Presentation on theme: "Gas Utilities and Conservation – the Policy Context for: Teaching Energy Efficiency at the University Level York University July 16, 2014."— Presentation transcript:
Gas Utilities and Conservation – the Policy Context for: Teaching Energy Efficiency at the University Level York University July 16, 2014
2 2 Introduction Profile – Enbridge Gas Distribution Provincial policy and the gas utilities Gas utilities and energy conservation (DSM) Other players and DSM policy instruments Recent policy developments
4 4 EGD largest natural gas utility in Canada (2M customers) -One of the fastest growing – added ~37,000 customers in 2012 -Longest serving – 165 year history - founded in 1848 -EGD BUSINESS TODAY -A REGULATED DISTRIBUTION UTILITY – earnings based on a regulated rate of return on distribution infrastructure, rates are approved by the Ontario Energy Board -owns and operates 37,000+ km of mains plus service pipes to transfer gas to meters on customer premises -Owns almost 3 billion m3 underground gas storage facilities and rents additional storage - Distributes ~ 400 billion cubic feet or 12 billion cubic metres /year -Sells natural gas to about 88% of franchise customers at cost; remaining distribution customers purchase gas from direct marketers
5 5 Provincial policy and the gas utilities Provincial policy goals re: GHG emission reductions (2007) Reduce Ontario’s GHG emissions by: –6 per cent below 1990 levels by 2014 (to approximately 166 Mt) –15 per cent below 1990 levels by 2020 (to approximately 150 Mt), and –80 per cent below 1990 levels by 2050 (to approximately 35 Mt)
6 6 Provincial policy and the gas utilities Sectors where the gas utilities can influence consumption: –Industry – Buildings – Agriculture Ontario 2012 Emissions by Sector2012 emissions Megatonnespercentage Transportation56.634.0 Industry50.430.1 Buildings28.617.1 Electricity14.58.7 Agriculture9.45.6 Waste7.54.5 Total167100 (Source Environment Canada. National Inventory Report – Greenhouse Gas Sources and Sinks in Canada 1990- 2012 [from Report of Environmental Commissioner of Ontario, July 2014])
7 7 Provincial policy and the gas utilities Ontario Energy Board Provincial Government Gas Utilities Stakeholders Stakeholders: ratepayer groups, environmental groups, low income advocates Provincial policy on energy conservation impacts the gas utilities through the Ontario Energy Board.
8 8 Gas utilities and DSM Stakeholder relations -Part of the landscape for a regulated utility -On application to the Board, stakeholder groups can obtain standing at OEB proceedings regarding DSM plans, annual results and utility compensation -Informal consultation – the DSM Framework includes an advisory role for stakeholder groups in evaluation research and audit of results -Broad consultation with other stakeholders on DSM plans and programs: customer groups, business, trade and industry associations, key accounts, channel partners etc.
9 9 Gas utilities and DSM 1980’s Discussions on Integrated Resource Planning at the Provincial level Ontario Hydro Demand-Supply Plan discussions 1993 Ontario Energy Board directed gas utilities to provide DSM programs beginning in 1995
10 Gas utilities and DSM Enbridge1995 - 20072007- 20112012 - 2014 DSM Spending$2.2M (1995)$27.2M (2011)$30.6M (2012) Annual m 3 savings3.9 Mm 3 (1995)77.2 Mm 3 (2011)60.14 Mm 3 (2012) Scope has expanded: budget results number and type of participants types of programs role of stakeholders planning horizon
11 Other players and policy instruments FiscalMonetaryRegulatoryTechnicalEducation Federal government Carbon taxEcoEnergy home retrofit program Equipment standardsRD&D Trades training, public education Provincial government Carbon taxEcoEnergy home retrofit program Building codes Local improvement charges Trades training, public education Municipal government - Development charges - Local improvement charges Grants / Demo projects Land use planning Demo projectsPublic education Gas utilities N/A Customer / supplier incentives N/ARD&D Trades training, public education
12 Provincial policy and the gas utilities Ontario Energy Board Provincial Government Gas Utilities Utilities’ DSM Program Results The gas utilities impact policy on energy conservation through DSM results.
13 Provincial policy and the gas utilities: Utility program results prove that it can be done – create confidence in future policy direction. Savings by Design – shows builders how current code can be exceeded – paves the way for future code amendments Home labelling – helping to prepare the real estate industry for home energy labelling at time of sale 1990ies – utilities supported pioneering home energy audits which paved the way for the federal and provincial EcoEnergy home retrofit program Supported adoption of higher efficiency technology, e.g., high efficiency furnaces in advance of changes to equipment standards
14 Recent policy developments: Directive from the Minister of Energy to the Ontario Energy Board “…. the DSM Framework shall span a period of six years, commencing on January 1, 2015, (ending on December 31, 2021) and shall include a mid-term review” “… the DSM Framework shall enable the achievement of all cost- effective DSM and more closely align DSM efforts with CDM efforts, as far as is appropriate and reasonable having regard to the respective characteristics of the natural gas and electricity sectors;”
15 Recent policy developments: emerging policy issues Emerging policy issues from the Minister’s Directive Increasing the scope of gas utility DSM activities – what size of budget is appropriate? Widening the tent - which measures and programs will be eligible? Collaboration with the electricity sector – the same policy solutions don’t necessarily fit both the gas and the electricity sectors. These are all subjects of the next DSM Framework
16 Recent Policy Developments: the next DSM Framework The DSM Framework sets the “rules” or “guidelines” by which the gas utilities will operate the DSM programs. Size of budget Types of programs Metrics and Targets Utility incentive Third party audit of results Role of stakeholders in oversight The next Framework will set the rules for a 6 year period to 2020.
17 Recent Policy Developments: the next DSM Framework Stakeholders have diverging views on the utility’s role, extent of the budget, etc. Ontario Energy Board has convened a Working Group of stakeholders including the two gas utilities to discuss the issues Board to issue final Guidelines prior to the utilities submitting their plans for the next multi-year period … to be continued …