The Ontario Green Party and environmental groups are calling for an investigation into Premier Doug Ford’s government’s decision to overturn an independent regulator to help Enbridge keep its gas customers for decades to come.
In a May 7 letter to Ontario Auditor General Shelley Spence, Ontario Green Party Leader Mike Schreiner said there were good reasons behind the Ontario Energy Board’s (OEB) decision that rejected Enbridge’s proposal to pay for a massive gas network expansion using money raised from existing sources. customers through utility rates for 40 years.
“The OEB outlined extensive evidence…that took into account affordability, economics, and climate,” the letter reads. “The government’s unprecedented decision to overturn a decision by an independent body sets a worrying precedent.
“For these reasons, I am requesting that your office conduct a value-for-money audit and review of the financial and environmental costs of this government’s decision.”
At the heart of the OEB’s concern was that gas infrastructure, such as gas pipelines, typically pays for itself over 40 years through consumer gas tariffs. With the energy transition away from fossil fuels already underway, there is a risk that gas infrastructure will lose its value. As people increasingly replace gas boilers with electric heat pumps, there will be fewer gas customers, reducing the number of people paying for the infrastructure. That would raise rates, encourage more people to ditch gas and create a vicious cycle called a “death spiral” for utilities.
To mitigate this risk, the OEB ordered in December that, rather than stretching the cost of new infrastructure over decades, developers must pay for gas lines up front. In his letter, Schreiner refers to this as the end of a subsidy to Enbridge because it would have meant that homeowners would no longer pay for Enbridge’s gas expansion. Previously, Schreiner said Canadian National Observer the subsidy was worth $2 billion over five years.
When the independent regulator announced this change, the Ford government announced legislation overriding the regulator to the benefit of Enbridge. That legislation, called Bill 165 or the Law to keep energy costs downwas introduced in February by Ontario Energy Minister Todd Smith, who called the OEB decision “hasty” and “outrageous.”
Smith said government intervention was necessary to prevent housing costs from rising due to the ruling, although experts say the ruling would have, in fact, reduced housing costs.
Smith’s office did not respond to a request for comment on calls for an investigation.
Schreiner calls on Ontario auditor general to investigate:
“This is straight out of this government’s Green Belt playbook,” warns @Peter_Tabuns as calls grow for an investigation into Doug Ford’s plans to overturn the independent energy regulator. #onpoli
- The environmental impact of the decision.
- The financial impact on Ontarians’ bills.
- The extent to which the Ford government’s legislation will result in customers bearing the cost of stranded assets.
- The process Ontario is using to make long-term decisions and whether or not it is evidence-based.
The Ontario Auditor General’s office did not confirm whether it received an official request for an investigation, but a spokesperson said Canadian National Observer “We will review the ministry’s compliance with its consultation requirements as part of our legislated responsibilities under the Environmental Bill of Rights.”
On Thursday, climate advocates from Stand.earth, Clean Air Partnership, Seniors for Climate Action Now!, Harbord Village Residents Association and the Ontario Climate Emergency Campaign held a press conference supporting the inquiry request.
“The Conservative government is moving full steam ahead to pass this bill and we could see it become law next week,” said Lana Goldberg, climate campaigner at Stand.earth. Canadian National Observer. “Ontario climate groups are alarmed because this bill would pave the way for Enbridge to get ordinary people to pay their subsidy, which will increase their monthly energy bills and increase Ontario’s emissions.
“It’s a scandal,” he said.
“While most of the country and the world are looking for ways to responsibly phase out fossil gas, this government is acting as an arm of Enbridge and manipulating political decision-making to serve its corporate interests,” he added. “Given this government’s propensity to serve special interests, it is important that Ontario’s auditor general investigate the impacts of Bill 165.”
At Queen’s Park this week, Peter Tabuns, Ontario NDP critic on the energy and climate crisis, accused the Ford government of stripping Ontarians of protection from Enbridge’s attempts to use customers as “ an ATM”.
“This comes straight from this government’s Green Belt playbook: decisions made in secret to protect powerful private utilities; not to protect you, not to protect Enbridge customers who are out there, not to protect the constituents that you represent, but to protect Enbridge,” he said.
“It’s focused on ensuring Enbridge makes as much money as possible.”