Customers of Sun Peaks Utility Co. Ltd. (SPUCL) should be prepared to pay more for their gas after prices increased June 15. Customers will now pay $13.8474/Gj for propane, up from $9.6750/Gj.
SPUCL director of utility services Pat Miller said the hike is due to an increase in propane costs since the last SPUCL rate change in August 2016 and a balance that must be eliminated.
Miller said SPUCL purchases propane at market price but customers are charged a constant rate, as rate changes must be approved by the B.C. utility commission.
She explained that as market prices fluctuate, the difference between what SPUCL pays for propane and what is billed to customers is charged to an account called a gas reconciliation account (GCRA). The GCRA balance changes as SPUCL sells at a loss or profit depending on the market price of propane.
Miller said last year’s rate application included a GCRA credit that is now a GCRA balance of $32,000 that needs to be brought down to zero by April 2018.
“The objective is for SPUCL to recover from customers exactly what it pays for propane,” Miller said.
“Therefore when SPUCL makes a rate application, it’s setting rates based upon what it expects future propane prices to be, as well as an additional amount to bring the GCRA account balance back to zero.”
The increased rates follow a period of the lowest price per gigajoule ever at Sun Peaks in 2016, but rates still remain lower than those between 2007 and 2015.