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BCUC Allows Subsidy of High-Carbon Propane in Revelstoke

Bill Andrews, BCSEA's Lawyer in BCUC Proceedings
Friday, November 20, 2020

Disappointingly, in early October the BCUC approved FortisBC Gas’s request to have its approximately 1,030,000 natural gas customers subsidize propane rates for the approximately 1,500 residential and commercial piped-propane customers in Revelstoke. Even though propane is more carbon-intensive and more expensive than natural gas, as of New Year’s Day 2021 FEI’s Revelstoke propane customers will pay a commodity charge based on the wholesale cost of natural gas while continuing to receive propane.

BCSEA argued strongly against the proposed cross-subsidization of propane consumption, saying it would encourage increased use of propane and cause increased GHG emissions in BC. However, the Commission panel held that propane is sufficiently similar to natural gas to justify a single price for both propane and natural gas. The panel said the proposal “may suggest discrimination” but is not “unduly discriminatory.”

BCSEA was joined in its position by Canadian Biomass Energy Research Ltd., headed by long-time Revelstoke resident Cornelius Suchy. Mr. Suchy is an engineer and physicist who specializes in wood-to-gas technology. He intervened in the proceeding due to his concern for the sustainable development of the community. Mr. Suchy argued that Revelstoke is an ideal location for a wood-to-gas energy plant, and that subsidized propane prices would hurt competing low carbon energy providers, electric and wood appliance retailers, and installation tradespeople doing business in Revelstoke.

The piped propane system was first introduced to Revelstoke in 1991. A pipeline connection to the natural gas distribution system would have been uneconomic because Revelstoke’s load is too small and it is too far from the natural gas pipeline system. This remains the case today. FEI ships propane to Revelstoke by railcars and tanker trucks, where it is offloaded into storage tanks, vaporized as needed, and distributed to customers through an underground piped distribution system. Propane is more carbon-intensive than natural gas. The BC Carbon Tax – based on carbon intensity – is $2.407/GJ for propane, and $1.986/GJ for natural gas.

Link:

BCSEA opposes Revelstoke propane subsidy,” Policy Corner, 30 June 2020