Grand Theatre, city forced to cough up as Enwave retires steam heat line

A decision by Enwave to decommission an underground line that supplies steam heat to 17 downtown buildings has left the city and London's Grand Theatre scrambling to install their own heating systems. 

One city councillor worries it could be just the start of similar expensive heating system replacements if Enwave, which owns the London District Energy system, moves to decommission its other steam lines. 

"My gut feeling is that there could be more decommissioning in the future," said Ward 13 Coun. David Ferriera. "I'm really not happy about this." 

At issue is Enwave's system of pipes that deliver steam heat to buildings in downtown London. In May of this year, the company gave affected customers one year's notice that it would decommission a low-pressure line. In a statement to CBC News, Jason Brimble of Enwave said the decision was made for reasons of cost and safety. 

"Portions of the steam system will become increasingly unreliable and may pose safety concerns in the future," he said. "As a result, London District Energy has made the difficult but necessary proactive decision to decommission parts of the LDE steam network." 

The statement said 17 affected customers in the downtown core have been told steam service will be discontinued on May 31, 2025. 

The company's website said Enwave serves 60 customers in London with steam heat and in some cases chilled water for cooling. St. Joseph's Hospital is listed as a customer on the company's website.  

A city staff report said City Hall, Centennial Hall, Museum London, RBC Place and Budweiser Gardens are also served by a separate, medium-pressure Enwave line which is "not impacted at this time."

The company's website touts district energy systems, in which the water is heated off-site and supplied by pipes to the customer's building, as a cost-effective and reliable alternative to on-site heating systems. It allows the customer to avoid the need to provide space in their building for a furnace or boiler. Also, any upgrades to the heating portion of the system are centralized off-site. In London's case, the heating happens at the company's plant at Colborne Street south of York Street. 

The company's decision to decommission the low-pressure line has left at least two customers scrambling to source and install their own heating systems in a short period of time. 

The city-owned J. Allyn Taylor building at the corner of Dundas and Wellington Streets relies on the Enwave's low-pressure line for heat. Its offices house Tourism London. At a meeting of council's Corporate Services Committee on Wednesday councillors voted to spend $810,000 to install a new heating system in the building. Staff recommended granting the single-source contract because Enwave's move to decommission the line caught them by surprise and there wasn't time to follow the regular procurement process. 

Mayor Josh Morgan told the committee the district energy model "works great until something like this happens." He suggested municipalities look at pushing the province to step up regulation of systems like Enwave. The province's Technical Standards and Safety Authority (TSSA) regulates the LDE system and Brimble said they've consulted with the regulator about the company's move to decommission the line.

Grand Theatre 'has no working system'

Enwave's decision to decommission the low-pressure steam line has left London's Grand Theatre in a serious funding crunch. Their problems with the service started in September of 2023 when Enwave told them the line would not be able to supply them with heat through winter. The company provided a temporary heating system and paid for the cost of operating it. Then in April of 2024, Enwave informed the theatre the line would be decommissioned and they would not pay for the installation of a new heating system. 

"We have no working system at this moment," Grand Theatre executive director Lyndee Hansen told city councillors on Wednesday. She said Enwave's decision unexpectedly left the theatre to start the long process of procuring a contractor to design and install a new heating system. The lowest cost estimate they've received is $800,000, a cost that comes as the theatre continues work to rebuild attendance numbers lost during the COVID-19 pandemic. 

"Taking on an $800,000 debt at this point in our rebuilding would be crippling," Hansen told the committee. 

Councillors voted to give The Grand $400,000 out of the Municipal Accommodation Tax fund, a pool of money collected through a tax on hotel stays. 

City politicians also asked staff about the future of the Enwave's service and how it might affect other city buildings the company supplies using medium-pressure steam lines.

"We've asked our friends at Enwave and we've been told they're assessing their entire system," said Lynda Stewart, the city's director of fleet and facilities. "And that's the extent of the information that's been provided at this time."