City gives gas utility a ‘Kodak moment’

In 1973, legendary musician Paul Simon released a hit song titled “Kodachrome,” named after one of the world’s most famous film stocks made by a company named Kodak.

So ubiquitous was the photo imaging company, a pleasant memory was often referred to as a “Kodak moment.”

So how did a category-leading multi-billion dollar corporation get reduced to nothing in the public consciousness practically overnight?

It is safe to say that Kodak and its board of directors completely failed to grasp the disruptive power of digital photo sharing, and platforms such as Instagram and Facebook.

Some sweeping changes at Vancouver city hall in recent months tell me that other companies must heed the lesson of Kodak’s precipitous fall.

At a summer meeting of city council, after many hours of speakers and deliberation, a plan to adopt a new policy called the Zero Emissions Building Plan was approved unanimously, albeit with reservations from the NPA opposition as to its costs.

It follows the city’s broader Renewable City Strategy approved last November.

In a nutshell, Vancouver is updating its bylaws to require any new buildings to use so-called renewable energy sources instead of natural gas for heating and hot water.

Natural gas is in abundant supply in British Columbia, is an efficient low-carbon resource, and — in case you did not get the memo — is something we want the whole world to buy from us.

Our monopoly utility FortisBC supplies natural gas to heat our homes and hot water. Now, the City of Vancouver aims to wean us off natural gas in the coming years through its zero emissions plan.

The switch to 100 per cent renewable energy will be most likely noticed in your household budget. While city staff provided scant details on the per-user costs, we should look at the experience of Sweden where renewable energy from burning garbage and wood waste has been mandated for approximately two decades.

Just like with the city’s plan, homes and other buildings are required by law to either connect to district energy utilities (like the ones currently in the works for downtown Vancouver, Southeast False Creek and the Cambie Street corridor), or choose more costly electric heating.

In Sweden — where it must be acknowledged the climate is cooler than in the Lower Mainland — households pay about US$4,500 annually for electric heat, or US$3,200 for district energy (customers using electric heat heavily subsidize the district heat utility).

These numbers may bear little resemblance to what will happen here, but it is a cautionary note as to why we must be really clear on what we are prepared to pay for these new energy sources.

Energy could be significantly more expensive in a city where affordability is already a challenge.

Which brings me back to FortisBC and the story of Kodak.

Though the city has set a course for 100 per cent renewable status last year, it appears staff at the gas utility scrambled at the eleventh hour to respond to the zero emissions building plan.

It should be a wakeup call for all energy utilities that the landscape is rapidly changing.

At present, FortisBC claims to be connecting up to 1,400 new customers for natural gas energy in Vancouver annually. The new bylaws will eventually reduce this growth to practically zero.

Keep in mind that, under the COP21 Paris accord, all of Canada’s communities are obligated to reduce greenhouse gas emissions. So companies like FortisBC can choose whether this is a death knell for their future, or an opportunity for success.

I am reminded of the famous “Internet” email Bill Gates sent to all staff at Microsoft in 1995. He effectively admitted that the company was failing to grasp the power of that new medium and had to embrace it in a hurry.

In hindsight, that email saved the company.

There are multiple ways Vancouver’s shift to renewables can get it wrong, but the fact is the city is driving change and others are soon to follow.

There are utility companies whose business models have rapidly adapted to the shifting marketplace — take Telus, for example. This subject I will save for a future column.

For now, it feels like our gas utility just had a Kodak moment, and not in a good way.

— Originally published at Vancouver Courier.