The Policy Framework Agenda
| In May, 2010, the ECO released its first Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials. | |||||
From the policy review in this report, four issues stand out that the ECO believes should set the energy conservation policy
agenda.
Contents |
1. Develop a comprehensive energy conservation strategy.
| Recommendation :
The ECO recommends that the Secretary of Cabinet direct the development of a comprehensive energy conservation strategy encompassing all major energy sources used in Ontario. The strategy should be developed with public input. |
Several other provinces and Ontario municipalities have energy conservation strategies but Ontario does not. The Ministry of Energy and Infrastructure should make the creation of a comprehensive strategy applicable to all energy sources its first priority.
The strategy should provide a definition of conservation to guide the measurement of progress; it should set objectives and targets as appropriate; and, the strategy should co-ordinate government-wide initiatives. Development of the strategy should incorporate public comment by posting it on the province’s Environmental Registry.
2. Stabilize electricity policy, and provide clarity and certainty to that policy.
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure move quickly to clarify the role of the Integrated Power System Plan and to finalize the key conservation regulations and directives under the 'Green Energy and Green Economy Act, 2009. |
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure commit to a period of policy stability to allow for implementation and evaluation of the Green Energy and Green Economy Act, 2009. |
There is a need for stability in Ontario’s electricity policy in order to consolidate the gains already made and to capture the potential created by the GEGEA. This does not mean there should be no further activity. Our report suggests some initiatives to be pursued as the GEGEA framework is implemented, but these are mostly refinements of the existing policy as opposed to new departures.
The GEGEA has been characterized as a “game-changer” . There is a need now, however, to pause, implement, evaluate and adjust. Most of 2009 was devoted to creating the GEGEA and implementing its renewable energy provisions. Conservation provisions (regulations and directives) of the GEGEA have been slow to emerge, and 2010 may be another year of instability, negatively affecting the energy savings achieved. Organizations tasked with delivering conservation would benefit from a multi-year commitment to the GEA policy framework, together with the assurance of stable financing. Such a commitment would allow them to do the assigned job, as well as to be evaluated properly by policy makers and regulators.
The process for approving the proposed IPSP is in hiatus at the time of writing this report. It is essential that the issue of the proposed IPSP be settled. It must be determined whether the IPSP process will be resumed with revised conservation targets, or whether it will not be used at all, or whether another method will be used, such as a blended policy-making approach using the minister’s directive power and IPSP planning.
3. Examine the role of benchmarking and energy targets.
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure establish targets to reduce provincial electricity consumption. These consumption targets will supplement the province’s existing targets to reduce peak electricity demand and fulfill the government’s commitment to build a culture of conservation. |
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure establish reportable benchmarking by sector. This would assist the government in deciding whether to establish targets to conserve natural gas, oil, propane and transportation fuels, and would make the targets meaningful. |
To date, Ontario’s electricity conservation targets have been established using a fairly blunt approach. A provincial target is set for a given year, measured as a reduction in the peak or maximum amount of electricity (in megawatts). The overriding objective of system planning is to ensure that enough electricity is available to meet the highest expected peak demand. This approach places a high value on activities that reduce demand through temporary reductions or shifting the demand to an off-peak time, but may not necessarily reduce the overall consumption of electricity.
Quantitative targets are powerful tools because they provide a simple metric for measuring progress. The ECO believes that the government should review its approach to target setting, given the several targets and goals adopted by the province, and use a more integrated and nuanced approach that reflects all aspects of conservation.
The ECO believes that the government should also implement reportable benchmarking by sector as the GEA enables the government to do. Following measurement and benchmarking, MEI should also consider whether reforms to setting natural gas demand-side management targets would be beneficial. It should also determine whether such targets should extend to other fuels (i.e., oil, propane and transportation) not subject to regulatory oversight and, if so, how they would be implemented.
The development of a comprehensive conservation strategy would provide an opportunity to re-evaluate Ontario’s use of targets as a policy tool.
4. Ensure accountability, transparency and public input on energy directives.
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure provide an opportunity for public input in the development of policy directives to electricity sector institutions, as required by the Environmental Bill of Rights, 1993. |
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure develop a reporting mechanism to track progress on directives which ensures accountability and transparency. |
Accountability, transparency and public participation are essential to maintaining energy consumers’ support for conservation. Under the current (and possibly under the future) regulatory framework, it is not clear that meaningful public scrutiny can occur.
In the absence of an approved IPSP , the minister has made extensive use of the directive power to require the Ontario Power Authority to undertake conservation activities without public input. The GEGEA expands the minister’s directive power over both the OPA and the Ontario Energy Board. This effectively removes a previous restriction on ministerial direction to the OPA: namely that the duration of the minister’s directive authority would be limited to the time period leading up to the passage of the IPSP , at which time the minister would relinquish this power. Thus, the lack of public input on conservation that has characterized the period before an approved IPSP will now persist. The minister will be free to set conservation and demand management goals and budgets with little or no public input. The IPSP review process, if it resumes, will not need to consider the merits of initiatives directed by the energy minister.
The extensive use of directives to guide conservation action has also removed
accountability for ensuring implementation of the desired actions.
Citing This Article:
Environmental Commissioner of Ontario. 2010. Annual Energy Conservation Progress Report, 2009 (Volume One): Rethinking Energy Conservation in Ontario. Toronto, ON : Environmental Commissioner of Ontario. pp. 43-45
