Inga Beamish
Ministry of Energy and Mines
77 Grenville Street
Toronto, ON M7A 2C1
inga.beamish@ontario.ca
Clean Air Council Submission on Consultation on the Future of Community Natural Gas Expansion
ERO number 025-0923
The Clean Air Council (CAC) is a network[1] of 41 municipalities from across the Greater Toronto, Hamilton, Eastern and Southern Ontario that work collaboratively on the development and implementation of clean air and climate change mitigation and adaptation actions. Clean Air Partnership, a charitable organization whose mandate is to advance climate action ambition and implementation, serves as the facilitator for the CAC.
We commend the Ontario government for initiating a review of its programs and its commitment to enhancing the affordability of home heating for all communities. However, we urge the government to reconsider the expansion of natural gas infrastructure and instead focus on supporting cleaner, more sustainable energy solutions.
CAC is concerned about the implications of expanding natural gas to communities in rural and northern Ontario. Expanding natural gas infrastructure amounts to a very costly fossil fuel subsidy on the rate base and greatly undermines Ontario's ability to meet our 2030 GHG reduction targets.
Alternative Energy Options
The CAC network recommends that the province explore and compare alternative options for advancing affordable home heating options for Ontarians. Expansion of natural gas is no longer the only (nor the most cost-effective) option for helping people address high heating energy costs. Cold climate air source heat pumps have high heating capacities and maintain efficiency even at temperatures as low as minus 25 - 30°C. In regions with limited electrical service, hybrid systems that combine mini-split heat pumps with existing wood, oil, or propane heating solutions should be considered. Geo-exchange or ground source heat pumps offer lower operating costs and reduce peak electricity demands on the larger system.
It is also important to consider that natural gas costs are also susceptible to global pricing fluctuations, by as much as 300% between 2020 and 2023. Investing in these other technologies can provide secure and affordable energy while reducing (rather than increasing) Ontario's greenhouse gas emissions. It is essential that the province objectively considers alternative options to support households in moving away from a costly fossil fuel natural gas lock-in. Ontarians should be provided with the choice to invest in lower carbon energy options on an equal footing to pipeline expansion.
Costly Subsidies
Expanding natural gas infrastructure requires substantial subsidies that are ultimately borne by ratepayers. For example, Phase 2 of the Natural Gas Expansion Program had a budget of $234 million to connect 8,750 homes, resulting in an average cost of $26,742 per connection. Estimated savings per household range from $250 to $1,500 per year, which means the payback period could be anywhere from 17 to 106 years, depending on actual savings. The expansion also requires a $12-per-year surcharge on the gas rates of Enbridge's 3.6 million existing residential customers, in addition to a $0.23 per cubic metre surcharge on new gas customers, to cover project costs over multiple years. Addressing high energy costs for Ontarians is a worthwhile endeavor, the default assumption of natural gas being a cost-effective approach to addressing their higher-than-average energy costs is not accurate.
Stranded Asset Risks
More households will be locked into fossil fuel dependency for decades. There is a significant risk that new natural gas infrastructure will become a stranded asset. As households increasingly adopt electrified heating options, the new pipelines and facilities may be underutilized or obsolete. The Ontario Energy Board has already rejected expansion proposals, in part because the risks of stranded assets were not adequately addressed. Moreover, there are financial implications if households drop off the natural gas system at rates higher than expected, leaving remaining ratepayers to cover the costs of the infrastructure. Additional costs such as system expansion surcharges and heating system conversions further increase the financial burden of new natural gas investments.
Environmental Concerns and Risks to Emissions Targets
Expanding natural gas undermines Ontario's climate objectives. Natural gas is primarily methane, a potent greenhouse gas, and its extraction and delivery, including potential leaks, carry significant environmental concerns. Connecting new homes to fossil fuel heating locks them into burning fossil fuels for the lifetime of the system, potentially delaying progress toward 2030 greenhouse gas reduction targets.
Alternative Government Initiatives
The CAC recommends the province adopt an Energy Decision Matrix to rank cost-effective home heating options. This tool evaluates lifecycle costs, infrastructure requirements, operational savings, greenhouse gas emissions, and social, economic, and environmental impacts. A transparent decision-making process ensures Ontario's energy planning aligns with sustainability objectives, maximizes cost-effectiveness, and builds public confidence.
Conclusion
The long-term benefits, cost savings and sustainability of alternative heating solutions warrant serious consideration before further expanding Ontario's natural gas infrastructure. It is crucial that our energy policy decisions are informed by a comprehensive analysis of all available options, taking into account both economic and environmental implications. All CAC municipalities have committed to climate action and are either developing their Climate Change Action Plans and science-based GHG reduction targets. Expanding the use of fossil fuels contravenes those commitments.
[1] Municipal staff representatives on the Clean Air Council (CAC) were consulted in the preparation of this submission to reflect the feedback of member municipalities, but a direct endorsement of this submission by municipal councils was not sought due to time constraints, and several municipalities are preparing their own independent submissions. CAC representatives are the municipal change agents within leading climate action municipalities and have been working collaboratively across the region for the last 15 years to support and enable progress on clean air and climate change actions. The consultations undertaken were facilitated and endorsed by the Clean Air Partnership, a charitable environmental organization that serves as the secretariat for the Clean Air Council.