Conservation & Demand ManagementJuly 2004 – September 2007

Joyce McLeanDirector, Strategic IssuesToronto Hydro416 542 3047jmclean@torontohydro.com

April 7, 2005

Ontario can not meet its long-term energy needs without a combination of increased generating capacity and significant conservation efforts

Gap of Electricity Demand and Supply in Ontario

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

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2020

Year

Cap

acit

y (M

W)

Total Installed Capacity Assuming Existing Generation Assets and Plant Life

Peak Demand + 15% Reserve

Peak Demand - IMO Medium Grow th Forecast

The government requires electric utility conservation and demand management (CDM)

• Target of conservation & demand management

- 5% demand reduction by 2007 – up to 250 MW from Toronto Hydro grid system

• Direction of conservation & demand management

- Smart meters – 800,000 in place by 2007 – useful management tool

- Conservation – $225 million available to LDCs for CDM

- System loss reduction – Incentives for system improvements

- Cleaner energy, ie. renewables and natural gas – 300 MW

As of March 1, 2005, Toronto Hydro will be allowed to achieve its full Market Adjusted Rate of Return …

• Conditional on Toronto Hydro Corporation reinvesting the equivalent of one-year of these monies in conservation and demand management initiatives

• $ 40 million for Toronto Hydro Corporation

• The OEB proposes a 3-year spending window

• July 2004 – September 2007

• First generation of electricity CDM initiatives

• Not unlike the requirements for Enbridge and Union Gas

Toronto Hydro sees CDM as an opportunity

•CDM fits THC’s business strategy• To follow the Shareholder’s Direction – City of Toronto has

environmental and conservation goals related to cost-cutting and emission targets

• To comply with Ontario Energy Board requirement

• It sends the right message to the public

•THC’s overall CDM strategy • Customer education

• CDM enabling monies help more projects get developed

• Distributed Energy enabling

DR/EE DR/EE DR/EEDR/EE

DE

DE DE DEDE

IndustrialCommercialResidential

Our CDM strategy opens many opportunities in the electricity business

Central Generating Station

Receiving Station

Transmission Distribution Substation

Developers/Retailers

EE: Energy Efficiency, DR: Demand Response, DE: Distributed Energy

Smart Metering

We were granted a final and unconditional approval of our CDM Plan from the OEB on Dec. 7th, 2004

•Final approval

•Quarterly reporting

•Annual reporting

We need your participation in the delivery of the Toronto Hydro CDM Plan

CDM Task Force

How does Toronto Hydro

organize its CDM Task

Force?

CDM Plan

What programs are included in Toronto

Hydro’s CDM Plan?

CDM Participation

How could you

participate in the

program delivery

of the CDM Plan?

TogetherWe contribute to the emergence of a

“Conservation Culture”We support the reduction of electricity peak demand by

5% by 2007

What programs are included in the CDM Plan?Full range, well balanced CDM programs

CDM: Residential and Small Commercial (< 50 kW)

Commercial, Industrial, Institutional (> 50 kW)

Distribution Loss Reduction:

A broad network based initiatives

Distributed Energy:Load Displacement Program

Stand-by Generators Program

THESLConservation and Demand Management Plan

Ontario Energy Board File No. RP-2004-0203November 4th, 2004

Toronto Hydro pilots to date

CDM: Residential and Small Commercial (< 50 kW)

Commercial, Industrial and Institutional (> 50 kW) Smart Metering and Load Management Systems

Ellipse Banner

Meter Data Mgt Interface

MVSTAR/MVPBS

EBT Connector

Meter Data Mgt & Processing Smart Metering System

Load Control System (Residential)

MV90

GEAR

SCADA

Load Control System (Large C/I)

SM

LC

LC

SM

Large C/I Customer

ResidentialWeb Access

Smart Metering and Load Management Systems

Ellipse Banner

Meter Data Mgt Interface

MVSTAR/MVPBS

EBT Connector

Meter Data Mgt & Processing Smart Metering System

Load Control System (Residential)

MV90

GEAR

SCADA

Load Control System (Large C/I)

SM

LC

LC

SM

Large C/I Customer

ResidentialWeb Access

Toronto Hydro pilots to date

Distributed Energy:Load Displacement Program

Stand-by Generators Program

Total Power Generated:

16,832 kWh

Peak Generated:

31.5 kW

Total Dollar Value Generated:

$1397.11

Opportunities for new technologies

EE: Energy Efficiency, LM: Load Management, DE: Distributed Energy

EE/LM EE/LM EE/LMEE/LM

DE

DE DE DEDE

IndustrialCommercialResidential

Central Generating Station

Receiving Station

Transmission Distribution Substation

Developers/Retailers

SmartMetering

TH

C C

on

tro

l C

en

tre

These CDM programs will enable Toronto Hydro to reduce its daily peak demand for electricity

2,500

3,000

3,500

4,000

4,500

5,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Time of Day

TH

ES

L S

ys

tem

De

ma

nd

(M

W)

Normal Load (MW) Cleaner Energy (60 MW) Conservation (60 MW) Load Management (130 MW)

Social Housing Incentives

What did the Ontario Energy Board approve?•A province wide centralized energy management service for the social housing sector may be developed in collaboration with the provincial government, utilities and others.

•A pilot program will be conducted to determine feasibility with an expectation that a full scale program would follow.

Target users•Local social housing corporations, non-profit homes and co-op housing.

Synergies•Synergies may be created through the combined initiatives of the various agencies.

Budget 2004 to 2007

Toronto Hydro Budget for Social Housing program•$405K for 2004/05•$405K for 2006•$405K for 2007•Total - $1.215 millionOther budgets within CDM plan may be applicable

•All approved projects must be substantially complete by September 2007

•This is not project financing, rather it is investment in existing or anticipated expenditures to reduce demand.

Discussions to date

• Along with the Coalition of Large Distributors, meetings with Social Housing Services Corporation on the design of and support for their pilot 4000 unit audit/retrofit program.

• Series of meetings with Toronto Community Housing Corporation on a suite of initiatives relating to their properties, including support for Regent Park redevelopment (phase 1), scattered housing audit and retrofit program (currently being run by Green$aver), appliance change-out program, multi-residential audits and retrofits.

• Proponent-driven exercise.• Every $1 = 6 kW reduction

Collaboration with Enbridge Gas

• The CDM program provides a real opportunity for Toronto Hydro to learn from Enbridge on their program success in supporting conservation activities for their customers.

• Toronto Hydro/Enbridge collaborating with EnerAct and City Councillors on the Smart Living program in certain City wards with identified low income populations.

How could you participate in our CDM program delivery?Contact us & get your CDM projects qualified for the incentive

Documents

1. Letter of

Intent/Cooperation

2. Non-Disclosure Agreement

3. Project

Justification/Contract

4. Project Status Reports

5. OEB Reports

Purpose

1. Engage partners or channels

2. Protect proprietary (especially

customer) information

3. Cost/Benefit analysis / Scope of

work and delivery schedule

4. Ensure that project spending and

benefits are delivered on schedule

5. Ensures OEB is satisfied with the

progress

“ A MW saved is every bit as good as a MW built “

Toronto Hydro Corporation

Conservation & Demand Management

$40 Million 250 MW

You

Are Invited to

Participate In!