IndEco reports results from LDC conservation efforts in 2006

An IndEco project report
In this Enwave photo, heat exchangers for deep lake cooling are lowered into the John Street pumping station. A Toronto Hydro program to have commercial buildings use deep lake cooling was the program with the largest life-cycle savings of more than 500 programs offered by LDCs.
In May 2007, IndEco provided the Ontario Power Authority with a report outlining electricity savings realized by Ontario electricity distribution companies (LDCs).

Background


Each year the Chief Energy Conservation Officer (CECO) is required to prepare an annual report on progress in meeting provincial conservation and demand management targets. As part of fulfilling this requirement in 2006, the CECO introduced a scorecard approach to reporting on savings achieved, including savings achieved by local electricity distribution companies (LDCs) through CDM. On 28 May, a supplement to the 2006 annual report was published on the Conservation Bureau and Ontario Power Authority websites.

There are numerous actors involved in promoting the transition to a Conservation Culture in Ontario, including the Ontario Power Authority through its programs and outreach activities, provincial and municipal conservation programs, and others. The local electricity distribution companies (LDCs) have been one of the key players in promoting electricity conservation, in response to a requirement from the Minister of Energy that to attain their third instalment or tranche of a Market Adjusted Rate of Return (MARR) they must spend the equivalent of one year's third tranche on conservation and demand management (CDM) initiatives by the end of September 2007. Plans were submitted to the Ontario Energy Board (OEB), and the Board approved plans totalling just over 160 million dollars.

As part of their approvals of these plans, LDCs were required to report annually to the OEB on their CDM activities, and the OEB provided guidelines for their reporting. Among the requirements are to report on spending and results. These include direct spending from the approved plan budgets, indirect spending (e.g. value of time of LDC staff involved in CDM activities), and benefit-cost analyses based on a methodology called the Total Resource Cost (TRC) test. The TRC test considers benefits and costs from the perspective of society over the life of the measures adopted by the program. To assist LDCs in preparing these estimates, the OEB published a TRC Guide that includes typical costs, savings and lifetimes for numerous common conservation technologies, and a description of how to undertake the TRC test. Because the TRC test is from a societal perspective, the TRC test includes costs incurred by program participants, e.g. for equipment they purchase using financial incentives offered by the LDC.

LDCs were required to file their second annual reports - for the calendar year 2006 - at the end of March 2007, and the IndEco report reviews and summarizes the results reported in these annual reports.

Conclusions


Ontario's local electricity distribution companies reported progress on a large number of diverse and innovative programs to help their customers and themselves to reduce their electricity use and demand. Substantial savings of electricity were reported: 3.5 billion kilowatt-hours over the lifetime of the measures implemented, and 520 million kilowatt-hours in the first year. In addition, summer demand reductions of 141 MW were estimated for 2006.

Programs covered all sectors - residential, commercial, industrial and institutional - as well as important sub-sectors, including low-income customers and social housing buildings. In addition, the LDCs implemented programs to improve their own electricity efficiency, both in the distribution system, and in their office and other operations.

Programs addressed both energy reductions and demand reductions, and realized these savings through a mix of information programs, financial incentives, and direct installations. The LDCs were also involved in supporting OPA's Every Kilowatt Counts programs, and some of their programs, including Toronto Hydro's Summer Challenge program, and load reduction programs by a number of the LDCs served as models for OPA programs to be delivered by LDCs beginning this summer.

The LDCs were able to realize these savings at a very low reported cost per kilowatt-hour: about 0.02 $/kWh (over the lifecycle of the measures implemented), and in the process of doing so they reported that they improved relationships with their customers.

It is clear from the results achieved that LDCs can play an important role in helping Ontario to meet its objectives for energy conservation.

Related information


See the full report for a breakdown of these savings, a description of the methodology, and comments on data quality.

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Ontario's Chief Energy Conservation Officer's update to the 2006 annual report
IndEco's energy services