Policy Roll-out has OPA Implementing Ambitious Demand Reduction Targets

The Ontario Power Authority (the “OPA”) received a direction from the Minister of Energy to coordinate, support and fund the delivery of certain programs under the Conservation First Framework (the “Framework”) over the next 6 years, beginning in January 2015.

The purpose of the Framework is to keep Ontario on track to achieving the province-wide conservation and demand management (“CDM”) target of 30 terawatt hours (TWh) by 2032 that was set pursuant to the Ontario Government’s 2013 Achieving Balance: Ontario’s Long-Term Energy Plan, which is discussed here and here. The “short-term” goal established under the Framework is a 7 TWh (or 7 billion kilowatt hours (kWh)) reduction in energy consumption by December 1, 2020 via the implementation of programs aimed at reducing the draw from the electricity grid.

The Minister likewise issued a direction to the Ontario Energy Board (the “OEB”), instructing the OEB to amend the license of each licensed electricity distributor (“Distributors”) to add a condition that specifies the Distributor will, between January 1, 2015 and December 31, 2020, make CDM programs available to its customers and will do so in relation to each customer segment in its service area.

In accordance with the Framework, the OPA will work with Distributors to design, deliver and administer a core set of Province-Wide CDM programs and Local and/or Regional CDM programs to make available to customers in its licensed service area. The OPA, in consultation with Distributors, will allocate the 7 TWh among Distributors and give each Distributor a CDM target to achieve reductions in electricity consumption for all customer segments in that Distributor’s licensed service area. Distributors will also be encouraged to team up with neighbouring local distribution companies to develop regional CDM plans that will meet regional CDM targets.

Distributors will be required to submit their CDM plans to the OPA for approval by May 1, 2015 and, in turn, the OPA will provide Distributors with long-term, stable funding to implement CDM programs. Most of the currently available province-wide saveONenergy programs will continue to be available throughout 2015 to allow for a seamless transition to the new framework.

CDM is defined, and will be considered by the OPA, to include activities aimed at reducing electricity consumption, such as geothermal heating and cooling, solar heating and small scale (less than 10 MW) behind the meter customer generation. However, the direction issued by the Minister states that CDM programs should be considered to exclude those activities related to a Distributor’s investment in new, or replacement of existing, infrastructure; activities promoted through a program or initiative undertaken by the Ontario Government or the OPA (such as the FIT Program); and activities related to the price of electricity or general economic activity.

The progress of electricity savings will be evaluated annually and findings published in a report which will set out contributions to the target achieved through Province-Wide CDM programs, Local and/or Regional CDM programs, demand response programs and programs for transmission connected customers. In addition, the OPA will undergo a formal mid-term review no later than June 1, 2018 and will conduct an achievable potential study for electricity efficiency in Ontario every 3 years, with the first study to be completed by June 1, 2016.

For an overview and helpful timeline of the implementation of the Framework, see here.

Webinar

To facilitate a streamlined and transparent implementation of the Framework, the OPA, Distributors, natural gas utilities and the Electrical Distributors Association, set up a Conservation First Advisory Working Group (“CFAWG”). The CFAWG’s goal is to ensure the Framework provides value for customers and the electricity system, while meeting the requirements of the Minister’s direction and the needs of Distributors and natural gas distributors.

The OPA will be hosting an information webinar on the Framework on Tuesday, August 26 at 2:00 p.m. (ET). More information can be found here.