Commercial gas rate takes a plunge
Imperial Oil reduces product to $20 per thousand cubic feet from $47.60
Kassina Ryder
Northern News Services
Published Monday, May 26, 2014
LLI GOLINE/NORMAN WELLS
The commercial rate for natural gas customers in Norman Wells was reduced to $20 per thousand cubic feet (MCF) in April.
Imperial Oil had hiked the rate for commercial customers by 138 per cent last November to $47.6 per MCF of gas. Town manager Eric Whitworth said the price was reduced to $36.26 from November until the end of March before being further decreased to $20.
The $20 rate matches the current residential rate.
Imperial Oil, which provides Norman Wells with natural gas, told the town in 2007 that dwindling reserves meant residents and businesses would have to convert to another source.
That deadline has been extended over the years. Imperial Oil's most recent deadline was extended until Oct. 31. The $20 rate will remain in effect until that time, Whitworth said.
After the increase was announced last September, commercial customers filed a complaint with the NWT Public Utilities Board. The board found that while the rate was fair, the way it was being applied could be improved.
The board directed the town and customers to work out a solution which the board then approved.
The increase was intended to help offset the cost of decommissioning the town's natural gas system, as well as to help refund customers converting to another heating source.
The hike was also intended to provide incentive for commercial customers to convert to other sources, said an Imperial Oil representative.
The cost to decommission the town's natural gas system was originally expected to be about $750,000. But Whitworth said because the town has decided not to take out existing pipelines, the cost will be less.
"Now we have better information available and we now know the cost of decommissioning is less than what was initially anticipated," he said.
Whitworth said the gas lines will be injected with an inert gas, which will provide stability and safety and possibly allow for future use.
Whitworth said now that barge season is coming, more businesses and residents will be able to convert to other systems in time for the Oct. 31 deadline.
"It has to be," he said. "The gas is being shut off so we'll have no gas to distribute."
Imperial Oil has committed to providing $1 million to help customers with conversion costs as long as the deadline is met, but how much will be provided is not yet known.
"The town is looking at ways to assist with the cost of conversion," states the town's website. "We urge you to convert and to keep all associated receipts."
- With files from Chris Puglia and Daron Letts
