Friday, January 26, 2024

Why is Ontario rushing to the aid of a fossil fuel monopoly?

It probably comes as no surprise, but the province of Ontario has sided with the gas monopoly Enbridge as it fights back against the Ontario Energy Board's directive to force Enbridge to charge developers, not homeowners, for new natural gas hookups.

I don't really see that it makes much difference in terms of cost. Either homeowners pay for their gas hookups, or the developers pay for it and then charge the homeowners. Because you don't really think that the developers will just suck up extra costs without passing them on, do you?

In terms of policy and optics, though, the Ontario Energy Board is probably on the right side of history, given the risks of gas becoming obsolete in the coming years as communities look to reduce their carbon footprint. Forcing developers to pay for gas hookups, which is, after all, undeniably part of the process of building housing, might make them think twice and maybe opt for cleaner, more sustainable, all-electric heating, with heat pumps as the primary heating and cooling medium. 

In fact, this could save homeowners a significant amount of money, given that they would not have to pay up-front for a gas hookup, and then again later to change to a more sustainable system. (The current system, administered by Enbridge, is that new gas connections are amortized over 40 years, and recovered in the gas rates paid by all customers.) Installing a heat pump from scratch is much cheaper than a subsequent retrofit. You'd think that the province, which professes to be all about reducing housing costs, would be all over this.

You can see why Enbridge might be up in arms about this - they are the ones staring down obsolescence - but why does the province of Ontario care so much? The speed and vehemence of Energy Minister Todd Smith's reaction to the Board's ruling was breathtaking and curious in equal measure. 

Certainly, it would be all but unprecedented for a provincial government to legislate against the findings of an independent regulatory in the way that Minister Smith is threatening. Introducing bare-faced politics into what should be a purely economic and financial decision is never going to be a good idea.

It's not like Ontario has a huge gas industry to protect. Do we really need to be protecting Alberta and BC's gas industries? Shouldn't we be boosting our home-grown green electricity industry instead?

I've never really understood it, but it seems that Conservative governments the world over automatically back the oil and gas industry, even when it just makes no sense. What exactly are they trying to conserve? The environment of the planet? Natch. The status quo? Apparently. 

Conservatives, almost by definition, do not like change. But change is exactly what we need at this juncture. So, they really need to get over themselves, and wise up to the writing on the wall.

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