All Cost-Effective Conservation: Developing a New Conservation Framework for Ontario’s Natural Gas Utilities July

The views and ideas expressed in this presentation are presented by the Toronto Atmospheric Fund to support the discussion around developing a new gas DSM policy framework. We welcome your views about these or other issues related to natural gas conservation policy in Ontario Disclaimer 2

Conservation = Energy Efficiency = Demand-Side Management (DSM) Terminology 3

 Ontario’s “Conservation First” commitment in the Long Term Energy Plan  Ontario’s 2007 Action Plan on Climate Change  Minister of Energy’s Directive to OEB Context 4

 OEB DSM Working Group  Draft DSM Guideline document expected mid-August  Opportunity to submit comments Process 5

 Enable all cost-effective energy efficiency  Achieve greenhouse gas reductions  Be cost-effective  Be fair  Enable improved quality of living in buildings & improved business productivity Key Objectives 6

 Investing in DSM can raise rates but will deliver bill savings  Maximizing participation is key to stakeholder benefit from DSM  Minimizing impact on low-income consumers Challenges & Opportunities 7

 Non-participants experience rate impacts  Therefore, increase participation (i.e. pursue all cost-effective DSM) Bill Benefits Exceed Rate Impacts 8

Ambitious savings targets and budgets  Aim for all cost-effective energy efficiency  i.e. > 1% total gas sales annually  Reflect bottom-up DSM potential studies and the experience of jurisdictions with similar goals  i.e. minimum $200 million/year for Ontario Key Design Elements 9

Cost-effectiveness calculation should:  Treat costs and benefits symmetrically  i.e. include costs and benefits for ___each perspective examined  Account for government policies/priorities  e.g. address GHG emissions (carbon price) and ___low-income impacts. Key Design Elements 10

Incent & reward utility performance  DSM should be at least as profitable as supplying gas.  Award incentives for high performance based on clear metrics  Evaluate DSM program impacts at least every three years (allocate ~ 3% of DSM budgets) Key Design Elements 11

Integrate gas and electricity DSM programs  Can lower costs, enhance reach, improve market clarity, and lower transaction costs for consumers.  Require utilities to report on collaborations  Fuel switching should be required where cost- effective and reduces GHGs Key Design Elements 12

Achieving all cost-effective conservation has multiple benefits:  Reduces GHGs (fast, cheap)  Cheaper than supply-side  Helps manage energy bills  Green and local jobs  Better homes & buildings Is DSM Worth It? 13

For more information:To participate: Toronto Atmospheric FundOntario Energy Board Julia LangerJosh Wasylyk Chief Executive OfficerOEB Advisor Rebecca Mallinson TAF Policy Researcher TAF webinar available at: Have Your Say 14