Montréal May 8, 2019
Madame Valérie Plante
Mairesse de la ville
Ville de Montréal
Directeur du Bureau de la transition écologique et de la résilience
Ville de Montréal
Subject: Conversion of residential oil heating systems to electricity
Madame Plante and Monsieur Ribaux,
Over the past years the heating oil industry has been steadily declining due to several factors such as unpredictable and fluctuating oil prices, the high costs of maintaining heating oil equipment, restrictive municipal regulations designed to reduce pollution caused by greenhouse gas emissions, financial incentives offered by the CHAUFFEZ VERT program, not to mention consumers’ growing concerns over environmental issues.
Consequently, in the last decade, the market share of the residential heating oil industry has gone from 15% to 6%. As a result, the major heating oil companies have cut back on the amount of oil delivery trucks and drivers which has created (especially in the past 2 years) increased delays for oil deliveries and run-outs.
The heating contractor trade that service heating oil equipment is an aging workforce (over 60 years old) and with most of them retiring, there aren’t many new young heating technicians available in the near future.
As a result of all these factors, an increasing amount homeowners run out of oil during cold snap periods because heating oil suppliers can no longer keep up with the demand for oil deliveries due to the lack of resources.
All these logistical problems have affected homeowners’ confidence towards heating oil suppliers to the point where many of them are now considering converting their oil (and dual energy) heating systems to electricity in the near future.
Considering all these factors, it would be advisable for the city of Montréal to offer a municipal subsidy (grant) for homeowners who choose to reduce their carbon footprint by converting their oil heating systems to electricity now rather than later. As an incentive, the city of Laval offers financial aid of up to $1,000: https://www.laval.ca/Pages/Fr/Citoyens/chauffage-au-mazout.aspx
Electric conversions are already eligible for the Chauffez vert financial aid program within the energy transition plan from the Québec Government. This financial aid program is a good incentive to entice homeowners to convert from oil heating to electricity. The addition of a municipal subsidy from the city of Montréal would compensate for the recently abolished RénoVert tax credit on March 31st.
Some important facts: 200,000 to 225,000 homes still heat with oil in the province, of that amount about 75,000 to 80,000 in the Greater Montréal area. It would be logistically unlikely to convert them all in the short term. However, on a 10 to 12 year span, it would be realistic for the city of Montreal to be carbon free from oil heating emissions.
From Hydro-Québec’s prospective, to accelerate the energy transition, the end of the dual energy preferential DT (double tariff) rate would be advisable. The reasoning behind this is as follows: More than half of the homes that heat with oil in Montreal heat with dual energy and therefore benefit from the preferential rate which in turn delays the transition from oil heating to electricity. By abolishing this DT rate, homeowners who heat with dual energy will no longer have incentives to remain on oil heat. The dual energy mode heats with electricity at a preferential rate when the outdoor temperature is warmer than -12 ºC. The oil heating system takes over when it is colder than -12ºC.
In an article Hydro veut en finir avec le mazout published in le journal la Presse in February 2017,
Hydro-Québec stated that they wanted to eliminate oil heating from the Québec market and wished to conquer new markets to increase profits for the state-owned company. In this context, by continuing to offer the preferential dual energy DT rate would be counter-productive.
To understand the reasoning behind the inception of the DT rate in the 1980’s, the high demand for electricity during peak demand periods in the winter season incited Hydro-Québec to offer heating oil customers a subsidy and preferential rate to convert their homes to dual energy. When the outdoor temperature was colder than-12ºC, homeowners would use oil as a source of heat therefore reducing pressure on Hydro’s grid. Since then, times have evolved, and it should be Hydro-Québec’s priority to move forward by putting an end to the dual energy program altogether.
The ecological transition that the city of Montreal is taking is happening at a pivotal time. The recent announcement by the city to convert its remaining properties to electricity by 2021 is coherent and sets the example with the overall willingness to reducing our environmental footprint for the benefit of our future generations.
About the author of this letter:
Heating and air conditioning consultant, marketing and sales director of a major heating oil company for the past 35 years, and more recently, founder of a new enterprise which will specialize in safely and expertly converting oil and dual energy heating systems to electricity. The launching of this new venture is planned for early summer 2019.
Should you require additional information on the subject, I am available to answer questions or elaborate on the residential heating industry.
Citizen of Montréal