Pacific Northern Gas Ltd.

Pacific Northern Gas Ltd.

October 07, 2005 16:49 ET

PNG Applies for Reconsideration of the Commission's September 9, 2005 Decision

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 7, 2005) - Pacific Northern Gas Ltd. (TSX:PNG)(TSX:PNG.PR.A) announced today that it has filed an application with the British Columbia Utilities Commission ("Commission") for reconsideration and variance of a portion of the Commission's September 9, 2005 decision approving PNG's Income Trust Conversion Application.

The Commission determined that the interest rate on the fixed-rate subordinate notes to be issued by PNG to the PNG Income Trust should be 11 percent, and not 12 percent as applied for by PNG, and that the interest rate on the variable-rate subordinate notes should be 4.75 percent above long Canada bonds, and not 5.75 percent as applied for by PNG.

Roy Dyce, President and CEO of PNG said, "The effect of the Commission's decision to lower the interest rate on the subordinate notes by 1 percent is to reduce cash flow to the income trust by approximately $0.9 million annually. Consequently, we believe that the result of this reconsideration application will be an important influence on PNG's decision regarding proceeding with the next steps of the conversion process. If PNG does not proceed with the conversion to an income trust the clear benefits of the conversion to PNG and its customers as recognized in the Commission's decision will be lost."

PNG is requesting that the Commission reconsider and vary its September 9, 2005 decision by approving interest rates on the subordinate notes as applied for by PNG in the original application. In addition to the approval granted by the BCUC, the approval of the shareholders of PNG, court approval, a provincial Order in Council, consent of the existing bondholders and acceptable market conditions will also be necessary for the conversion to proceed. No assurances can be given by PNG that the required approvals will be obtained, or that the change to an income trust will occur.

Headquartered in Vancouver, British Columbia, Pacific Northern Gas Ltd. (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's subsidiary Pacific Northern Gas (N.E.) Ltd. 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
    Chief Financial Officer
    (604) 691-5684
    Pacific Northern Gas Ltd. - Media Inquiries
    Greg Weeres P.Eng.
    Vice President Operations & Engineering
    (604) 691-5680