Denial of gas pipeline has chilling effect on business, home heating

Opinion: Despite the NDP record of trampling on the B.C. Utilities Commission, the governing party seems content to let ruling on an Okanagan project to stand

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VICTORIA — The NDP climate plan appears to have sunk a $327 million pipeline to expand natural gas service in the Okanagan.

Fortis B.C. sought regulatory approval for the project from the B.C. Utilities Commission, saying the 30-kilometre extension was needed to meet increased demand for natural gas in the growing region.

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The company forecast that without it, the carrying capacity of its existing network would be exhausted two winters from now. It might even have to restrict service to some of the 105,000 customers it serves today.

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A two-member utilities commission panel accepted the company’s evidence of a looming shortfall in its ability to deliver natural gas to the region.

“The panel agrees and finds that there is an immediate need to address this imminent capacity shortfall,” wrote panel chair D.A. Cote and panelist A.K. Fung.

Still, they turned down the application, arguing that in the long run the province’s climate plan would “potentially” succeed in reducing consumption of fossil fuels like natural gas.

Their decision, issued Dec. 22, specifically cited the likely impact of “the clean road map, the changes to the B. C. energy step code and the zero carbon step code,” all elements of the Eby government’s Clean B.C. plan.

“The panel rejects the granting of a certificate (approval) at this time because we find it is not necessary for the public convenience and does not conserve the public interest.”

Okanagan residents might disagree, especially those dependent on natural gas or anyone hoping to tap into the Fortis network for residential or commercial purposes.

Those concerns could be magnified considering the Fortis response to the decision.

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“We are disappointed that our application to develop this important piece of infrastructure has been denied,” the company said the day the commission issued its decision. “The Okanagan capacity upgrade project is required to meet peak energy demand in the Okanagan region, which occurs during colder winter months when customers rely on gas to heat their homes and businesses.”

Environmental activists had opposed the Fortis application and celebrated the commission’s decision as a great victory.

But, as the commissioners emphasized in their decision, the ruling against Fortis ultimately came down to the informed opinion of the two panelists.

“The question whether public convenience and necessity requires a certain action is not one of fact. It is predominantly the formation of an opinion,” they wrote, citing an earlier commission decision. “Facts must, of course, be established to justify a decision. But that decision is one which cannot be made without a substantial exercise of administration discretion.”

In exercising their administrative discretion to turn down the pipeline project, the two commissioners left the door ajar to other ways to address Fortis’s capacity problem.

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The commission is reviewing a separate application to provide renewable gas service in the region, which if approved could affect demand for regular natural gas. The panel also directed Fortis “to examine other short-term solutions and file a mitigation plan with the BCUC by the end of July 2024.”

Still, the shelving for now of the $327 million pipeline project, financed entirely by private money, is the sort of thing that the B.C. Business Council warned about in its recent report on the chilling effect of the NDP’s CleanBC plan on investment and job creation.

The commission’s decision will also presumably put on hold Fortis’s pending agreement to share benefits from the pipeline project with the Penticton Indian Band.

New Democrat MLA Joan Phillip, the MLA for Vancouver-Hastings, was the land manager of the band for 20 years. Her husband, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs, was formerly chief of the Penticton band.

New Democrat Harwinder Sandhu, the first term MLA for Vernon-Monashee, represents several of the communities — Lumby, Lavington, Coldstream and Vernon — that are most likely to be shortchanged when the Fortis network reaches capacity.

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New Democrats could argue that their climate plan, for all its good intentions, was never intended to cancel a project that was crafted to address an “imminent capacity shortfall” — to quote the commission’s own words back at it.

Yet in declining to get involved in any challenge to the utility commission decision, the New Democrats might claim that they are respecting the commission’s independence.

Except that was never their view when it suited their political self-interest. The NDP cabinet has issued directive after directive to the commission, compromising its independence on ICBC rates and B.C. Hydro rebates.

The cabinet must be preparing to override the commission again, given Premier David Eby’s hints at another Hydro rebate to offset the next increase in the carbon tax.

Eby himself made a mockery of commission independence last September, when he fired CEO David Morton and replaced him with Mark Jaccard, the SFU prof who oversaw the commission under the last NDP government.

But as things stand today, the New Democrats have accepted the rejection of the pipeline project as a consequence of their climate plan and accepted, too, the imminent risk to continued natural gas service in the Okanagan.

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