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Minister to overrule Ontario Energy Board’s natural gas decision, says it would raise cost of new homes

Ontario’s energy minister says he will introduce legislation to reverse an Ontario Energy Board (OEB) decision that would increase costs for new homes heated with natural gas.

Todd Smith says the OEB decision would slow or halt the construction of new homes, so he is intervening to “keep shovels in the ground.”

The OEB decision relates to a rate application from Enbridge Gas, and the energy board says the utility’s long-term plan is unreasonable because it assumes that every new housing development will include gas servicing and that homebuyers will remain on gas for 40 years, despite an energy transition toward electrification.

The board says that Enbridge’s “business as usual” plan to amortize the cost of a natural gas connection over 40 years for customers will leave a large stranded asset risk as some customers inevitably get off natural gas, and that’s a cost that would be paid by future ratepayers.

Instead, the OEB says the connection cost, which Enbridge estimated at about $4,400, should be paid up front by home developers to address that risk and incentivize developers “to choose the most cost-effective, energy-efficient choice.”

Enbridge says it is disappointed with the decision, which it says will lead to unnecessary costs for residents, and is reviewing all of its potential options for challenging the order, including going to court.

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