April 25, 2005

Ont Energy Board approves $160M worth of conservation plans

The Ontario Energy Board (OEB) has approved more than $160 million worth of conservation initiatives in the electricity distribution sector. These conservation plans are aimed at helping the government fulfill its commitment to create a conservation culture and reduce electricity consumption in the province by 5% by 2007. Eighty-four electricity utilities applied to the Board to recover the last portion of their rate of return through distribution rates. Approvals have already been incorporated into 2005 distribution rates, which became effective April 1st.

Four main themes characterize the local utilities' conservation and demand management (CDM) plans:

* 32% of the programs implement utility-driven initiatives such as research and development and improvements to distribution networks;

* Over 21% of the programs involve the installation of new pilot meters for consumers, including smart meters, time-of-use meters and apartment sub-meters;

* Over 11% of the programs will develop alternate sources of electricity, such as wind power, cogeneration and landfill gas; and

* Over 10% of the programs implement operational changes for customers through more efficient lighting, heating and appliances.

Utilities whose CDM applications have been approved must report their program results to the Board quarterly and annually. The annual report must include a cost-benefit analysis of each of the initiatives and will be subject to a public review.

In December 2003, the Minister of Energy allowed local distribution companies (LDCs) to apply to the OEB for the next installment of their allowable rate of return beginning March 1, 2005. The approval was conditional on a financial commitment by utilities to reinvest an amount equal to one year of incremental return on equity in conservation and demand management (CDM) activities.

More information is available from Paul Crawford at the OEB, 416/440-7607, or on the Board's Web site, www.oeb.gov.on.ca.

In related activities, Ontario has issued its second green power Request for Proposals (RFP), seeking up to 1,000 megawatts (MW) of electricity from renewable energy sources- enough to power 200,000 homes. The government's RFP calls for wind, water, solar, biomass and landfill gas projects with a capacity of 20 or more MW. Proponents have until August to submit their proposals, and the government could announce the successful projects as early as this fall. Full details on the RFP may be viewed on-line at www.ontarioelectricityrfp.ca.

The new RFP follows the government's selection, last November, of ten new renewable energy projects which will generate both 395 MW of clean power and $700 million in new investment. Last week's announcement is expected to bring another $1.5 billion of new investment to Ontario, and will help the government reach its target of generating 5% (1,350 MW) of Ontario's total energy capacity from renewable sources by 2007.

Energy Minister Dwight Duncan also announced that in June the government will issue an additional RFP for up to 200 MW of power from small and medium-sized renewable energy projects under 20 MW. This RFP will be co-ordinated with the Ministry of Natural Resources' efforts to make Crown sites available for waterpower development.

In addition, the province is exploring a strategy to encourage very small community- and agriculture-based renewable energy projects. The Ministry of Energy is consulting widely on the options available and expects to make an announcement later this year.

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