Kingston supports OEB decision to end pipeline subsidy

Photo by Dark Arts Astrophotography.

In defiance of the provincial government, Kingston City Council has voted to support the Ontario Energy Board’s (OEB) decision to end the subsidy for Enbridge methane gas pipelines to be built in new construction developments.

This move, made at Council’s regular meeting on Tuesday, Mar. 19, 2024, followed what has been called a “watershed moment”: on December 21, 2023, the Ontario Energy Board ruled that Enbridge Gas could no longer pass the cost of connecting new home builds to natural gas lines on to homebuyers.

The OEB’s ruling was quickly followed on February 22, 2024, by the provincial government’s introduction of Bill 165, Keeping Energy Costs Down Act, 2024, accompanied by the claim that “the OEB decision would increase the upfront cost to consumers of installing natural gas connections for new homes and small businesses…This change could increase the cost of new homes in the province by tens of thousands of dollars, particularly in rural areas, and would limit customer heating choices in Ontario.”

Kingston resident Nancy Nichols, however, was having none of it. In her delegation to Council, the member of Seniors for Climate Action Now said the OEB decision would, in fact, lower energy bills “for existing gas customers who pay for the subsidy: over $250 million each year… It would also improve affordability for new homebuyers.”

The OEB also cut $1.25 billion from Enbridge’s $7 billion costs for new infrastructure, which Nichols described as “unnecessary and too risky… and [the OEB] told Enbridge to focus on repairing existing pipelines rather than building new ones.”

“The so-called ‘Keeping Energy Costs Down Act,’” Nichols commented, “should be called the ‘Taking Care of Enbridge Act.’”

She pointed out that about 70 per cent of Ontario households use gas for home heating, and “Enbridge supplies 92 per cent of those households. If the COP28 [28th Conference of the Parties to the United Nations Framework Convention on Climate Change] resolution to transition away from fossil fuels is taken seriously, then Enbridge is in trouble.” 

Nichols continued, saying, “the Doug Ford/Enbridge alliance” would limit energy choices and hurt customers in the long run by forcing them to choose gas, even though there are now lower-cost heating choices like heat pumps, and it would also end up “restricting efforts to reduce carbon pollution, and denying future generations clean, safe, and affordable energy.” 

She called Bill 165 “government overreach against the consumer protection role of the Ontario Energy Board.“

Deputy Mayor Wendy Stephen, seconded by Councillor Lisa Osanic, made a motion pointing out that “natural gas is methane gas, a fossil fuel that causes approximately one third of Ontario’s greenhouse gas (GHG) emissions, and must be phased out because it is inconsistent with all climate targets.”

The motion stated that “heat pumps are a more efficient way to heat homes, result in lower GHG emissions, and are consistent with a zero-carbon future” and that the OEB decision “will help lower energy bills for existing gas customers, improve affordability for new homebuyers, and encourage heating systems that are consistent with climate targets.”

The motion also said subsidies for Enbridge are “inconsistent with the City’s climate targets and will result in higher carbon emissions, higher energy bills, higher future decarbonization retrofit costs to get off fossil fuel heating, and a continued financial drain as dollars leave the province to pay for fossil fuels extracted in other jurisdictions.” This is especially significant, the motion noted, given that “Council declared a climate emergency on March 5, 2019 and is actively working to support the decarbonization of heating and cooling systems in existing and future building stock within the community.”

Stephen’s motion asked Council to express Kingston’s support for the OEB’s decision to end the gas pipeline subsidy, and to request that the Ontario government allow the decision to stand; furthermore, that a copy of this motion be sent to Premier Doug Ford, Minister of Energy Todd Smith, Minister of Finance Peter Bethlenfalvy, and the Association of Municipalities of Ontario.

Stephen then spoke to the motion, saying, “OEB is supposed to be an independent regulator of the electricity and natural gas sectors. Their job is to protect consumers and to make decisions that serve the public interest. This includes regulating rates for two major gas utilities in Ontario, one of them being Enbridge.” 

She called the December ruling by the OEB “remarkable… and it went largely unnoticed. We’re talking about a watershed moment in the energy industry.”

“Historically homeowners have paid off natural gas connection charges over a ‘revenue horizon’… which is basically a 40-year amortization period. But starting January 2025, because of this OEB decision, the revenue horizon is going to drop from 40 years to zero years,” Stephen explained — meaning developers will have to pay upfront for natural gas hookups. 

“This ruling is meant to protect consumers,” she went on, saying her “favourite part” about this decision is that it creates the conditions in which developers might actually pause to consider their options. “They can make a choice,” rather than being “forced” by Enbridge to hook up in advance.

Stephen also noted that Kingston is “in the midst of an energy transition. We’ve got the Better Homes Kingston program, and we know that people are actually paying to retrofit their homes. They’re actively choosing to spend their money to remove natural gas furnaces in favour of cold climate heat pumps.”

“We know the energy transition is exceptionally complicated and incomplete. Electricity generation, storage, and transmission are significant issues and are being worked on now. But we can do more than one thing at a time,” she emphasized, saying that future consumers should have the choice, when buying a home, to pay for the type of energy they want and not be forced into a lifetime of gas costs.

Bill 165 is also counter-intuitive, Stephen said: “Forty years from now, it will be 2065, and Canada’s target for reaching net zero emissions is 2050. Something’s not adding up here. So I hope you will support this motion and help tell the province to let the OEB decision stand.”

Despite remarks by Mayor Bryan Paterson, who said he disagreed with both the OEB decision and with Bill 165, Stephen’s fellow councillors agreed with her, and the motion passed.

The agenda from this meeting of Kingston City Council can be found on the City of Kingston’s council meetings webpage, and the meeting can be viewed in its entirety on the Kingston City Council YouTube channel. Council meets on the first and third Tuesday of each month (except in July and August, when it meets once each month) at 7 p.m. in Council Chambers at Kingston City Hall, 216 Ontario Street.

3 thoughts on “Kingston supports OEB decision to end pipeline subsidy

  • Kudos to Kingston. Now if only the rest of Ontario would do the same!

  • Air Heat Pumps are usually the ones referred to for home heating and cooling in Kingston. However with our winter temperatures sometimes dipping below -20C there will be the necessity for auxilliary heating and this is generally provided by a gas furnace. I don’t know how auxilliary electric heating would fare.

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