TORONTO — Ontario's energy minister has introduced legislation to overturn a decision on natural gas connections by the province's independent energy regulator.
Todd Smith says the December decision by the Ontario Energy Board would increase costs for homebuyers by making them pay up front for the connection instead of seeing it amortized over 40 years.
But environmental groups have said the decision was a huge win for the environment and Ontarians, as it would have encouraged the uptake of greener home heating and cooling such as heat pumps, and the ruling should be allowed to stand.
Smith's bill would give the province authority to reverse the OEB decision and enable the government to direct the regulator to conduct a separate hearing on any matter of public interest.
The OEB decision relates to a rate application from Enbridge, which serves the majority of natural gas customers in the province, and Enbridge has filed a motion with the energy board asking it to reconsider its decision and has also asked the Divisional Court to set aside four key parts of the ruling.
The energy board ruled that Enbridge's long-term plan is unreasonable because it assumes that every new housing development will include gas servicing and that homebuyers will remain on gas for 40 years, despite an energy transition toward electrification being underway.
Amortizing the cost of a natural gas connection over 40 years for customers will leave a large stranded asset risk as some customers inevitably get off natural gas, and that's a cost that would be paid by future ratepayers, the decision said.
Instead, the OEB said the connection cost, which Enbridge estimated at about $4,400, should be paid up front by home developers to address that risk and incentivize developers "to choose the most cost-effective, energy-efficient choice."
Enbridge said in its notice of appeal that the OEB has historically directed it to use 40 years and erred in law by "rendering a decision in the absence of any evidence considering the effect of a 0 year revenue horizon and with no evidence that any other jurisdiction has adopted this approach."
The OEB heard submissions from a large number of groups and heard suggestions to lower that 40-year amortization period to either 30, 20, 15 or zero years.
This report by The Canadian Press was first published Feb. 22, 2024.
Allison Jones, The Canadian Press
