Local distribution companies (LDCs), or distributors, are responsible for delivering electricity to over four million Ontario homes, businesses and public institutions. They are also responsible for managing and delivering energy conservation programs, and are the main touch point for most Ontarians in understanding their electricity use and how to effectively manage it.
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The new Conservation First Framework reflects a continuing evolution of conservation planning and management in Ontario. It focuses less on central, IESO-led administration, and brings greater emphasis to the role of the province’s distributors.
Ontario has more than 70 LDCs, ranging from Hydro One with more than one million customers, to local companies like Hydro 2000, serving just over 1,000. Now, through an enhanced focus on teamwork and greater support for their autonomy, LDCs can better tailor conservation planning to the needs of their local communities and the larger region.
Conservation and Demand Management Plans
Collectively, Ontario’s LDCs are responsible for planning cost effective ways to reduce seven terawatt-hours (TWh) of electricity consumption by December 31, 2020, with individual targets assigned to each distributor.
To meet these targets, LDCs are developing their own six-year plans for delivering conservation and demand management (CDM) programs to their customers, assisted by the tools, support and guidance of the IESO.
CDM plans can be developed individually or in partnership with other utilities, for cost sharing and greater integration with other regions. They can include programs delivered across the province, those that the LDCs design themselves for their own communities, or a mix of both. Natural gas distributors are also encouraged to contribute to program design in areas where they might share customers or program goals.
Other details include:
Targets and funding – The share of the total seven TWh target
assigned to each LDC was based on its individual characteristics, including socio-economic conditions, growth rates, and past program performance. LDC budgets were based on their share of the energy-savings target at pre-established funding rates. These targets are not location-specific within an LDC’s service territory, which gives
them more flexibility to collaborate with other utilities and to contribute to broader regional plans.
New and ongoing programs –The CDM plan development process encourages utilities to submit conservation programs of their own design, called Local/Regional Programs, suited to their
communities or to the larger region. They are also encouraged to do this in partnership with other utilities. Once approved, the IESO will continue to provide ongoing support for the implementation and assessment of these programs. In the case of ongoing province-wide programs, an emphasis on continuity and transparency will help maintain a consistent customer experience.
New funding model opportunities – LDCs may choose between two types of funding models to meet their energy-saving target:
- Full cost recovery – the IESO will reimburse all eligible costs and expenses incurred by LDCs for the design, development and delivery of their CDM plan;
- Pay-for-performance – the IESO will pay LDCs based on a pre-specified value for each verified kilowatt hour of electricity savings achieved, shifting compensation risk to the LDCs in exchange for the chance of a greater reward.
Plan approval – In addition to proposed programs, plans will include milestones, budgets and expected energy savings. The IESO will follow a streamlined approval process for plans and for newly proposed programs, to reduce barriers to effectiveness while ensuring cost oversight and the avoidance of program duplication.
Continuous assessment and improvement – Plans may be updated by LDCs as often as needed to reflect program performance and a revised understanding of market opportunities. This also allows for target and budget adjustments after the IESO’s June 2017 mid-term review of the seven TWh target.
Support – The IESO is supporting CDM plans in many ways, during their design and throughout their entire lifespan. Included is the sharing of best practices, offering of program delivery services if LDCs elect to use them, and the building of awareness in the marketplace through marketing and communication. It will also provide centralized customer service and technical support, market research, program evaluation and measurement, and training.
LDCs had until May 1, 2015 to submit their CDM Plans to the IESO for review and approval. Plans and the accompanying conditional approval letters are posted below as they are approved. Use the dropdown menu to search by LDC.