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Ontario Reducing Costs by Centralizing and Refocusing Conservation Programs

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Ontario Reducing Costs by Centralizing and Refocusing Conservation Programs

Ontario's Government for the People is continuing to take steps to reduce costs and provide electricity rate relief for Ontarians.

The government has issued Orders in Council and Directives to refocus and centralize the delivery of conservation programs to save electricity customers and taxpayers up to $442 million over the next three years.

Today's customers understand the value of conservation and require fewer initiatives to realize reductions on their electricity bills. Winding down these conservation programs will refocus conservation programs to those who need it the most, including low-income families, small, medium and large businesses and First Nations communities. There will also be opportunities for local distribution companies to deliver local programs. The proposed changes will have no effect on the environment, will lower system costs and will reduce hydro rates for medium and large employers, increasing competitiveness and opportunities for growth.

For example, an auto sector company, consuming 15,000 megawatt hours a month, would see a bill reduction of about $15,000 per month. A mining sector company, consuming 50,000 megawatt hours a month, would see a bill reduction of about $30,000 per month.

Moving to central program delivery by the Independent Electricity System Operator (IESO), as opposed to a local distribution company (LDC) delivery model, would also reduce the costs of program oversight, administration and delivery and end up to $150 million in wasteful bonus payments to LDCs that do nothing to help conservation.

Ontario's electricity system is one of the cleanest jurisdictions in the world thanks to our reliance on nuclear and hydro power. Over 95 per cent of our electricity is emissions-free, making Ontario's electricity system cleaner than other jurisdictions like Germany and California.

Further, legislative changes are also being proposed to enable the IESO to accept tax base funding to fund conservation in the future. These amendments would provide the flexibility to the government to take further costs out of the electricity rate base.

Forecasted savings in conservation funding are:

Total cost to electricity systemElectricity SavingsBonus payments to LDCs for program delivery
Before$1,128 million2.93 TWhUp to $150 million
After$686 million2.11 TWh$0

The IESO is expected to present a Conservation and Demand Management (CDM) Plan to the government within one month of receiving the Directive that would provide details on the programs, budgets and expected electricity and demand savings for the balance of 2019 and 2020

The CDM Plan is expected to include the following CDM programs, or equivalent programs, centrally delivered by the IESO:

  • Retrofit Program: provides incentives to businesses for updating old or inefficient equipment (for example, lighting, motors and variable frequency drives)
  • Small Business Lighting: provides an assessment and incentives for eligible lighting upgrades
  • Energy Manager Program: provides funding for a portion of the salary of an energy manager to help identify energy saving opportunities & investments and help secure financial incentives
  • Process and System Upgrades: provides incentives, tools, and resources to help identify, implement, and validate energy efficiency projects from start to finish
  • Industrial Accelerator Program: will be merged with the Process and System Upgrades program under the new framework to expand the eligibility of that program to include transmission connected consumers
  • Energy Performance Program: provides incentives to businesses for whole building energy improvements
  • Home Assistance Program: provides free home energy assessment and installation of electricity savings measures for income-eligible customers
  • Targeted programs for on-reserve First Nation communities.

The programs expected to be discontinued include:

  • Business Refrigeration Incentive: provides businesses incentives for the direct installation of product refrigeration equipment upgrades
  • Audit Funding Program: provides funding for a portion of the cost of a facility energy audit
  • High Performance New Construction: provides design assistance and incentives for building owners and planners who design and implement energy efficient equipment within their new space
  • Existing Building Commissioning: provides incentives for improving the efficiency of the chilled water system, including, audit, purchase and installation of equipment
  • Monitoring and Targeting: provides incentives to purchase and install a monitoring and targeting system operational Incentives
  • Instant Discounts: provides point of purchase incentives at participating retailers for qualifying energy efficient products, including LED light bulbs, light fixtures and power bars
  • Heating and Cooling Incentive: provides rebates for purchasing and installing new qualifying energy-efficient heating and cooling equipment (central air conditioners and furnaces), including smart thermostats and air sourced heat pump/system
  • Residential New Construction: provides incentives to improve energy performance and install energy efficient products in new builds.

For details on the refocused and discontinued conservation programs, visit saveonenergy.ca.

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