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Commission Accepts FortisBC-Gas Long-term Plan

William Andrews, Barrister & Solicitor
Thursday, March 7, 2019

The BCUC accepted FortisBC Energy Inc.'s 2017 long-term gas resource plan, in a decision released on February 25, 2019. After a year-long proceeding, in which BCSEA-SCBC filed expert evidence, the Commission found that FEI's met the requirements of the Utilities Commission Act. Issues included: GHG emissions, load forecasting, demand-side management, biomethane, natural gas for transportation, and innovative technologies. The plan serves as a guideline for the future. The Commission's acceptance of the plan does not constitute approval of any specific initiatives.

BCSEA and SCBC emphasized GHG reductions through conservation and efficiency measures and biomethane as a substitute for fossil fuel gas. BCSEA-SCBC's expert evidence focussed on measures FEI should take to reduce peak demand and thereby delay investments in additional gas infrastructure.      

While the Commission stopped short of adopting BCSEA-SCBC's recommendations, the groups put the following arguments on the record: 

A. Reduced GHG emissions from the combustion of natural gas

BCSEA-SCBC want major reductions in BC’s GHG emissions. As the largest natural gas delivery public utility in BC, FEI should, and will, play a significant role in helping to reduce GHG emissions. While BCSEA-SCBC strongly support the rapid expansion of FEI’s nascent biomethane program, almost all of the natural gas delivered by FEI and consumed by its customers is a conventional fossil fuel. Reducing the consumption of conventional natural gas by FEI customers is a high priority and a major prerequisite for BC to achieve its climate action commitments.

Policy support for substantial GHG emissions reductions remains high in British Columbia. The new BC government has raised the carbon tax, re-affirmed legislated GHG reduction goals, added a 2030 GHG reduction target, and today issued a new climate action plan emphasizing, among other things, substantial reductions of GHG emissions from the use of natural gas in the buildings sector.

B. Locked-in natural gas infrastructure

From BCSEA-SCBC’s perspective, a significant planning challenge is that FEI already has in place considerable system resources for delivering natural gas, and this expensive ‘locked in’ infrastructure is paid for by customers through their ongoing delivery rates. Unfortunately, this creates pressure for continued or increased natural gas throughput at the same time as action on climate change requires reductions in the use of fossil fuels.

C. Proposed Woodfibre LNG Export Project

This locked-in infrastructure dilemma is epitomized by the proposed Woodfibre LNG Export Project that would increase FEI’s throughput by almost half while facilitating the overseas combustion of almost 100 million GJ/y of conventional natural gas.8 BCSEA-SCBC reject the claim by the proponent of the Woodfibre project that this exported natural gas would reduce global GHG emissions. While FEI does not claim GHG reductions benefits associated with the possibility of the Woodfibre LNG Project becoming an FEI customer, FEI does note the substantial incremental throughput the Project would provide.

The 2017 LTGRP treats the Woodfibre LNG Project as an “example” of a potential future very large new load, and not as a planning objective. Nevertheless, BCSEA-SCBC believe that FEI should not overtly encourage implementation of the Project.

D. Capacity-focused DSM to defer capital infrastructure

BCSEA-SCBC’s concern that locked-in natural gas infrastructure will hamper future GHG reduction measures is reflected in their desire to ensure that focused, cost-effective demand-side measures are fully considered and implemented ahead of any large system expansion projects.

BCSEA-SCBC ask the Commission to direct FEI to accelerate its examination and development of demand reduction and demand response measures that would cost-effectively defer infrastructure investments. This request is supported by the expert evidence of Mr. Jim Grevatt, filed by BCSEA-SCBC.

E. Natural Gas for Transportation

BCSEA-SCBC take a very cautious approach to FEI’s “Natural Gas for Transportation” (NGT) emphasis within the 2017 LTGRP. The use of fossil fuels for transportation accounts for a substantial component of BC’s GHG emissions. The best approach is to reduce transportation energy use and to adopt zero-carbon transportation fuels such as clean renewable electricity and hydrogen. In very limited circumstances, there may be a case for using natural gas as a short-term substitute for higher-carbon-intensity fuels such as diesel and oil. Even these narrow exceptions, however, are increasingly obviated by the growing availability of zero-carbon transportation technologies. In BCSEA-SCBC’s view, FEI’s NGT program should be scrutinized for GHG reductions effectiveness in future iterations of the long term resource plan.

F. Biomethane

BCSEA-SCBC strongly support FEI’s biomethane program (“Renewable Natural Gas” or RNG). Demand for RNG is growing rapidly. BCSEA-SCBC recognize that even annual demand forecast scenarios that assume a high level of RNG demand result in RNG accounting for a small proportion of FEI’s total annual demand by the end of the planning period. However, this analysis assumes current biomethane supply technologies. As FEI notes, “If cellulosic biogas technologies become commercially scalable at reasonable cost, RNG demand may account for a significant share of FEI’s demand within 20 years.”

G. Emerging technologies for GHG reductions

BCSEA-SCBC cautiously support FEI’s commitment in the 2017 LTGRP to support emerging GHG reduction technologies. These include: “[technologies] to de-carbonize the natural gas stream and enable the natural gas infrastructure to store electric energy (indirectly by injecting into the pipeline system hydrogen derived via electrolysis), de-carbonize natural gas end-use appliances or increase beyond 100 percent the efficiency of natural gas appliances.”

Links:

BCUC FEI Long Term Gas Resource Plan proceeding https://www.bcuc.com/ApplicationView.aspx?ApplicationId=617

BCUC Decision and Order G-39-19 https://www.bcuc.com/Documents/Proceedings/2019/DOC_53485_Decision-and-G...

BCSEA-SCBC Final Argument in FEI 2017 LTGRP https://www.bcuc.com/Documents/Arguments/2018/DOC_52998_2018-12-06-BCSEA...