Tyler Hamilton
Toronto Star
June 17, 2006

Households and small businesses that use 10 per cent less electricity this summer would get a 10 per cent discount on their hydro bills under an ambitious conservation program being proposed by Toronto Hydro Corp.

The utility has asked the Ontario Energy Board for permission to launch its $5.6 million 10/10 program on July 15. If approved later this month, half-a-million Toronto Hydro-Electric System customers would be automatically enrolled in the three-month pilot, which is modelled after a similar initiative proven effective in California.

"We believe it’s a first of its kind in Canada," said Toronto Hydro spokesman Blair Peberdy.

"If customers reduce their energy consumption by 10 per cent over the summer months, we’ll rebate an additional 10 per cent on the bill. This is our first shot at trying to trigger a massive consumer reaction to the call for conservation."

Customers’ electricity usage will be compared against the summers of 2004 and 2005 between July 15 and Sept. 15. Peberdy said last summer was one of the hottest and the previous year one of the coolest, so the two periods will be averaged and used as a benchmark.

"We’ll be telling each customer what their target would be in terms of kilowatt-hours and here’s how you can reach that," he said.

The discount would be applied to the entire bill, including delivery charges and debt retirement, but excluding GST.

Toronto Hydro alerted the energy regulator of its intention on Tuesday, the same day the Ontario government announced plans to reduce the province’s electricity demand by 6,300 megawatts through conservation, doubling a previous recommendation by the Ontario Power Authority.

A week prior, the Independent Electricity System Operator, which manages Ontario’s power balance, revealed in a report that it overestimated the province’s electricity supply for this summer by up to 3,000 megawatts.

"Both of these developments underscore the heightened importance of electricity conservation in Ontario," Toronto Hydro stated in its formal application yesterday to the energy regulator.

In its application, Toronto Hydro said it anticipated that one third of its customers — about 165,000 households and businesses – would reach the 10 per cent target and benefit from the program.

Estimated electricity savings would amount to 45.6 million kilowatt-hours over the period, equivalent to taking about 5,000 homes off the grid for a year and amounting to $5 million in rebates. Customers who don’t achieve the target "will still have benefited from lower electricity bills," the application says.

Tom Adams, executive director at Energy Probe, called the initiative a "crude" instrument marked by good intentions.

"In a lot of cases, what we’re going to have here is some customers paying other customers to go to the cottage this summer," said Adams, explaining that some homeowners who happen to be away this summer will qualify for the rebate for doing nothing.

"This program will have some beneficial effects but will also have some unfairness effects that are clearly a drawback."

He said the utility would do more for conservation if it eliminated the practice of bulk metering in multi-occupancy buildings and stopped renting out flat-rate water heaters. He called the latter a "wasteful" program that hurts Toronto Hydro’s credibility as a conservation agency.

But providing incentives to conserve has worked in California, where since 2001 a similar program has helped the U.S. state save thousands of megawatts of peak power demand during critical winter and summer peaks.

But instead of operating under a three-month period, the California program rewarded participants on a month-by-month basis.

By lowering power usage by 20 per cent one month over the previous year, a homeowner received a 20 per cent discount for that same month.