Terasen Gas receives BCUC approval for natural gas and propane commodity rate
decreases

Customers will benefit from some of the lowest rates in years

SURREY, BC, June 16 /CNW/ - Terasen Gas has received approval from the British Columbia Utilities Commission (BCUC) to decrease the natural gas and propane rates it charges most of its customers. The decreases will take effect July 1, 2010.

"Terasen Gas is committed to delivering maximum value to our customers. We are pleased to be able to decrease the natural gas commodity rate for most of our customers who will be benefitting from some of the lowest commodity rates in years," said Cynthia Des Brisay, Vice President of Gas Supply and Transmission, Terasen Gas. "Nevertheless, we always want to encourage our customers to continue using energy wisely to keep costs down and to benefit the environment."

For a summary of the rate changes, please see the backgrounder. Terasen Gas purchases natural gas and propane on behalf of its customers and passes on these costs without mark-up. Factors affecting the market price of natural gas include weather, supply and demand, and economic conditions. North American natural gas prices have declined as a result of mild spring weather in key consuming areas of the U.S. and record high storage levels for this time of the year. Moreover, the new shale gas developments are continuing to keep production levels stable despite the lower demand and pricing environment.

Terasen Gas' July 1, 2010 rate change does not apply to customers on Vancouver Island, the Sunshine Coast and in Powell River. These regions are covered by a separate, longer-term regulatory structure that provides a level of insulation from fluctuations in the commodities market. For a two-year period, which started on January 1, 2010, residential and commercial commodity rates in this service area will remain unchanged, unlike commodity rates in most mainland service regions, which increased on April 1, 2010. Rates in Whistler will remain unchanged as the BCUC's final decision on Terasen Gas' 2010-2011 Revenue Requirements Application is pending.

Propane prices are closely linked to global oil markets and oil prices have decreased in the last quarter, thus leading to the decrease in Terasen Gas' propane rate.

Terasen Gas reviews natural gas and propane commodity rates with the BCUC every three months to ensure the rates passed on to customers cover the cost of purchasing the gas on their behalf. Terasen Gas earnings come from delivery charges - what the company charges to deliver natural gas to customers. Delivery rates and midstream rates are reviewed by the BCUC every December with any changes coming into effect the following January.

For more information on natural gas and propane rate changes by region and to learn more about Terasen Gas visit terasengas.com.

Terasen Gas is mainly composed of the operations of Terasen Gas Inc. and Terasen Gas (Vancouver Island) Inc., both indirect wholly owned subsidiaries of Fortis Inc. Fortis Inc., the largest investor-owned distribution utility in Canada, serves approximately 2,100,000 gas and electric customers and has total assets exceeding $12 billion. Its regulated holdings include Terasen Gas and electric utilities in five Canadian provinces and three Caribbean countries. Fortis Inc. owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com or www.sedar.com.

    
    BACKGROUNDER - Approved Residential Natural Gas and Propane Commodity
    ---------------------------------------------------------------------
    Rates
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                                                          Approximate annual
                                                          bill decrease for
                         Approved          Per cent        average customer
                      commodity rate      decrease in        depending on
                        decrease*     commodity rate        consumption
    -------------------------------------------------------------------------
    Lower Mainland,
     Fraser Valley,
     Interior, North,
     and the Kootenays   $0.633/GJ                11%         5% ($47 to $60)
    -------------------------------------------------------------------------
    Whistler             No change          No change              No change
    -------------------------------------------------------------------------
    Vancouver Island     No change          No change              No change
    -------------------------------------------------------------------------
    Fort Nelson          $0.525/GJ                 8%                6% ($74)
    -------------------------------------------------------------------------
    Revelstoke           $1.801/GJ                11%                8% ($90)
    -------------------------------------------------------------------------

    * Commodity rates for customers participating in the Customer Choice
    program will not be affected, as they purchase the gas commodity from a
    licensed gas marketer.

    A gigajoule (GJ) is a measure of energy. One gigajoule is equivalent to
    278 kilowatt hours of electricity. One gigajoule of natural gas can heat
    a typical 2,000 square foot home for one day during the winter.
    

For further information: Media Contact: Marcus Wong, Corporate Communications Manager, Terasen Gas, Phone: [phone], Email: [email protected], Follow us at: www.twitter.com/terasengas