The Ontario Energy Board gave approval late Thursday afternoon to Enbridge Gas Distribution’s $686.5 million GTA Project aiming to carry natural gas across the top of Toronto.
The project, consisting of two segments of pipeline stretching 50 kilometres from a compressor station in Milton into Scarborough where it will link up with other Enbridge pipelines, was touted by the company as an “upgrade to the backbone of its natural gas system in the Greater Toronto Area.”
“We are pleased with the OEB’s decision today as we believe this project will provide significant benefit to Enbridge Gas Distribution customers,” said Glenn Beaumont, President of Enbridge Gas Distribution in a written statement. “The project is designed to serve growth in the GTA, allow for continued system reliability, and provide access to lower cost natural gas supply.”
The company maintains the system upgrade was necessary given their existing GTA natural gas infrastructure was built in 1992 when they were responsible for supplying only 1.1 million customers: today, that figure is almost double at two million.
The OEB also approved two projects from Union Gas in southern Ontario to construct the Parkway West compressor station in Milton for which the company will be able to recover up to $219 million in capital costs, in addition to a 13.9 kilometre pipeline extension from Cambridge to Hamilton known as the Brantford-Kirkwall/Parkway D project. Up to $204 million is recoverable for that project as well.
Enbridge and Union Gas estimate the construction of all projects approved Thursday will reduce residential consumer bills by 3.7 per cent and 11 per cent for industrial customers by lowering gas prices in coordination with related projects from TransCanada.
Here is a map of Segment A from Milton to Albion station in Toronto:
And here is a map of Segment B from Keele station to Sheppard and Warden avenues in Scarborough:
Demand side management
In the decision, the energy board notes representatives from Environmental Defence, an intervenor at the hearings, said the system expansion was unnecessary because Enbridge had not fully considered whether demand side management (DSM) options for helping consumers use less gas in their homes or businesses would be sufficient to meet consumer needs.
“Environmental Defence submitted that DSM was a superior alternative to the project,” the decision states. “In Environmental Defence’s view, load growth and the reliability concern can be adequately addressed using DSM and interruptible rate options, [and they] argued that such an approach would be less risky for ratepayers and would be consistent with government policy.”
Environmental Defence attempted to argue both segments of Enbridge’s proposed project should be rejected “on the basis that Enbridge’s planning approach was inadequate,” the decision states.
Yet despite recognition from the board that Enbridge’s consideration of DSM alternatives to building the pipelines was “cursory at best” and that “evidence is clear that no staff with DSM expertise attended the relevant meetings,” the OEB still ruled Environmental Defence and their fellow intervenors were unable to show that demand management options were a suitable alternative to building the pipelines.
However, recognizing the value of conservation and demand management options, the energy regulator said it would push gas companies to make greater efforts to curb their customer’s supply in future. This keeps with a current trend from the OEB to encourage electrical utilities to find increased efficiencies to pay for system upgrades rather than ask ratepayers to pick up the tab.
Construction on segments A and B is expected to begin in late 2014 and finish October 2015.