Gas Utilities and Conservation – the Policy Context
for:
Teaching Energy Efficiency at the University Level
York University
July 16, 2014
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
22
Profile: Enbridge Gas Distribution
33
Profile: Enbridge Gas Distribution
•
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
44
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)
55
Provincial policy and the gas utilities
(Source Environment Canada. National Inventory Report – Greenhouse Gas Sources and
Sinks in Canada 1990- 2012 [from Report of Environmental Commissioner of Ontario,
July 2014])
Ontario 2012 Emissions by Sector
2012 emissions
Megatonnes
percentage
Transportation
56.6
34.0
Industry
50.4
30.1
Buildings
28.6
17.1
Electricity
14.5
8.7
Agriculture
9.4
5.6
Waste
7.5
4.5
Total
167
100
Sectors where the gas utilities can influence consumption:
– Industry – Buildings – Agriculture
66
Provincial policy and the gas utilities
Provincial policy on energy conservation impacts the gas utilities
through the Ontario Energy Board.
Provincial
Government
Ontario Energy
Board
Gas Utilities
Stakeholders
Stakeholders: ratepayer groups, environmental groups, low income advocates
77
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.
88
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
99
Gas utilities and DSM
Enbridge
DSM Spending
Annual m3 savings
1995 - 2007
2007- 2011
2012 - 2014
$2.2M (1995)
$27.2M (2011)
$30.6M (2012)
3.9 Mm3 (1995)
77.2 Mm3 (2011)
60.14 Mm3 (2012)
Scope has expanded:
•budget
•results
•number and type of participants
•types of programs
•role of stakeholders
•planning horizon
10
10
Other players and policy instruments
Fiscal
Federal
government
Provincial
government
Municipal
government
Carbon tax
Carbon tax
- Development
charges
- Local
improvement
charges
Gas utilities
N/A
Monetary
EcoEnergy
home retrofit
program
Regulatory
Equipment
standards
EcoEnergy
home retrofit
program
Building codes
Local
improvement
charges
Grants / Demo
projects
Land use
planning
Customer /
supplier
incentives
N/A
Technical
RD&D
Education
Trades training,
public
education
Trades training,
public
education
Demo projects
RD&D
Public
education
Trades training,
public
education
11
11
Provincial policy and the gas utilities
The gas utilities impact policy on energy conservation through
DSM results.
Provincial
Government
Ontario Energy
Board
Gas Utilities
Utilities’ DSM
Program Results
12
12
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
13
13
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 costeffective 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;”
14
14
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
15
15
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.
16
16
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 …
17
17