Union Gas is ready to work with Ontario communities to expand natural gas service. Our efforts were buoyed in January 2017 when the provincial government announced it would direct $100 million in grants to move natural gas expansion projects forward.
The $100 million is intended to support the building of necessary infrastructure to expand access to natural gas to communities that do not have service, including those in rural, northern Ontario and Indigenous communities.
Details on the eligibility criteria or the application process have not been finalized by the province. Those details are key to understanding which natural gas expansion projects the funding might be used to support.
The grant announcement followed on the heels of a decision from the Ontario Energy Board (OEB) to natural gas distributors late in 2016 on the approach for extending natural gas to new communities.
In its regulatory flexibility decision, the OEB denied the ability for existing customers to cross subsidize expansion projects. Union Gas has completed a more thorough analysis of the framework and we are currently in the process of finalizing a revised approach that would enable us to complete several projects.
The ultimate goal at Union Gas is to contribute to the economic vitality of Ontario. Natural gas is the most economical source of energy for homes, businesses and industry. Low natural gas prices have translated into as much as $5 billion in annual savings for Ontario since 2008, and rates are projected to remain low for years to come thanks to abundant supplies.
Community Expansion Timeline
Our Expansion Plan
For many rural and northern Ontario communities the distance from the nearest natural gas supply pipeline, paired with a relatively sparse population, means the cost to construct and operate natural gas infrastructure can be prohibitive.
Union Gas has been leading efforts with government, the OEB and other stakeholders to make the case for new approaches to expanding natural gas access across Ontario.
The OEB held a public hearing in 2016 to determine the best solution for bringing gas service to more remote communities. We actively participated in the process and advocated for our proposal. On Nov. 17, 2016, the OEB issued its new regulatory framework that will apply to future projects to bring gas service to new communities.
Since the OEB issued its decision, we have completed a more thorough analysis of the framework and are currently in the process of finalizing a revised approach that would enable us to complete several projects. After this, the next step is for project proponents to submit applications to serve specific communities using the new framework to the OEB.
The OEB will conduct a public review process to determine which projects are in the best interest of the community and, where appropriate, grant a leave to construct so the project can move forward. We will submit our revised proposal by the end of March 2017.
The Benefits for Communities
The benefits of connecting critical new infrastructure to the natural gas system at the community level are clear. Natural gas is the most economical source of energy for Ontario homes and businesses as it costs significantly less than electricity, propane or oil. Connected residents have access to affordable and plentiful sources of natural gas to heat their homes and hot water.
Over the past two winters, homeowners have saved between $1,700 and $2,200 a year by using natural gas rather than electricity, oil or propane for heat and hot water. The benefits to business and industry are even greater, and expanding access offers an opportunity to drive economic development.
Check out this Q and A for additional Community Expansion details:
Upon review, we feel that the new framework will enable expansion of natural gas to a number of communities. The framework, however, does not include contributions from pre-existing ratepayers as an option to help offset project costs. This means in some cases, additional sources such as government funding may be needed to move a project forward.
It’s still too early for us to make a decision on which communities we will serve. Once we’ve completed our review process, we’ll be in a better position to determine our next steps. We do believe that the number of projects will be limited in the absence of funding from the province.
It’s too early for us to make a decision on which projects we will move forward with. Once we’ve completed our review process, we’ll be in a better position to determine our next steps for each of the communities.
We will submit our revised proposal by the end of March 2017.