News Release
Aug. 22, 2002

PNG APPLIES FOR RECONSIDERATION OF BCUC 2002 DECISIONS

VANCOUVER, BRITISH COLUMBIA – Pacific Northern Gas Ltd. (PNG) announced today it has filed an application with the British Columbia Utilities Commission (BCUC) for reconsideration and variance of the two July 31, 2002 decisions issued by the BCUC on the   PNG and Pacific Northern Gas (N.E.) Ltd. 2002 revenue requirements applications. 

 

In its decisions, the BCUC significantly increased projected 2002 gas deliveries to residential, commercial and some industrial customers, compared to the forecasts set forth by PNG in its 2002 applications.  Even though weather for the first seven months of 2002 was 8 percent colder than normal, actual deliveries to residential and commercial customers were lower than levels determined in the decisions by 12 percent and 1 percent, respectively.

 

Roy Dyce, President and CEO of PNG said, “Following our review of the decisions, we have concluded that the aggressive delivery volumes laid out by the BCUC, combined with disallowed elements of the 2002 operating budget, will make it very difficult for the Company to earn its allowed rate of return in 2002.”

 

As noted in the Company’s August 1, 2002 news release, the disallowance of certain deferral accounts by the BCUC will reduce net income by approximately $0.5 million in 2002.  The Company will endeavour to offset other disallowed cost of service items totaling about $0.85 million by carefully managing operating and administrative costs over the remainder of 2002.

 

PNG’s application requests that the BCUC reconsider its 2002 forecast of residential and commercial deliveries and vary the decisions by reinstating the PNG forecasts contained in the original revenue requirement applications.  If the Company’s application is denied, the difference between actual gas deliveries during the first seven months of 2002 and the higher forecast deliveries established by the BCUC will reduce net income by $0.5 million in 2002.  Similarly, assuming normal weather during the remainder of 2002, the Company’s net income could be reduced by a further $0.2 million due to deliveries during the remaining five months of 2002 being lower than the levels set out in the BCUC decisions.

 

A decision by the BCUC on the Company’s application for reconsideration and variance is expected prior to October 31, 2002.  The impact of the BCUC decisions on earnings over the first nine months of 2002 will be reflected in the consolidated third quarter report of PNG, scheduled for release prior to October 31, 2002.

 

Headquartered in Vancouver, British Columbia, Pacific Northern Gas Ltd. (TSX:PNG.A/ PNG.PR.A) owns and operates natural gas transmission and distribution systems.  The Company’s western transmission line extends from the Duke Energy Gas Transmission (formerly Westcoast Energy) system north of Prince George to tidewater at Kitimat and Prince Rupert, and provides service to 12 communities and a number of industrial facilities.  In the northeast, Pacific Northern’s subsidiary Pacific Northern Gas (N.E.) Ltd. provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas.  www.pacificnortherngas.com.

 

Contact: Craig P. Donohue -- Pacific Northern Gas
Phone: 604/691-5680
24 Hour Phone: n/a
Email: cdonohue@duke-energy.com