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Decrease in propane commodity rates approved for July 1st
Contributed by FortisBC
SURREY, B.C. – FortisBC has received approval from the BC Utilities Commission (BCUC) to decrease propane commodity rates for Revelstoke customers starting July 1.
Propane prices have returned to lower levels from recent highs that were caused by extreme cold weather this past winter as well as strong propane demand for crop drying prior to winter.
Residential customers receiving piped propane will see a commodity rate decrease of $1.235 per gigajoule (GJ). The average residential customer using approximately 50 GJ per year of piped propane will see a decrease of approximately $62 to their total annual bill.
Factors affecting the market price of propane and natural gas in North America include weather, supply and demand, transportation constraints and economic conditions. Propane prices are also more directly influenced by global oil markets than natural gas.
In recent years, natural gas prices have trended lower relative to propane due to increased supply availability resulting from advancements in production technology. However, propane prices have remained more closely connected to oil prices. Propane prices have also been volatile due to fluctuating demand, limited storage infrastructure and supply chain congestion and disruptions connecting the propane supply to market. This has increased the premium paid for propane over natural gas prices.
FortisBC helps mitigate the impacts of market price volatility on customers by locking in prices for a portion of supply before peak winter demand begins.
Every three months, FortisBC reviews propane and natural gas commodity rates with the BCUC in order to make sure rates passed on to customers cover the cost of purchasing the propane and gas on their behalf. The next review of natural gas and propane commodity rates will take place prior to October 1.