Toronto Sun article
Wednesday February 14th, 2024
Ending the subsidy would be a win-win-win-win. There is, however, one loser – Enbridge Gas
Just before Christmas, the Ontario Energy Board (OEB) issued an important decision affecting the gas bills of nearly four million Ontario consumers.
The OEB ordered natural gas distributor Enbridge Gas to bear the costs of expanding its natural gas infrastructure, rather than imposing these costs on existing consumers.
The OEB decision acknowledged the obvious: At a time when Ontario is moving away from fossil fuels, any plan to expand natural gas infrastructure carries enormous risks — not just to the environment but to your pocketbook. And so, the OEB decided Enbridge’s proposal was not in the interests of consumers.
The next day the Doug Ford government announced that it would reverse the decision and protect the interests of Enbridge. It plans to pass legislation in February that will raise energy bills across the province and make life more expensive for new homebuyers.
It all goes back to a subsidy that most gas customers don’t even know they are paying. Right now, your gas bill includes a charge worth hundreds of millions of dollars each year to cover Enbridge’s cost of expanding gas pipelines into new developments. On Dec. 21, Ontario’s independent energy regulator decided to put a stop to this subsidy because it raises energy bills for existing gas customers and new homebuyers, while also increasing financial risks for the whole gas system.
Ending the subsidy would save gas customers more than $1 billion over four years in avoided pipeline subsidy costs, which comes to more than $300 per customer. Ending the subsidy will also encourage developers to install heat pumps in new homes, which provide much cheaper heating and cooling, instead of gas.
Ending the subsidy would be a win-win-win-win. It would lower energy bills for existing customers, lower energy bills for new homebuyers, lower carbon emissions, and avoid even more cost down the road when homes heated with natural gas convert to heat pumps.
There is, however, one loser – Enbridge Gas. It would lose millions of dollars in profits, and it is lobbying hard against the Energy Board decision.
It’s no surprise that Ford’s minister of Energy, Todd Smith, has announced that they will pass legislation to overturn the decision.
But gas is no longer the cheapest heating source. Investing in gas pipelines for heating is financially foolish because they will become obsolete and a massive cost to all current and future customers as we move away from gas heating.
The government’s own expert electrification panel noted “growing indications that it is unlikely that the natural gas grid can be decarbonized and continue to deliver cost-effective building heat.” Our neighbours, like New York State and Montreal, are prohibiting gas in new construction.
Passing legislation to reinstate a subsidy is completely out of step and risks financial disaster down the road.
The Ontario Energy Board made the right decision, based on evidence, to lower your energy bills. The Ontario government is on course to make the wrong decision, based on back-room lobbying, to raise your energy bills.
But over the years we’ve seen this government bend under public pressure and reverse decisions like opening parts of the Greenbelt for development.
Hopefully the evidence and the truth will prevail, the government will respect the independent decision of the Ontario Energy Board, and you will be protected from this rate increase.
— Peter Tabuns