Vancouver’s (natural) gas pains

When the public finally got wise to city council’s effective ban on natural gas last week, you saw the city’s spin machine go into overdrive.

“There is no ban!” insisted city manager Sadhu Johnston, repeating the points laid out in a mayor’s office communiqué.

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But in truth, city council has used its power to enact bylaws that will not only end the use of affordable, efficient, and locally-sourced natural gas to heat our homes and hot water, some see it as a path where only the “super rich” can afford to live in Vancouver.

At first blush, the city’s so-called Zero Emissions Building Plan seems like an example of where a government’s good intentions can go horribly awry. After all, who these days does not want to fight climate change?

In a December 2015 column, I raised the matter of how city council had awarded a monopoly district energy franchise for downtown, Northeast False Creek and Chinatown to Creative Energy Vancouver Platforms Inc. (“Creative Energy”), a company owned by prominent developer Ian Gillespie.

Under the terms of the agreement with the city, newly permitted buildings in that dense part of the city will be required to source their heating and hot water supply from Gillespie’s company.

To choose who would operate this district energy utility the city issued what is known as a “Request for Expressions of Interest” or EOI. As opposed to an open tendering process where the lowest bidder usually wins, an EOI is generally used to vet whether suppliers are able to provide the required goods and services.

If one drills down on these proposals to shift to district energy, however, it is interesting to note a 6.85 per cent annual return on investment is built into the pro forma. In other words, ratepayers will bear the financial risk for establishing these new energy utilities.

One of the first countries to adopt mandatory connection to municipally operated district energy systems was Sweden in the late 1990s. Sweden is cited in city reports touting the switch to renewable energy.

Since 2007, Swedish households have paid, on average, US$3,100 per year or more — or about 10 per cent of their disposable income — to heat space and water if they are connected to Swedish city-developed district energy utilities.

Swedish homeowners have to spend US$4,500 annually if they heat with electricity, in part because the state has packed a tax on electricity bills to finance a subsidy for district energy systems.

New city bylaws require that all new buildings not connected to district heat must install electric baseboards instead of comparatively efficient gas heating.

High utility bills are the cause of “energy poverty” (or “fuel” poverty) in several developed nations, including Canada. A recent episode of CBC Radio’s “The Current” reported on Ontario families forced to choose “between heating and eating” thanks to exorbitant prices for electricity.

In 2015, nearly 60,000 residential customers were disconnected from their hydro services in Ontario for non-payment.

In the U.K., a “Home Heat Helpline” exists to aid people who cannot pay their energy bills.

In a city where so many people are already struggling to cover their cost of living, why would city hall make it worse?

In a July interview with Vox.com, Sadhu Johnston explained how the city plans to use locally sourced wood waste to generate the district heat supply.

“It has to be from within the city,” said Johnston. “We’ve banned all clean wood from entering the landfill and that’s creating a supply of wood waste that can be used.”

So, exactly how many demolished wood buildings are we talking about here?

Late Monday, the B.C. Utilities Commission issued a ruling denying Creative Energy’s appeal for a CPCN (monopoly) to provide thermal energy to buildings in Chinatown. BCUC has considered all arguments for nearly two years, and though it places a high value on greenhouse gas reductions, it ruled that a monopoly was not in the public interest.

BCUC did not entirely slam the door on Creative Energy, however. It noted that the city could pass a bylaw to create a monopoly that would supersede the regulator’s authority.

What citizens have to ask is when experts at our public regulator decide something is clearly not in the public interest, why is Vancouver city council voting for it?

@MikeKlassen

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