Like other utilities for the…

Like other utilities for the past 100 years, gas supply in Ontario is a regulated monopoly. Enbridge is allowed to charge customers for its costs plus a profit. However they make no profit from the methane gas itself. They can only pass on the gas at cost with no mark-up. They only make a profit on their net asset base. The more new gas pipes, the more profit.

So they are only incentivized to build new infrastructure. They have no incentive to sell less gas, or fix gas leaks, or improve efficiencies.

This outdated regulatory approach comes from an era when security of gas supply was the only priority. Now there are additional priorities like reducing the use of fossil fuels, increased energy choices, and fairness.

With Bill 165, the government is intruding on the OEB’s expertise, independence, and new-found concern for the transition to a low-carbon economy. The government would do much better if it changed the regulatory framework from one which rewards the expansion of soon-to-be stranded assets, to one which drives reductions in greenhouse gas emissions and increased investments in decarbonization.