August 21, 2023

By Bill Andrews and Tom Hackney

In July 2023, BC’s main natural gas distribution utility — FortisBC Energy Inc. (FEI) – applied to the BC Utilities Commission for approval of strikingly different types of demand-side measures (DSM) than the utility has ever carried out. Gone were the incentives for traditional high-efficiency natural gas furnaces and water heaters. In their place are incentives for gas heat pumps, dual fuel hybrid heating systems (electric heat pumps plus natural gas furnaces for the coldest times) and deeper retrofits (building envelope improvements). 

Why the big change? Low-carbon electricity replacing fossil natural gas. In June 2023, the BC Government amended the DSM Regulation to implement the Government’s 2022 CleanBC Roadmap to 2030, which called for drastic reductions in GHG emissions from the customers of gas utilities by 2030. The amended DSM Regulation legally bars gas utilities from providing incentives for high efficiency gas space and water heating equipment, except to qualifying Low Income and Indigenous customers. The Roadmap strongly promotes low-carbon electrification, such as electric heat pumps, over gas equipment, even high-efficiency gas equipment.  

FEI has asked the BCUC to approve some $626-million in spending on DSM for the four-year period 2024 to 2027. BCSEA is actively intervening in the BCUC’s review of the application, and recently filed information requests to FEI. In addition to the technical aspects of the proposed DSM spending, BCSEA addressed the impact of the forecasted natural gas savings on GHG emissions. BCSEA’s concern is that the amount of GHG reductions associated with the planned gas savings are miniscule compared to the amount of GHG reductions that will be required by the Roadmap’s upcoming legislated cap on gas utilities’ customers’ GHG emissions from burning fossil gas.