BCUC clips the wings of FortisBC Energy gas utility

20 March 2024

by Bill Andrews and Tom Hackney

The BC Utilities Commission issued two important, long-awaited decisions today, both involving the natural gas utility FortisBC Energy Inc. (FEI). In both decisions, the BCUC curtailed certain FEI initiatives that BCSEA opposed due to GHG emissions concerns. We read these two BCUC decisions as marking tangible progress in the BCUC’s slow shift toward actions to reduce the BC GHG emissions from the use of energy delivered by BC public utilities.

Regarding Renewable Natural Gas (RNG), i.e., biomethane, the BCUC approved FEI’s new RNG Blend program and approved continuation of FEI’s Voluntary RNG program. But the BCUC rejected FEI’s RNG Connections proposal. (For background, see our December 2023 article BCSEA Supports RNG Blend; Opposes RNG Connections.) 

Under the RNG Blend program, all sales customers will automatically receive a percentage blend of RNG as part of their regular gas service. 

The Connections proposal was an attempt by FEI to bolster natural gas connections in new residential construction where there is increasing competition from heat pump solutions using clean electricity. Under the Connections proposal, all new residential construction would get 100% RNG for the life of the building at the price of conventional natural gas, with the cost (estimated at $750-million over ten years) cross-subsidized by all customers. BCSEA filed expert evidence by Jim Grevatt of Energy Futures Group that 100% RNG is less cost-effective than clean electricity for zero-carbon heating in new residential single family homes in BC. BCSEA argued that RNG that would have gone to the Connections program should be re-directed to the Blend program. BCSEA, and many other interveners, argued that the Connections program would undermine the strategic direction of the Province and an increasing number of local governments to reduce and even eliminate GHG emissions due to water and space heating in new buildings where zero-carbon electric solutions are feasible and cost-effective. 

In rejecting the Connections proposal, the BCUC called it “a clear case of price discrimination with RNG Connections service customers being subsidized by existing customers.” The Panel said “the RNG Connections service, as proposed by FEI, is unreasonable and unduly discriminatory.” 

Regarding FEI’s 2022 Long-Term Gas Resource Plan, the BCUC accepted most of the plan, but rejected the “Resiliency Plan” component and FEI’s planned investments in Liquefied Natural Gas (LNG) for marine fueling (bunkering) and global markets. This outcome is consistent with BCSEA’s final argument. The Panel noted “the significant uncertainty associated with the LNG bunkering and export markets currently,” and found that it “is not in a position to make a finding that pursuit of sales or infrastructure investments in LNG for these markets will be beneficial to ratepayers and in the public interest.”