Ontario taxpayers will subsidize the expansion of the province’s natural gas network after the Ontario Energy Board (OEB) rejected a proposal by the province’s two largest gas utilities to add a small surcharge on to existing customers to help cover the costs.
On Jan. 30 the government announced that it would put $100 million towards expanding the province’s natural gas network to more rural and northern communities. Financed from the province’s infrastructure fund, municipalities and First Nations will work with utilities to make proposals this spring.
About 75 percent of Ontario homes heat with natural gas. The remainder heat with oil, propane, electricity and/or wood. The government estimates that converting from electricity to natural gas will save the average homeowner about $1,500 a year, and converting from oil will save about $1,100 per year.
The government has faced considerable anger over rapidly rising electricity costs.
It had earlier proposed establishing a $200-million natural gas access loan program and a $30-million grant, but municipalities called for a straight grant program instead.
The government also expects reduced heating energy costs in the North will lead to an increase in economic development in those communities.
The surcharge proposal by Enbridge Gas Distribution and Union Gas Limited was rejected at the Ontario Energy Board (OEB) after it was opposed by a number of groups, including the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI) on behalf of the Ontario Geothermal Association (OGA). It argued that if the proposal went ahead it would put other alternatives such as geothermal at a disadvantage.
“In essence, the OGA’s case centered on the point that geothermal heating and cooling presents a completely viable competitive alternative to natural gas technology, if all costs are fully accounted for. The special advantage of geothermal, argued the OGA, is that it is also a non-carbon-emitting technology (assuming the supply of electricity is from “clean” sources), which makes it of special interest in light of the province’s new focus on climate change mitigation,” reported Martin Luymes, director of programs and relations for HRAI. The OGA operates as a division of HRAI.