Consultation on the Future of Community Natural Gas Expansion

What is the Natural Gas Expansion Program?

The Natural Gas Expansion Program (NGEP) was created under the Access to Natural Gas Act, 2018 to help expand access to natural gas to areas of Ontario that currently do not have access to the natural gas distribution system. The program recognizes the challenges faced by many rural, northern, and Indigenous communities in affording up-front costs to extend critical infrastructure to their communities without additional funding assistance. Expanding natural gas can make life more affordable for families and businesses. It can also foster economic development by making local communities more attractive to job creation and investments.

NGEP provides funding to enable natural gas distribution system expansion where it would otherwise not occur without government support. For these projects, the cost of building the infrastructure exceeds the projected revenue that will be generated from customers using the infrastructure.

NGEP funding comes from a $1/month surcharge applied to natural gas bills of existing customers, which is authorized by the Ontario Energy Board Act, 1998 and O. Reg. 24/19 (Expansion of Natural Gas Distribution Systems) under that Act.

Through Phases 1 and 2 of Ontario’s NGEP, it is estimated that approximately 17,000 buildings, mostly residential and some businesses, in 59 communities, will have the option to switch to natural gas over the span of 10 years, after a project has been completed.

To date, sixteen expansion projects have been completed under NGEP, while others are in different stages of planning, development, and regulatory approvals processes.

Ontario’s Natural Gas Policy Statement

Natural gas is a critical energy source for Ontario. It provides almost 40 per cent of Ontario's total energy use across the industrial, residential, commercial, and agricultural sectors of the economy.

In Ontario’s vital industrial and agricultural sectors, there are currently few alternatives to natural gas for certain processes. Natural gas is also critical to supporting electrification as it maintains reliability of Ontario’s electricity grid and meets peak electricity demand. A premature phase-out of natural gas-fired electricity generation is not feasible and would hurt electricity consumers and the economy.

Most Ontario homes use natural gas for heat, while homeowners in rural and northern areas do not have access to natural gas and want the option to connect through expansion of the natural gas network.

There is a need for an economically viable natural gas network – as the province builds a more diverse energy system – to attract industrial investment, to drive economic growth, to maintain customer choice, and ensure overall energy system resiliency, reliability, and affordability.

The Ontario Energy Board (OEB) will continue to play its role as the natural gas system’s economic regulator, protecting consumers, allowing gas utilities an opportunity to earn a fair return on investment, and enabling the continued rational expansion of the natural gas system.

As part of a gradual transition to a more diverse energy system, Ontario will continue to support the important role of natural gas in Ontario’s energy system and economy while pursuing options to lower costs and reduce emissions through energy efficiency, electrification, clean fuels (e.g., renewable natural gas, low-carbon hydrogen), and carbon capture and storage.

The OEB’s work to develop a new natural gas connection policy should ensure that a broad range of stakeholders are consulted to help avoid barriers to building more homes faster, create more alignment between natural gas and electricity policies, and consider impacts on the electricity grid’s capability to support customers switching to electric heat options.

Why do we want to hear from you?

The Ontario government is committed to continue supporting rural, northern, and Indigenous communities in Ontario. Our goal is to enable affordable heating and energy options for these communities. In doing so, we recognize the unique energy needs and preferences of each community, and that heating technologies continue to evolve. We have received feedback on the province’s natural gas policy statement during recent consultations. We now want to hear from municipalities, communities, Indigenous communities, and other stakeholders on the best path forward to help support the energy needs of businesses. We will use this feedback to make informed decisions about the future of NGEP​​​​​​​.

To facilitate this consultation, MEM has drafted some discussion questions to help provide the Ministry with more accurate information about your community. All stakeholders seeking to provide feedback on the future of NGEP​​​​​​​ are invited to review the discussion questions and provide responses to the best of their knowledge.

Discussion questions

• what application types (residential, industrial, commercial, or agricultural) should natural gas expansion focus on in the future
• how would access to natural gas support economic development in your community
• is access to natural gas included in your municipality’s development plan
• have you engaged with a natural gas developer to explore the possibility of expansion in your community
• what barriers do you feel are preventing access to natural gas development in your community
• if your community has a project that was successful in Phases 1 and 2 of NGEP​​​​​​​, either already constructed or currently in planning, what has been your experience thus far

Feedback

We welcome feedback from you on the natural gas priorities in your community and any other related topics.

The information MEM receives will help the Ministry understand how it can continue best supporting rural, northern, and Indigenous communities to foster economic growth.

Potential Environmental Impacts

Expanding natural gas pipelines helps the government achieve its vision of providing more energy options for consumers and businesses, including building a more affordable and reliable energy system. The approach to planning natural gas pipeline expansion projects can have impacts on land (e.g​​​​​​​., vegetation management along the route of the expansion project), and on local environments and ecosystems. These projects will require consideration in the context of Ontario’s environmental assessment, permits and approvals framework. These approvals include requirements for the proponent to consult with Indigenous communities, the public, and stakeholders on the proposed project, including its impacts to the environment and any appropriate mitigation measures. Building natural gas infrastructure is essential for maintaining Ontario’s affordable, secure, and reliable energy system, and attracting investment and economic growth.