Municipalities sign utility partner for natural gas project

Public meetings to be held next month

By Barb McKay


The three municipalities participating in the regional natural gas project have acquired a utility partner and expect to know what the cost to consumers will be within six months.


The municipalities of Kincardine, Huron-Kinloss and Arran-Elderslie held a joint press conference Monday to announce that they had unanimously selected EPCOR Utilities Ltd. to partner with them and create a natural gas utility for the region. EPCOR is an Alberta-based utility corporation owned by the City of Edmonton. The company builds, owns and operates electrical transmission and distribution infrastructure, water and wastewater infrastructure and provides electricity, water and natural gas services. The municipalities began collecting expressions of interest from utility companies across Canada and the United States six months ago and EPCOR was selected from a short list of six.


Kincardine mayor Anne Eadie called the partnership a significant milestone in the pursuit of natural gas that has spanned four years.


“We are now much, much closer to getting this up and running,” she said.


If plans are approved by the Ontario Energy Board, construction could get underway as early as fall of 2016. Eadie reinforced the statement made during the past municipal election that no taxpayer dollars will be spent on construction costs associated with bringing natural gas lines to the municipalities, expected to cost between $100 million and $120 million. Senior executives with EPCOR, vice president of business development Karim Kassam and senior vice-president of commercial services Stephen Stanley, were present for the announcement and explained that EPCOR will put up the money to build the natural gas infrastructure and will recoup its investment over time through rates. Kassam told The Independent following the meeting that its approach to recovering its investment may differ from Union Gas, which uses a short-term rate rider strategy, over a period of seven to 10 years, attaching an additional cost to what users of established systems elsewhere in Ontario are paying.


The municipalities, with EPCOR, are continuing to pursue a portion of $230 million in new provincial funding aimed to extend natural gas service to municipalities in rural and northern Ontario. The intention is that a good piece of any provincial funding received would go to help cover conversion costs borne by consumers. Eadie said that while funding is not guaranteed, the provincial ministries the mayors have met with have been receptive to them and offered every indication that they want the project to succeed.


Huron-Kinloss mayor Mitch Twolan said the municipalities will host a series of public meetings next month to provide additional information and answer questions from residents and business owners. The first meeting will be held in Chesley on Oct. 15. Subsequent meetings will be held in Ripley on Oct. 16 and in Kincardine on Oct. 17. The development of a new website is also in the works that will provide progress reports as the project moves forward.


The next step will be for EPCOR to obtain approval from the Ontario Energy Board (OEB) to create a natural gas distribution utility. That is expected to occur in six months and will require the company to have concrete cost figures for consumer connections. Mark Rodger of Borden Ladner Gervais, the legal firm representing the three municipalities, said there is reason for optimism.


“This really is a historic announcement and we think it is something the Ontario Energy Board and province will welcome.”