PNG agreed to cost of service reductions of about $0.4 million, including the cost savings resulting from not having a public hearing into the revenue requirement application.  Rates effective January 1, 2003 will be set based on a deemed 36 percent common equity ratio and a 10.17 percent return on common equity. 

A key term of the negotiated settlement was agreement on the implementation of a deferral account to record the variance between actual deliveries to residential and small commercial customers and budgeted deliveries during 2003.  The financial impact of the difference in deliveries will be deferred for future recovery or refund to the customers.

The negotiated settlement will result in the current interim rates being reduced as of January 1, 2003.  Gas deliveries billed at the interim rates will be rebilled at the lower settlement rates and customers will receive a refund with interest on a future bill.  The amount of the refund will vary depending on each customer’s gas consumption over the rebilling period.  The refund for a typical residential customer is estimated to be about $10. 

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 of northeast B.C.  PNG(N.E.)’s 2003 revenue requirement applications are being considered by the BCUC through a written hearing process.  The BCUC is expected to render decisions on the PNG(N.E.) applications by early April 2003.

Headquartered in Vancouver, British Columbia, Pacific Northern Gas Ltd. (TSE: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. Further information is available on the Company’s Web site at: www.pacificnortherngas.com.