10 September 2026

by Tom Hackney, BCSEA Policy Advisor

What role, if any, can gas play in a sustainable energy future? And what is the best pathway to that sustainable future? These are the key questions that FortisBC Energy Inc. (FEI), the BCUC and interveners are grappling with in the BCUC’s current review of FEI’s 2026 Long-Term Gas Resource Plan.

BCSEA does not claim to know the answers, but in its final argument (filed jointly with the intervener My Sea to Sky, by order of the BCUC) BCSEA said FEI had not proposed a plausible pathway or end goal.

FEI considers five scenarios for how it could proceed. Of these, the Diversified Approach and the Electrification Focus show the two main strategies FEI could follow to decarbonize its system: decarbonizing the gas and switching from gas to electricity. FEI’s preferred scenario, the Diversified Approach, depends on FEI being able to ramp up supplies of low-carbon renewable natural gas and hydrogen to about 60% of the gas mix it supplies to customers by 2050. FEI’s current mix is about 98% fossil gas and 2.5% renewable natural gas, with no hydrogen.

FEI claims the Diversified Approach would be less costly the Electrification Focus, which relies mainly on policy, regulations and incentives to encourage utility customers to choose electricity over gas. FEI points out, correctly, that switching customers from gas to electricity would drive up the peak loads of BC’s electric utilities, necessitating costly acquisitions of capacity resources.

FEI also claims the Diversified Approach would reduce greenhouse gas (GHG) emissions more effectively than the Electrification Focus would, and would even achieve a 90% reduction in emissions, exceeding BC’s legislated 2050 target of 80% emissions reductions.

In reply, BCSEA argued that FEI’s information and analysis is too uncertain for the BCUC to be able to reasonably conclude that the Diversified Approach would be more practical or effective than the Electrification Focus. The renewable gas supplies FEI assumes for the Diversified Approach are speculative and implausibly optimistic. The assumed ability to procure large amounts of cost-effective, low-carbon hydrogen is especially questionable. Also, FEI has shown scant progress in the last five years in solving the technical challenges of mixing hydrogen into its fossil natural gas supply.

As well as decarbonized gas, FEI relies heavily on dual-fuel hybrid space heating systems (DFHS) to achieve decarbonization. A DFHS combines a high efficiency gas furnace with an electric heat pump under a single control system. The heat pump is used above a set temperature (and can provide cooling too, as needed). Below the set temperature, the gas furnace takes over. The rationale is that electric heat pumps are energy efficient and cheap to operate at higher temperatures, but as the ambient air grows colder, their efficiency and cost effectiveness declines. Gas does not become less efficient with declining temperatures and can thus be more effective in the cold.

FEI provides analysis that DFHS in the Kelowna area, using fossil natural gas and with a switchover temperature of 2° Celsius, can cost customers less in gas and electricity bills relative to all-electric heat pump heating, while reducing customers’ peak electricity demand and reducing GHG emissions by about 41%. FEI further claims that using increased mixes of renewable gas could reduce GHG emissions even further.

DFHS have not been deployed at scale in BC, or to BCSEA’s knowledge elsewhere, so their system-level effects have not been assessed. Nevertheless, FEI argues that DFHS can have a major role in BC, optimizing between keeping customers’ costs down, reducing GHG emissions and reducing the need for electric utilities to make expensive capacity additions.

This idea gains some support from recent coordination between BC’s gas and electric utilities. The BCUC initiated Energy Scenarios for BC Hydro and FEI (for Information Only) in 2021, in response to the government’s CleanBC plan for implementing BC’s GHG emissions reduction targets. This has led to an ongoing collaboration between BC Hydro and FEI to align their underlying assumptions for their respective forecasts for loads that could be met with either gas or electricity. Specific to the Okanagan region, the BCUC initiated Energy Supply to the Okanagan Region (for Information Only) in 2026. Over a dozen submissions came from utilities, municipalities and stakeholders, including a submission from BC Hydro expressing interest in exploring DFHS in its service territory to help dampen increased peak demand.

FEI and the FortisBC Inc. electricity utility in south-central BC are now coordinating their planning where their service territories overlap. The FortisBC electric utility is experiencing growing demand, as population grows in the Kelowna area and more people seek to electrify their energy needs. FEI argues that getting customers in the FortisBC electric service area to use more DFHS instead of electric heat pumps will help that utility to avoid or reduce the need for costly capacity upgrades to serve peak loads. (The FortisBC electric utility is due to submit its 2026 Long-Term Electric Resource Plan for review by the BCUC this fall. BCSEA expects these issues to be explored in depth in that plan.)

FEI also argues that it may need to expand the capacity of its gas delivery system in the Okanagan area, due to increased demand for gas heating and the FortisBC electric utility’s possible need for a new gas-fired power plant to meet growing peak demand. (FEI would have to file a separate application to seek approval for any such expansion.)

BCSEA acknowledges that DFHS reduce gas use and GHG emissions relative to gas furnaces. But they increase them relative to what the BCSEA says is the optimum solution: electric heat pumps. These use no gas and cause virtually no GHG emissions. 

In the current proceeding, BCSEA argued that the BCUC should not accept DFHS as a general solution for a low carbon energy transition, because they lock in a level of continuing gas use and GHG emissions that is inconsistent with BC’s legislated GHG emission targets. While FEI does not currently seek a ruling on DFHS, a BCUC endorsement of them in this proceeding would help FEI to justify them in its upcoming demand-side management expenditures filing, which will likely include incentives for DFHS.

Instead of DFHS, BCSEA strongly encouraged FEI’s efforts to implement programs to improve the energy efficiency of the shells of customers’ buildings. Such programs save energy and unequivocally reduce the GHG emissions of gas customers.

Another aspect of FEI’s business is the provision of LNG for export, marine bunkering and ISO shipments (containerized LNG shipments by truck or boat: ISO stands for the International Organization for Standardization). BCSEA strongly opposes these operations. BCSEA does not agree that LNG operations result in net GHG emissions reductions, as FEI claims, and even where they may be marginal emissions reductions, they fall far short of what is needed to achieve long-term sustainability. 

However the BC government has intervened to remove the issue from the BCUC’s purview. With the amended Direction 5 to the BCUC, the Province has granted FEI permission to spend $2.2 billion in ratepayer money to build the Tilbury 1B marine jetty to enable expanded marine bunkering and LNG exports.

FEI’s reply submission is due on 15 September. The BCUC will likely take two or three months to decide on whether to accept FEI’s plan.