Ontario government props up Enbridge gas expansion despite official ruling

Summary

Fitting Ontario's buildings with heat pumps, rather than fossil fuels, is a cost and climate-effective solution.

Update: On February 22nd the Conservative government introduced legislation (Bill 165) to reverse the Ontario Energy Board’s position, take over decision-making on the Enbridge rate case, replace the independent regulator’s chair, and remove the need for permission to construct pipelines under $10 million.”

At the end of December, the Ontario Energy Board (OEB), an independent gas regulator, made a responsible decision that would encourage new homes to use clean and affordable heat pumps over polluting gas furnaces.

But, the day after the decision was released, before climate and housing affordability advocates even had time to celebrate, the Ontario government announced its intention to overrule the decision.

Wait, what? The purpose of the Ontario Energy Board is to “protect consumers and make decisions that serve the public interest.” Its stated goal is to “promote a sustainable and efficient energy sector, for today and tomorrow.”

What’s the point of having an independent regulator tasked with prioritizing the public interest if you intend to reverse any decisions you don’t like, as Ontario’s Energy Minister is suggesting he will do?

Perhaps we shouldn’t be surprised that this Ontario government wants to support a gas expansion project that will line Enbridge’s pockets at the expense of people and the planet. But we should get ready to act to reverse its decision.

[Use our tool to send a message to Ontario decision makers now]

The Ontario Energy Board’s decision

The OEB’s decision came in response to a request by Enbridge Gas to force its current and future customers across Ontario to pay hundreds of millions of dollars each year (and many billions over the course of 40 years) for an expansion of its gas infrastructure – just so that Enbridge can connect new homes to unnecessary fossil gas lines and continue raking in profits.

Luckily, the Ontario Energy Board had the sense and foresight to conclude that this scheme wouldn’t serve the public interest. In particular, the agency raised the problem of stranded assets which could leave millions of Ontario gas customers on the hook to pay for obsolete gas pipelines as the province transitions away from using fossil fuels.

What’s more, as homeowners inevitably choose to go with the cleaner heating technology, the pool of people footing the bill would decrease, leading to a “death spiral” in which remaining customers would have to cough up more and more money to cover the costs of the unnecessary gas pipelines, leading to additional people ditching the scheme.

The whole plan was a total scam.

There is no doubt that the Ontario Energy Board’s decision to hit the brakes on Enbrdige’s scheme was the right call.

But the Ontario government is going to bat for this mega corporation, in what seems to be a continuation of a pattern in which Conservative politicians prioritize big business interests over those of regular people (think: the attempt to open the Greenbelt to benefit wealthy developers, handing over public land at Ontario Place to a private spa company, privatizing health clinics rather than investing in public care, and so on).

Ontario government seeks to overrule the OEB decision

The Ontario Energy Minister has made public his unheard-of plan to overrule the Ontario Energy Board’s decision using legislation which would allow Enbridge Gas to profit at the expense of residents and the climate.

The Energy Minister’s main excuse for reversing the OEB decision is the claim that it will hamper and slow efforts to build new housing.

Nothing could be further from the truth.

The claim rests on an inaccurate assumption: that developers would necessarily have to front the bill for new gas lines. It’s true that the OEB decision means that the costs for gas hookups would have to be paid up front by developers, but it does not mean that they must put in gas lines. They can just as easily choose to install a central electric heat pump system to address the home’s heating needs, which the the Ontario Energy Board itself said would be a “win for homebuyers”.

The only reason houses have continued to be connected to gas pipelines is because of the subsidy Enbridge has been enjoying. Developers haven’t had to pay for the hookups so they went with the status quo. Now, they can opt to install heat pumps instead.

The upfront costs have been shown to be similar or even more cost-effective in favour of electric heating.

Perhaps even more important than upfront costs is the enormous long-term savings that heat pumps provide. Heat pumps are more efficient than burning fossil gas and therefore lead to lower monthly energy bills. Numerous studies have found that residents can save tens of thousands of dollars over the lifespan of heating equipment by using a heat pump instead of a gas furnace in Ontario and across the country.

This suggests that fitting buildings with heat pumps is the best financial option for new housing.

The Energy Minister’s argument about slowing down housing development also doesn’t stand up to scrutiny. Choosing an electric system for new buildings would save time because it wouldn’t require the building of new gas pipelines in the neighbourhood and gas pipes in the home itself. Heat pump technology doesn’t require additional infrastructure and would therefore lead to faster construction.

The Minister’s claims are clearly bogus, intended to generate fear and panic in the midst of a real housing crisis.

His statement and position also ignore the many other benefits of choosing electric heat pumps for home heating which would make new homes more affordable and equitable.

Heat pumps are the best option for heating

We’ve already established that heat pumps provide much lower energy bills for residents – which is critical at a time when we are financially stretched and fossil gas prices are volatile.

Heat pumps also double as cooling devices in the summer. Building homes with heat pumps ensures that everyone has a proper cooling system and won’t have to suffer through hot summer weather. They can also purify indoor air which is becoming critical as wildfires and their smoke impact more and more people.

Heat pumps have come such a long way that they can now operate in the coldest of temperatures. This means we don’t need backup or hybrid systems to guarantee heating in the cold winter months, even in northern regions of Canada.

Having a home come equipped with a heat pump also means that homeowners won’t have to organize and pay for retrofits in the future.

And of course, heat pumps are the right choice for the climate. They produce way less emissions than gas furnaces. This is incredibly important as we experience worsening climate events here and around the world. Bringing down building emissions is an easy way for both Ontario and Canada to get closer to meeting their emissions reduction targets.

As we take action to address the climate emergency, there will be some complicated adaptations to make. Heat pumps aren’t one of those cases – they’re an easy and proven choice to make. Every new home should come with one.

Let’s make sure fossil fuel giant Enbridge and the Ford government don’t get in the way of technological and climate progress.

[Tell the Ford government to back off]