Ontario Launches New Energy Efficiency Programs

Earlier today, Ontario’s Minister of Energy and Electrification, the Honourable Stephen Lecce, announced a new electricity conservation and demand-side management procurement initiative (“eDSM Framework”) which includes new and recapitalized energy efficiency programs to help Ontario consumers lower their energy bills. Today’s announcement follows consultation with stakeholders through the Environmental Registry of Ontario (“ERO”) in October 2024 and is consistent with the substance of the Minister’s Directive to the Independent Electricity System Operator (“IESO”) of November 7th, 2024, and the subsequent amendments to that Directive made on December 19th, 2024.

The new eDSM Framework replaces the expired 2021-2024 Conservative and Demand Management (“CDM”) Framework and is intended to prioritize maximizing savings while optimizing program delivery to improve the customer experience. Notably, the eDSM Framework is established for a 12-year term, from January 1, 2025 - December 31, 2036, and comes with a total budget of $10.9 billion for that term. This budget is inclusive of all residential, business (small business, medium-sized enterprise, commercial, agricultural, municipal, institutional and industrial), income-qualified, on-reserve First Nation, and Local Distribution Company (“LDC”) funding programs which may result from the rolling three-year eDSM plans from the IESO as part of the eDSM Framework.

Consistent with several themes presented by the Electrification and Energy Transition Panel (“EETP”) and key considerations for the Integrated Energy Plan (“IEP”) currently under development, the IESO has been asked to pursue the creation of a single delivery window for residential and income-qualified eDSM programs in an integrated and complimentary manner with Enbridge Gas’ residential DSM programming approved by the Ontario Energy Board (“OEB”). As well, they have been instructed to consider eDSM to be inclusive of beneficial electrification measures, which involve using electricity to reduce the province’s overall emissions in a manner that minimizes electricity system impacts. The IESO will also look to coordinate program delivery with aligned initiatives at the federal and municipal levels, including with entities delivering natural gas DSM programs.

The following new programs are to be rolled out as part of the eDSM Framework:

• ‍Home Renovation Savings Program: Scheduled to launch on January 28, 2025.
  • Program will offer rebates of up to 30 per cent for home energy efficiency renovations and improvements (windows, doors, insulation, air sealing, smart thermostats, heat pumps), as well as behind-the-meter storage batteries and rooftop solar for homes.
  • Second phase of the program (to be launched later in 2025) will include energy efficient appliances (refrigerators and freezers).

• Peak Perks Program: Expand program targeted to small businesses (including convenience stores and restaurants).
  • Participants will receive $75 upon initial enrollment in the program and $20 per year for each eligible smart thermostat connected to a central air conditioning system or heat pump unit.
• ‍Save on Energy Programs: Continue to support the current 12 programs.

Sussex anticipates that the IESO will launch further consultation and engagement on the implementation and design of these and other new energy efficiency programs throughout 2025.

Over the coming weeks and months there will also be continued evolution of recommendations and policy in Ontario, anticipating the release of the IEP, the IESO’s Annual Planning Outlook (“APO”) in Q1 2025, and other important milestones.