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
Goals
furnace replacement and a huge opportunity for energy savings and GHG emissions
reductions through such initiatives.
Furnace replacement was identified as a huge energy savings opportunity in the
development of the Technical Potential of the 2010 CPR. There is enormous opportunity
to significantly impact the age distribution profile of existing furnace stock. The Ministry
of Energy and City of Vancouver are evaluating opportunities for financing programs for
home efficiency upgrades. The EEC team will also investigate different financing models
for home renovation loans that promote efficiency upgrades.
There are challenges that need to be overcome in launching a Furnace Scrap-It
program:
• In traditional DSM environments, rebate programs cannot be in market for
measures that are regulated. It would be essential that government
stakeholders and regulators support this initiative in order to take it to market;
• If the Companies were to actively promote early retirement it is important to
include product stewardship as one of the program requirements to ensure that
old furnaces are recycled safely;
• Contractors, distributors, and manufacturers would be key to the successful
rollout of this program. Adequate inventory would have to be in place and an
assurance that no fraudulent mid-efficiency replacements took advantage of the
offer; and
• With the low cost of gas, it is difficult to convince customers that a new furnace
has a direct pay-back with the full capital cost of the investment top of mind for
the consumer. It would be beneficial to educate consumers about the additional
benefits such as comfort, improved air quality, and furnace reliability.
The national market penetration of high efficiency furnaces in Canada is reported to be
40%, while the Wisconsin Energy Conservation Corporation reports the market share of
high efficiency furnaces in Illinois, Michigan and Ohio range from 52% to 73%.
Wisconsin has achieved a 92% penetration. Market intelligence is difficult to obtain but
an exact estimate for the province of BC would be beneficial.
The enforcement of federal efficiency regulations apply only to the manufacturing of high
efficiency models, but mid-efficiency models can still be sold. Therefore it appears that a
sizeable inventory of mid-efficiency furnaces remain in the market. From time to time
we see advertisements promoting the merits of mid-efficiency over high efficiency
furnace replacement.
The Companies are also gathering anecdotal evidence of lower efficiency furnaces that
are due for replacement remaining in place and having repairs “jerry rigged” as a way to
avoid some of the venting issues that British Columbians may face with the introduction
of the government’s 90% efficient furnace regulation. The “Give Your Furnace Some
TLC” furnace service campaign is one way of engaging customers in dialogues with
contractors to promote replacement. In fact, program evaluation suggested that about
15% of participants required upgrades or replacements and participants cited financial
considerations as the major barrier. Although we use 18 years as the measure of life for
furnace upgrade, our 2010 programs indicate that customers are keeping their furnaces
for a much longer timeframe. Participants in the Switch N Shrink oil conversion program
report that replaced furnaces are 36 years old on average. while the furnace upgrade
program participants report that replaced furnaces are 27 years old on average.
• Actively promote proactive furnace replacement with high efficiency furnaces to
reap the associated energy savings of ENERGY STAR® heating systems,
thereby substantially reducing GHG emissions in the residential sector.
• Reinforce the compliance and market penetration of high efficiency furnaces
with installers, distributors, and manufacturers.
SECTION 3: RESIDENTIAL ENERGY EFFICIENCY PROGRAM AREA Page 41