Phase 2 of the Natural Gas Expansion Program

Ontario’s Natural Gas Expansion Program facilitates the expansion of natural gas distribution networks through a ratepayer-funded account that funds construction of gas works in areas of the province where it would otherwise not be economical to distribute natural gas. The first phase of the program was launched in 2019, and the government is now preparing to deliver a second phase that will fund additional projects across Ontario using the same funding mechanism as Phase 1 (namely, a $1 per month charge that all natural gas customers pay as part of their gas bills).

In preparation for the launch of Phase 2, last year we asked the Ontario Energy Board (OEB) to collect proposals for natural gas projects that could be funded by the second phase of the program. In December 2020 the OEB publicly released their report outlining the proposals it had received, which showed that there was very strong interest in natural gas expansion from municipalities and First Nations across the province: 210 projects were proposed, which would need funding of approximately $2.6 billion. We are considering the projects that were proposed to the OEB and plan to amend Ontario Regulation 24/19 to:

• Specify which projects will be funded by Phase 2 and how much money each project will receive (giving due consideration to the  large number of proposals submitted to Phase 2);
• Enhance reporting and accountability requirements for the natural gas companies that will receive Phase 2 funding.