Conservation First Framework LDC Tool Kit Final v2.1 July 1, 2017

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1 Program Name: Save on Energy Heating and Cooling Program 1. Program Description The Heating and Cooling Program encourages individuals and businesses to replace or retrofit existing heating and cooling systems with, or to install new, qualified Eligible HVAC Measures. This Heating and Cooling Program is offered under, and is subject to the terms of, the Energy Conservation Agreement. All capitalized terms not defined in Section 8 of these Program Rules have the meaning given to them in the Energy Conservation Agreement between the LDC and the IESO. These Program Rules will take effect on July 1, Program Offer / Participant Incentives 2.1 Standard (Provincially-Consistent) Incentives Table 1 summarizes the Participant Incentives offered under this Heating and Cooling Program. Table 1: Participant Incentives Eligible HVAC Measure High efficiency furnace equipped with a variable speed ECM (replacement) Participant Incentive $ Circulator Pump equipped with a variable speed ECM $30.00 ENERGY STAR certified CAC system with SEER 18 or higher and 13 EER or higher $ Ductless ASHP $1, Page 1 of 10

2 Eligible HVAC Measure Ductless Multiport ASHP Participant Incentive $1, for one exterior unit and the first two interior units plus $ for each additional interior unit attached to the same exterior unit, up to a maximum Participant Incentive of $3, Ducted ASHP $1, Cold Climate Ductless ASHP $1, Cold Climate Ductless Multiport ASHP $1, for one exterior unit and the first two interior units plus $ for each additional interior unit attached to the same exterior unit, up to a maximum Participant Incentive of $4, Cold Climate Ducted ASHP $4, Adaptive Thermostat $ Exceptions Not applicable. Page 2 of 10

3 3. Program Eligibility Criteria 3.1 Participant Eligibility Participants must: (a) (b) (c) (d) be an individual that is at least 18 years old or a business classified as a general service <50kW account; not be a dealer or distributor of heating or cooling systems (for greater certainty, Adaptive Thermostats are considered to be part of heating or cooling systems); be the owner, or a tenant with the written consent of the owner, of the residence or business where the Measure will be installed; and in the case of a replacement Measure, own or rent the existing furnace or CAC system to be replaced with the Measure(s) (and if renting the system, the Participant must have the written consent of the owner of the system). 3.2 Facility Eligibility The location where the Measure(s) will be installed must: (a) (b) be located in Ontario; and be connected to, or behind the meter of another electricity consumer connected to, the LDC s Distribution System. 3.3 Project and Measures Eligibility Measures A Measure must, (a) in the case of a furnace: be a replacement of an existing furnace; and be a new high efficiency furnace equipped with a variable speed ECM listed on the Eligible ECM List; (b) in the case of a Circulator Pump: be installed on an existing hydronic heating system and not on a DHW heater; and be a new Circulator Pump equipped with a variable speed ECM listed on an Eligible ECM List approved by the IESO; Page 3 of 10

4 (c) in the case of a CAC system: (iv) be a new installation or a replacement of an existing system; be a new CAC system that is ENERGY STAR certified; have a minimum SEER of 18 and a minimum EER of 13; and have an indoor coil that is listed on the Eligible A/C and A/C Coil List; (d) in the case of a Ductless ASHP: be a new heat pump that is ENERGY STAR certified, or that meets the CEE Tier-1 qualification (i.e. has a minimum efficiency rating of SEER 15/HSPF 8.5/EER 12.5); be installed in a home or business that uses electricity as its primary heating source (i.e. 70% or more of the total heating load); and have an interior unit that is compatible with the exterior unit in accordance with OEM specifications; (e) in the case of a Ductless Multiport ASHP: meet all of the requirements outlined in Section 3.3.1(d); and have 2 or more interior units; (f) in the case of a Ducted ASHP: be a new heat pump that is ENERGY STAR certified, or that meets the CEE Tier-1 qualification (i.e. has a minimum efficiency rating of SEER 15/HSPF 8.5/EER 12.5); be installed in a home or business that uses electricity as its primary heating source (i.e. 70% or more of the total heating load); and have an indoor coil that is listed on the Eligible ASHP and ASHP Coil List. (g) in the case of a Cold Climate Ductless ASHP: be a new heat pump that is ENERGY STAR certified, or that meets the CEE Tier-1 qualification (i.e. has a minimum efficiency rating of SEER 15/HSPF 8.5/EER 12.5); meet the requirements in NEEP s Cold Climate Air-Source Heat Pump Specification (NEEP, 2017 or more recent); and also meet the following Page 4 of 10

5 two requirements: (a) COP at -15 C (5 F) greater than 2.0 at maximum capacity operation; and (b) maintain a maximum capacity at -15 C (5 F) that is greater than or equal to 55% of maximum capacity at 8.3 C (47 F); (iv) be installed in a home or business that uses electricity as its primary heating source (i.e. 70% or more of the total heating load); and have an interior unit that is compatible with the exterior unit in accordance with OEM specifications. (h) in the case of a Cold Climate Ductless Multiport ASHP: meet all of the requirements outlined in Section 3.3.1(g); and have two or more interior units; in the case of a Cold Climate Ducted ASHP: (iv) be a new heat pump that is ENERGY STAR certified, or that meets CEE Tier-1 qualification (i.e. has a minimum efficiency rating of SEER 15/HSPF 8.5/EER 12.5); meet the specifications of NEEP s Cold Climate Air-Source Heat Pump Specification (NEEP, 2017 or more recent); be installed in a home or business that uses electricity as its primary heating source (i.e. 70% or more of the total heating load); and have an indoor coil that is listed on the Eligible Cold Climate ASHP and Cold Climate ASHP Coil List. (j) in the case of an Adaptive Thermostat: be a new web-enabled thermostat with heat pump lockout temperature control, which is listed on an Eligible Adaptive Thermostat List approved by the IESO; and be installed in a home or business with a ducted electric heating system (i.e. central electric furnace) or ducted ASHP; (k) (l) be purchased from and installed by a Participating HVAC Contractor. be purchased and installed during the period in which the LDC is approved to deliver the Heating and Cooling Program in accordance with the LDC's approved CDM Plan. Page 5 of 10

6 3.3.2 Documentation Applications under this Heating and Cooling Program must be post-marked by no later than February 1, or if submitting the Application electronically, the electronic submission must occur by no later than February 1, of the year after the purchase and installation of the applicable Measures Participating HVAC Contractors A Participating HVAC Contractor is a supplier and installer of HVAC equipment that has: (a) provided to the IESO evidence of: a 313A and 313D licence issued by the Ontario College of Trades for each technician employed, contracted or otherwise used by the Participating HVAC Contractor; a Technical Standards & Safety Authority registration certificate; a Gas Technician 1 or 2 certificate, or Oil Burner Technician 1 or 2 certificate issued by the Technical Standards & Safety Authority for each technician employed, contracted or otherwise used by the Participating HVAC Contractor; (iv) (v) (vi) a letter of clearance from the Ontario Workplace Safety & Insurance Board; a valid 306A licence issued by the Ontario College of Trades for each technician employed, contracted or otherwise used by the Participating HVAC Contractor to perform Circulator Pump installations; and evidence of general liability insurance with coverage limits in the amount of at least equal to $2 million per occurrence and automobile insurance with coverage limits of at least $1 million per occurrence; (b) (c) successfully completed the HVAC Contractor Orientation and the HVAC Contractor Training; and entered into an HVAC contractor agreement with the IESO. 3.4 Eligible Costs Not applicable. 4. Participant Agreements Page 6 of 10

7 The Participant Agreement will include the terms and conditions specified in the Energy Conservation Agreement. In addition, it must require Participants to submit proof of purchase of eligible Measures and it will include any other provision required to give effect to these Program Rules. The Participant Agreement for this Heating and Cooling Program will be developed and made available by the IESO, as updated from time to time. 5. QA/QC and Project M&V Minimum Requirements Not applicable. 6. Minimum Record-Keeping Requirements Upon request, the IESO will provide the LDC with a report of the previous month s activity under the Heating and Cooling Program in the LDC s service area. 7. Other 7.1 Program-specific IESO Obligations The IESO will: (a) (b) (c) develop and enter into contractual arrangements with HVAC suppliers and installers to become Participating HVAC Contractors; make available to the LDC, a list of Participating HVAC Contractors, as updated from time to time; use reasonable efforts to ensure that Participating HVAC Contractors: provide a copy of the Participant Agreement to each Participant; fill out the Application on behalf of the Participant and send it to the e- mail address provided by the Participant, provided that if the Participant wishes to complete a paper copy of the Application, the Participating HVAC Contractor will fill out a printed Application on their behalf; complete the installation of eligible Measures; and (d) receive and verify that the Application complies with the requirements of the Heating and Cooling Program, and if so, pay the Participant Incentive to the Participant. 7.2 Program-specific LDC Obligations Page 7 of 10

8 The LDC will encourage HVAC suppliers and installers in its service area to become Participating HVAC Contractors. 8. Program Specific Definitions The following terms have the meaning stated below when used in these Heating and Cooling Program Rules: Adaptive Thermostat means a smart learning thermostat that is listed on the Eligible Adaptive Thermostat List. Application means, in respect of this Heating and Cooling Program, any form of request that must be completed by a person in order to participate in such Heating and Cooling Program, including a completed application form. ASHP means air-source heat pump, which transfers heat from outside to inside a building. CAC means central air conditioning. CEE means the Consortium for Energy Efficiency, an organization that manages qualified energy efficient product lists. Circulator Pump means a type of low-horsepower (low capacity) pump that circulates hot water in a residential hydronic heating system. Cold Climate ASHP means a system that is capable of heating the home at lower outdoor temperatures than regular heat pumps (typically down to minus 25 degrees Celsius, but some can go even lower), and that has higher seasonal performance than a regular heat pump. Cold Climate Ductless Multiport ASHP means a ductless system with more than one internal unit or head that is capable of heating the home at lower outdoor temperatures than regular heat pumps (typically down to minus 25 Celsius, but some can go even lower), and that has higher seasonal performance than a regular heat pump. COP or Coefficient of Performance is a ratio of the instantaneous energy output of a system compared to its instantaneous energy input and is generally used as a measure of the energy efficiency of heat pumps, refrigerators and CACs. Distribution System means a system connected to the IESO-Controlled Grid for distributing electricity at voltages of 50 kv or less and includes any structures, equipment or other thing used for that purpose. Ducted ASHP means a split-system ASHP that delivers heat in the home through an interior unit lodged in the CAC system duct, thereby dispersing heating/cooling through the home s air ducts. Page 8 of 10

9 Ductless ASHP means a split-system ASHP that delivers heat in the home through a packaged interior (wall or ceiling) unit that disperses heating or cooling using a built-in fan. Ductless Multiport ASHP means a split-system ASHP that delivers heat in the home through multiple packaged interior (wall or ceiling) units that disperse heating or cooling using a built-in fan. DHW means domestic hot water ECM means an electronically commutated motor. EER or Energy Efficiency Ratio is a measure of how much cooling effect is provided for each unit of electrical energy that it consumes under steady-state operation. It is determined by dividing the cooling output of the unit, in BTUs per hour, by the electrical power input, in watts, at a specific temperature. Eligible Adaptive Thermostat List means a list made available by the IESO, as updated from time to time, setting out eligible smart learning thermostats which qualify as an Eligible HVAC Measure. Eligible A/C and A/C Coil List means a list made available by the IESO, as updated from time to time, setting out eligible residential air conditioners and their corresponding air conditioner coils, which qualify as an Eligible HVAC Measure. Eligible ASHP and ASHP Coil List means a list made available by the IESO, as updated from time to time, setting out eligible residential ASHPs and their corresponding ASHP coils, which qualify as an Eligible HVAC Measure. Eligible Cold Climate ASHP and Cold Climate ASHP Coil List means a list made available by the IESO, as updated from time to time, setting out eligible residential Cold Climate ASHP and their corresponding Cold Climate ASHP coils, which qualify as an Eligible HVAC Measure. Eligible ECM List means a list made available by the IESO, as updated from time to time, setting out, by manufacturer, the ECM equipped furnaces which qualify as an Eligible HVAC Measure. Eligible HVAC Measure means those Measures listed in Section 2.1. ENERGY STAR means the international ENERGY STAR symbol rating as promoted and monitored by Natural Resources Canada s Office of Energy Efficiency. HSPF or Heating Seasonal Performance Factor is a measure of seasonal heating performance of a heat pump and is expressed as a ratio of BTU heat output over the heating season to watt-hours of electricity used. HVAC means heating, ventilation and air conditioning. Page 9 of 10

10 HVAC Contractor Orientation means the orientation program offered by the IESO that must be completed by an HVAC contractor as a pre-requisite to entering into an agreement with the IESO for participation in the Heating and Cooling Program. HVAC Contractor Training means the mandatory training course specified on the IESO s website at Participation.aspx (as may be updated by the IESO from time to time), which must be completed by each technician employed, contracted or otherwise used by an HVAC contractor prior to any such technician installing Eligible HVAC Measures under the Heating and Cooling Program. Participating HVAC Contractor means an HVAC supplier or installer that satisfies the eligibility requirements set out in Section PSC means a permanent split capacitor motor. OEM means the original equipment manufacturer. NEEP means the Northeastern Energy Efficiency Partnership, which has developed a Cold Climate Air-Source Heat Pump Specification. SEER or Seasonal Energy Efficiency Ratio is a measure of seasonal cooling energy performance of CAC and heat pumps and is expressed as a ratio of BTU cooling output over the cooling season to watt-hours of electricity used. 9. Pay-for-Performance The pay-for-performance rate for this Heating and Cooling Program is $0. Page 10 of 10