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October 2020

UDPATE - ON: Energy board decisions further expand natural gas market

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While the provincial government’s policy regarding expansion of natural gas was explicit from the outset of their mandate in June 2018, recent applications by natural gas providers and resulting favourable Ontario Energy Board (OEB) decisions go beyond the projects and areas initially identified, which is unacceptable to the propane sector.

Natural gas companies have used the government’s natural gas expansion policy platform to inundate the OEB with numerous applications for fee increases and facilities approvals. Examples include:

1. On September 24, 2020 the OEB issued a decision granting approval for Enbridge Gas Inc. and EPCOR Natural Gas to increase rates for natural gas customers by over 25 per cent, effective October 1, 2020.

Because these companies are not permitted to increase rates by this much at one time, both companies were required to submit a price adjustment plan to spread this cost out over time.

Enbridge and EPCOR cited “upward pressure on commodity prices associated with a decrease in natural gas production “has led to higher future pricing” and the reason for this increase.

Without the approved price mitigation scheme, Enbridge documents state their customers would have been subject to increases ranging from 17.5 per cent to 33.4 per cent, depending on location. The plan the OEB approved spreads the impact out over time, thereby reducing rate increases ranging from 13.3 per cent to 23.7 per cent. Natural gas companies can apply for such increases four times a year and the OEB has a track record of granting these increase requests.

2. Enbridge Gas alone currently has 13 applications before the Board for fee increases or facilities expansions. Given the Board’s track record, it is expected most of these requests will be granted.

The CPA continues to work to increase public awareness of the actual and potential future costs of natural gas among consumers. The CPA also utilizes all interactions with provincial officials and staff to promote propane’s contribution to the provincial economy and the impact of these policies on the sector.

The CPA will continue to monitor Board activity and intervene when applications are deemed significantly detrimental to CPA members. The CPA also continues to ask members to forward any instances of misleading marketing or business practices by natural gas providers in their communities to Marcelline Riddell, Ontario Government Relations Director at marcellineriddell@propane.ca.

 

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