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Image by infomatique
www.streetsofdublin.com
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Ontario Energy Board Putting Up Barriers to Energy Conservation
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Emacs!
Media Release
Ontario Energy Board Putting Up Barriers to Energy Conservation
Toronto, June 14, 2011 – Ontario’s Environmental
Commissioner says the province’s energy regulator
is putting up barriers to increased energy
conservation. This is just one of the conclusions
from his Annual Energy Conservation Progress
Report – 2010 (Volume One), Managing a Complex Energy System, released today.
"The Ontario Energy Board (OEB) plays a
valuable role in protecting consumer interests,
but this traditional regulatory function is in
conflict with its expanded powers over
conservation," says Commissioner Gord Miller. He
points to recent decisions by the OEB that have
forced both electricity and natural gas
distributors to restrict the conservation programs they offer to consumers.
One of the OEB’s key objectives is to promote
energy conservation, but the Board recently told
Union Gas and Enbridge Gas Distribution to
curtail proposed increases in their conservation
budgets and instead, freeze them at existing
levels for the next three years. "The
‘low-hanging fruit’ in conservation has already
been harvested," says Miller, "but the Board
won’t approve the investments that are necessary
to accomplish further energy savings. The Board
is ignoring the benefits that will come with
reduced infrastructure costs and lower greenhouse gas emissions."
The progress report also says the OEB has
established rules that could hinder the
Conservation and Demand Management (CDM) programs
offered by the province’s electricity utilities.
"The Ontario Power Authority has designed
province-wide conservation programs, yet it’s the
electric utilities who will carry them out. The
Ontario Energy Board has given utilities all of
the responsibility but none of the freedom to
modify or improve programs if necessary."
Conservation is only one of the areas where the
OEB has been asked to take on an expanded
policy-making role. The government has also told
the OEB to facilitate the adoption of the smart
grid – a modernized electricity system that uses
information technology to operate more
efficiently. Miller believes that "one entity has
to be given the responsibility for establishing
the vision of an integrated electricity system,
and providing the leadership for modernizing our
electricity grid." However, the Commissioner
questions whether the OEB would be the
appropriate choice to achieve this innovative
objective, given its conflicted responsibilities.
To watch the Commissioner’s pre-recorded comments, please visit:
www.youtube.com/user/EcoComms
For more information, contact:
Maria Leung
Communications and Outreach Coordinator
Environmental Commissioner of Ontario
416-325-3371 / 416-819-1673
1-800-701-6454
Maria.leung@eco.on.ca
For French language release and bilingual support, please contact:
Jean-Marc Filion, 705-492-6997
The report is available for download at www.eco.on.ca
Aussi disponible en français
-30 -
The Environmental Commissioner of Ontario is the
province’s independent environmental watchdog.
Appointed by the Legislative Assembly, the ECO
monitors and reports on compliance with the
Environmental Bill of Rights, the government’s
progress in reducing greenhouse gas emissions and
its actions towards achieving greater energy conservation in Ontario.
Report Summary
Managing a Complex Energy System:
Annual Energy Conservation Progress Report – 2010 (Volume One)
Under the Environmental Bill of Rights,1993, the
Environmental Commissioner of Ontario (ECO)
reports annually to the Legislative Assembly of
Ontario on the province’s progress in energy
conservation. Managing a Complex Energy System,
the first volume of the 2010 energy conservation
report, reviews policy developments that occurred
over the year, highlights concerns with the
current policy agenda and outlines
recommendations to further conservation in Ontario.
The Long-Term Energy Plan
In 2010, the government restarted the development
of the Integrated Power System Plan by issuing
the Long-Term Energy Plan (LTEP) and a Supply Mix
Directive. The ECO is pleased the government
acted on a previous recommendation to establish
electricity consumption targets in addition to
peak demand reduction targets. This will reduce
the need for new generating stations,
transmission and distribution lines, and better
reflects the design of many of the conservation
programs available. However, the ECO feels the
LTEP did not adequately explain the difficult
trade-offs necessary when choosing among types of
generation. Furthermore, the LTEP is an energy
plan in name but is an electricity plan in
reality. Ontario needs an energy plan and a
multi-fuel conservation strategy that addresses all energy sources. (Page 11)
Electricity Pricing
Several changes in fiscal policy have affected
the cost of electricity, including the 13%
Harmonized Sales Tax (HST). As a result,
electricity is now treated like other goods and
services, sending a more accurate price signal
about its cost. However, with the Ontario Clean
Energy Benefit the government has essentially
reversed the impact of the HST and restored an
artificial price subsidy on electricity, creating
a perverse incentive that undermines
conservation. Changes were also made to the
Global Adjustment to charge very high prices
during a few hours of very high demand for large
electricity consumers (more than 5 MW). This
change is essentially a form of critical peak
pricing. In general, the ECO supports this
incentive to reduce peak demand and urges the
government to expand critical peak pricing to
smaller consumers and adjust some inequities in
the allocation of costs in the Global Adjustment. (Page 21)
A New Conservation Framework
A new Conservation and Demand Management (CDM)
framework for electric utilities has been
implemented for 2011 to 2014. For the first time
utilities have been mandated to meet conservation
targets based on a provincial target of 1,330 MW
and 6,000 GWh. The Ontario Energy Board (OEB)
developed a CDM Code to govern the utilities’ CDM
activities. The ECO is concerned that the current
CDM framework may discourage co-operation with
other utilities or organizations and is
unnecessarily restricting the role of utilities
and their ability for innovation. The current CDM
framework is set to expire on December 31, 2014.
To ensure momentum is sustained a review and
preparation for the next CDM framework should be
completed before this end date. (Page 31)
Conservation Budget Freeze
On March29, 2011, the OEB announced that the
conservation budgets for Ontario’s natural gas
utilities would be limited to their existing
levels for the next three years. This was a
surprising decision as both utilities and Board
staff supported an increase in conservation
spending. In addition, the Minister of Energy had
also urged the OEB to consider expanding natural
gas conservation efforts. The decisions of both
the government and the OEB to restrict
conservation spending will stall needed growth in
conservation programs. (Page 39)
Smart Grid
Smart grid is the term used to describe the next
generation of the electricity delivery system.
Fundamental to this initiative is a two-way
communication network that will allow consumers
to more effectively manage their electricity use
and also increase the opportunities for demand
response and distributed renewable energy
generation. If the smart grid is to succeed, the
ECO believes that one organization with a
perspective of the electricity system as a whole
should guide all organizations with grid-related
responsibilities to the common goal of
modernizing the smart grid. The ECO also feels
incentives should be provided to undertake
infrastructure investments that reduce
distribution line loss to overcome the higher
cost of efficient infrastructure and ensure that
appropriate long-term system planning occurs. (Page 43)
Barriers to Alternative Energy
Solar thermal systems, which use solar energy
directly rather than convert it into electricity,
are generally more energy efficient and deliver
greater energy and cost savings than solar
photovoltaic (PV)systems. The provincial
government’s cancellation of incentives to
install solar thermal systems for homeowners,
combined with the OPA’s enticing microFIT
program, has created a perverse incentive for
homeowners to install solar PV systems over solar
thermal. The ECO believes both types of
technologies have value and both should be encouraged. (Page 53)
Recommendations:
The report makes the following recommendations:
1. The ECO recommends that the Ministry of Energy
clarify how the peak demand and consumption
targets contained in the Long Term Energy Plan
and Conservation and Demand Management Directive are measured.
2. The ECO recommends that the Ministry of Energy
build upon the work completed in the Long-Term
Energy Plan and produce a comprehensive multi-fuel energy plan.
3. The ECO recommends that the Ministries of
Energy, Revenue, and Finance improve the design
of the Ontario Clean Energy Benefit so that any
transitional assistance on electricity bills oes
not act as a disincentive to conservation.
4. The ECO recommends that the Ministry of Energy
initiate the next Conservation and Demand
Management framework, which would include
guaranteed funding, by January 1, 2014.
5. The ECO recommends that the Ministry of Energy
clarify the appropriate roles of the government
and gas utilities in funding natural gas
conservation, with the goal of increasing overall funding.
6. The ECO recommends that the Ontario Energy
Board encourage and facilitate smart grid
investments that reduce line losses, putting
these investments on an equal footing with conservation investments.
7. The ECO recommends that the Ministry of Energy
adjust the relative financial incentives
available for solar thermal and solar
photovoltaic in residential buildings to
appropriately reflect the economic and
environmental benefits of each technology.
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The Chicago Climate Action Plan is released
Image by Center for Neighborhood Technology
CNT led the mitigation research team for the Chicago Climate Change Task Force that developed the Chicago Climate Action Plan, released in September.
CNT developed a greenhouse gas inventory for Chicago in 2000 and 2005, which allowed us to understand better where Chicago’s emissions come from. We also worked with the City to solicit emissions reduction strategies from residents, business, institutions, and government. We received hundreds of suggestions and boiled them down into a portfolio of feasible, effective, and sustainable strategies for Chicago.
The emissions reduction strategies we have helped develop are truly sustainable solutions that can lower the cost of living and doing business in Chicago while making this a better city in which to live and work.
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