Ontario ramps up electricity savings target

Conservation programs for 2015-2020 still on hold while IESO and LDCs finalize details
Monday, March 30, 2015
By Barbara Carss

Preliminary results indicate that Ontarians largely achieved the provincial electricity savings target for the 2011-2014 period, but fell significantly short of the goal for reducing the peak demand that creates pressure for costlier — and often dirtier — sources of supply. Recently released tallies from the Independent Electricity System Operator (IESO) of Ontario peg cumulative five-year savings at nearly 5.9 billion kilowatt-hours (kWh), while 798 megawatts (MW) of peak demand reduction was about 40 per cent below the original objective.

“These results show how consumers have been able to use saveONenergy programs to take control of their energy use and reduce both their current and future energy costs,” says Terry Young, the IESO’s vice president of conservation and corporate relations. “For each dollar invested in conservation, about two dollars are saved in avoided generation.”

Ontario’s Ministry of Energy has now set an even more ambitious goal for 7 billion kWh of electricity savings in the 2015-2020 period. Conservation efforts are primarily in the hands of the province’s 70+ local distribution companies (LDCs), which have each been allocated a share of the overall target and an equivalent budget for conservation programs. This is expected to include a slate of province-wide incentives that LDCs can choose to offer within their jurisdictions, as well as programs that LDCs specifically design for their own customer base.

Thus far, few details are available since LDCs have a May 1 deadline to submit their plans to the IESO for approval. Province-wide programs were initially scheduled to be unveiled by January 1, but that still hadn’t occurred as of late March. In the interim, some of the most popular incentives from the 2011-2014 period remain in place, but program participants must complete the work by the end of 2015 to be eligible for rebates.

“A significant part of the success of the current programming is what it does to support every stage of conservation, from finding out how to save, all the way to getting the project done,” maintains Eric Chisholm, an engineer and project manager with the green building and energy services team at Halsall Associates in Toronto. “There are incentives for audits and for retrofits, and incentives tailored to every sector of customers.”

Among these, the IESO’s recent news release to announce the preliminary conservation results trumpets accomplishments in the residential sector — reporting that homeowners had taken advantage of the free Fridge & Freezer Pickup program to turn in more than 22,000 old, inefficient appliances in 2014, while nearly 5 million saveONenergy coupons were redeemed for the purchase of a range of energy-efficient products.

Nevertheless, program penetration rates have been somewhat uneven. For example, Utilities Kingston recorded a 0.03 per cent take-up rate for a 2012 coupon campaign, Stephen Sottile, the LDC’s manager of conservation, recounted at a conference sponsored by the IESO and Toronto’s MaRS Discovery District earlier this winter. Indeed, he identified himself as the redeemer of the only three out of 10,000 coupons distributed.

Customers in the commercial and broader public sectors have tended to favour incentives for energy audits, and upgrades to lighting, HVAC, motors, variable fan drives, belts and pumps — options that still make sense while they wait to learn details of the new programs.

“Some projects can easily be done in time to meet the deadline,” Chisholm says. “You can install variable speed drives very quickly. You can certainly conduct an energy audit before the year is out.”

LDCs may appear to be the power-brokers, authorizing incentives and evaluating participants’ results, but they face significant pressures of their own. Again, details are scant, but a performance bonus or penalty is expected to be part of the pursuit of the new, more aggressive conservation target for 2015-2020. Big customers — whether singularly or collectively advocating through organizations like the Building Owners and Managers Association (BOMA) — have clout.

“Our LDC, Horizon Utilities, has $84 million worth of incentives it has to deal with to meet its target, and we’ve been one of the biggest clients in terms of achieving the conservation objective,” observes Geoff Lupton, the director of energy, fleet and traffic for the city of Hamilton, and a member of the IESO’s stakeholder advisory committee. “In our case, we’ve got a great relationship with our LDC. It always works very well with us to figure out how we can take advantage of the available incentives.”

Responsibility for demand response programs has now been transferred to the IESO, leaving LDCs to focus exclusively on energy savings. Advocates for commercial customers urge LDCs to look at previous successful initiatives such as BOMA Toronto’s former CDM program, which served as a pilot and predecessor to the current saveONenergy program.

“We paid out about $25 million in incentives in exchange for more than 50 MW of peak demand reduction and more than $150 million in investment in energy-efficient technologies and improvements to building performance. Is there any other investment vehicle the provincial government could have used to get that level of return on investment?” asserts Bala Gnanam, BOMA Toronto’s director of sustainability and building technologies. “The key message that LDCs need to understand — considering the aggressive target with only a marginal increase in their program administration budget — is that, in order to be successful, they need to fully leverage industry organizations like BOMA and the Retail Council of Canada so that they can engage the end-users more efficiently. We know what works and what doesn’t in the commercial sector when it comes to delivering programs.”

Others counsel LDCs to loosen some of the more problematic program rules. Notably, bottlenecks at the application approval stage can cause businesses and municipalities to miss their own internal budgeting cycles, thus postponing projects for another year or scrapping them altogether. Lupton suggests it’s in conservation program administrators’ best interest to allow proponents to begin work before they receive the official go-ahead provided they can later document what they’ve done.

“The LDCs are going to have to be flexible and consistent to make sure there are no major changes part way through the programs,” he advises. “And they are going to have to really hustle.”

Barbara Carss is editor-in-chief of Building Strategies & Sustainability and Canadian Property Management.

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