Stimulating Infill Development through Utility Policy and Programs

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1 Stimulating Infill Development through Utility Policy and Programs Neil Freeman, Vice President, Business Development Quality Urban Energy Systems of Tomorrow 2013 November 13, 2013

2 Horizon Utilities and sustainable development Award of Merit 2013 Sustainability Leadership Award 2013 LDC PERFORMANCE EXCELLENCE AWARD

3 Sustainability in action CDM energy mapping How can a utility better contribute to the sustainability of its communities? Energy mapping combines major data bases customer, property attribute and georeference data Key output is kwh / m 2, but many others Received $500K from OPA to pilot for all Ontario utilities Received $300K in-kind from partners, incl. MPAC, NRCan, Environics Bar Height kwh/m 2 commercial buildings less than (red) and greater than (blue) 10 years old 3

4 How a utility can contribute to intensification Many social and economic benefits good for communities good for utilities Issue is finding the right role for a utility to play 4

5 Infill development a notable success story Canada s largest LEED Platinum residential building A Horizon Utilities customer in Hamilton Important learnings for utility policy and programs 5

6 Infill development making it more attractive 1. Rethink connection policy how and what customer is charged 2. Leverage utility asset data how can it aid marketing of properties 3. Leverage customer asset data assets left behind same 4. Build a database more and better information gives an edge 6

7 Rethinking connection policy philosophy Municipal and community benefits Infill development improves tax base more sustainable communities Less pressure for greenfield developments meet Ontario s infill urban growth plan Horizon s objectives Enhance attractiveness of existing municipal infill and brownfield programs through Horizon s customer connection policy Increase usage/revenue from underutilized Horizon distribution assets Reputation advantage for Horizon be first utility with an infill strategy Path to success Focus first on finding new customers for existing vacant and marketable buildings move in ready properties Second focus is finding new customers for vacant residential and commercial lands 7

8 Horizon s new approach to connection costs Customers faced three types of costs in a Connection Agreement as permitted under Ontario s Distribution System Code until now: 1. Incremental operating cost to support customer 2. Expansion costs (direct construction costs of connection, such as extending a pole line, expanding capacity of a station) 3. Enhancement costs (portion of pooled system improvement costs across utility) Actual connection cost was determined by whether projected customer revenue is greater than sum of three costs above Horizon s new framework only includes expansion and incremental operating costs in calculation not system enhancement costs Horizon is first utility in Canada to tie its customer connection policy to an infill development strategy 8

9 Horizon infill connections policy advantage Little or no expansion costs required to connect customers that locate in repurposed buildings Removal of charge for pooled system enhancement costs make connection cost reflective of utility s direct cost of connection 9

10 Significant customer connection costs benefits Customer A: 1,500 kw Old New % Change Customer Contributed Capital $225,000 $ % Customer Deposit (Refundable) $0 $105,000 Customer B: 2,800 kw Old New % Change Customer Contributed Capital $250,000 $ % Customer Deposit (Refundable) $0 $20,000 Cost reduction is greatest where Horizon s distribution lines are at the street and capacity is available at the station Generally no expansion costs beyond reconnection of lines and installation of new metering How best to assist customers to find properties? 10

11 Adding to existing economic development support All municipalities are in competition for new business having electricity data adds to informed location decisions to reduce costs for new businesses In past, Horizon provided help on a one-off basis, as in table above New strategy is to provide full tools up front through a large database 11

12 Multi-variable, searchable infill database Database includes all vacant commercial buildings larger than 5K sq ft Many variables to cross-reference properties and customer needs Details on sharing data yet to be worked out privacy issues Issue: how best for Ec Dev departments to market database? 12

13 Matching station capacity to business parks Business Park Bayfront 19 # Vacant industrial Buildings Hamilton St. Catharines Transformer Station Capacity (MVA) Beach / Birmingham / Elgin / Kenilworth 112 East Hamilton 10 Lake 40 Eastchester 26 Bunting 10 (part) Flamborough 0 Dundas Glendale 4 Glendale 35 Mountain 11 Nebo 3 0 Ontario 0 Carlton 23 (part) Port Weller 3 Bunting 10 (part) Martindale 1 Carlton 23 (part) Not Available 2 Stoney Creek 30 Winona 53 Vansickle 11 Vansickle 51 West Hamilton 3 Newton 31 Total: Critical knowledge for large commercial customers locating where capacity exists is a huge cost and time savings Narrows search focuses attention on finding other cost savings 13

14 Utility supply / delivery assets in database Catalogue of supply voltage, redundant supply and station capacity serving each building by street address and other local identifiers Information is critical to finding locations where no expansion is required significant start-up cost savings for a business 14

15 Customer-owned equipment now in database Catalogue of customer assets left behind for each vacant building transformers, switchgear, and other large assets Information is critical to finding locations where customer can get valuable equipment to help reduce start up costs Will need customer permission to release data 15

16 Leveraging CDM to support infill development Electricity retrofit incentives add to increasing the attractiveness of infill properties additional savings on top of infill benefit Horizon brings its strong track record of getting CDM incentives for business to its infill development strategy Horizon has secured largest retrofit saveonenergy grant every year since the program s inception in

17 Connected to municipal infill programs Province established strong guidelines for municipalities to follow Hamilton & St. Catharines are leaders in Ontario Horizon connected through ongoing planning and economic development department contacts Next steps branch out into other infill avenues 17

18 Sustainability in action industry leading First utility to be designated a Sustainable Electric Company by Canadian Electricity Association First utility in Canada to undertake energy mapping for CDM First utility in Canada with an infill development strategy 18