FEI-FEVI 2010 EEC Report filed March 31, 2011 - FortisBC

FORTISBC ENERGY INC. AND FORTISBC ENERGY (VANCOUVER ISLAND) INC.
2010 ENERGY EFFICIENCY AND CONSERVATION ANNUAL REPORT
manufactured after September 1, 2010. Customers will still have a choice until existing
inventories are exhausted. This first tier of provincial change has not incurred adverse market
effects. BC is moving alone without collaboration from federal agencies on this 0.62 efficiency
level for residential gas-fired storage tanks.
There has been collaboration between NRCan and the BC Ministry of Energy and Mines along
with the Canadian Gas Association (“CGA”) and Canadian Institute of Plumbing and Heating
(“CIPH”) regarding future implementation of efficiency regulations. The different efficiency levels
are often referred to as: Tier 1 0.62 EF, Tier 2 0.67 EF, and Tier 3 0.80 EF or condensing.
These three tiers represent three different technologies needed to achieve the prescribed
efficiency level for residential storage tanks. There are different efficiency levels and timelines
for tankless units and storage units over 75,000 BTUH (British thermal units per hour) input. As
described in the case of furnaces in Section 11.2.3.2 above, any changes to timelines or
efficiency levels will impact the Companies’ ability to offer effective incentives. Manufacturers
have indicated they have concerns with the second and third tiers of the proposed water heater
regulations. Some suppliers and distributors are not complying with Tier 1 requirements, citing
supply problems. This is a provincial enforcement issue and highlights the hazards of regulation
being out of step with supply. The second tier specifies an EF rating of 0.67 proposed for 2016
and the third tier is 0.80 or condensing technology proposed for 2020. The second tier would
require retooling of equipment by manufacturers for a short time period and then retooling again
for the third tier. There is uncertainty among manufacturers with regard to market share as the
new tiers will require significant new investment with associated higher costs per unit
production. Due to the short transition framework outlined by regulators, it is likely
manufacturers will move to completely skip Tier 2. This will create additional problems for the
gas industry as Tier 3 equipment can cost three times as much as Tier 1 equipment. This will
affect new construction somewhat but will result in an energy shift to electric for retrofits. Utilities
continue to try to bring stakeholders together to determine the appropriate market
transformation plan.
A CGA partner 0.80 EF domestic hot water pilot program is currently in the development phase.
Information on this pilot can be found in Section 3.
11.2.3.5 Summary
The Companies believe their codes and standards activities are aligned with and support the
federal and provincial governments’ energy and climate change objectives.
There are a number of product areas where regulations are connected to effective market
development with the assistance of EEC programs including: commercial water heaters and
boilers, residential furnaces, boilers, and domestic hot water heaters, hearth products, and BC
building codes with particular attention to EnerGuide 80 ratings for houses and eventually net
zero buildings in 2020. The Companies need to ensure codes are developed in conjunction with
market dynamics and equipment manufacturers’ ability to provide specified products in order to
ensure their customers have appropriate choice in the marketplace.
SECTION 11: ENABLING ACTIVITIES Page 236