|News at TransGas News Archive|| December 11, 2002
2003 Rate Announcement - Transportation and Storage Service Rates
On December 05, 2002, TransGas Limited (TransGas) announced that it had finalized the rates for its transportation and storage services that will be in effect starting January 01, 2003. Following a three- year rate freeze, the TransGas service rates and charges will increase by an average of two percent (2%).
TransGas also announced that it has finalized the determination of the transportation gas-in-kind requirement (for fuel gas and unaccounted-for gas) assessed on receipt transportation. This will be reduced by fifteen percent (15%) from the present assessment of 1.00 percent to an assessment of 0.85 percent. This reduction will also take effect on January 01, 2003.
TransGas last adjusted its rate levels on January 01, 1999. While TransGas customers have enjoyed frozen rates over the last three years, the Canadian economy has seen inflation of approximately ten percent (10%). Over the same period, the flows on the system have shown a modest three percent (3%) decline. TransGas has been able to limit the requirement for increased revenues such that only an inflationary two percent (2%) increase is required. TransGas has reduced operating costs in a number of areas and has actively pursued new revenue opportunities and ways to increase the level of utilization of its system to help offset this upward pressure on rates over the past four years.
There will also be a number of other policy, rate and service changes that take effect on either January 01, 2003 or May 01, 2003. Since the fall of 2001, TransGas has been discussing these changes with its customers, primarily through the Customer Dialogue Process. The result is a package of revenue- neutral changes that will improve the quality and fairness of the services provided by TransGas. After considerable discussion, there was general acceptance by Customer Dialogue participants of the package of changes. The following is a summary of the changes that makes up this package:
Premium for Service with Short-Term Contracts
Some customers are permitted to hold short-term contracts that allow them to manage the risk of holding more space on the pipeline than they require. Effective January 01, 2003, a premium of ten percent (10%) will be charged for such short-term contracts of less than one year to enhance the fairness of the system.
Premium for Transfers of Intra-Delivery to Export Delivery
Intra-Saskatchewan delivery transport customers are permitted to transfer contract rights to the export market that allow them to manage the risk of holding more space on the pipeline than they require. Effective January 01, 2003, a premium of ten percent (10%) will be charged for such transfers to enhance the fairness of the system.
Commodity Component of Storage Rate
A new commodity charge is being introduced to incorporate a value of service component to the storage service tolls. Some customers move their gas into and out of storage, or cycle the gas, a number of times during the year, while others may not move all of their gas into and out of storage in a given year. An injection commodity charge will be implemented at the beginning of the next storage year, May 01, 2003. This charge of 5.07¢/GJ will be paid as gas is injected into storage.
Commercial Movement of Storage to the TransGas Energy Pool (TEP)
When storage service was first introduced, TEP did not exist. Storage was, therefore, commercially considered a receipt point and customers had to pay to move the gas from storage to delivery point markets. When TEP was introduced, storage remained commercially considered a receipt point. At the beginning of the next storage year, May 01, 2003, TransGas will be making a change to commercially consider storage as being located at TEP (received from receipt points in the production fields but not yet delivered to markets). This will eliminate all transport between storage and TEP.
The general consensus among the TransGas customers is that this is desirable because it:
To provide an overall revenue-neutral storage to TEP commercial change, as well as the elimination of the transport services between storage and TEP, the following rate changes will occur on May 01, 2003:
Non-Rate Related Policy Changes Effective November 01, 2002
As well as the preceding changes that have rate implications, there were several other policy changes that were part of the package of changes and became effective November 01, 2002.
The specific rates, which reflect these changes, are contained in the Transportation and Storage Rate Summary. There are five columns in this document, as follows:
The commercial movement of storage to TEP involves structural, policy, procedural and rate changes. TransGas will be holding customer workshops, which will review these changes in detail and will highlight how these changes will affect various customers. The dates for these workshops are now scheduled as:
Additional details regarding these workshops will be distributed when available. If you have any questions with respect to how these rate, service and policy changes will affect you, please contact your Key Account Manager, Debbie Brown at (306) 777-9687 or Chris Uhren at (306) 777-9501.
If you have more general questions regarding the changes, please contact our Policies, Rates and Regulations Department: Gary Johannsson, Manager, at (306) 777-9560 or Vern Gorr, Director, at (306) 777-9556.