(Submitted)
Algonquin Power & Utilities Corp.’s (APUC) CEO Ian Robertson was in Fredericton Tuesday unveiling new “Liberty Utilities” signs over Enbridge Gas New Brunswick’s office. The $331-million acquisition of Enbridge’s New Brunswick operations now complete, the business of growing the customer now begins.
At the time of the sale, Enbridge provided natural gas to around 12,000 customers across 12 communities, with around 1,200 kilometres of natural gas distribution pipeline throughout the province.
When Enbridge built its transmission system, it had aimed to serve around 70,000 customers but fell far short of that goal. Liberty Utilities, an APUC subsidiary, sees opportunities to make big gains, targeting an additional 10,000 customers and beyond.
“When we look at the system, there’s probably another 10,000 customers who are located tantalizingly close to the pipeline but perhaps because of that $1,500 or $2,000 investment that they have to make for a burner system for their house, they haven’t been able to make the switch [to natural gas]. We’re hoping to facilitate those switches,” Robertson said.
The deal to buy the Enbridge business was announced in January but made official Tuesday.
Robertson said other than the signs on the building, vans or workers’ jerseys, not much will change.
“We will have the same great service provided by the same committed team. Our operating philosophy is very much about being local and responsive and so, everybody who is part of the Enbridge team here in New Brunswick is continuing on as part of the Liberty Utilities team,” Robertson said. “People shouldn’t be worrying about Liberty not stepping up to the shoes of Enbridge from a community support perspective.”
Liberty also plans to bring jobs that are currently performed outside New Brunswick into the province, including roles in engineering and customer service. Robertson said he doesn’t know whether these seven or eight positions will be filled by hiring locally or moving some workers already in those jobs from other cities.
The utility also doesn’t plan on increasing prices for current customers. But it plans to increase the number of customers on its system.
“We certainly have committed that this isn’t about raising prices for everybody and in fact, we think that lowering cost is the way that this thing becomes ultra-competitive from our point of view,” he said. “The objective of bringing more customers into the system is to lower the cost for everybody who’s on the system.”
The utility plans to pitch in $5 million of shareholders money into a Fuel for the Future fund that’s aimed at helping new customers make that switch in their homes or businesses. Liberty is hoping with more people on its system, the costs of running the utility can be spread across more users and in turn, lower the price of the service for all customers.
Colleen Mitchell, president of industry association Atlantica Centre for Energy, said Liberty’s investment is a “tremendously good signal” for the energy sector in New Brunswick.
“It was a very big deal to see this investor confidence in New Brunswick that there’s a future for natural gas and the purchase price was significant, showing that there was value in the Enbridge system, so it’s a very positive signal,” she said, adding that this shows there are companies that see New Brunswick as a place for growth and good return for capital investment.
She also notes that while in Western Canada and Ontario natural gas is the top fuel for heating homes, that’s the opposite in New Brunswick where only around 10 per cent of homes use natural gas.
“From that standpoint, there’s a tremendous upside potential for the heating market in particular during the cold winter months of increasing the use of natural gas to be more comparable with other parts of the country,” she said of the opportunities for Liberty.
Both Mitchell and Robertson said natural gas is cheaper than alternative fuels, it’s cleaner than heavier emitting fuels like oil, and the price of the commodity has been very low in recent months.
However, it’s the cost of getting the gas to consumers in New Brunswick that can get expensive, so when commodity prices rise, the price that hits consumers also rises.
“There’s a variety of factors [that make natural gas access challenging in New Brunswick]. We’re at the end of the pipe if you want to think of it that way,” Robertson said. “One of the things that hopefully we’re willing to do…is we need to invest more in transmission systems, we need to invest in more shipping capacity, commit to longer-term shipping capacity because I think we can lower the cost of the actual methane molecules by making those commitments. And we’re willing to do that.”
“While we enjoy the cost benefits right now we have to make it even bigger to induce people to join the system. We’re committed to investing capital in order to do that,” he added.
A local supply would lower prices
With offshore natural gas supply from Nova Scotia shut down for around 10 months now, both Mitchell and Robertson said having on-shore, local supply of natural gas would make the cost of natural gas cheaper for New Brunswickers.
“There’s such a great local resource of natural gas, and I’m hoping that the province … finds a way to take advantage of that resource in an environmentally constructive and responsible way,” he said. “I understand the debate that exists with fracking and the whole shale gas, but there’s no doubt that one way to lower the cost of natural gas in the province is if the province can get comfortable with [local supply].”
He notes that APUC is working on a project in Moncton that aims to harvest the natural methane coming out of the landfill to feed the pipeline.
“If there was a domestic supply, then that would not only help local distributors like Algonquin in New Brunswick and Heritage Gas in Nova Scotia, but also the prospect of exporting that gas to areas in Europe and other parts of the world,” Mitchell said.
