Proposed Natural Gas Expansion Support Program

ERO number
013-4060
Notice type
Act
Act
Ontario Energy Board Act, 1998
Posted by
Ministry of Energy, Northern Development and Mines
Notice stage
Decision
Decision posted
Comment period
October 31, 2018 - November 30, 2018 (30 days) Closed

This consultation was open from:
October 31, 2018
to November 30, 2018

Decision summary

On December 6, 2018, ENDM amended the Ontario Energy Board Act, 1998, to authorize the creation of a rate-payer funded subsidization Natural Gas Expansion Support Program. The amendment allows for regulations to implement program details. Both the amendment and the regulation are set to come into force on July 1, 2019.

Decision details

Bill 32: Access to Natural Gas Act, 2018

On September 19, 2018, the government introduced Bill 32, the Access to Natural Gas Act, 2018, which proposed to create a rate-payer funded cross-subsidization Natural Gas Expansion Support Program. The Ministry of Energy, Northern Development and Mines (ENDM) also proposed to create regulations that would outline program criteria and details to support and operationalize the expansion program. On October 31, 2018, ENDM posted a proposal on the Environmental Registry (ER) to amend the Ontario Energy Board Act  (OEB Act) by adding a new section, section 36.2, and proposing to create regulations that would outline program criteria and details.

Bill 32 was passed and received Royal Assent in December 2018. Section 36.2 of the OEB Act, among other things, provides the authority, through a Lieutenant Governor in Council regulation, to prescribe the consumers or classes of consumers who are required to contribute towards the cross-subsidized expansion of natural gas distribution systems in Ontario. It also provides authority to prescribe criteria for eligible investments, rules pertaining to the amount of support and how it is to be calculated, as well as the time and manner of collection, among other things.

Section 36.2 is scheduled to be proclaimed into force on July 1, 2019.

Expansion of Natural Gas Distribution Systems Regulation

On March 8, 2019, ENDM filed O. Reg. 24/19, Expansion of Natural Gas Distribution Systems. The regulation sets out the first phase of the Natural Gas Expansion Support Program and identifies the first nine projects that are intended to be eligible to receive funding under the program. The regulation also specifies that all natural gas consumers are required to pay one dollar (1$) per month to fund the program, and the Independent Electricity System Operator is to act as the independent settlement agent, collecting amounts from gas distributors and disbursing amounts to fund each of the nine projects based on rules outlined in the regulation.

The regulation is scheduled to come into force on July 1, 2019, the same date that section 36.2 of the OEB Act is set to be proclaimed

Comments received

Through the registry

15

By email

6

By mail

0
View comments submitted through the registry

Effects of consultation

All comments received were given full consideration by ENDM. The written submissions generally supported the changes proposed by Bill 32, the Access to Natural Gas Act, 2018, and ENDM’s intent to create a ratepayer funded cross-subsidization Natural Gas Support Program.

Supporting materials

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Get in touch with the office listed below to find out if materials are available.

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Contact

Stephen Motluk

Phone number
Office
Ministry of Energy, Northern Development and Mines
Address

77 Grenville Street
6th Floor
Toronto, ON
M7A 2C1
Canada

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Original proposal

ERO number
013-4060
Notice type
Act
Act
Ontario Energy Board Act, 1998
Posted by
Ministry of Energy
Proposal posted

Comment period

October 31, 2018 - November 30, 2018 (30 days)

Proposal details

Bill 32 would, if passed, amend the Ontario Energy Board Act, 1998 (OEBA) to facilitate the expansion of natural gas across the Province.

If passed, Bill 32 would amend the (OEBA) by:

  • Requiring the OEB to provide rate protection for consumers or prescribed classes of consumers, with respect to the costs incurred by a gas distributor to expand the natural gas distribution system to those consumers. The rates that would otherwise have applied to the distributor to recover such costs would be reduced.
  • Providing gas distributors with entitlement to compensation for lost revenue resulting from the rate protection provided to eligible newly-connected consumers.
  • Requiring all consumers, or classes as consumers as prescribed, to contribute towards the rate protection amounts that would be provided to eligible newly-connected consumers.
  • Requiring the OEB and gas distributors to provide information and reports, as prescribed by regulation, to the Ministry and to each other regarding implementation, administration, funding and delivery of the rate protection.

The proposed program would operate in conjunction with the OEB's existing natural gas framework.

If Bill 32 is passed, ENDM proposes to develop regulations that would set out program specific criteria.It is anticipated that the regulation may prescribe program details such as eligibility and funding rules, as well as cost responsibility and recovery.

Work is ongoing to develop the specific details and ENDM is soliciting comments and input on these program design areas.

The purpose of the proposed program would be to mitigate or reduce the costs of expansion paid by newly-connected natural gas customers and subsidize these costs across the natural gas rate base. The proposed program would be designed to ensure that it recovers as closely as possible only the minimum costs necessary to make expansion projects economically viable.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Comment

Commenting is now closed.

This consultation was open from October 31, 2018
to November 30, 2018

Connect with us

Contact

Lindsay McAlear

Phone number
Office
Ministry of Energy, Northern Development and Mines, Strategic Network and Agency Policy Division
Address

77 Grenville Street, 6th Floor
Toronto, ON
M7A 2C1
Canada