The shameful rebate by Fortis to keep customers hooked on gas

Part 2 of a two-part series. Read Part 1 here

FortisBC is the private monopoly that provides so-called “natural” gas to homes and businesses in British Columbia. Its business model, simply put, requires tying-in new buildings to the gas network. And the corporation is bound and determined to keep doing just that.

In 2023, FortisBC grew their net residential customer base by an additional 9,664 homes (a slightly smaller increase than the last few years, when the annual growth had exceeded 10,000). According to documents I requested from B.C.’s Ministry for Energy, Mines and Low-Carbon Innovation, this is very similar to the number of households claiming government rebates to convert to an electric heat pump system, which clocked in at 9,586 homes for the fiscal year ending in March 2024.

It is worrying that Fortis keeps hooking up new customers at the same rate as existing ones switch to electric heat pumps. A trend of one-in-one-out makes it virtually impossible for the province to hit its GHG reduction targets for buildings; the math simply doesn’t work. On the other hand, this is a good news development from a year earlier, when FortisBC was gaining new customers at twice the rate that existing users were fuel-swapping and claiming the government heat pump rebate. The province has been managing to successfully grow its rebate program and get more homes using climate-friendly heat pumps.

But Fortis isn’t throwing in the towel.

For years, FortisBC ran a program that offered generous rebates for people purchasing new gas appliances and furnaces. This subsidy was only possible by forcing existing gas customers to pay for the corporation’s enticements to retain and secure new customers. Thankfully, however, as of January of this year (and after a lengthy delay), the provincial regulator finally disallowed FortisBC from engaging in this practice.

Yet now, ever inventive, FortisBC has found a work-around. They have just started offering mammoth rebates of $10,000 for customers who purchase dual-system electric heat pumps with gas back-up. Apparently, these rebates are still permitted. An argument can be made for hybrid units such as these in particularly cold regions, but not in the temperate south-west of B.C. where most of the population resides. More to the point, at $10,000, these new rebates will actually encourage consumers to use dual gas-electric systems, even when that’s not warranted. In combination with the government’s heat pump rebates, these new Fortis ones pretty much cover the full cost of conversion – insidiously, they make it uneconomic not to stay hooked up to the gas network.

The cost of this new offering could be astronomical – if 10,000 households a year were to claim this new rebate (a modest projection given that B.C. builds about 50,000 new homes a year), the program would cost $100 million annually. That cost would again have to be subsidized by existing customers through their monthly gas bills. Good grounds for the provincial regulator of this private monopoly to disallow this new rebate.

A bridge too far?

These efforts to block the electrification of buildings aren’t unique to B.C., of course, nor are they new. Enbridge, the main supplier of fossil gas in central Canada, keeps doing everything in its power to tie-in new homes to gas lines, in their case with the active cooperation of the Ford government in Ontario.

And just last week in Washington State, after spending millions of dollars, the gas industry and its allies managed to get a ballot initiative certified that, if successful in November, would roll back that state’s nation-leading all-electric building code.

It is, unquestionably, deeply demoralizing – and such a terrible waste of time and effort – to have to keep re-prosecuting these fights.

But, just maybe, FortisBC and its industry allies have overplayed their hand. For years, the provincial government has not wished to lead on this fight, preferring to let municipalities decide which of them wishes to expedite the transition to all-electric new homes and buildings. Surely the gas industry has now made clear that this is a path to hell, where those municipalities that chose to move on this matter will be relentlessly hounded by the proxies of the gas companies, before and after they take decisive action, even as so many communities are living through the horrifyingly real impacts of the climate crisis each year. The provincial government simply needs to make the prohibition of gas in new homes the law of the land.