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Energy board decision stifling northwest natural gas expansion

Municipalities want cost recovery decision revisited

A decision by the Ontario Energy Board (OEB) dictating that those communities wanting to bring natural gas services to local homes and businesses will be saddled with the full costs of the expansion has outraged the Northwestern Ontario Municipal Association (NOMA).

Kenora Mayor and NOMA president Dave Canfield was not impressed that Ontario’s energy regulator rejected the call of NOMA and the Northwestern Ontario Associated Chambers of Commerce that expansion costs should be shared across the entire rate payer base of the province.

“We made the case that when the natural gas system was first developed across Southern Ontario and parts of the North that all of the rate payers contributed to the cost of creating the existing network,” said Canfield in a release. “We also argued that it was essential that Northern and rural communities currently without natural gas services should now be treated the same way in order that they can access lower cost energy.”

NOMA and a coalition of communities in the northwest point to high heating costs in many towns that rely on electricity, propane or fuel oil.

NOMA’s submission to the OEB said: “Fuel oil is 14 times more expensive and electricity is 27 times more expensive than natural gas to generate the same amount of heat in an area of the province where long periods of minus 20 or lower temperatures occur.”

Canfield added that property taxes in many financially struggling northwestern Ontario communities are at a point where many people are finding it difficult to remain in their homes.

He wants the provincial energy minister to instruct the Ontario Energy Board to revisit the decision and stage hearings in Sioux Lookout, Schreiber, Terrace Bay, Manitouwadge and Armstrong “so that they can hear firsthand what the impact of such a policy would be.”

It’s major disappointment for communities like Sioux Lookout, which is not serviced by natural gas.

The town is working with Rockex Mining and its plans for an open-pit iron ore mine to the northeast and a processing plant that the miner wants to situate close to town.

Municipal officials hope that this development creates enough of a business case to finally justify the construction of a natural gas pipeline to the community, located 70 kilometres off the Trans-Canada Highway.

The OEB decision doesn’t sit well with Sioux Lookout Mayor Doug Lawrance which doesn’t have the tax base to pay for a natural gas connection on its own.

“The cost to bring natural gas to Sioux Lookout is estimated to be over $65 million,” he said in a release. “However, it is likely that our best short-term option is to pursue programs that reduce our energy costs without natural gas. So our community energy planning and advocacy will focus more on programs and funding related to: funding for energy related retrofits, advocacy for hydro rate relief, energy education regarding conservation and efficiency, assistance with conversions to lower cost energy sources, and incentives for alternative energy sources (for example solar, geothermal) at the residential level.”

The OEB’s cost-recovery decision, however, was applauded by the Canadian Propane Association (CPA), which stated that it would not be “appropriate for existing customers to pay for costs associated with expanding natural gas services.”

"The CPA commends the Ontario Energy Board for looking further into the issue of costs associated with expanding natural gas services and recognizing that there are other alternative forms of affordable, low-emission energy," said Andrea Labelle, executive director of the CPA. "This decision promotes a level playing field, ensuring that CPA's retail members compete in free and open markets with the suppliers of other forms of energy and, indeed, with each other."