FortisBC ups gas prices by 20 per cent: shift to 'renewable' gas partly to blame

British Columbia's gas utility is hiking its prices nearly 20 per cent, in part to help cover the cost of a climate plan that will do little to reduce the province’s harmful emissions or use of fossil-based natural gas. The price hike, which will see the average Vancouver and Lower Mainland consumer pay $171 more annually, comes amid growing awareness of the high cost of gas furnaces and boilers relative to electrical alternatives like heat pumps. 

The announcement – quietly posted on the company website last week – comes after the utility and industry groups linked to Canada's gas industry spent years attacking municipal efforts to restrict natural gas heating in new buildings. Among the industry's main arguments are that gas is affordable, and that the utility's plan to use so-called "low-carbon" and "renewable" natural gas will reduce emissions. 

"We constantly hear misleading messaging from the fossil fuel industry that methane gas is cheaper than electricity for heating, and this significant rate hike proves them wrong," said Melissa Lem, president of the Canadian Association of Physicians for the Environment. "Households that are stuck on gas now and in the future will suffer all the harms of rising utility bills and air pollution indoors and outdoors." 

Renewable natural gas (RNG) is methane gas made from decomposing organic waste or manure. Because B.C. does not produce enough waste to meet demand, FortisBC relies heavily on buying sustainability credits from RNG facilities from as far away as Ontario and the U.S. to offset the climate impacts of the fossil-based gas actually coursing through B.C. buildings. 

Low-carbon gas is a catch-all phrase for several fuels, like blue hydrogen, that emit less carbon when burned than natural gas, but are largely produced using fossil fuels. 

Doubling the amount of RNG in its gas supply (to two per cent) was cited as one of the reasons behind the rate hike by FortisBC in its public announcement. But in a statement emailed to Canada's National Observer Friday, the company said that the "increase of the designated RNG blend from one to two per cent resulted only in a small portion of the total increase noted above but it was not the main factor."

The company "operates as efficiently as possible to help keep rates as low as reasonably possible for our customers. However, rate increases result from FortisBC needing to make necessary system improvements and long-term investments so that customers have the energy they need, when they need it. Rates cover the cost of making important and necessary investments in the maintenance and upgrading of the system to meet our customers’ growing energy needs," the statement said.  

A December report about FortisBC's renewable energy plan that was commissioned by the B.C. Utilities Commission (BCUC) found that by 2030, the average household bill will increase by about $370, or about 27 per cent more than if the utility only used fossil-based gas. By 2050, those extra costs will have ballooned to $1,060. 

This is because renewable natural gas is more than ten times more expensive than fossil-based fuel, the BCUC said in its decision allowing the rate hike. Those higher costs were among the factors pushing FortisBC to increase the price of fuel, alongside upgrades to the gas delivery system and the maintenance costs for the utility's gas network. 

Yet based on FortisBC's public portrayal of the fuel, British Columbians could be forgiven for thinking otherwise. 

In July, the company announced that all its fuel would contain one percent RNG and emphasized that costs to consumers wouldn't change. The announcement came with a disclaimer that consumers "could see a change [their] bill in the future," but no details about when that might happen – or by how much prices might increase.

In March, a coalition of environmental groups sued FortisBC, alleging false representation over its efforts to market gas as cheaper and more sustainable than electricity. Court documents claim the company made misleading statements about the costs and environmental impact of their fuel in advertisements, on social media and in traditional media, and in public presentations. 

The company has aggressively pushed back on municipal efforts to restrict natural gas heating in new buildings and questions about the feasibility of its RNG plan. For instance just last month, Vancouver city council narrowly avoided reversing the city's gas ban after mayor Ken Sim and allied councillor Brian Montague tried to reverse the rule. That effort came after they met with a FortisBC lobbyist.

National industry groups have also pushed shady advertising campaigns to promote natural gas as "affordable," for instance through the Voice for Energy website. Those efforts are subject to a greenwashing investigation by the Competition Bureau, instigated by Lem and five other healthcare professionals. 

"The official investigation is ongoing," she said. “This announcement provides an even stronger rationale for the Competition Bureau to rule in our favour."