.C. Gas Utility president. “The proposed rates remain very attractive compared to propane or home heating oil whose costs have escalated Significantly in past months.”
“We have held the line on commodity costs as Jong as possible thanks to our gas purchasing strategy where we locked in the majority of our gas supply for the winter at lower prices. This proposal allows us to run part of the increased
costs through a deferral account that customers will pay back over a longer period of time when our purchase costs are expected to decline.”
B.C. Gas Utility does not earn a profit on natural gas; the utility’s cost is passed on to the customer. Any rate change must be approved by the B.C. Utilities Commission, the provincial regulatory agency.
Like oil or gold, in the past six months, the market price of natural gas has increased substantially, said B.C. Gas, driven upwards by heavy demand in the east as a result of a very cold winter. Rising crude oil prices, spurred by civil disruption in Venezuela and uncertainty around the Middle East situation have also served to push natural gas and other energy prices upwards.
The cost of the natural gas makes up about two-thirds of the typical residential gas bill. The remaining one-third is composed of delivery charges. If approved, this increase will add approximately $185 to the annual bill of a Lower Mainland customer and $161 to an Interior customer. The application asks to have the increase take effect April 1,2003.
Banner telethon final piece to MRI puzzle
Citizen staff
The Spirit of the North telethon put to bed a banner year for the Spirit of the North Healthcare Foundation.
Gifts totaling $595,457 were recognized during the five-hour event, aired Sunday afternoon on PGTV. The total is well above the $235,084 acknowledged during last year’s telethon.
Foundation fund development officer David Wharrie said the increase represents the final push before the arrival of a new $2.5 million Magnetic Resonance Imager, which is expected to arrive at Prince George Regional Hospital in May and be operative in July.
“We’re very pleased,” said Wharrie.
He said much of the increase was due to a $100,000 donation from the hospital auxiliary, an $80,000 donation from Prince George physicians and contributions of $25,000 from local firefighters and $10,000 each from the Elks and the Stuart Lake Hospital Auxiliary, expressly for the MRI.
Other major donations included $40,000 from the B.C. Children’s Hospital Foundation
for pediatrics at PGRH.
After it’s paid for, the campaign will shift to the renovation phase of PGRH.
During the next 18 months, the foundation will help fund a Centre of Excellence for Maternal Childcare, including pediatrics, pediatrics clinics and the Special Care Nursery on the second floor of the hospital, and renovate resident rooms at Jubilee Lodge extended care home.
Famous Last Words was the theme of this year’s event, the third annual, and featured grand finale episodes of popular sitcoms Cheers, Seinfeld, Mad About You and Spin City, with Michael J Fox who comes from B.C. The shows were commercial free, but interspersed with fund-raising and recognition of donations to the Foundation’s Centre of Excellence Campaign. It’s not too late to give. Credit card donations are accepted online at www.spirilofthenorth.bcca Manning telephones were volunteers from Costco, Women of the Moose, Yellowhead Rotary, Nechako Rotary, Freightliner, PGRH staff, doctors and hospital auxiliary, Knights of Columbus and Prince George Firefighters.
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Mayor disappointed gas deal on shaky ground
Citizen staff
Mayor Colin Kinsley said he’s disappointed it appears enough people signed a counter petition to force council to take a second look at the city’s proposed deal with B.C. Gas — but he puts the blame on the shoulders of himself and council.
“Obviously, we failed to articulate the tremendous value of this deal appropriately to the public and we have to bear responsibility for that,” he said Sunday.
A preliminary count released Friday showed 4,364 signatures against bylaw No. 7448, to authorize borrowing $74.89 million for the deal, and 4,288 against bylaw No. 7455, to give the dty authority to enter into an agreement with B.C. Gas.
A total of 2,129 completed petition documents — equal to five per cent of eligible voters in Prince George — were required to prevent the dty council from considering adopting the bylaws without the assent of the voters.
There was a 30-day period for circulating and collecting them, and the deadline for filing them was Wednesday afternoon.
Kinsley maintains the deal is still worth pursuing even at the time and expense of a referendum.
“I’ve studied the thing a lot, and it’s complicated, but there’s virtually no risk to the taxpayer and everything to gain,” he said.
Kinsley added the deal would’ve been brought to the public long ago, but the dty held out for more money during negotiations. Similar deals have been reached in Kelowna and Vernon.
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PRINCE GEORGE
Citizen
Serving the Central Interior since 1916
FOR
YEAR CONTESTl
PURRRRFECT FORM — Jodie Wiebe performs her cat-like moves during the 12-and-under solo interpretive dance competition Saturday at Vanier Hall. The event was part of the 27th annual Prince George Dance Festival which began on Friday night and continues until this Friday night, wrapping up with the popular honours performance.
Gas deal is a bargain
for the city:
by MARK NIELSEN Citizen staff
Prince George residents will miss out on a rare opportunity if the quest to parlay a wrinkle in the city’s franchise agreement with B.C. Gas into a $39-million legacy fails to win popular approval, says the consultant helping to develop the deal.
‘You won’t find as good a deal anywhere and it’s a unique opportunity available to the dty to, in effect, generate revenue,” said David Craig of Consolidated Management, based in Vancouver.
If the deal is to go ahead, it appears likely it will have to go to referendum first after an estimated 3,500 counter petitions were handed over to dty hall on Ttiesday by campaigners critical of the proposal.
If the counter petitions are deemed valid, the number will be well above the threshold of 2,129, or five per cent of the electorate, needed to spark a full-fledged vote on the issue.
At issue is a plan to remove the dt/tf ‘buyout” dause in its franchise agreement with the natural gas provider and create a legacy fun<#worth about $39 million in 17 years through a lease-in, lease-out agreement.
Estimating the value of the asset at $77 million, the city would borrow $74.89 million from the Municipal Financial Authority to cover 95 per cent of the cost of a capital lease that would last 35 years, the time it would take for most of the value of the system to depredate, and pay the remaining five per cent over the same 35 years.
The city would then enter into an operating lease with B.C. Gas for a 17-year period, requiring the company to make payments to the dty that would offset the annual financing costs. At the end of 17 years, B.C. Gas would have two options:
consultant
■ The company could cancel the remaining 18 years on the capital lease with a termination payment of $37.62 million to the dty;
■ A new operating lease for the remaining 18 years could be negotiated so B.C. Gas continues to make annual payments to the dty, with the accumulated total amounting to a substantially greater sum.
Based on today’s estimates of financial variables the overall size of the fund after 17 years is estimated to total about $39 million. Putting that total in context, the net present value of the $39 million is about $14 million.
Critics point out borrowing the money will double the aty’s debt load, but offidals have stressed it would still leave the dty with $80 million in borrowing capadty — equal to the cost of four Multiplexes — and the total would soon begin dropping as B.C. Gas pays back the money it owes the dty.
Craig said it’s a chance to use a portion of the city’s borrowing capacity to generate some'income for the dty.
The dty would get an average return of eight to nine per cent based on two components. B.C., Gas would pay for two-thirds of the loan at a locked-in rate, that would represent a spread of 1.0 -1.75 per cent (1.25 per cent in the dtys estimates), depending on the terms at the time the deal is completed, over what the city would pay to borrow that amount from the Munidpal Finance Authority.
For the remaining one-third, which would be borrowed on the open market at a floating rate, the dty would get B.C. Gas’s pre-tax return of 13 to 14 per cent (equivalent to the 9.25 per cent after tax return in the dtys estimates), which, when put against what the city would pay to finance that portion, would amount to a spread of nine to 10 per cent
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