May 21 2012
No sooner had the British Columbia (BC) government announced a plan to allow utilities and their customers to underwrite expansion of natural gas vehicle (NGV) use than the province's largest distributor, Fortis BC, started its engines.
“The costs of maintaining the pipeline systems are recovered in the delivery rates of all customers. Better year-round optimization of these pipeline assets -- especially during the summer months when heating requirements are reduced -- will result in a long-term, positive impact for our customers.”
The company has taken a lead position in a provincial program allowing utilities and their customers to fund incentives for NGV use, thereby boosting the market for the province's production, according to a report in Natural Gas Intelligence.
"All gas utility customers will benefit from the additional volumes of natural gas moving through Fortis BC's pipeline system," President Doug Stout said in announcing the company's bid to participate in the government's NGV growth plan, officially called the Greenhouse Gas Reduction Regulation. "The costs of maintaining the pipeline systems are recovered in the delivery rates of all customers. Better year-round optimization of these pipeline assets -- especially during the summer months when heating requirements are reduced -- will result in a long-term, positive impact for our customers."
The provincial government's new utility regulation enables distribution companies to make heating fuel and other natural gas customers pay for providing new NGV services through rolled-in rates. Over a five-year period ending March 31, 2017, the rule authorizes gas distributors to put up to C$104.5 million each into NGV conversion programs and fueling stations.
The regulation enables NGV conversions in all three fields of ground transportation. Fortis BC's proposed program includes C$62 million for conversions of diesel vehicles, C$30.5 million for liquefied natural gas (LNG) fueling stations and C$12 million for compressed natural gas outlets. The company plans to file a cost recovery application for the program soon with the BC Utilities Commission. The west coast arm of Newfoundland-based Fortis Inc. has 1.1 million customers in 2,300 communities.
BC Energy Minister Rich Coleman called the new rule a step toward "global leadership in clean transportation." Environment Minister Terry Lake added, "The shift from vehicles that use costly, higher-polluting diesel to those that use locally sourced natural gas is another example of made-in-BC innovations that are part of our green economy."
The NGV regulation is a consumer counterpart to supply-side initiatives encouraging northern BC shale gas drilling and construction of liquefied natural gas export terminals and pipelines. The grand design is rooted in Canadian industry consensus that BC's new gas fields will replace Alberta's depleting old reserves as the national mainstay of domestic and export supplies.
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