Canadian regulators deny FortisBC Energy’s natural gas pipeline plans

(UI) – On Dec. 22, the British Columbia Utilities Commission (BCUC) denied FortisBC Energy Inc.’s (FortisBC) application for its Okanagan Capacity Upgrade project, which includes the construction, installation, and operation of approximately 30 km of new natural gas pipeline.

In its application, FortisBC stated that the pipeline expansion project is needed to meet its forecast increase in demand for natural gas in the Okanagan region due to population growth. FortisBC indicated that it expects to be unable to meet the growing demand with its existing pipeline infrastructure, as early as the winter of 2026/2027.

Following an open and transparent public review process, the BCUC denied a Certificate of Public Convenience and Necessity (CPCN) for the Okanagan Capacity Upgrade project because it determined that the project was not necessary for public convenience or in the public interest.

The BCUC found that FortisBC’s application did not consider the possibility that demand for natural gas in the Okanagan region could flatten or decrease over the next 20 years, due, in part, to BC’s CleanBC Roadmap commitments, BC Building and BC Energy Step Codes impacts, and other planning guidelines or zoning bylaws.

In addition, the BCUC is currently reviewing FortisBC’s Revised Renewable Gas Comprehensive Review application that seeks approval to provide renewable gas service to its new customers. The outcome of this proceeding could also impact FortisBC’s expected demand growth.

Given the estimated project cost of $327 million, the BCUC determined that it would not be prudent to approve the Okanagan Capacity Upgrade project at this time. FortisBC has been directed to examine other short-term solutions and file a mitigation plan with the BCUC by the end of July 2024.

The BCUC’s proceeding to review FortisBC’s Okanagan Capacity Upgrade project application included multiple rounds of information requests, a procedural conference, evidence and input from several interest groups, and feedback from the public through 96 letters of comments.

Public utilities must apply to the BCUC for approval of a CPCN before beginning the construction or operation of a public utility plant or system, or an extension of either, as required under section 45 of the Utilities Commission Act.

The BCUC is an independent regulatory body, responsible for regulating BC’s energy utilities and intra-provincial pipeline rates. It is the BCUC’s role to balance the interests of ratepayers with the interests of the businesses it regulates.

 

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