Canadian Press
Toronto Star
July 20, 2003

While businesses and residents answered the Ontario government’s pleas this week to conserve power as the provinces generators are brought back on line, only an increase in the cost of electricity will force consumers to become more energy efficient in the long run, experts suggested.

“Moral suasion is an effective way of getting people to respond in a crisis environment because officials have the public’s attention,” said Tom Adams, executive director of industry watchdog Energy Probe.

“But in the longer term unless conservation is in their own best interest people move on to other subjects.”

“What we’ve seen in the past is that unless there is a price signal, no amount of programs or inducements are likely to get people to move.”

Last year, Ontario opened its publicly owned electricity generation market to competition. In the following months, in what was one of the hottest summers in decades, prices went through the roof.

Amid tales of hardship and a growing consumer revolt, Premier Ernie Eves froze retail prices until 2006 at the pre-deregulation level of 4.3 cents a kilowatt-hour.

Wholesale prices were left to fluctuate on the open market at a cost to taxpayers of more than $600 million so far.

Eckhart Stoyke, an Edmonton-based energy conservation consultant, called the freeze stupid and said it’s a disincentive for consumers to be more energy efficient.

“Fixing a low level per kilowatt-hour is the stupidest thing one could do because people react rationally,” he said.

“If it doesn’t pay to do something, they won’t do it. If it pays to implement the conservation measure because there is a high payback they will do it. If the cost of energy is too low nobody cares.”

In 2001, California was hit by rolling blackouts as the state struggled with skyrocketting electricity rates.

The state responded with a wide range of programs designed to encourage conservation including one that offered consumers a one-time rebate on their electricity bills if they cut usage by 20 per cent that was credited with reducing the state’s peak demand by 14 per cent.

But Adams said there were no long-term benefits.

“During the crisis there was substantial conservation by consumers, electricity demand dropped, but as soon as the crisis was over demand went right back up and has been growing steadily since,” he said.

The Ontario government has announced some measures aimed at encouraging conservation. They include a temporary provincial sales tax rebate for upgrading appliances and tax breaks for green-power generators.

The province also launched a television ad campaign to encourage people to use more efficient light bulbs and reduce their reliance on air conditioning.

Ottawa announced rebates earlier this month to encourage Canadians to improve the energy efficiency of their homes as part of its plan to implement the Kyoto climate agreement.

In encouraging Ontario residents and businesses to change their power-using habits, Ontario Premier Eves asked consumers and businesses this week to:

• Cut factory, mill and plant use in half; 
• Turn up thermostats or shut off air conditioners; 
• Air dry clothes and dishes and use major appliances at night when power demands are lower; 
• Wash clothes with cold water to save on water heating use; 
• Keep blinds, shades or drapes closed at the hottest time of the day and; 
• Turn off unnecesary lights and computers.In many industries, companies have become more fuel efficient by using more modern machinery that uses less energy to run. Airlines, for example, have benefited by buying newer airplanes that cut fuel usage by more than a third. Steel mills example, use natural gas to fuel their blast furnaces instead of dirtier coal or other more expensive fuels. Meanwhile, factories and pulp mills use more energy efficient lighting or buy steam and electricity at the same time from so-called co-generation power producers.

  Many companies have moved to lower energy costs because they face rising costs for industrial power in a deregulated market.

  For ordinary consumers, Adams suggested, government conservation programs need to be combined with market priced electricity.

  “The smart approach to conservation is you give people the tools to conserve and the incentive to conserve and that combination can really move the mountain,” he said.