_ people are going to manage,”
Said, -

Electricity now costs more than gas

Mayors warn of exodus out
of gas if increases okayed

HUGE INCREASES in natural gas
rates in northwestem B.C. must be
rejected to avoid a mass exodus
of homeowners from the use of
gas, northern B.C. mayors told the
B.C. Utilities Commission.

Pacific Northern Gas wants the
commission’s approval for resi-
dential increases totalling 42 per
cent over the past five months.

“We. believe this increase is
excessive and should not be
granted,” said Houston mayor
Tom Euverman, who presented an
1,800 signature petition from his
residents opposing further in-
creases,

He told the commission four or
five people a week are inquiring
at his town’s. fire hall about re-
turning to wood heat because of
high ‘natural’ gas prices.

“We want that fuel in our com-

munities, but not at a price we »

can’t afford,” added Fort St.
James mayor Jim Togyi.

Telkwa mayor Sharon Hartwell
tald of how one elderly woman in

‘her town received an $800 gas

bill.
“I truly don't Know how these
she

~ Besides rising prices, the.
mayors noted PNG layoffs to re-
duce costs have removed service
technicians based in towns such.

as Houston and Fort St, James.

' “After promoting the use of na-

tural gas as a clean, efficient,

safe, low-cost fuel, and luring the

.. public: to change to natural gas
with. government incentive grants, |
“our citizens are now left with the

worry of collossal costs and con-

_ cerns of safety,” Hartwell said.

“Missing from the hearings were

- ‘presentations from any City of.

Terrace ‘representative,
. High ‘prices forcing homeow-
‘ners away from natural gas heat

and industry out of ihe northwest

threaten ‘to further increase finan-
cial pressure on PNG as it loses
customers, warned Justin Rigsby,
president of the Terrace Chamber
of Commerce.

»“Imposing additional cost-in-
érébses’Oh businesses Giid CoTIsu-

, Tiers: with promote ‘aPdenthr ‘spiral
that’ may’ not be avérted,” ‘Rigsby
said;

“The cost to purchase gas will

Chop into PNG’s profits,

PACIFIC NORTHERN GAS’ regulated profit
margin should be trimmed to ease the hil to
natural gas customers, the B.C. Utilities Com-

mission was told last week,

The utility is regulated to allow a 10 per
cent return on equity, noted Richard Gather-
cole, executive director of the B.C. Public In-

terest Advocacy Centre.
“Maybe we're in a situation
shareholders ought to contribute

least a lower return or in some other way,”

Gathercole suggested.

‘Pacific Northern Gas president Roy Dyce
rejected that notion, saying the shareholders
have already taken a “significant hit” to their

investments in the company.

PAGIFIC NORTHERN GAS: The northwest utility has been driven to the edge of insolvency by high
gas prices, an ecanomic downturn and too heavy a reliance on one big industrial customer.

Gas —

grief

Testimony before the B.C. Utilities

Commission shows natural gas

provider Pacific Northern Gas is in
crisis. And its customers are along.

for the ride.

ne

¢

A special report by Jeff Nagel

become extremely prohibitive as
PNG customers dwindle,”
. A home using electricity would

23 pay? 1347 Tper' year: thé commis!” happened, ” said Richard Gattiel-!'"

ts 00 heard while natural” “gas costs:
now ‘approaching $1,900 per

yea.
“We've got a situation now

ity and unprecedented
year history.
And, he said, the

per cent from last May.
where the “Not only to lose

through at
would suggest to you

Dyce responded.
The elimination

makes PNG less attractive as a normally divi-

Dyce said PNG already moved
last year to suspend regular dividends
— something highly unusual for a util-

stock has nose-dived by more than 60

but to lose 60 per cent of their in-
vestment over that period of time, I

teady paid dearly in this situation,”

where natural gas rates for heating
will be significantly. above elec-
tricity bills, which has never

“cble,: executive director of the *

B.C." Public Intéfest”’ ‘Advocacy
Centre,
PNG president Roy Dyce told

in PNG’s 20-

‘price of the

the dividends

they have al-

Gathercole
of dividends

the commission the gas company

-has yet to have a cusiomer dis-

connect that it
high gas prices.
He rejected suggestions home-

can attribute to

owners are on the verge of switch-

ing heating fuels in large numbers.

And he predicted the price
PNG has to pay for natural gas
will go down.

“We believe that beyond 18 to
24 months, prices will be on the
decline,” Dyce said,

“We think this is going lo be a
temporary situation and we will
quickly get back to being compe-
titive with electricity.”

Gathercole disagreed.

“It’s going to be [ think two or
three years before we see signif-
icant easing of the price because
it will take that long to bring more
supply on,” he said.

Gathercole also disputed
PNG's premise that just because
customers haven't disconnected it
can expect to sell the same
amount of natural gas as in the

” past.

He said many people with mut-
tiple heating sources, such as

electric baseboard heaters or a

wood stove, are using those more
and turning down or turning off
their gas furnace,

“That doesn’t show

As a result, he ‘said; PNG’ s
forecast for gas consumption is
overly optimistic.

advocate says

dend paying stock in the invesimeat
community.
The utility is under great pressure be-
cause of the shutdown since last sum-
mer of Methanex Corp.’s Kitimat me-
thanol plant.
The plant is the largest single consu-
mer of PNG‘s gas.
PNG has already laid off 40 employ-
ees, foregone stock dividends, and re-
E structured finances before seeking
Richard major fate increases, PNG officials
“PNG acted swiftly to use all possible
means to stabilize our financial situa-
tion,” Dyce said,

Rates threaten to destroy
industry, Eurocan warns

PNG enjoyed higher profits based
on risk of relying on one customer

PACIFIC NORTHERN GAS isn’t
the only northwest industry in a fi-
nancial crisis, say officials with
Evrocan Pulp and Paper in Kiti-
mat.

“Obviously PNG is facing a
crisis situation snd the solution
they’ ve proposed ts to offload that
problem onto ratepayers,” Euro-
can's Bill Legraw tald the B.C.
Utilities Commission last week.

But he said ratepayers such as
Burocan are also at the precipice
and could be driven over it by gas
price increases.

“We're here ta ask the com-
mission to put a stop to what we
see as a first step in what could
be a self-destructive process.”

’The paper mill, a. major Kiti-
mat employer, last year threa-

‘tened to shut down without major

cost, reductions, citing a long his-
tory of losses. over the past de-

' gade,

Burocan did achieve a $2 mil-
lion profit in-2000, company offi-
clais told the hearing, but is. pro-

jecting a $14 million loss for

2001.

Legrow called on. the commis-
sion to reject the. Bas rate in-
creases.

“PNG was a Ihigh-rik venture ”

when it was built,” Legrow said,

Because the viability of the
gas system depends on a small
number of big industrial custo-
mers, the commission heard, PNG
has enjoyed a risk premium that
guaranteed higher profits than
comparable utilities,

The utility, and its main owner,
Westcoast Energy, has always
known it could fail.

Legrow noted parent company

tem it decided to repay construc-
tion costs over 50 years,

That has turned out to be much’
longer than the expected lifetime
of Methanex here.

“So whal happens in October
2002 when the main Methanex
contract expires? What happens if
Skeena [Cellulose] fails and that
load goes away? What happens if
a substantial number of residen-

“The very event that was anticipated by that risk
premium is happening and now they want the load -

to pick up the tab.”

Westcoast has benefitted for years
from PNG's extra profits because
of the tisk.

“The yery event that was anti-
cipated by that risk premium is
happening and now they want the
load to pick up ‘the tab,” he said,

The resuit is PNG's request for
a 10 per cent transmission rate in-
crease for all other customers in
anticipation of lost revenue from
Methanex,

When PNG built the gas sys-

tials switch from gas to perhaps in
this part of the world to wood
fuels? What happens in October

2003 when the second Methanex °
contract expires? And I could do -

scenarios for a while here, but
that probably gets the point
across.”

If PNG tries to recover costs
each time it loses a customer
from the remaining customer
base, he suggested, the result will
be a “death spiral” as prices rise

and more users flee or go broke,

“Every time the rate gets
jacked higher somebody else is
going to work harder to get off the
line,” be said,

Legrow said higher natural gas
costs have put “a tremendous
amount of pressure on our
operations,”

He said Eurocan is trying to re-
duce natural gas use in favour of
burning oi! and wood waste as
much as possible.

Legrow said Eurocan will take
the commission's decision on
PNG’s rates as a signal as ta
where gas costs will go over the
next few years and govern itself
accordingly.

Al stake is the potential clo-
sure of the paper mill, said West
Fraser vice- president Lon Schroe-
der,

Eurocan’s top executive told
the commission he's even mini-
mizing his use of natural gas at
his Kitimat home by using electri-
cal heaters,

"It’s off, gas is off,” Schroeder
said. “We're using electricity.”

Eurocan employs 600 workers
at its Kitimat paper mill,

. Around -40 of them commute to
work from Terrace and Lakelse
Lake,

that. "
"they ve lost’ the ‘castmér butt
fact’ they have,” he. said. y ieitwedk:

The Terrace Standard, Wednesday, March 14, 2001 - AS

CORRESPONDENCE FOR THE TERRACE STANDARD

The Mail Bag

Dismayed at alley plan

Dear Sir:

I read of the Terrace city council's plans to
eliminate back lanes with greal dismay.

My house on Scott was built about 30 years aga,
with access from the alley at the back as an
important feature. The buildings, fruit trees, shrubs
and garden beds are located with access from the
alley in mind, and these game items are what
persuaded me to purchase this particular house.

Eliminating the alley will greatly reduce the utility
of my land, and reduce its value far more than the
additional few square feet will increase it.

Is the Terrace council prepared to compensate me
for this Loss of utility?

I could regain a portion of the convenience offered
by having alley access by relocating fences and
garden beds, but the costs will far outweigh the
‘increase in value provided by the few extra square
feet.

The extra land is no bargain, either. The soil in the
laneway consists of hardpacked clay and gravel, with
such poor drainage that a hint of cain turns it into
soup. Simply providing this area with sufficient
drainage and improving the soil to the point where it
would grow grass acceptably would cost more than it
is worth — assuming I could get equipment in to do
the work!. This is poor land, but a great alley. Let's
leave it that way.

Robert MacDonald, Terrace, B.C,

Sacred airport land

An open letter to:
Mayor and Council

When Mother Nature created the Terrace/Kitimat
plateau, she must have held a pilot’s licence. In this
vast region of Canada, where can be found a sight
more conducive to flight? We hold the key,

Time is on our side. Leaving the present buildings,
over the next few years, clean off the surface from the
Beam Station road to Highway 37, thus exposing the
potential of this flat tableland.

Reflect on the miracles since the bush pilot. Try io
imagine the advancement in- aircraft and spacecraft,
the safety features, the many improvements in
glidepaths ahead. Science will defeat our present
enemy, the elements. Speed and space will be
measured in seconds. Networks will play their part.
We could become a hub, a world flight centre.

Do not give up one square metre of this huge
aircraft cartier. Develop and never lose sight of this
priceless natural resource. Negotiate with Ottawa and
Victoria now. Take up this challenge of the new
century, Show the world and the universe who we are,
what we are, and where we are.

Gerald Duffus, Terrace, B.C.

Stop vote buying
Dear Sirs, :

* {adrett this letter ‘to: those ‘who: dé-aot- accept the
| theory that “B.S. Baffles Brains’. This is the tactic of
Premier’ Ujjal Dosanjh. The ‘announcements by Mr.
Dosanjh on a continuous basis must be dealt with in a
serious manner.

The many discrepancies and problems of the NDP
which began with Glen Clark's tenure is the
responsibility of all ministers at that time, including
the financial fiasco of Elizabeth Cull and her so-
called “balancing the budget” act.

Would a financial officer of any organization
survive such an absolute blatant misrepresentation?
Even though she was not in the cabinet after the
election, you are now paying her wages as she is now
a hired hand in the premier’s office.

Regarding the fast ferry fiasco (the definition of
fiasco is ‘spectacular failure’), the NDP went outside
of their ranks and found Gordon Wilson hoping he
would be saviour of this multi-million dollar boon-
doggle.

There is the Bingo-gate and Glen Clark's
encounter with the gambling group that forced his
resignation.

There are other serious problems which the NDP is
trying to sweep under the rug. I feel that a good strong
organization is necessary to deal with the inner
sanctum of this NDP government.

Let us not allow the premier to use our tax money
to buy our votes in the upcoming election.

Andy Nabess, Terrace, B.C,

Simply irresponsible

Dear Sir:

Young people have never in previous times had
access and information on pregnancy, disease, drugs
ete. and yet they choose in ever increasing numbers
to ignore vital and explicit facts for their future
quality of life,

Who has not seen or heard of the flirtation with
drugs. Despite being saturated with this knowledge
people expose themselves in ever increasing
numbers, then have the nerve to -impose their
irresponsible selves on others.

So-titled parents that create but then abuse,
abandon, and expect others to raise and care for their
children are irresponsible and seem to be taken for
granted in this age of degeneracy.

Then we have those characters that will push their
luck seemingly ignoring all reasonable caution,
smashing their bones getting buried, ignoring any
posted rules or signs or the basic law of gravity
expecting olhers to be tearing to their aid.

What has become of the super quality of self
responsibility? Surely a radical rearrangement of our
education system is a screaming impetative, a system
that will strive to instill basic responsibility first, then
math, college, careers. Maybe.

D.L. Bulleid, Terrace, B.C,

About the Mail Bag

The Terrace Standard welcomes \etters. Our

-address is 3210 Clinton St., Terrace, B.C. V8G

BA2. You can fax us at 260-638-8492 or e-mail
us at standard@kermode.net. No attachments,
please. We need your name, address and
phone number for verification. Our deadline is
noon Friday or noon Thursday if it's a long
weekend,