It's all about the connection

Connecting growing communities to cleaner heating sources, like natural gas, can be challenging work. EPCOR’s long history of working collaboratively with developers, regulators and customers has given us the edge in helping cities and towns make smart energy choices — from Ontario to Texas.

EPCOR has ambitions for growth, but only in reasonable, sustainable, and ethical ways, as we are seeing play out with EPCOR’s expansion into Ontario and Texas. David Billinger was born and raised in Texas, and after working as an environmental advisor with various companies, he moved to EPCOR three years ago to become Director of U.S. Gas Operations. As a member of the Texas Coastal Conservation Association, he has also a personal interest in environmental sustainability. Still, he says, “Texas is one of the faster growing areas for the corporation. We have ambitious plans to grow the business footprint.”

Texas is a highly competitive natural gas market. Unlike Canada, where companies bid on contracts for clearly demarcated areas, the Texas market is somewhat less structured than many others in which EPCOR operates. “We don’t have the same kind of defined service areas,” says Billinger. “It is a very free market. It does well for the end consumer because it drives the competitiveness of the business.”

Also driving the competitiveness is the fact that natural gas for home heating is far from an automatic assumption in Texas. Slightly over 50% of home connections use it, but a significant portion use electric heating. Conversion of existing homes hasn’t had much uptake to date, and so EPCOR is focusing on greenfield expansion, meaning new housing.

There is such rampant growth across the state that you can plant a flag anywhere near a city and be certain of finding a new market. Four of the 10 most populated cities in the United States are in Texas. The state has a deep- water port. The weather is good. There is significant diversity. “It’s a great place to be,” says Billinger. “A real economic powerhouse.”

Ontario may be Canada’s economic powerhouse, but before EPCOR was awarded the franchise for the Kincardine/Bruce area (a chain of smaller communities northwest of Toronto on the Lake Huron shore), the energy mix was approximately 60% propane, 25% electricity and the remainder oil and wood.

Being cleaner, more convenient, and more affordable, natural gas is a significant upgrade for customers in these areas. In fact, it was the community that drove the move to natural gas. Three mayors of small towns in the region created a joint RFP that EPCOR bid on and won, though there was a hiccup. The Ontario Energy Board decided after the fact that it was their RFP to oversee and so they re-ran it. EPCOR bid again, and won again.

After roles in various aspects of the energy industry, Susannah Robinson joined EPCOR four years ago as Vice President of the Ontario Region and remembers how unusual the process was. “Winning that bid was a long journey, as you can imagine,” says Robinson. “But the communities played a big role in discussions with the government because they were a strong proponent of our original and second proposals.”

“Before EPCOR was awarded the Natural Gas franchise for the Kincardine/Bruce area, the energy mix was approximately 60% propane, 25% electricity and the remainder oil and wood."

Since then, EPCOR has completed a backbone natural gas pipeline and distribution lines, but it’s been a challenging project, not just because of the pandemic. “We had to enter people’s homes to inspect infrastructure,” she says. “And because gas is new to everybody in the area, there has been significant education around natural gas. The community has been very welcoming, though, and now we’re over-subscribed.”

When it comes to the rationale behind why people do or don’t convert to gas, David Billinger says that the primary reason is that conversion savings take too long to recoup the upfront investment. With newer homes in suburban and exurban areas, natural gas is a natural fit. The cost can be built into the price of a new home. “It pretty much sells itself,” says Billinger.

What doesn’t automatically sell itself, though, is getting developers and regulators to choose EPCOR in an aggressive marketplace. “The competition to serve a new development is fierce,” says Billinger.

He focuses any bid on EPCOR’s many strengths—its history, its service record, its strong reputation with both developers and regulators, community feedback, deadline delivery. He also highlights the facts that EPCOR is Canadian and municipally owned as strengths, since they represent lasting relationships and inherent stability, unlike, say, a utility owned by a private equity firm. EPCOR’s strategy of measured and principled expansion is working so far in Texas, with 5,400 connections and thousands more upcoming. “Sustained growth is the goal,” adds Billinger. “We’re growing the business close to 6% a year on customers and a little over 10% a year on contracted growth. We have a definite growth window here.”

“We are seeing many propane and oil customers in Ontario convert to natural gas. There are savings to be had, but also the peace of mind associated with switching to a cleaner fuel.”

The growth window is also open in Ontario, but you still need incentives to get customers there. For example, EPCOR committed to a 10-year guaranteed rate, excluding annual inflation, to offer customers migrating to natural gas a higher comfort level. The connection pace is exceeding expectation so far, even if, as in Texas, some are less inclined because of the conversion cost. Nevertheless, says Robinson, there has been strong uptake. “We are seeing many of those propane and oil customers actively converting,” says Robinson. “There are savings to be had but also peace of mind associated with switching to a cleaner fuel.”

EPCOR has plans to continue its expansion in Ontario and Texas, but it must be sustainable. Texas is a volatile market and Ontario much less so, but in both places the way EPCOR is connecting with customers is through highlighting its standards, its track record and its ability to connect both gas lines and communities. It remains the foundation of EPCOR’s success. “What we do resonates with communities,” says Robinson. “And we have a good sense of what success means for a community.”

Investing in our people is one way we're building stronger communities

We're committed to helping our communities by protecting the environment and promoting social responsibility. We do that by conducting our business responsibly, with openness and transparency. We're pleased to share our ESG report to showcase our performance in areas that are important to us—our customers, our partners, and the communities we serve.

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It's all about the connection

​Connecting growing communities to cleaner heating sources, like natural gas, can be challenging work. EPCOR’s long history of working collaboratively with developers, regulators and customers has given us the edge in helping cities and towns make smart energy choices — from Ontario to Texas.

“Before EPCOR was awarded the Natural Gas franchise for the Kincardine/Bruce area, the energy mix was approximately 60% propane, 25% electricity and the remainder oil and wood."​

Inv​​​esting in our people is one way we're building stronger communities

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Connecting growing communities to cleaner heating sources, like natural gas, can be challenging work. EPCOR’s long history of working collaboratively with developers, regulators and customers has given us the edge in helping cities and towns make smart energy choices — from Ontario to Texas.

“Before EPCOR was awarded the Natural Gas franchise for the Kincardine/Bruce area, the energy mix was approximately 60% propane, 25% electricity and the remainder oil and wood."

Investing in our people is one way we're building stronger communities