At the March 18 council agenda my motion that the Council support the Ontario Energy Board’s decision to end the gas pipeline subsidy and request that the Ontario Government allow that decision to stand will be considered.  I have tabled this motion as the province’s proposed legislation The Keeping Energy Costs Down Act will maintain the subsidy which encourages new homes to be a source of green house gases (GHG) as they will be built with the obsolete infrastructure of gas fired furnaces for heating. Without the subsidy developers would be incented to install a proven new infrastructure (heat pumps) which does not produce GHG. Reduction of GHG is critical for mitigating climate change; Ontario’s goal for 2030 is to have 30% less emissions than 2005; as 19% of Ontario’s emissions come from buildings we must not be enabling more.  Furthermore there is a financial argument that installation of heat pumps will be a savings for the individual homeowners.

Here is the back story. After a year of hearings and analysis the Ontario Energy Board (OEB) whose role is to regulate Ontario’s electricity and natural gas sectors in the public interest), announced on December 21, 2023 a multifaceted decision about energy rates including a decision to end the connection cost subsidy applying to new residential and commercial buildings effective 2025.  The next day the Minister of Energy announced that a bill would be tabled which would prohibit the termination of the subsidy. Accordingly, the above-mentioned bill was introduced on February 22.

What is this subsidy and why does it affect the price of natural gas for heating homes? Most developers pay nothing for the installation of gas pipelines in new developments so continue to equip their new homes with gas fired furnaces. Enbridge pays the costs of these new pipelines and charges all natural gas users both current and future. Very specifically, Enbridge asked for approval to add$1.3 billion into the rate that users are charged to cover the cost of the new pipelines.  The OEB decision to not include that capital cost into the rate would be a savings of ~$600 per every customer over the five-year term of the OEB decision.

Why did the OEB decide to terminate the subsidy? They judged that Enbridge is not being responsive to the energy transition away from fossil fuels and that expanding pipelines increases the risk of stranded or underutilized pipelines as users switch to the cheaper heat pump alternative. As heat pumps gain momentum the remaining natural gas users will see even higher rates as Enbridge tries to depreciate its capital spending across a smaller and smaller customer base.

Of interest perhaps is that at time of writing several municipal councils have considered motions comparable to mine and have voted to support the motion.

As always you can participate in the Council and make a deputation on this motion  in person or virtually.  For details on how to do please see Council agenda.  Or you can send an email to clerks@king.ca by Monday noon with your comments, questions.