- Aug 2021
-
www.canarymedia.com www.canarymedia.com
-
will reduce overall natural-gas usage by about 70 percent in buildings that install them,
Quebec's plan to encourage hybrid heating (electric + gas) will cause a dramatic increase in gas bills:
Reducing the quantity of gas commodity consumed does not reduce the largely fixed costs of gas delivery. Thus, in order to ensure revenue neutrality and adequate utility cost recovery, a 70% reduction in the quantity of gas delivered will require a 333% increase in the per-unit cost of gas delivery. This increased cost will, of course, be offset by reduced expenditure on the gas commodity. However, If we make the reasonable assumption that today's costs are evenly split between commodity and delivery, a 70% reduction in gas consumption will require a new per-unit price of delivered gas which is at least 182% of the current price with a reduction to 8.25% of the commodity's share of costs. Gas consumers will be paying for pipes, not gas... (I'm not sure what todays cost split is in Quebec. If it's 60% delivery, the price will rise to 212% of today's cost. If it is only 40%, the price will rise to 151% of today's. )
However, it is likely that if the per unit cost of gas increases by the amounts calculated above, a great many gas users will realize that the cost/kWh or BTU of heating with electric heat pumps is lower than that for gas. Thus, it is likely that gas abandonment will increase over the current rates. While environmentalists will welcome increased gas abandonment, it should be recognized that it will create additional pressure to increase the per-unit cost of gas delivery which will, of course, encourage even more abandonment. The result will be a gas death-spiral.
The Quebec approach is unlikely to lead to good outcomes.
-