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Questions about:

Natural gas

What's the source of gas?

We'll connect to the system via Union Gas connection points either in Wingham or Dornoch metering stations. But because it's extremely hard to track a molecule of gas, we can’t easily say what the origin of the gas in the system is. It comes from a mixture of sources.

Is it safe? What happens if a pipeline breaks and gas leaks?

The pipelines will meet all safety standards and have cathodic protection. If gas does escape, it will try to make its way into the atmosphere as gas is lighter than air — seeping upwards through the ground or bubbling through water;making it's way into the atmosphere without reacting with its surroundings.


EPCOR

Why EPCOR? How are they qualified to build pipelines?

We’ve been doing gas retail for a little while but this is our first gas system construction.However, we’ve built many other types of linear assets (such as electricity distribution and transmission lines as wel as water and wastewater systems). We've surrounded ourselves with contracted partners who have a lot of experience developing pipelines in this area. We feel that we have a great team in place and the ability to bring this project to completion.

Will EPCOR sell appliances?

We're not in the retail appliance business. Purchasing natural gas appliances will be an individual choice. We'll be looking to speak with and source out qualified furnace installers and water heater services so enough contractors are available and have been researched for local residents for when conversion needs to happen. We anticipate a bulk in the beginning and will do what we can to reduce wait times because of contractor availability.

When connection happens, will it be EPCOR employees doing the connection?

We anticipating a large demand in the beginning, so we'll outsource most of the initial connection work. But as demand for connection subsides, then we could look at maintaining the work ourselves. We’d look at what's appropriate and most cost effective.

Will EPCOR have a local office?

Yes. We're looking at establishing offices in the area to help with connection and conversion for customers.

I want to tell EPCOR about my services which can be used to build the project. How do I bid on work?

AECON is proposed to be our design/builder. It would likely be AECON who will be determining sub-contractor needs for construction. But as we are still in the design phase it is too early to say what sub-contractor needs we will have or how we will look to fill them.


The project

How many customers on the current route is EPCOR hoping to convert?

We believe that there'll be about 4,000 connections that could be put onto this system. We're currently discussing connection probabilities with large industrial customers and looking to secure fairly firm commitments from at least 10 of those. For agricultural and residential interest we think that a 65% conversion rate to start working with and an escalation to 85% in the first few years is reasonable and achievable.

Approximately 3,000 connections will be needed in the early years with a thought to grow that to the 4,000 connections in the subsequent years.

How will EPCOR measure resident interest?

Exit surveys from open houses were a great start. In addition, we’ve received emails from a number of people throughout the area which indicates a good level of interest. When EPCOR offices are available in the area, we are hoping you will be able to register there. We'll also undertake some door knocking efforts in order to confirm interest.

Will Bruce Power be the biggest customer?

No. There are large industrial customers we are in discussion with to assess their needs; Bruce Power is only one of them.

Which roads will it come by / down?

The routing depends on supply and demand and operating inside of an agreed franchise area. This project will connect to the Ontario system at a metering station, likely in Dornoch and/or perhaps Wingham. From there routing will look to have the larger distribution lines head toward areas of greatest demand. Branching off from these larger pipelines will be the distribution system into the residential neighbourhoods. Exactly what the routing will be is still under discussion, but we will have more specific information for residents in early 2016.

Why are other counties not invovled?

The three municipalities that have been spearheading this have invested a great amount of time and energy in developing this deal. So to be fair to them, developing a system that works for them first and foremost is the concern. After that, looking at economics to see if other areas can be brought in and what the implications to franchise agreements would be is something we may look at.

Who approves the project? Who has the final say on where the pipeline route is?

We'll seek approval from the Ontario Energy Board (OEB) to create a natural gas distribution utility.

What are the next steps?

As part of our application to the OEB, we'll engage stakeholders, landowners, residents, First Nations and Métis communities and other interested parties. We want to understand what's most important when developing the route for this project. We'll continue the conversation over the coming months and bring more detail on a proposed route, as well as costs for customer connections. Another round of Open Houses is planned so we can continue to share with you what we have learned and additional details on the project.

Will natural gas storage be part of the plan?

Any time you build a natural gas system storage becomes an important option. We will consider all storage options. There are regional and system options that we can explore. We will compare these options and make decisions at a later time based on least cost option with increased reliability and minimum risks.

Who do I contact if I have questions about the project?

You can contact us at southernbruce@epcor.com.


Individual properties / hook-ups

Is is mandatory to hook up?

This isn’t like water or drainage: you can’t be forced to hook up. Connecting will be on a voluntary basis and we are hoping the economic benefits will motivate home owners and commercial customers to see the value in connecting.

Will EPCOR pay for the line from the street to the house like Union Gas does?

This is currently being determined. We're looking at a solution that will help to reduce cost of building the line to your house and that mirrors best practices from other natural gas distributors in the area. Our current thinking is that during the initial build, we would cover the cost for up to 30 metres of connection onto a property. A house within that 30 metre distance could be connected at no charge to the customer. After the system is in place and operational, we'll determine what, if any, connection costs will be covered.

Why build before provincial dollars are secured?

We’ve been told we are early in the queue. The goal of pursuing the funds is to get as much as possible to help ease connection costs and/or reduce rates to consumers. But even without those funds, we're examining the options. Our capital costs, regardless of provincial funding, will cover a 30 metre hook up as we have to put the meter on your side of the property line. As well, we may look at how best to provide conversion financing to help residents out if provincial funds aren’t available. We hope to be creative in this area to ensure an efficient conversion with savings.

Do we have to hook up right away? Can we connect without converting and then convert down the road?

You can connect now or convert later. There would be a flat monthly charge you would have to pay but there wouldn’t be any usage related charges until you begin using the gas.

How can I save money when my propane costs don't come anywhere close to the costs you're showcasing?

The costs and savings that we have been using as examples are averages and come from outside sources. We use them to discuss personal economics of connection and conversion but they are not intended to be indicative of any one specific set of circumstances. The economics of connecting and converting will be different for every customer. Sometime in 2016, we'll have a better idea of routing and rates, as determined by the Ontario Energy Board. We'll then be in a better position to give more precise thought to conversion and connection costs on an individual customer-by-customer basis.

Will rates be the same as they are in neighbouring communities that have natural gas?

Rates are set by the Ontario Energy Board. But there will be a specific Southern Bruce rate which based on recapturing capital costs invested.

Will there be an opportunity to lock in pricing?

It depends on how many people are looking for that as an option. We're currently in the project planning stages with thought on how billing would work is a consideration for a later date.

What is the amortization period?

Typically for a project of this size it would be 20-30 years.

Does EPCOR have tips for people looking to build in the next few years before the system is available?

A propane system is cheapest and easiest to convert.

How much of a load do I need to make it worthwhile at my house to convert? If I'm not using a gas stove or if I have a geo-thermal heat pump instead of a furnace, does it still make sense for me to connect?

The economics of connecting are unique to every house, so it depends on how close you are. If you're close to the distribution line (within 30 metres) and connection costs are minimal or non-applicable to your case, then you would only be paying usage plus the monthly fees. Your savings would be smaller, but your monthly costs would be smaller as well. The savings would still likely be in the same ratio as customers who have lots of appliances and require a furnace.

What about condos? Would EPCOR meter individually?

We’d have to review the scenario for a few variables and develop a solution that worked for the building as a whole.

Could system additions be put in place where people could hook up natural gas vehicles?

It is technically possible but isn’t really a part of the conversion economics that we’ve studied.


Project economics

Will my taxes go up?

No taxpayer dollars will be spent on construction costs associated with bringing natural gas lines to the municipalities.

Who's paying for this?

We're providing the capital funding to develop this project.

Is there government money available to help with conversion costs? What are the conversion strategies with government grants and EPCOR grants?

With the municipalities, we're continuing to discuss this and to look for opportunities to access government funding.

How will EPCOR determine who gets a subsidy and how much it will be?

We're still working on the formula. Without knowing if or how much money the Province is willing to commit, or knowing how they will look to administer the funds, we can’t answer how we'll handle things on our end.

How are natural gas rates be set?

Natural gas rates are regulated by the Ontario Energy Board.