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Home heating costs set to fall for most B.C. natural gas customers

FortisBC electricity bills up, gas bills down, in New Year
surreyrngplant-fortisbc
A biogas plant in Surrey that supplies FortisBC with some of its renewable natural gas. | FortisBC

It will cost slightly less to heat homes with natural gas in most parts of B.C. in 2024 -- Fort Nelson being a notable exception.

Starting Jan. 1, many FortisBC natural gas customers will see a minor decrease in their home heating bills of about 1.1 per cent -- about $1 per month.

But those who heat their homes with electricity supplied by FortisBC in Kelowna and other parts of the Southern Okanagan will see their electricity bills shoot up 7 per cent in the New Year.

The BC Utilities Commission (BCUC) recently approved a number of rate changes for natural gas and electricity providers.

FortisBC is B.C.’s biggest natural gas utility. It also provides electricity for Kelowna and the southern Okangan region (Princeton, Osoyoos, Trail and Kaslo). The BCUC recently approved a 6.74 per cent increase in electricity bills for FortisBC customers in the southern Okanagan. This averages out to about $11.26 per month for the average homeowner.

"A significant driver for the rate change is the increased cost of purchasing electricity," FortisBC said in a news release.

While natural gas home heating bills will drop slightly by about one per cent for most parts of B.C. served by FortisBC, they will jump 11.4 per cent in Fort Nelson.

There are two costs involved in setting prices for residential customers – the actual cost of the gas (which has gone down) and the cost of delivering it, which is going up.

Earlier this year, in October, Fort Nelson customers would have seen their residential natural gas bills drop by about 10 per cent, a reflection of falling North American natural gas prices. But as of January 1, 2024, that decrease will get clawed back, due to increasing delivery charges.

Meanwhile, customers who buy renewable natural gas (RNG) in B.C. will see their costs for RNG go down in 2024.

North American natural gas prices have fallen significantly over the last year. American prices for natural gas fell from US$5.85 per MMBtu on Dec. 19, 2022 to US$2.57 per MMBTu this week, according to oilprice.com.

DRBRS Morningstar notes that underground storage is up in the U.S. and fall and winter temperatures warmer than expected. Moreover, “relatively weak consumption from industrial and commercial sectors, partly caused by a slowing of business activity from elevated interest rates” have decreased demand, while there has been strong growth in natural gas production.

The average annual price of natural gas in Western Canada has likewise fallen. In 2022, Western Canadian natural gas prices averaged $5.10 per gigajoule – more than half what the price is today.

After North American gas prices spiked in 2021, the BCUC approved a significant 9 per cent rate hike for FortisBC customers in October 2021.

Earlier this fall, in October, FortisBC natural gas bills went down by eight per cent (about $7 for the average residential customer), in response to falling natural gas prices. Fort Nelson customers would have seen their bills decline by 10 per cent – about $10 per month.

But now any savings that Fort Nelson customers may have received on the cost of the gas is being erased by the cost of delivering it.

The BCUC recently approved an eight per cent delivery charge increase for FortisBC, to cover a revenue shortfall.

“Delivery rates cover the cost of maintaining FEI’s (Fortis Energy Inc.) natural gas system and delivering natural gas service to its customers across British Columbia,” the BCUC explained. “The rates increase will recover part of FEI’s forecast revenue shortage, due to operating and maintenance costs, financing rates, and taxes.”

The change in delivery rates will translate into a slight decrease in costs for customers in Metro Vancouver, Fraser Valley, the Interior, Northern B.C., Whistler, Vancouver Island, Revelstoke and the Kootenays.

The decrease averages out to less than $1 per month (a 1.1 per cent decrease), while Fort Nelson residents will get an 11.4 per cent increase, adding $117 to an average annual home heating bill.

Fort Nelson is unique in B.C., having a separate midstream rate for storage and transport, according to FortisBC.

Meanwhile, FortisBC customers who buy RNG (renewable natural gas) will see RNG prices drop from $14.72 to $12.47 per gigajoule (GJ).

“As we look to meet the growing demand for clean and lower-carbon energy, RNG will play a critical role,” Michelle Carman, FortisBC’s vice-president of customer service and external communications, said in a press release.

“The decrease in the price of renewable natural gas creates more opportunity for our customers to play a positive role in meeting climate goals.”

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