Pacific Northern Gas Ltd.

Pacific Northern Gas Ltd.

August 21, 2006 18:25 ET

Pacific Northern Gas Ltd. Announces B.C. Utilities Commission Decisions on 2006 Revenue Requirements Applications

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 21, 2006) - Pacific Northern Gas Ltd. ("PNG") (TSX:PNG)(TSX:PNG.PR.A) announced today that it has received decisions from the British Columbia Utilities Commission ("Commission") on PNG's 2006 revenue requirements applications for its PNG-West division as well as for the Fort St. John/Dawson Creek and Tumbler Ridge divisions of PNG's wholly owned subsidiary, Pacific Northern Gas (N.E.) Ltd. ("PNG(N.E.)"). With respect to the PNG-West division, the Commission concluded that the level of 2006 costs was appropriate having regard to a number of factors including PNG's initiatives to reduce its annual cost of service in response to the closure in November 2005 of the Methanex methanol/ammonia facility in Kitimat. The Commission stated "that PNG has taken all prudent steps to manage and reduce its costs and that there are no unnecessary or unreasonable costs in the 2006 cost of service."

A negotiated settlement agreement was reached in March 2006 in respect of PNG(N.E.)'s Fort St. John/Dawson Creek and Tumbler Ridge divisions. The Commission issued an Order today confirming the terms of the negotiated settlement agreement.

Craig Donohue, PNG's Director of Regulatory Affairs and Gas Supply, commented that "The Commission's decisions result in permanent rates effective January 1, 2006 that are lower than the interim rates paid by customers since the beginning of the year and therefore PNG will be calculating lump sum rate refunds equal to the difference between the interim and permanent rates for crediting to customers in future gas bills."

PNG's reported earnings in 2006 have been based on the applied for cost of service for the PNG-West division and the rates set forth under the PNG(N.E.) negotiated settlement. Therefore, reported earnings per common share in the six months ended June 30, 2006 of $1.08 will remain unchanged as a result of the Commission's decisions.

Headquartered in Vancouver, British Columbia, PNG (TSX:PNG)(TSX: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 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, PNG(N.E.) provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas.

Contact Information

  • Pacific Northern Gas Ltd. - Investor Inquiries
    Elizabeth Fletcher, C.A.
    Chief Financial Officer
    (604) 691-5684
    Pacific Northern Gas Ltd. - Media Inquiries
    Craig Donohue
    Director, Regulatory Affairs and Gas Supply
    (604) 868-7955