Interprovincial Purchase of RNG In British Columbia
FortisBC received its first delivery of renewable natural gas (RNG) from outside of the province in early August, making it the first interprovincial purchase of RNG in Canada by a natural gas utility. “RNG is an essential component of FortisBC’s 30BY30 target, which includes a focus on having 15% of our natural gas supply be renewable by 2030,” explains Diana Sorace, FortisBC’s Corporate Communications Advisor. “The more RNG we receive, the better we can supply our customers with carbon neutral energy that helps reduce greenhouse gas (GHG) emissions. Out-of-province agreements are currently in place in both Ontario and Alberta.” The 30BY30 target is to reduce FortisBC’s customers’ GHG emissions by 30% by 2030 to help the province of BC meet its climate action goals. You can find more information about FortisBC’s current projects and the value of Renewable Natural Gas in their latest blog: A little less conversation, a little more (climate) action.
This from the RNG implementation handbook for Ont Municipalities selling to Fortis BC
Longer term contract, high price up to $30 per GJ. (Municipalities selling their
RNG to FortisBC should note, however, that they won’t be able to realize the
full potential up to $30/GJ, since marketing fees and similar tariffs will need to
be deducted from the final selling price).
Pros:
FortisBC, a Canadian-based organization, is procuring supplies of RNG
from within and outside of BC. They are currently testing markets
outside of Canada. This regulated entity is a solid counterparty to
base financing for an RNG project in Ontario.
They will also contract with a municipal RNG producer for a longer
term (e.g. 20yrs), allowing municipalities to mitigate risks.
The gas utility is authorized by the BC energy regulator to pay a fair
price for the RNG.
Cons:
A municipality contracting with FortisBC will need to work with a
broker/trader to make the transportation arrangements for the fuel
to notionally be delivered from Ontario to British Columbia.
Transportation and exchange costs will be incurred by the seller (i.e.
municipality) (e.g. >$3/GJ). FortisBC has designated Huntingdon as its
trading hub in BC.
There is risk in the project from having a policy change in British
Columbia as it relates to purchasing RNG from out of province (e.g.
British Columbia ratepayers are carrying the cost premium for the
Ontario-made RNG being consumed in their province).