Canadian provincial governments have moved to shield customers in four major regions from increased costs associated with federal greenhouse gas (GHG) reduction policies that had previously fallen between the cracks.

carbon capture

The moves by Alberta, Ontario. Nova Scotia and Quebec tackle a gap left by the carbon tax, a cornerstone of Canada’s GHG reduction policy. The system rebates the tax on fuel to consumers, but not hardware or delivery expenses that average half of natural gas and power utility costs.

The Nova Scotia government introduced legislation to set a 1.8% cap on annual nonfuel rate increases by Nova Scotia Power (NSP) until the end of 2024. Additions to consumer bills would be held down to $18.7-22.5 million.

An NSP rate application to the Nova Scotia Utility and Review Board sought more than $375 million for replacing thermal power stations with wind or solar generation and adding transmission lines.

NSP and owner Emera Inc. protested that the legislated rate cap would block environmental improvements and undermine the Nova Scotia grid’s ability to respond to storms such as the recent Hurricane Fiona.

“Fuel costs are unavoidable – they have to be paid,” said provincial Natural Resources Minister Tory Rushton. “We’re preventing power rate increases based on those other things unless they improve reliability of power services to Nova Scotians.”

In Quebec, the provincial government has committed an initial $118.5 million to subsidies for consumers that participate in a program devised by power supplier Hydro-Quebec and gas distributor Energir.

The program helps households install electric furnaces for low-carbon power from Hydro-Quebec dams and keep gas-fired appliances for fuel from Energir. Homes switch between the two heating systems at times of peak demand and prices for either one.

While a legislated drilling ban prevents production, natural gas will stay a consumption mainstay in Quebec through 2030 under a dual energy program that includes a subsidy for households that add electric heat appliances to their fossil fuel furnaces.

In Ontario, power grid manager Independent Electric System Operator (IESO) is calling up to 1,500 MW of added gas-fired generation, around 40% of its 4,000 MW supply growth program that also includes utility-scale batteries.

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The Alberta Utilities Commission persuaded provincial Natural Gas Minister Dale Nally to be slow and careful with a hydrogen substitution program that he initially jumped on as an economic growth opportunity created by federal climate change policy.

Alberta taps 2.4 Mt of natural gas for hydrogen as an industrial material used in oilsands bitumen upgrading, oil refining and petrochemical processes. It accounts for around 80% of annual Canadian hydrogen production.

Planning is underway on projects that would make hydrogen into a consumer item as well as grow Alberta exports. Provincial policy sets a target of eventually switching Alberta gas utilities to a 20% hydrogen blend.