CONSERVATION AND DEMAND MANAGEMENT ( CDM ) PLAN

Transcription

1 Exhibit G Page of CONSERVATION AND DEMAND MANAGEMENT ( CDM ) PLAN 0 Introduction This CDM Exhibit provides the full scope of Toronto Hydro-Electric System Limited s ( THESL ) CDM programs to be carried out between 00 and 00. In addition to the CDM programs included for this Application, as described in Schedule of this Exhibit, the Ontario Power Authority-funded ( OPA ) CDM programs are summarized for information. The Total Resource Cost ( TRC ) Test benefit/cost ratios are provided to demonstrate the viability of the CDM programs in this Electricity Distribution Rate ( EDR ) application. Ontario s Minister of Energy authorized electricity distributors to apply to the Ontario Energy Board ( OEB ) for the 00 rate implementation of their third installment of market adjusted revenue requirement ( MARR ), on the condition that an equivalent amount of incremental revenue be invested in conservation and demand management activities ( rd Tranche CDM ) by those distributors. In a letter dated May, 00 to electricity distributors, the Minister further identified some of the activities that might be included in a distributor s CDM Plan ( Plan ). 0 On November, 00 THESL filed with the OEB the Plan as part of the rd Tranche CDM funding process. The Plan was based on investing $.M in CDM during the period from January, 00 to September 0, 00. The key thrusts of the Plan were to promote a conservation culture and reduce the summer peak demand in Toronto. The OEB issued its Final Order granting approval of the Plan on February, 00. THESL has since implemented the Plan successfully in accordance with the Board s guidelines. As of the end of 00, THESL has already achieved peak demand reductions of MW and energy savings of, MWh.

2 Exhibit G Page of With the rd Tranche CDM funding, CDM has become an important part of THESL s core business. Both customers and the distribution system benefit from the results of CDM activities. Customers benefit from the electricity usage savings, and the distribution system benefits from improved reliability achieved through lowering system peak demand. THESL has established a CDM Operation with a base staff of CDM professionals, to operate and maintain the infrastructure to continue to manage and deploy CDM programs, and a demand response center that can activate demand reductions in response to peak demand challenges. It is also evident that Torontonians have responded enthusiastically to the CDM programs rolled out by THESL. 0 As the rd Tranche CDM funding is coming to an end, THESL has been working with the OPA for additional CDM program funding. Under the Government s 00 MW Toronto CDM directive, THESL has entered into an agreement with the OPA to provide transitional funding in 00 for a number of planned CDM programs and funding for conservation programs in the years 00-00, based on a contract signed May, 00 in reference to the Government s directive Toronto Reliability Supply and Conservation Directive to the OPA. In addition, THESL has received 00 funding for three of the five OPA standard programs under the $00M LDC CDM directive. 0 Since the OPA is in its early stage of CDM development, it will fund CDM only on a program-by-program, and on a year-by-year basis. This creates a significant uncertainty not only for the development and planning of future CDM programs, but also as to the on-going maintenance of THESL s CDM operation established under the rd Tranche funding. It is critical that THESL continue to maintain and support the CDM technologies and equipment that it has implemented, in order to achieve the full benefits of prior CDM programs. The CDM programs presented in this EDR application are fundamental to ensure the continuity of CDM at THESL.

3 Exhibit G Page of OBJECTIVES THESL s overall CDM objectives are as follows: To address the electricity peak demand challenge in the City of Toronto; To promote a conservation culture among THESL customers; To help improve the reliability of the THESL distribution system; and To assist THESL customers in managing their electricity usage, especially during peak periods and to implement long-term energy efficiency solutions. 0 Within the above overall CDM objectives, the goal of the CDM programs included for this Application is to maintain the established CDM operation and infrastructure to ensure the sustainability of CDM at THESL. CDM PROGRAMS OVERVIEW There are three major CDM initiative areas, or CDM program portfolios: Conservation Demand Response Distributed Energy Programs are deployed to actively engage customers to implement permanent efficiency improvements or become conservation conscious to reduce electricity usage. Control equipment and devices are installed to allow the customers discretionary loads to be reduced or turned off during peak demand periods. Renewable generation and standby generators are used to displace loading on the electricity supply system. The following CDM functional organization has been put in place at THESL to support the three CDM portfolios of activities.

4 Exhibit G Page of Chief Conservation Officer Conservation Demand Response Distributed Energy CDM Governance Figure : CDM Functional Organization With funding from the rd Tranche and the OPA, programs have been designed in each CDM portfolio to encourage participation from all customer sectors. To ensure CDM programs are carried out with proper control, a governance and management CDM function has been established. CDM control processes have also been developed and implemented for the CDM organization. 0 For the period 00-00, consistent with the OEB report in EB-00-0, Report of the Board on the Regulatory Framework for Conservation and Demand Management by Ontario Electricity Distributors in 00 and Beyond, THESL seeks funding from the OPA where there is a relevant OPA program. In areas not covered by the OPA, THESL is seeking funding through distribution rates as follows: ) The infrastructure necessary for the demand response operation (peaksaver centre and retention of demand response capacities previously acquired); ) CDM program governance. 0 The CDM portfolios and the CDM programs within the portfolios included in this Application are as shown in the following table:

5 Exhibit G Page of Table : CDM Portfolios and CDM Programs Exhibit Schedule CDM Portfolio CDM Programs Demand Response Residential Load Control CDM Governance CDM Program Governance The CDM programs included in this Application as well as the CDM programs currently approved by the OPA are summarized in Table. 0 The kw reductions from the Residential Load Control program have not been incorporated into the EDR load forecast because they will have little impact on the distribution revenue. Residential Load Control is a demand response program deployed to address summer peak demand by responding to dispatches from the Independent Electricity System Operator s ( IESO ) Emergency Load Reduction Program ( ELRP ). Emergency demand reduction is expected to be activated only a handful of times over the summer period. Moreover, little or no reduction in overall kwh energy consumption is anticipated, since the energy not consumed during the load reduction period will likely be consumed immediately after the control period. The purpose of demand response is to shift load during periods of extreme peak demand. Since the distribution rate of the customers in this program is based on kwh, the impact on distribution revenue will be minimal. 0 CDM BENEFITS In addition to supporting the Government s initiative in CDM, THESL s CDM programs have resulted in, and will continue to bring about, benefits to ratepayers as well as the distribution system. Customers in all sectors are involved in THESL s CDM programs, and in the process reduce their electricity usage and become conservation conscious. The reduction in electricity usage during system peak reduces the demand on the distribution system, thereby helping to improve the reliability of the system.

6 Exhibit G Page of 0 The 0MW Residential Load Control demand response capacity shown in Table for 00 will have been installed prior to 00, but will be maintained and controlled using the infrastructure and operational facilities included in this Application. This demand response capacity will be available to help reduce the system peak demand when there is a need to do so. To justify the costs of the infrastructure and operational facilities included in this Application, the total costs used for the TRC Test calculation have included the infrastructure and operational facilities costs for and the annual recurring costs to 0, in addition to the costs incurred to establish the 0MW demand response capacity. The TRC Test benefits are the avoided costs related to generation, transmission and distribution for the same period. 0 The Net TRC Benefit is $,,000, which reflects the value of the THESL CDM program in this Application and provides a measure of the net tangible benefit of the CDM program to the society. It should also be noted that THESL plans to participate in the OPA residential load control standard program in the years This will result in additional installed demand response capacity for the Residential Load Control program. This additional demand response capacity is not shown because THESL does not have approval from the OPA for the program as yet.

7 Table : Summary of THESL CDM Programs EDR-funded and OPA-funded ($000s) Toronto Hydro-Electric System Limited Exhibit G Page of