Enbridge Gas representative Julie Alexander presented cost estimates to the municipal natural gas expansion task force on Nov. 29.
The estimate for the expansion to serve Hutchinson Corners and Bowles Hill areas east from Markdale would be $3.56 million, and to service the Eugenia area from Flesherton would require $4.7 million. If Aecon ran into rock, the costs would be higher.
Those numbers are too much for the municipal budget, said Mayor Paul McQueen. He noted that Grey Highlands still can apply for funding from the province in the third round of applications when it opens.
“In my mind, the only way we could even remotely think of going forward would be in the roll-out of Stage 3,” said the Mayor.
At meeting’s end, the task force endorsed sending the cost estimates and other information to be considered by full council.
Ms Alexander joined the online meeting to give the cost estimates and to answer questions. The pricing was done for a 2024 installation.
The estimates both assume a 65 percent connection of potential customers. Enbridge’s first step, if the expansion was to go ahead, would be to send letters to potential customers, she said.
There is also a surcharge added onto customers’ natural gas bill for the infrastructure over 40 years.
Mayor Paul McQueen asked if the municipality could pay its share over 40 years. The answer was – likely not, but an inquiry could be made about what payment period might be possible.
WORK TO DATE
The task force is nearing the end of its mandate, having been formed to look into possible rural expansion of natural gas.
Under chairman, councillor Tom Allwood, many steps have taken. These included getting staff to suggest specific areas for expansion, finding out how the cost could be funded, and then getting costs through Enbridge and its partner, Aecon, given local municipal requirements for where the line would be laid.
The three possibilities for funding, confirmed with Enbridge in October, 2022. First, meeting Enbridge’s own standard of achieving payback in 40 or fewer years – not government funding required. Second, if that payback is not met, the municipality could make up the difference. The third options is applying under Phase 3 of the provincial natural gas program.
However, that process has been paused while the province asks for comments to shape what the Phase 3 requirements should be.
The Ministry of Energy is accepting comments on the future of natural gas expansion and home heating affordability until Dec. 15. The Enbridge rep encouraged the municipality to submit comments.
The municipality met with Enbridge at AMO, with MPP Rick Byers present.
RULES AROUND CONSTRUCTION OF LINES
Enbridge was also looking for municipal support on another front.
The company wants the province to speed small rural projects by raising the dollar limit that triggers the “Leave to Construct” process.
The limit was set at $2 million about 20 years ago and has never been changed, the company said in a letter. Today, even a half-kilometre of pipe in urban settings is over that limit.
Enbridge is asking the municipality to pass a support resolution for raising the Leave to Construct threshold from $2 million to $10 million for hydrocarbon lines. The Indigenous consultation and environmental reviews for projects from $2M to $10M would remain, Enbridge suggests.
The company argues that smaller projects could get built faster, which would speed like housing developments and community expansion.
In the spring, council asked staff to answer questions from Enbridge about specifics of where a line could be located in Flesherton and Markdale expansion areas.
Staff told Enbridge that the municipality would not be willing to give blanket approval to placing line one metre off asphalt. Instead, the standard in Grey Highlands and Grey County is to place the line one metre off the property line.
Any exception to that would have to be explained and the location inspected by the municipality, the staff letter said.
The pricing given by the Enbridge rep last week therefore used the one metre off property line standard.
M.T. Fernandes, Local Journalism Initiative Reporter, The Flesherton Advance