Homes heated by natural gas may soon get a break on their utility bills.

Terasen Gas is planning to cut its natural gas commodity rate, reducing the typical residential bill by nine per cent, or roughly $85 per year.

The drop reflects sagging natural gas prices, which are also responsible for sending B.C. government revenues into a tailspin.

Terasen would drop its commodity rate from $5.96 per gigajoule to $4.95, effective Oct. 1, subject to the approval of the B.C. Utilities Commission.

Terasen officials cited low demand due to the economic downturn and cooler-than-normal summer weather across much of North America.

Utilities across the continent also store natural gas, but gas in storage is reaching high levels and the glut is another factor forcing prices lower.

It will be the third straight cut in natural gas rates for Terasen in just over a year.

Lower Mainland customers haven’t paid this little for gas since 2004.

The new rate will be almost half of the $9.78 per gigajoule that Terasen was charging in the summer of 2008, when energy prices soared.

But not all households on natural gas are benefitting from the series of rate cuts since then.

Some bought fixed-price contracts sold in 2007 by independent gas marketers to households who worried about escalating prices. They’re locked in to three- to five-year contracts at between $9 and $11 per gigajoule.

Terasen is required to pass the commodity cost of natural gas to its customers without markup.

It makes its profit on separate charges for delivery, storage and account handling.

Those separate charges are also why a household’s overall bill won’t drop by the same proportion as the commodity price.