District of Chetwynd, British Columbia,

April 7, 2006 News Release

On February 28th of this year, the British Columbia Utilities Commission (BCUC) released their decision regarding Terasen?s Application for an Operating Agreement in Chetwynd. In this decision, the BCUC stuck Chetwynd with an Agreement requiring us to use Terasen as our gas provider for another 21 years and pay their inflated gas delivery charges.

The Distinct of Chetwynd has been in a dispute with Terasen for a number of years. Previous Councils had requested that the District be able to purchase Terasen?s gas distribution assets in Chetwynd at the expiry of the former Operating Agreement. Most of this was based on extremely poor service and inflated costs. Terasen refused to sell the business and asked BCUC to impose an agreement in perpetuity on Chetwynd. We refused, appealed and argued for the last few years, but in the end, we lost. We lost not because we were wrong; we lost because we can?t beat or change the system.

The BCUC is an independent commission that is supposed to ensure that public and private utilities are operated to the benefit of both the provider and the receiver of services. The District has begun to believe that the BCUC operates more to ensure that they follow their own rules and are less concerned that a small community like Chetwynd actually receives value for services received.

This dispute started a few years ago when Terasen was known as BC Gas. BC Gas closed their Chetwynd office and began serving us from Quesnel. This sort of worked until the day that the gas line was ruptured and a repair crew had to be dispatched from Quesnel. Downtown Chetwynd was closed for over 6 hours while the crew drove here from Quesnel to turn the gas off. After this mini-disaster, we began to compare our gas delivery rates with those of communities (Dawson Creek and Fort St. John) served by Pacific Northern Gas (PNG) and found that when we compared the total cost of gas (product plus delivery charges), residents and businesses of Chetwynd paid anywhere from 20 to 30% more. The range depended upon which rate class one was in.

We appealed to the BCUC with this information, but they responded by stating that due to ?administrative simplicity?, they would not make any changes. (This may mean that it is too complicated for BCUC to figure it out, so they will leave as is.) After all, we are just a few hundred customers and we should not be able to raise a concern to the Provincial level that may cost Terasen and the BCUC money to sort out. To BCUC, it didn?t matter that Terasen charges Chetwynd costs that are not applicable to our gas delivery. What they said is that we just have to keep paying, because if we don?t, then other communities that Terasen serves would have to pay more.

After this, we refused to sign the Operating agreement, but we eventually lost this battle (we still don?t have to sign, but it will be enforced, signature or not). The BCUC also ruled that they would not tie our gas delivery costs and operating agreements together. Our take on this ? we get another 21 years of Terasen being able to charge you cost plus (the total for the past few years is in the millions of dollars).

Over the years we have had numerous discussions with Terasen, but when all was said and done, all they wanted was for us to sign the agreement. They didn?t care that we paid for services we didn?t receive and they didn?t care that we were charged costs that didn?t apply to us. Simply stated, they would follow the rules and if the rules penalized us, so be it. Why should they care? They are a business that is supposed to make a profit; they aren?t a social service. Profits and share prices are much more important to them than selling gas in Chetwynd at a fair and competitive price. It was interesting to note that when we asked Terasen about providing a break down of service costs associated with Chetwynd, they said that they would be unable to provide them as they were unable to calculate such costs for an individual municipality. Does this sound like a company that is interested in a community?s well being? Should they be entrusted in delivering such an essential service if they don?t know what they are doing? Surely a multi-billion dollar company should be able to organize its staff and computers to track costs associated with a geographically distinct place like Chetwynd.

Our next moves are still being contemplated. We are considering challenging Terasen at the next rate hearing. We can look at why we have to pay costs associated with the Southern Crossing when it delivers no benefit to Chetwynd. We can challenge why we have to pay tolls that are non-existent in delivering gas to Chetwynd and we can watch to see if Terasen applies to build more pipelines and then bill their costs back on the gas users of BC.

If you have any questions or concerns about this, or any other topic, please give me a call at 401-4102 or at d-chet@gochetwynd.com

Evan Saugstad, Mayor