Andrea Pastori   Cabinet…

Andrea Pastori

 

Cabinet Liaison and Strategic Policy Coordinator

 

Ministry of Energy

 

Strategic, Network and Agency Policy Division

 

Strategic Policy and Analytics Branch

 

77 Grenville Street, 6th Floor

 

Toronto Ontario

 

M7A 2C1

 

Submitted via EBR/ltep@ontario.ca

 

Dear Ms. Pastori,

 

As the President and CEO of PowerStream and the President and CEO Designate of “MergeCo” I am pleased to provide the following comments on the development of the 2017 Long Term Energy Plan (LTEP).

 

The comments, predicated on the vital relationship that exists with our customers, are three-fold: 1.LTEP 2017 should set out clear strategies for achieving policy alignment in the areas of energy and climate change.

 

2.LTEP 2017 should direct that the Ontario Energy Board (OEB) convene a generic proceeding to examine the future of the electricity grid and how innovation can be funded.

 

3.LTEP 2017 should clearly commit to the optimization of existing electricity sector resources and infrastructure as part of any new policy implementation plans.

 

Creation of MergeCo

 

The four high-performing and progressive utilities that will form MergeCo, with 950,000 customers, are coming together in order to bring more value to customers and shareholders. Our scale and depth will provide us with a platform to deliver better performance and a progressive business, and be able to provide technologically-advanced energy products and services to energy consumers.

 

As provincial energy and environmental policies continue to evolve, we see the potential for significant alignment between MergeCo and the government of Ontario to enhance the reliable and affordable delivery of energy via an innovative and consumer-centric approach.

 

Customer-focused approaches will continue to be central to the business of MergeCo. As we come together to form our new company, MergeCo will keep our customers’ trust by delivering value and acting as a key advisor on energy solutions.

 

The following recommendations are based on what we understand will help build an energy policy framework that can best meet customer needs and preferences.

 

Recommendation One:  LTEP 2017 should set out clear strategies for achieving policy alignment in the areas of energy and climate change

 

a.LTEP should signal the creation of a government  (cross-Ministry) led industry working group to determine the policy and regulatory support required to ensure the grid is prepared to respond and accommodate the various demand scenarios in the most cost effective and efficient way.

 

Background

 

The economic, social and political landscapes have changed considerably since the release of the 2013 LTEP. Governments at all levels have developed, or are developing climate change strategies to address rising GHG levels. There is growing consensus around the need for a pan-Canadian energy strategy, and the electricity sector itself continues to undergo rapid transformation.

 

We recognize and support the government’s efforts to take a more integrated approach in this LTEP (for example, producing the Fuels Technical Report), but encourage the full accounting of the policy and financial implications of other concurrent government initiatives, particularly those entailed in the Climate Change Action Plan (CCAP).

 

Recent energy and climate change policy announcements from both levels of government have led to some confusion for industry as to how the various initiatives will flow together.

 

Some of the policy areas that could benefit from clarity in LTEP 2017 include:

 

•Details on how the Green Bank programs will be integrated with the CDM framework now and beyond the expiry of the current programs (this will be critical in avoiding customer confusion).

 

•Conflicting drivers/policies for fuel switching of residential heating. Switching from gas to electric heating would support GHG reductions and climate change policy, but it would increase customers total energy bills and could undermine current bill mitigation efforts.

 

•An approach to integrating federal government initiatives to enhance energy efficiency with existing provincial efforts and;

 

•Increased EV adoption and anticipated impacts on the distribution grid.

 

Recommendation Two: LTEP 2017 should include a direction that the OEB convene a generic proceeding to examine the future of the electricity grid and how innovation can be funded.

 

Background

 

For the past 10 years PowerStream has been committed to advancing a smart grid agenda and transitioning to become an integrated energy services provider. This has resulted in several unique pilot programs (Time of Use optionality through dynamic pricing models, expansion of EV technology and infrastructure, microgrids, residential solar-storage etc.) that have yielded sector-wide benefits in terms of results, research and data. We believe that our emphasis on testing and deploying innovative technologies is aligned with government direction and customer expectations.

 

Unfortunately, efforts to increase adoption of these technologies are often caught in a structural gap between policy priorities and regulator imperatives to keep rates low. This is exacerbated by the fact that even in cases of more wide-scale adoption of innovative technology, virtually all associated investment costs (and risks) are placed on local ratepayers. A sector-wide approach, developed by the OEB would allow for a more sustainable form of funding energy innovation and would result in a more equitable distribution of the financial burden over the entire rate-base.

 

The OEB has successfully used generic proceedings to review important issues and provide guidance in the form of a decision. The most recent example was the proceeding on Natural Gas Expansion. Earlier this year the OEB heard evidence from 28 interested parties, including customer groups, environmental organizations, municipalities, First Nations, industry associations and utility companies. The OEB accepted written submissions until July 11, 2016 and received comments from 24 participants.  We understand that parties were satisfied with the process and the result.

 

Clearly, the industry is at a critical juncture. Distributed energy resources and emerging technologies are changing how the electricity gird is utilized. Climate change initiatives have aggressive targets and will require quick action.  There is a need to identify and apply innovative ideas and technology.  At the same time, however, the grid must remain reliable. Finally, concern over electricity prices continues to escalate, compounded by the fact our industry finds itself in a highly politicized environment.

 

The complex and interdependent topics are well suited to the subjects of a generic hearing.

 

 

 

Recommendation Three: LTEP 2017 should clearly commit to the optimization of existing electricity sector resources and infrastructure as part of any new policy implementation plans

 

Background

 

Over the past few years, PowerStream has worked relentlessly to ensure that innovation and a customer focus are central to its utility business.  In addition to our long-established commitment to emerging technologies and operational excellence on the grid side of the meter, we have grown our human resources and infrastructure to design and deliver customer-facing programs at a mass adoption scale. While these programs to date have been primarily focused on electricity conservation and demand management, the skills (e.g. marketing, program design) and the infrastructure (contractor networks, program application processes, rebate fulfillment etc.) are easily transferrable to other products and programs that could support LTEP objectives, such as EV adoption, fuel switching, and transportation demand management. Leveraging these existing resources and infrastructure would not only be cost-effective, but would be customer centric as it would allow for the delivery of more integrated solutions based on the individual customer’s needs. LTEP 2017 should seize the opportunity to leverage and optimize those resources and infrastructure. We offer the following examples where additional opportunity exists:

 

•Expand the definition of conservation to include efficiency upgrades on the grid side of the meter (e.g. Conservation Voltage Reduction) as well as more behind-the-meter solutions which reduce electricity demand from the grid (e.g. renewables, storage).

 

•Leverage MergeCo’s CDM program design and delivery infrastructure for the design and delivery of GHG-reduction programs to customers, including energy efficiency, fuel switching and distributed clean energy resources.

 

•While the ICI Demand Response program exists, the “residential” DR resources remain untapped. Enhancing the current DR process by facilitating residential DR participation will ensure continued benefits to the energy system and to the customer and;

 

•Provide a clear pathway to leverage the successful inclusion of aggregated, clean energy resources including renewable generation, battery storage and microgrids in the PowerStream and MergeCo portfolio for which an enhanced net-metering regime will be critical.

 

Conclusion

 

MergeCo plans to be Canada’s leading integrated and innovative energy solutions provider.  With a customer-focused approach, we are keen to provide the technology-advanced energy products and services that our customers demand.  Our results in piloting and delivering integrated energy services to date demonstrate that we are in a position to deliver on the government’s objectives related to energy management and climate change. We look forward to continuing to work with government to close the gap between the government’s vision for the sector and cost and regulatory constraints through a transition period.

 

Once again, thank you for providing this opportunity to provide feedback as you develop LTEP 2017.

 

Should you wish to discuss this issue further,  please contact me via the e-mail address or phone numbers listed above/below or Director of External Affairs, Tamar Heisler at tamar.heisler@powerstream.ca; 416-258-4538.

 

Sincerely,

 

Brian Bentz

 

President and CEO, PowerStream

 

President and CEO Designate, MergeCo

 

cc.MergeCo CEO Council:

 

Peter Gregg, Enersource

 

Max Cananzi, Horizon Utilities

 

Paul Tremblay, Hydro One Brampton

 

[Original Comment ID: 207165]