Ontario passes bill to lend Enbridge a helping hand

To help Enbridge lock gas customers in for decades to come, Premier Doug Ford's government on Wednesday overrode Ontario’s independent energy regulator and passed the Keeping Energy Costs Down Act.

The legislation gives the provincial government authority to reverse a decision from the Ontario Energy Board (OEB) disallowing Enbridge from funding a major gas expansion by increasing rates on existing customers for decades to come. The move effectively strips the regulator of its arms-length role because the government will now have authority to thumb the scales when faced with decisions it doesn’t like.

Ontario’s rationale for the move is that it disagrees with a recent decision from the OEB that shot down Enbridge’s expansion payment plan. Enbridge proposed using customer rates to pay off new gas pipelines and other related infrastructure over 40 years. The OEB rejected that plan, stating it did not properly take into account the energy transition and increased the risk to the public that they’ll be stuck paying for worthless infrastructure into the 2060s. The OEB ordered the cost of new infrastructure be paid upfront by developers, rather than imposed on existing ratepayers.

Shortly after the OEB decision was released, Ontario Energy Minister Todd Smith said the province would reverse the board’s decision, claiming it would push the cost of housing up. In fact, experts have told Canada’s National Observer the decision would actually lower the cost of owning a home because high-efficiency heat pumps are cheaper over their life cycle than gas furnaces.

Smith’s chief of staff is David Donovan, who served as Enbridge’s senior government affairs strategist from 2013 until 2018 when he left the company to work with the Ontario government.

Smith’s office did not return a request for comment.

Enbridge is jubilant the legislation succeeded. A spokesperson told Canada’s National Observer it congratulates the Ontario government for passing the bill and recognizing that gas “is an essential component of a measured approach toward Ontario’s energy transition.”

“We appreciate that this legislation is a major step in the right direction… However, we have more work to do,” the spokesperson said. “The OEB's decision conveys a strong sentiment against natural gas. It contains additional decisions that impact our ability to support and grow natural gas as a part of Ontario’s energy mix.”

Enbridge added that growing its gas business in Ontario “helps reduce emissions.” However, that statement is not true. Natural gas is composed primarily of methane — a potent greenhouse gas and a priority pollutant to slash if the country is going to reach its internationally committed emission reduction targets.

Ontario Green Party Leader Mike Schreiner said in a statement that Ford’s government faced a choice between Ontarians and Enbridge, and chose the company.

“Today, as wildfire smoke from Alberta and BC settles over southern Ontario, this government is passing legislation to keep Ontarians hooked on costly fossil gas for decades to come,” he said. “It’s a disgrace.

“Once again, I call on the Ford government to respect the OEB’s independent decision to protect consumers, repeal its lousy legislation and stop using ratepayer dollars to subsidize fossil giants.”

Previously, Schreiner, as well as environmental advocacy groups, called for the Ontario Auditor General to investigate the Ford government’s plan to overturn the OEB decision. And last week in Queen’s Park, Ontario NDP critic for energy and the climate crisis Peter Tabuns accused the Ford government of stripping Ontarians of protection from Enbridge’s attempts to use customers like “an ATM.”

“This is straight out of this government’s Greenbelt playbook: decisions made in back rooms to protect powerful private utilities; not to protect you, not protect the Enbridge customers who are out there, not to protect the constituents who you represent, but to protect Enbridge,” he said.

In a statement Wednesday afternoon, Environmental Defence programs director Keith Brooks called the legislation “shameful” and “irresponsible.”

“The so-called Keeping Energy Costs Down Act is an affront to good governance and an insult to Ontarians who are grappling with an affordability crisis,” he said. “Contrary to the bill’s ironic name, this piece of legislation will raise energy costs for nearly four million households in Ontario and saddle new homebuyers with higher energy costs by making gas heating the default, instead of nudging homebuilders to install highly efficient heat pumps.

“With wildfire season almost upon us, this government is bending over backwards for a fossil fuel company,” he added.