Heritage Gas wants to recoup costs of importing natural gas
Distributor to pass along savings gleaned from securing long-term contracts with suppliers
Nova Scotia's natural gas distributor, Heritage Gas, wants the provincial regulator to decide what's fair when it comes to recovering the costs of importing natural gas.
Energy Minister Geoff MacLellan introduced a bill Tuesday in the Nova Scotia Legislature to give the Nova Scotia Utility and Review Board the power to oversee any longer-term contracts Heritage Gas might sign as it tries to find a supply beyond the dwindling reserves off Sable Island.
"The driving force behind it is that the offshore is declining and so I think we've all heard the fact that once we get out to 2019, 2020, gas will effectively be gone from the offshore," said Heritage Gas president John Hawkins. "Therefore, it becomes necessary for us as a utility to bring that gas in from another location."
The problem is that importing natural gas means paying pipeline tolls to get it here from suppliers, be they in Alberta or the northeastern United States.
Lower prices
Hawkins said unlike other jurisdictions that have a mechanism to pass on those costs to customers directly, Nova Scotia doesn't have a system in place.
The Nova Scotia Utility and Review Board would get that job, if the amendments introduced Tuesday become law and are enacted.
According to MacLellan, the UARB would rule on whether the contract would be "prudent and in the public interest."
"The board will be able to look at ways to fairly recover costs associated with long-term pipeline contracts," he said. "Long-term agreements could provide Nova Scotians with reliable access to natural gas at a more stable price than short-term rates."
Despite the extra charge, Heritage Gas thinks by signing longer-term deals it will get a better price overall and those savings will be passed on to customers.
"Our expectation is that prices will go down," said Hawkins. "There will be a transportation cost that people will see on their bill, but the net effect is a transportation cost on one end but lower gas costs on the other for a net decrease."