Gas giant Fortis loses a round

The BC Utilities Commission (BCUC) has dealt a blow to efforts by the province’s gas utility to expand natural gas infrastructure in the province.

On Wednesday, the regulatory body denied a request by FortisBC for permission to use 100 per cent so-called "renewable natural gas" in new buildings and offload the extra cost onto existing consumers. Those additional costs are estimated to reach $750 million between 2024 and 2032 alone.

"Renewable natural gas" (RNG) is made from organic waste or manure and costs more than conventional fossil gas. However, B.C. doesn't produce enough of the fuel to meet demand, so the company's RNG pitch hinged on purchasing offset credits generated by RNG facilities elsewhere in Canada and the U.S.

If accepted, the move would have allowed the gas company to circumvent municipal climate rules restricting the use of conventional fossil-based natural gas in new buildings. Researchers warn curtailing the growth of fossil fuel infrastructure and replacing gas with more sustainable alternatives are key to preventing runaway climate change.

"The BCUC absolutely did the right thing," said Stand.earth buildings campaigner Liz McDowell. "Being able to pipe 100 per cent RNG through people's homes was a fiction. It was never going to happen."

In the ruling, the BCUC stated FortisBC's plan would have unfairly required existing consumers to foot the bill for future customers' default use of RNG. The commission's mandate gives it limited power to consider the environmental costs associated with climate change and the use of fossil fuels.

"To us, it seemed like undue price discrimination," said Mark Jaccard, BCUC chair and CEO.

The commission did, however, grant Fortis permission to sell the fuel to new and existing customers through an optional program where gas users can pay an extra fee — $7 per gigajoule — to have their fuel offset with RNG. It also approved the company's request to blend RNG into the fossil-based gas sold to all consumers to ensure the gas company can meet its provincially mandated greenhouse gas emissions reduction targets.

“I find this decision interesting because the BCUC doesn't have a climate mandate and so this is not a decision about greenhouse gases or something like that,” said George Benson, a former member of the Climate Solutions Council. “The BCUC, like they did in their Okanagan decision earlier this year, instead seems to be saying that they have doubts about the fairness to consumers and the economics of continuing to expand the gas network in B.C."

Benson said that RNG can play a role in reducing carbon emissions by fuelling associated with some energy-intensive industrial processes but because supplies of the fuel are limited and pricey, it should be prioritized for those uses. Heating homes and cooking — the main uses for natural gas in residential and commercial buildings — can usually be more cheaply, safely and healthily replaced with electric alternatives.

According to a 2022 study commissioned by the David Suzuki Foundation from a team of researchers at the University of Victoria, B.C. could by 2035 meet its energy needs with renewables if it bolstered its wind and solar generation and grid infrastructure. Moreover, researchers have found that electric heat pumps consistently outperform gas furnaces in efficiency, particularly in warmer parts of B.C.

In a statement, FortisBC vice-president of Indigenous relations and regulatory affairs Doug Slater said the company is "pleased with this decision as it confirms that the gas system will continue to play a key role in meeting the energy needs of British Columbians and lays the foundation for activities spanning the next 20 years."