Powerstream 2007 CDM Report

Avision for change CONSERVATION AND DEMAND MANAGEMENT REPORT 2005 - 2007

Contents INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A SUSTAINABLE APPROACH TO CONSERVATION . . . . . . . . . . . . . . . 2 STEWARDSHIP STARTS WITH REGIONAL PARTNERS . . . . . . . . . . . 4 BUILDING ENERGY EFFICIENCY INTO THE COMMUNITY . . . . 8 THE POWER OF CRITICAL MASS . . . . . . . . . . . . . . . . . . . . . 10 A ROLE FOR INCENTIVES . . . . . . . . . . . . . . . . . . . . . . . . . 12 TECHNOLOGY AS KINGPIN . . . . . . . . . . . . . . . . . . . . . .14 VISION FOR A SUSTAINABLE FUTURE . . . . . . . . . . 16

Introduction Strategic plans are one part execution, two parts vision.

When PowerStream developed its plans for conservation and demand management (CDM) in 2005, its vision was as compelling as it was focused: create strategic alliances with early adapters, and then shepherd the plan through by providing them with the necessary incentives and expertise to help make change happen.

In other words, teach a person to farm rather than give her food.

And not just one person, but an entire community.

The Ontario Energy Board saw the wisdom of PowerStream’s approach, and by late 2005 the company’s three-year CDM plan was ready to go. It consisted of a broad and comprehensive proposal for how PowerStream would invest $7.2 million to engage customers in Aurora, Markham, Richmond Hill and Vaughan in the challenge of helping to kick-start Ontario’s conservation culture.

For the 2005-2007 reporting period, the results are in. A total of 55.6 million kilowatt-hours of electricity saved, a solid coalition of support, and thousands of customers turned on by the dual possibilities of saving the planet while at the same time saving money on their electricity bills.

The following report illustrates how PowerStream’s vision for change took shape, where the gains were made in terms of kilowatt-hour savings and what lessons were learned throughout the implementation process.

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sustainable approach

Brian Bentz President and Chief Executive Officer

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to

conservation In the physical world, there are many metaphors for change.

A butterfly flaps its wings and a tsunami starts. After months of stillness, a sudden movement or sharp sound causes an avalanche to thunder down a mountain. A single pebble drops into a still pond and creates circles of water that multiply indefinitely.

For every action, there is a corresponding reaction. The same is true when it comes to engineering change.

In PowerStream’s service territory, the re-wiring of customers’ energy conservation behaviour started three years ago with a vision premised on shared responsibility and sustainability. No utility could make change happen on its own, nor could any customer, business, government, community agency, or environmental group.

If change were to happen, it had to be the result of a concerted effort, initiated through a combination of human capital and financial incentives, with partnerships playing a lead role.

Before giving any thought to programs, PowerStream first set out to identify conservation ‘champions’ whose brand positioning, size, marketing skills, products, distribution channels and corporate strategies were most closely aligned with its longterm conservation and demand management objectives. Only after these key building blocks were put in place did the internal CDM team sit down to develop programs that would breathe life into the vision.

Partners such as Toronto and Region Conservation, Town of Markham, the Coalition of Large Distributors, municipal public library systems, local builders and developers — all were chosen because they were already committed to helping the Province of Ontario meet its energy supply challenges and because together, their strengths could be

leveraged to fire the imaginations of the ‘uncommitted’, moving them to action en masse.

Each of these strategic alliances will be described in the next section of this report. But first, a word about sustainability.

PowerStream’s CDM planners were single-minded in their commitment to sustainability and agreed that only partnerships yielding long-term benefits such as new jobs, new skills, new markets, or new business opportunities would be sought.

It was not enough to stimulate the market through financial incentives, promotions, advertising campaigns or community awareness raising events; the outcome had to be kilowatthour savings and the results had to be sustainable.

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Stewardship starts

partn

with regıonal

PowerStream understood early on that in order to generate meaningful and sustainable results, it needed to forge strategic alliances with organizations that were 100 per cent committed to the challenge of changing consumers’ minds about energy conservation and energy consumption. PowerStream’s key partnerships are highlighted here.

TORONTO AND REGION CONSERVATION

PowerStream partnered with Toronto and Region Conservation to promote the Archetype Sustainable House Competition. The winning design called Building Blocks — was announced in June, 2007.

For the years 2005-2007, PowerStream invested significantly in a unique partnership with Toronto and Region Conservation (TRCA) — a partnership aimed at increasing public awareness for energy conservation and educating the community at large about the tools available to do so.

Given its long-standing commitment to sustainable communities, TRCA was a natural choice. Kortright Centre in Vaughan was already a magnet for educators, their students and for any member of the community wishing to learn more about the natural world, including renewable energy.

PowerStream has been a proud supporter of the Green Energy Home Show at Kortright Centre since 2005.

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With collaboration from York Region District School Board, York Catholic District School Board, Ontario EcoSchools, the Clean Air Partnership and York Region Health Services, PowerStream’s three-year investment provided students an opportunity to learn about energy conservation. The pilot project helped to transport more than 1,100 Grade 5 school children from 19 schools in 41 different classes, to be taught by TRCA’s expert staff at the Kortright Centre for Conservation.

tners According to Brian Bentz, President and CEO of PowerStream, “Delivering an education program on energy conservation to school-age children is an important part of building a conservation culture.”

The curriculum of the PowerStream Energy Education Program was based on Ontario EcoSchools resource materials, which included several energy guides as well as ‘20/20 The Way to Clean Air’ campaign brochures.

These resources allowed teachers and students to complete energy reviews and action plans. Each student also received an energy toolkit to facilitate the lessons and to help complete at-home exercises with their parents PowerStream’s investment was also instrumental in the promotion of the Archetype Sustainable House Design Competition, which encouraged architects and builders to submit plans for the best sustainable house. Once built, the sustainable house would become a ‘green’ demonstration project for other developers and for the community.

By demystifying the notion that sustainable houses are too expensive or too niche, the hope is that buyers will catch on to the benefits of green housing and challenge developers to start building homes with energy conservation in mind.

Selected by an independent panel in June 2007, the winning sustainable house is called ‘Building Blocks’. It features a four-bedroom home with garage that targets LEED® Gold and Energy Star® for New Homes environmental certification, based on the following: a green room on the garage to reduce storm-water runoff; sun shades on the

south side to minimize solar heat gain; a geothermal heat source to decrease the house’s energy demands; and locally sourced materials to mitigate transportation impacts.

Plans are now in place for the winning entry to be built by the Greater Toronto Homebuilders Association, beginning in June 2008. The demonstration project will be sited on Kortright’s Energy Trail.

With funding from PowerStream, 1,100 Grade 5 school children from 19 area schools had an opportunity to travel to Kortright Centre to learn about energy conservation and renewable energy.

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regional partners

MARKHAM ENERGY CONSERVATION OFFICE, TOWN OF MARKHAM PowerStream also invested money, expertise and resources in the establishment of the Markham Energy Conservation Office (MECO), with a goal of helping citizens learn about conservation and demand management by way of example.

If municipal government does the right thing when it comes to conserving electricity, residents, local businesses and commercial customers will soon follow their lead.

To date, the investment has yielded impressive results. A lighting retrofit at the Town of Markham’s Civic Centre’s parking garage, for example, that was implemented in 2007 is saving 25,000 kilowatt-hours of electricity annually. In addition, 175-watt metal halide downlight fixtures are being converted to 55-watt compact fluorescents

for an estimated annual savings of over 16,000 kilowatt-hours.

In the Fall of 2007, the Town of Markham began a comprehensive retrofit of Milliken Mills Community Centre, including: a drain water heat recovery unit; a solar thermal heating system for the pool; installation of a Building Automation System; and an upgrade of the heating system with more efficient condensing boilers. This initiative is expected to save 200,000 kilowatt-hours of electricity per year. In addition, 60,000 kilowatt-hours of annual electricity savings have already been achieved through a lighting retrofit and sensor control in the main corridor of the facility.

PowerStream’s expertise was also instrumental in the development of a demand response program designed to reduce the Town of Markham’s energy consumption during periods of peak demand.

In partnership with Rodan Energy and Metering Solutions, PowerStream identified energy savings opportunities at the Thornhill Community Centre, which houses two ice rinks, a fitness centre with saunas and whirlpools, community halls, a lounge and a library.

MECO now has strategies in place to either turn off

or significantly reduce its lighting load during peak times. Strategies have also been established to manage heating, air conditioning and ventilation during peak times and to curtail energy consumption of pumps and refrigeration plants.

Also of note during the 2005-2007 reporting period was the piloting of the No Catch to Conserve program – developed by PowerStream and implemented in conjunction with MECO, Green$aver, Enbridge Gas Distribution and the Ontario Power Authority.

This unique program was conceived as a way of helping small business customers (with a billed demand of less than 50 kilowatts) save money on upgrades to their facilities.

The program starts with a free energy assessment and ends with a maximum $1,000 credit towards approved energy retrofits.

Introduced as a pilot project for the Town of Aurora in early 2007, the program caught on like wildfire throughout PowerStream’s service territory, including the Town of Markham, with 90 energy assessments completed by yearend 2007. Through this program, small business customers, to date, have managed to achieve annual energy savings of over 250,000 kilowatt-hours.

Mike Evans, owner of True Value Hardware in Aurora saved 46 per cent on his electricity bill one month after he completed a lighting retrofit at his store. Mr. Evans was an early adapter in PowerStream’s No Catch to Conserve program for small businesses, launched last fall.

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MUNICIPAL PUBLIC LIBRARIES Shaun Kelly, chef and partner of Al Dente Restaurant, was one of the first businesses in Markham to take advantage of PowerStream’s new program. By installing a strip curtain, replacing 52 flood lights with dimmable compact fluorescent light bulbs and cleaning the freezer coils, Mr. Kelly will achieve annual energy savings of 12,721 kilowatt-hours and save $1,527 on his electricity bill.

The final highlight in this section is PowerStream’s investment in the Haul Away Your Energy Hog refrigerator program, which was piloted by PowerStream in 2006 and became a program of the Ontario Power Authority in 2007 (now referred to as The Great Refrigerator Roundup). MECO coordinated this program, and by the end of December 2007, over 1,300 fridges, freezers and window air conditioners had been removed from local homes, with annual energy savings amounting to 1.4 million kilowatt-hours.

Another striking example of how PowerStream leveraged existing infrastructure to deliver conservation messaging and education awareness programs was its partnership with municipal public library systems.

Two programs in particular are worth noting. The Watt Reader program — which gives borrowers the opportunity to take a watt reader out on loan from their local library at no charge — proved so successful during the pilot phase in Vaughan that it was rolled out to all six branches of Markham Public Libraries in fall 2006. In 2007, the program was expanded to include Aurora and Richmond Hill. To date, the watt readers have been signed out of public libraries in PowerStream’s service territory 1,850 times.

Public libraries were also the site for a new adult education class devoted to home energy savings and included ‘environmentally conscious’ cooking. The first in a series of four workshops was organized at Markham’s Milliken Mills Library in June 2007; it included a cooking class with professional home economist, Barbara Holland, PHEc, as well as an opportunity to learn about some of PowerStream’s new energy conservation programs.

PowerStream developed the City Styles publication in order to raise awareness for provincial and custom energy conservation programs.

Residential customers with families are the magazine’s target audience.

Building on the success of these initial workshops, PowerStream added five more workshops during fall 2007. In all, 600 guests participated in these sessions and the feedback received was overwhelmingly positive.

COMMUNITY EVENTS As part of its strategy to increase public consciousness for energy conservation, PowerStream took its message directly to the people, appearing at street fairs, festivals, markets and malls — where crowds gathered in an atmosphere deemed conducive to grass-roots conservation awareness building.

During the three-year reporting period, PowerStream appeared at hundreds of community events, distributed 20,780 compact fluorescent lights, 5,500 seasonal LEDs, and thousands of brochures, including a new consumer publication called City Styles — Going Green which was produced specifically with consumers’ conservation education in mind.

The events also provided PowerStream with an ideal opportunity to educate consumers about energy conservation programs such as Watt Reader, Haul Away Your Energy Hog and conservation tools such as solar panels, energy audits and energysaving appliances.

Conservation education and family fun went hand in hand at community events sponsored by PowerStream last summer.

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Building energy

effıcıencyınto the

com

As noted earlier in this report, PowerStream’s CDM vision is premised on the fact that change occurs when like-minded champions work towards a common goal; and momentum builds when groups of similarly motivated individuals join forces, creating a broad and enduring wave of acceptance.

In early 2005, PowerStream began to identify projects that would help to galvanize the public’s interest in energy conservation and that, ultimately, would become jumping-off points for the growth of green building communities.

The Archetype Sustainable House project established with Toronto and Region Conservation is one such project (see page 4 of this report).

According to developer Maurice Stevens, Vice-President of Castlepoint Development, “PowerStream has done a great job in terms of educating

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developers and builders as to why it’s important to start thinking about sustainable development.

PowerStream also stepped up by helping us broker improved relationships with regulators.

They’re committed to this, and it’s not going unnoticed in the development community.”

Another illustration of its commitment to leading by example is PowerStream’s new corporate headquarters in Vaughan. The targeted LEED® gold-rated building will have nine solar photovoltaic towers capable of producing 17 kilowatts of electricity, in addition to an onsite single 1.8 kilowatt Skystream wind turbine. Visitors to the

new building, which opened in February 2008, are able to look at specially-designed monitors to see how much electricity is produced by these renewable energy technologies at any given time and what the impact is on PowerStream’s overall power consumption.

PowerStream also invested expertise towards the development of Vellore Village — the largest energy efficient community in Ontario — slated to include 1,600 Energy Star® rated homes. Earthwork and grading began on the project in 2007 and construction is expected to begin in late 2008.

mmunity PowerStream’s new corporate headquarters — opened in February 2008 — is targeting LEED® gold certification.

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The

powerof

crıtical By teaming up with Enersource Hydro Mississauga, Horizon Utilities, Hydro Ottawa, Toronto Hydro-Electric System Limited and Veridian Connections — together representing 40 per cent of Ontario’s electricity customers — PowerStream not only successfully piloted new projects, it also helped to test these programs in its service territory. This collaborative effort led from the incubation stage in 2006 to a complete roll-out of three brand new CDM programs across

the province in summer 2007.

These programs included what are now referred to as Summer Savings, peaksaver ® and The Great Refrigerator Roundup.

Of the many new programs developed specifically by the Coalition of Large Distributors (CLD) during the past three years, PowerStream initiated a unique demand response program in 2007 with Rodan Energy and Metering Solutions called enerShift™, designed to incent large industrial customers

The Great Refrigerator Roundup is one of three province-wide conservation programs that were incubated by PowerStream in collaboration with the Coalition of Large Distributors in 2006. Shown here, as he rounds up an energy guzzling fridge, is Patrick Guran, PowerStream’s Chief Energy Conservation Officer, with a little help from his friends.

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peaksaver ® is a registered trademark of Toronto Hydro Corporation. Used under license.

Leveraging the collective marketing strengths, distribution channels and brand equity of Ontario’s six largest distribution companies (the Coalition of Large Distributors) was another integral aspect of PowerStream’s vision for change.

powerWISE® is a registered trademark of Hamilton Utilities Corporation. Used under license

mass to shed electrical load during periods of peak demand. To date, 16 customers are enrolled in this program, including the Town of Markham, as noted earlier in this report. Together, these customers have contracted to shave an average of 3,500 kilowatts of peak demand from the system, as required.

PowerStream was also instrumental in developing the No Catch to Conserve program, based on a model similar to the powerWISE® Business Incentive Program (now referred to by the Ontario Power Authority as the Electricity Retrofit Incentive Program).

The small business version of this program became an official program of the Ontario Power Authority in December 2007.

In addition to becoming developers and incubators for new CDM projects, the Coalition of Large Distributors also took a leadership role in early 2006 when it created an overarching brand — called powerWISE® — which provided an avenue for them to deliver authoritative conservation messages directly to consumers.

For example, under the powerWISE® umbrella, the partners created and implemented Lighten Your Electricity Bill — a massive coupon distribution campaign in one of the province’s largest retail outlets, Canadian Tire. They re-branded the vehicles in their fleets, invested in a province-wide advertising campaign, developed a powerWISE® website, and created millions of pieces of collateral and promotional materials, complete with tips, coupons and expert advice for consumers. Consumers responded positively to these prompts, and by the end of 2007, the full complement of programs developed by the Coalition of Large Distributors combined to generate even greater kilowatt-hour savings.

Of the programs initiated by the Coalition of Large Distributors which are now managed by the Ontario Power Authority, PowerStream will continue to implement The Great Refrigerator Roundup, Electricity Retrofit Incentive Program and peaksaver ® in 2008. It will also move forward with custom programs that respond to the specific needs of its

service territory, such as Build for Savings — a pilot project that builds conservation and peak load shifting features into blueprints for new homes.

“We developed this program because the construction of new homes provides great opportunity to make a lasting impact on future energy use. It is our hope that as this pilot becomes more and more successful, home builders in the rest of the province will join in,” said Chief Energy Conservation Officer, Patrick Guran.

The program launched in September 2007, and currently has interested builders signed on.

Over 2,000 PowerStream customers have signed up for the peaksaver ® program, which saves electricity during times of peak demand.

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A

rolefor

ıncentiv While PowerStream customers achieved significant kilowatt-hour savings in 2006 and 2007, with support from mass market programs and consumer education, other customers including industrial, commercial and institutional customers required financial incentives in order to create greater momentum for the emerging conservation culture.

For example, through the powerWISE® Business Incentive Program (now referred to as the Electricity Retrofit Incentive Program Program), the York Catholic District School Board saved 1.4 million kilowatt hours in 2006 and reduced peak demand by 500 kilowatts as a result of a major lighting retrofit in 23 of its schools.

Manufacturing company Global Wood Products also achieved significant savings in 2007 (a total of 85,175 kilowatt-hours per year), based on a lighting retrofit at that facility. And according to Mike Bomballa, Manager of Facilities at Hallmark, a lighting retrofit completed in 2007 will help his company to save 154,795 kilowatthours a year going forward.

During 2006, fourteen businesses in Aurora, Markham, Richmond Hill and Vaughan

York Catholic District School Board was one of 13 applicants in the powerWISE ® Business Incentive Program. These customers, together with Electricity Retrofit Incentive Program customers, achieved over 30 million kilowatt-hours in annual energy savings — almost 45 per cent of total energy savings in PowerStream’s service area during the reporting period.

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ives

were approved for the program, and once work was completed, they saved a total of 5.7 million kilowatt-hours. In 2007, the number of applicants who achieved reportable results totaled 13, with an additional 24 million kilowatt-hours saved by year-end.

PowerStream’s demand response strategy for the Town of Markham was discussed earlier in this report as an illustration of how PowerStream worked with Rodan Energy and Metering Solutions to help the municipality reduce its peak demand. Other examples of large customers who worked with PowerStream to shave consumption in exchange for financial incentives include Richmond Hill Arena Association and Teknion Form, whose demand response protocols were approved in 2007.

According to Robert Oboril, Quality Assurance Manager, Teknion Form: “Any interruption in the supply of power has dramatic effects on operations.

By actively reducing our demand, we are pleased to assist in maintaining a sufficient supply of electricity for York Region.”

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Technology as

k覺ngp

Just as a plan is nothing without a strong underlying vision coupled with a steady hand on execution, so is it unfathomable to think of changing energy conservation attitudes and behaviours without the appropriate tools.

Patrick Guran Chief Energy Conservation Officer

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Tools that were unavailable just a few short years ago are now mainstream, and with them price points that are making all manner of energy-conservation devices, from bulbs to washing machines, more affordable.

Consider the energy savings made possible through the use of compact fluorescent light bulbs (CFLs). During the 2005-2007 reporting years, PowerStream distributed 20,780 CFLs and took a total of 1,246,800 kilowatt-hours off the local grid as a result.

gpin

Equally promising were seasonal LED light string exchange programs. Through community events and coupon promotions, PowerStream customers decreased energy consumption by switching from incandescent bulbs to this type of LED bulb.

Solar power is another example of technology that has become more mainstream in recent years.

Consider The Home Depot store located at Highways 7 and 400.

Solar power panels capable of generating 20 kilowatts were installed on the roof of the garden centre in summer 2007 — a clear illustration of the company’s commitment to energy-saving technology.

PowerStream is also using solar technology not just to demonstrate its energy-saving potential, but also to conserve energy at the utility’s new corporate headquarters in Vaughan. As noted earlier in this report, nine solar photovoltaic

towers capable of producing 17 kilowatts of electricity have been installed on the new site, providing the opportunity to save 28,396 kilowatt-hours annually.

Programmable thermostats are another illustration of how far technology has progressed in a relatively short period of time.

Five years ago, programmable thermostats were considered a rarity; but today, having become more widely used, programmable thermostats are the foundation for residential and small commercial peak demand reduction programs such as peaksaver ®. During the 2006-2007 reporting period, 2,055 PowerStream customers signed up to be peak savers and to have Honeywell programmable thermostats installed in their homes, allowing PowerStream to cycle the devices down to save electricity during periods of peak demand.

Smart meters provide one final example of how energy-saving technology is helping to build Ontario’s conservation culture.

The Province of Ontario has mandated the installation of smart meters for all residential and small business customers in Ontario by December 31, 2010.

More than one million units were installed across the province by year-end 2007, with more than 82,000 of them in PowerStream’s service territory.

Devices such as programmable thermostats and smart meters will play a key role in the province’s energy conservation plans, once time-of-use rates are introduced.

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Vision for a

sustainab future During the 2005-2007 reporting period, PowerStream customers, through a variety of means, were able to achieve electricity savings of 55.6 million kilowatt-hours — enough to power 6,116 homes for one year.

Significant as these results are, the numbers don’t tell the full story. Equally important, but perhaps less quantifiable, is the degree to which consumer attitudes and behaviours have changed with respect to energy conservation during this time.

There is anecdotal evidence that school children’s attitudes have shifted considerably as they become more aware in the classroom of the need to save electricity. Do we know how much the needle has moved yet and if their in-class work is having a positive impact on their behaviour as consumers?

What of new home buyers?

Have they learned enough yet from PowerStream’s programs,

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promotions, communications and demonstration projects to insist that all new homes be built to LEED® standards?

Lastly, do we know yet if the combined efforts of PowerStream and its many partners is having a positive effect on the air we breathe? Is it cleaner than it was before the CDM full court press began in late 2005?

These are not questions that can be addressed by PowerStream alone. They are legitimate questions and their answers represent the ultimate goal for PowerStream’s CDM vision — a vision built on the premise that the best conservation and demand management plan in the world is only as good as the sustainable results it produces.

able Clean air and a sustainable future for our children are just two of the many benefits that will result from PowerStream’s vision for change. PowerStream will keep moving in this direction by continuing to offer conservation and demand management programs in 2008.

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PowerStream Inc. 161 Cityview Blvd.

Vaughan ON L4H 0A9

www.powerstream.ca