Conservation and Demand Management (CDM) - Electricity Distributors
(RP-2004-0203)
On May 31, 2004, the Minister wrote to electricity
distributors pursuant to section 79.6 of the Ontario Energy
Board Act, 1998 to allow them to proceed to the Ontario Energy
Board (the Board) with applications to establish deferral
accounts within which to track expenditures on conservation
and demand management initiatives.
Pursuant to the Minister’s letter, the Board has
allowed distributors to recover funds from ratepayers to
be invested in conservation and demand management initiatives. Overall,
distributors received
approval to invest $163 million in conservation
and demand management initiatives over a three year period.
Note:
With the passage of the Electricity Restructuring Act,
2004 on Dec 9-04, the Independent Electricity Market
Operator (IMO) is re-named the Independent Electricity
System Operator, or IESO, effective January 1, 2005.
UPDATES
Date
Issue
/ Document
Dec 11-06
The Board has issued a letter outlining the process it intends to use in relation to the development of a regulatory framework for conservation and demand management activities by electricity distributors. The letter also addresses the issue of cost awards. Interested parties are invited to indicate their interest in participating in this project by December 22, 2006.
The Board has posted submissions received in response to a request for comment on a proposal from the Electricity Distributors Association, regarding a revenue stabilization mechanism for electricity distributors.
The Board received a proposal from the Electricity Distributors Association (EDA) regarding a revenue stabilization mechanism for local electricity distributors (LDCs). The Board invited parties to comment on the proposal by November 17, 2006.
In support of cost effective conservation and demand management for the electricity sector, the Board has developed the Draft Guideline for Annual Reporting of CDM Initiatives. At this time, the Board is inviting comment from interested parties on the draft guideline.
In support of cost effective conservation and demand
management for the electricity sector, the Board has
developed the Total Resource Cost Guide (the Guide).
Please click on the following links:
In support of cost effective conservation and demand
management for the electricity sector, the Board has
developed the Guide to Total Resource Cost Analysis.
At this time, the Board is inviting comment from interested
parties on the document.
In accordance with the Board’s Decision of
February 18, 2005, Hydro One Networks Inc. has filed
the “Avoided Cost Analysis for the Evaluation
of CDM Measures”:
On April 29, 2005 the Board issued the Guidelines
for Electricity Distributors Wishing to Apply for SSM
Incentive for 2005 Implementation of CDM Plans.
The Board has released a Conservation
and Demand Management (CDM) web-based reporting tool
to facilitate electricity distributors' quarterly filings.
The first CDM filing for the period January 1, 2005
to March 31, 2005 is due April 30, 2005.
To access the CDM Form Online (Uniform Filing System),
click
here.
Feb 22-05
On February 18, 2005, the OEB, by
way of an oral decision, approved the CDM Plans
of Hydro One Networks Inc. (HONI) and Hydro One Networks
Brampton Inc. (Brampton). The oral hearing was held
in Toronto on February 17 and 18, 2005. To view the
transcripts of the hearing please click
here. The CDM budget approved is $39.5 million
in the case of HONI and $3.2 million in the case
of Brampton. The approval was subject to the following
4 conditions:
HONI to re-file alternative programs for $7.1 million
allocated in the original plan to SMART meters for
2006 spending. This re-filing is due June 30, 2005.
HONI to provide avoided cost estimates for distribution,
transmission and generation by May 30, 2005.
HONI and Brampton to file Quarterly Reports starting
June 30, 2005.
HONI and Brampton to file Annual Report by March
31, 2006. The Annual report should include a Cost/Benefit
analysis.
On December 6, 2004, the Ontario Energy
Board heard a motion brought by Pollution Probe. This
motion requested that the Board establish a lost revenue
adjustment mechanism (LRAM) and incentive mechanism
or shared savings mechanism (SSM) with respect to expenditures
on conservation and demand management (CDM) by local
electricity distribution companies (LDCs) in 2005. The
motion was supported by various LDCs, the Coalition
of Large Distributors (CLD) and the Electricity Distributors
Association (EDA), as well as various other parties,
including the Green Energy Coalition and the Canadian
Energy Efficiency Alliance.
To read the transcript of the decision, click
here.
The decision of the Board was to adopt a voluntary LRAM
for lost revenues incurred by LDCs as a result of CDM
initiatives in 2005. The formula for LRAM will be determined
by the 2006 Electricity Distribution Rate Panel (RP-2004-0188).
The decision of the Board also adopted an incentive
mechanism or SSM for the LDC. The application of a SSM
will only apply to funds spent on customer based initiatives.
Board staff prepared the “Draft Guidelines for
Electricity Distributors Wishing to Apply for SSM Incentive
for 2005 Implementation of CDM Plans”.
These Draft Guidelines consist of a general outline
of the process and will be refined and/or updated by
the Board in the future. At this time the Board is inviting
comments on the Draft Guidelines. Please submit any
comments on the Draft Guidelines by email to the Board
Secretary at boardsec@oeb.gov.on.ca
with the title “RP-2004-0203 Comments on the SSM
Draft Guidelines” before January 31, 2005.
Dec 10-04
Today the Ontario Energy Board issued
its Decision approving applications from six of the
province’s largest local electricity distribution
companies for their third installment (“tranche”)
of incremental Market Adjusted Revenue Requirement (MARR)
related to conservation and demand management (CDM)
initiatives.
The application amounts total more than $70 million:
$8.2 million for Enersource, $5.2 million for Hamilton,
$9.3 million for Hydro Ottawa, $6.4 million for PowerStream,
$39.8 million for Toronto Hydro and $3.5 million for
Veridian. Collectively the six utilities, known as the
Coalition of Large Distributors (CLD), provide services
to over 1.5 million customers or 40% of all Ontario
electricity customers.
The Board reviewed 10 key issues raised by intervenors
or applicants, which included cost/benefit analysis,
LDCs’ rate base, MARR, incremental expenses, operating
vs. capital expenses, program modifications, smart meters,
program balance, low-income consumers and LED traffic
lights. The Board decision also required the applicants
to implement reporting & monitoring mechanisms.
In addition, the OEB approved applications from Milton
Hydro and Brantford Power for their third tranche of
incremental MARR related to CDM initiatives. The budget
for these initiatives total more than $760,000 for Milton
and $1.3 million for Brantford.
In the cases of Milton and Brantford, the Board reviewed
issues that included cost/benefit analysis, rate base,
tax effect, incremental expense, operating vs. capital
expenses, program modifications, smart meters, LED traffic
lights and program balance.
While all plans have been approved, the Board requires
that Brantford re-examine calculations related to its
distribution system upgrade project.
In making its Decision, the Board recommended that
all above utilities voluntarily investigate possible
initiatives to assist low-income consumers.
The Board requires utilities to report on their CDM
programs quarterly and annually, providing results to
the Board. In addition, the Board will conduct annual
hearings to fully review CDM initiatives.
To read the transcript of the Decision click
here.
Nov 4-04
On October 28, 2004, the Board issued
Procedural Order No. 2 setting the process and date
for a Motions Day to be convened on Monday, December
6, 2004 at the Board's offices.
The motions proceeding will address the following issues:
a) Should the Board develop mechanism to provide revenue
protection and/or incentive for the purpose of 2005
rates? b) Does the Board have jurisdiction to adjust
rates to address revenue protection or incentives or
is approval of the Minister required? c) How would the
amount of a revenue protection or incentive mechanism
be determined? d) How would the mechanisms for 2005
relate to the mechanism for 2006, and the following
years?
The Board has amended the Accounting
Procedures Handbook and the Uniform System of Accounts
to establish account 1565, Conservation and Demand Management
Expenditures and Recoveries.
On October 5, 2004, the Board issued
a procedural order to electricity distributors regarding
distributor conservation and demand management activities
and deferral accounts, and the procedure to be used
for approval of expenditures related to these activities.
The Board today issued an information
bulletin to electricity distributors on distributor
conservation and demand management activities and on
the process for distributors to apply for deferral accounts.
The information in the table was
generated by utilities and has not been edited by the
Board.
For information on the program initiatives
reported by a utility, please contact the utility directly.
Board
Decisions on Approved CDM Plans: The OEB
has approved several Conservation and Demand Management
(CDM) Plan applications. To view a summary of the
CDM Plan, Budget and a copy of the Decision and
Order: Click
here.
For information on distributor application for approval of Conservation
and Demand Management Plans, contact Market Operations hotline at (416) 440-7604.
The OEB's toll free line is 1-888-632-6273.
This information is provided
as a public service. Although we endeavor to ensure that the information
is as current and accurate
as possible, errors do occasionally occur. Therefore, we cannot guarantee
the accuracy of the information.
Readers should where possible verify the information before acting on
it. External
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