Government of Ontario - Proposal for 2021-2024 Conservation and Demand Management Framework

The Ontario Ministry of Energy, Northern Development and Mines (MENDM) posted its proposal for a new framework to enable electricity Conservation and Demand Management (CDM) programs, which would launch January 1, 2021. The current CDM Interim Framework will end on December 31, 2020.

The proposal, which can be found on the Environmental Registry Ontario website here, is open for public comment until August 22nd. Submission details can be found on the posting.

On March 21, 2019, the Independent Electricity System Operator (IESO) was directed to discontinue the previous 2015-2020 CDM framework and replace it with a streamlined suite of programs centrally delivered by the IESO under the 2019-2020 Interim Framework.

Below are the key points from the Proposal:

Term: Four-year term from January 1, 2021 to December 31, 2024, with a mid-term review at the end of 2022.

Delivery: The Framework would continue to be centrally delivered by the IESO with opportunities for anyone, including customers, LDCs and program delivery companies to propose cost-effective programs or projects that meet local or regional electricity system needs.

Objectives and customers served: Address limited system needs in near team in the most cost-effective manner while maintaining program delivery capacity in the province; and increase CDM investments in the second two years of the Framework (2023-24) to meet system needs that emerge through the 2020s.To be achieved by:

• Targeting provincial bulk system needs (primarily peak demand reductions) and local/regional system needs
• Recognizing the wide availability of cost-effective residential energy efficient products, this Framework would focus on providing education and tools for residential customers to empower them to improve their energy efficiency.

Program Types: Proposed programs under the new Framework would fall under the following general program types, with some offering benefits in more than one category. In order to provide a seamless transition from the Interim Framework and to target system needs as they arise, programs may be phased in over time.

• Programs that incentivize whole building electricity savings and peak demand reduction and help business to increase their internal energy management capacity.
• Programs that target local/regional needs, procured through a competitive process.
• Customer-driven solutions for larger/complex projects.
• Customer friendly and direct install programs that enable easy access and savings for standardized measures, including programs for small businesses.
• Programs for on-reserve First Nations communities, including for remote communities soon to be connected to the provincial electricity grid.
• A program for income-eligible households that would provide energy saving measures and installation of measures at no cost to the participant.

Separate from this 2021-2024 CDM Framework development process, the Independent Electricity System Operator (IESO) is planning to pilot an ‘Energy Efficiency Auction’ mechanism. Per the posting, the results of this pilot are intended to be used to help inform future opportunities for CDM to cost-effectively meet system needs through competitive mechanisms.

In addition, a new Ministerial Directive was issued to the IESO yesterday (found here) from Minister Rickford regarding existing programs that were initiated under the former 2015-2020 Conservation First Framework (CFF) and meant to end December 31, 2020, were being extended until June 30, 2021.  The rationale given for the extension was unforeseen disruption to program delivery due to the COVID-19 pandemic.

Our team will continue to follow this closely; please do not hesitate to contact us with any questions.