March 22, 2004

Ontario Energy Board calls for new approach to enhanced, effective energy conservation

The Ontario Energy Board (OEB) is recommending a new approach to promote effective and co-ordinated conservation efforts across Ontario. In a report presented to the Minister of Energy early this month, the OEB calls for the creation of a conservation agency which would lead and promote conservation efforts by bringing together and sharing ideas, plans and best practices from its own research and a range of market participants.

The agency would:

*develop a province-wide plan to reduce both general demand for electricity and "peak" demand on the hottest and coldest days;

*find and act on opportunities to reduce demand in both the long and short term;

*set rules for selecting and ranking conservation priorities;

*invite funding proposals from a range of participants, including local distributors, to design and deliver conservation programs;

*make sure that programs are accessible across the province and the market, including hard-to-reach sectors; and

*monitor results, including an independent audit, and report publicly on progress.

Conservation efforts and programs would be funded by a charge on electricity consumption, in line with the approach that those who use the most electricity should contribute the most towards conserving it, and will also save the most from the investment in conservation. The Board would review this charge annually.

Conservation measures are essential in Ontario, the report states. Electricity supplies are already tight due to problems with existing nuclear plants, transmission system constraints, and lack of investment in new generating facilities. If the provincial government follows through with its intention of phasing out coal-fired plants by 2007 for environmental reasons, the supply will become even tighter.

"Conservation is a clean and affordable way of helping to bridge a growing gap between electricity demand and supply in Ontario," says the OEB. "Conservation is an important and achievable goal. By reducing consumption and using electricity more efficiently, the province can reduce the rate at which demand is growing. This will require changes in how the electricity market works and in individual behaviour, but the benefits are clear. Consumers will have an affordable and reliable supply of electricity. Higher energy productivity will also make Ontario more competitive."

In its report, Demand-Side Management and Demand Response in the Ontario Electricity Sector, the OEB makes recommendations on matters that range from the structure of the electricity market and the complexities of power delivery, through to better education of the general public as consumers. Its recommendations include ways of promoting conservation through its own activities as Ontario's electricity market continues to evolve. Specifically, the Board will:

*work to develop means of reflecting the price of electricity during high- and low-demand times;

*oversee distributors' investments in technologies which would make their systems more efficient;

*examine appropriate regulatory mechanisms to make sure that distributors are protected against the effects of reduced consumption as a result of conservation;

*play a role, as outlined in its governing legislation, in educating consumers about conservation; and

*look at how to encourage greater use of advanced metering technologies.

The report was prepared with input from consultations with distributors, consumers and other participants in Ontario's electricity market. In discussing the range of issues considered by the Board, the report points out that "everyone in Ontario can play an important role in conservation. Deciding to turn out lights and turn down air conditioners, investing in more energy-efficient equipment, reducing electricity lost in delivery, and setting province-wide standards that promote conservation: these are all parts of the solution."

More information is available from Donna Garant, 416/440-8140. The full text of the report may be viewed on the Board's Web site, www.oeb.gov.on.ca.

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