Ontario to reverse energy board’s decision that it says would raise cost of new homes

The Ontario government has introduced legislation that will reverse a decision by the Ontario Energy Board (OEB) that would increase costs for new homes heated with natural gas.

The proposed legislation—called the Keeping Energy Costs Down Act—would give the government time-limited authority to reset Enbridge’s financial plan to ensure developers, and in turn customers, don’t have to pay everything up front.

The government says it will prevent an average of $4,400 from being added to the price of new homes.

The government has also said it will appoint a new chair of the OEB this spring.

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In December, the OEB ruled that electricity costs for residential, small commercial and small farm customers shouldn’t be stretched over a 40-year timeline, as the assumption that new housing developments will include gas servicing for that time considering the move to electrification.

“The OEB is not satisfied that Enbridge Gas's proposal will not lead to an overbuilt, underutilized gas system in the face of the energy transition,” the majority of the board wrote at the time.

Instead, they said connection costs should be paid up front by home developers, with the hope that this would incentivize developers to choose energy-efficient choices.

These kind of costs often trickle down to consumers—in this case new home buyers.

“Natural gas will continue to be an important part of Ontario’s energy mix as we implement our pragmatic plan to invest in and bring online more clean nuclear energy,” Minister of Energy Todd Smith said in a statement.

“Unlike the previous government, which saddled families with sky-high hydro bills, our government is taking a thoughtful approach that keeps costs down for people and businesses and delivers energy security.”

• MORE: Minister to overrule Ontario Energy Board

Authority to reinstate a payment timeline will be returned to the OEB at a later date, the government said.

The new legislation proposed Thursday would also require the OEB to conduct broader engagement and provide the Minister of Energy with authority to ask for a separate hearing on any matter of public interest.

It also ensures new customers won’t incur upfront costs towards the construction of critical gas transmission projects.

It was largely two environmental groups that proposed the idea of developers paying for gas servicing up front. They argued that a pay-up-front method will prevent homeowners from being stuck with higher-cost heating system they will have to pay back over a longer period of time.