Ontario Government Cancels Heating-Cooling Incentive Program

Yesterday (March 21, 2019), Ontario’s Minister of Energy, Northern Development and Mines, Greg Rickford, directed the IESO to discontinue the Conservation First Framework, including the popular Heating and Cooling Incentive (HCI) program. The termination is part of an initiative intended to “reduce costs by centralizing and refocusing conservation programs.” The program is currently managed by Summerhill Impact in partnership with HRAI.  Originally labelled the “Cool Savings Rebate Program,” the HCI program has been in market since 2006, though the program elements and terms have been altered from time to time over its 13 year life. Over the life of the program, more than a million rebate cheques have been issued to Ontario households. Just over 1,400 contractors are currently registered in the program.
 
HRAI notified program-registered contractors yesterday afternoon, shortly after the public announcement was made.  Participating contractors were advised that projects that have already been completed and submitted for payment will be processed according to the Participant Terms and Conditions, and that they have until May 31, 2019 to submit incentive applications for projects with an installation date of no later than April 30, 2019. No new applications will be accepted after May 31, 2019. To receive a rebate, participating households will be required to submit proof of purchase and sign-off on the application submitted by their Participating Contractor before July 1, 2019.
 
In the Minister’s announcement, the decision was framed primarily as a transition to a more cost-effective way to administer conservation programs in the province by shifting the funding model from electricity ratepayers to tax-base and administering all programs centrally through the IESO:
 
Moving to central program delivery by the Independent Electricity System Operator (IESO), as opposed to a local distribution company (LDC) delivery model, would also reduce the costs of program oversight, administration and delivery and end up to $150 million in wasteful bonus payments to LDCs that do nothing to help conservation.
 
…Legislative changes are also being proposed to enable the IESO to accept tax base funding to fund conservation in the future. These amendments would provide the flexibility to the government to take further costs out of the electricity rate base.
 
Though this program and others funded through LDCs have been ended, the Minister also announced that the IESO “will be expected to present a Conservation and Demand Management (CDM) Plan to the government within one month of receiving the Directive that would provide details on the programs, budgets and expected electricity and demand savings for the balance of 2019 and 2020.”
The announcement added that the IESO’s CDM Plan will be expected to include the following CDM programs, or equivalent programs, centrally delivered by the IESO:
 
  • Retrofit Program - to provide incentives to businesses for updating old or inefficient equipment (e.g. lighting, motors and variable frequency drives)
  • Small Business Lighting - providing assessments and incentives for eligible lighting upgrades
  • Energy Manager Program - to provide funding for a portion of the salary of an energy manager to help identify energy saving opportunities & investments and help secure financial incentives
  • Process and System Upgrades - incentives, tools, and resources to help identify, implement, and validate energy efficiency projects from start to finish
  • Industrial Accelerator Program - to be merged with the Process and System Upgrades program under the new framework to expand the eligibility of that program to include transmission connected consumers
  • Energy Performance Program - providing incentives to businesses for whole building energy improvements
  • Home Assistance Program - providing free home energy assessment and installation of electricity savings measures for income-eligible customers
  • Targeted programs for on-reserve First Nation communities.
 
The announcement did not make clear what rationales were used to specify these priorities over others.  Meanwhile, in addition to the Heating-Cooling Incentive Program, the following programs will be discontinued:
 
  • Business Refrigeration Incentive: provides businesses incentives for the direct installation of product refrigeration equipment upgrades
  • Audit Funding Program: provides funding for a portion of the cost of a facility energy audit
  • High Performance New Construction: provides design assistance and incentives for building owners and planners who design and implement energy efficient equipment within their new space
  • Existing Building Commissioning: provides incentives for improving the efficiency of the chilled water system, including, audit, purchase and installation of equipment
  • Monitoring and Targeting: provides incentives to purchase and install a monitoring and targeting system operational Incentives
  • Instant Discounts: provides point of purchase incentives at participating retailers for qualifying energy efficient products, including LED light bulbs, light fixtures and power bars
  • Residential New Construction: provides incentives to improve energy performance and install energy efficient products in new builds.
 
HRAI will be in discussions with the Ministry and the IESO to assess where opportunities might exist in the new framework of programs to position the HVACR industry positively as a significant contributor to potential energy savings in the province.  Current indications are, however, that there will be no new residential programs introduced before the end of 2020.
 
For more information, contact Martin Luymes at 1-800-267-2231 ext. 235 or email mluymes@hrai.ca
 

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