British Columbia Utilities Commission rejects FortisBC revised RNG program
In its application, FortisBC indicated that the proposals in its revised RNG program were developed to fulfill three objectives: meet provincial CleanBC Roadmap targets for greenhouse gas (GHG) emissions reductions while balancing RNG supply and demand; enable compliance with new building regulations to maintain energy choice for new residential connections; and maintain an energy choice for existing FortisBC gas customers. Thus, FortisBC sought a number of approvals in its application that included keeping the voluntary component of its existing RNG program with modifications and adding two new mandatory components, namely the RNG blend service and RNG connections service.
After a public review, the BCUC approved the continuation of the voluntary RNG program with some adjustments, including renaming the Biomethane Energy Recovery Charge (BERC) to the RNG Charge. Eligible customers who voluntarily sign up for the RNG program will continue to pay the conventional natural gas rate, plus $7 per gigajoule. This is a subsidized rate that is lower than the current average cost of RNG supply. Natural gas vehicle and transportation service customers will now be charged based on the average cost of RNG supply.
FortisBC also proposed a new mandatory portion of the RNG program for an RNG blend service, where all FortisBC sales customers would automatically receive a portion of their gas supply that has been designated as RNG. This is to fully allocate the RNG supply FortisBC contracts for under the Greenhouse Gas Reductions Regulation (GGRR). The BCUC approved FortisBC to implement the new mandatory RNG blend service for sales customers, effective July 1, 2024.
The second mandatory component in FortisBC’s RNG program proposal was an RNG connections service that would apply to all new residential connections in FortisBC’s gas service territory and include a new residential connections tariff. FortisBC proposed that the RNG connections service would be permanent for the life of a building and 100% of the customers’ gas supply would be designated as RNG. According to FortisBC’s application, it would also provide rolled-in pricing, meaning customers in this program would pay the same rate as existing customers who receive a lower designated blend of RNG through the RNG blend service.
In its decision, the BCUC denied the proposed RNG connections service. The BCUC found that it would result in undue price discrimination, in part because existing customers would be subsidizing new customers for the much higher costs of this service.
The BCUC recognizes that there is a need for an orderly transition of BC’s energy system towards a net-zero carbon emissions future and measures will need to be taken to address the role of gas and protect FortisBC gas customers. Further guidance and clarity on how this can be achieved may come from BC government policies or plans, or a BCUC inquiry.
Category: Fuels
