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
applications received. The Companies believe the increased participation is a result of
sustained efforts at promoting both the program itself and the Energy Efficiency and
Conservation project more generally, at all available opportunities. The Companies also believe
stability and consistency in the program offering (i.e. staying in market over the long term)
contributes significantly to encouraging adoption of the high efficiency alternative. The decision
to purchase high efficiency boilers is much influenced when the market’s awareness of the
program is reinforced by its time in market, and when the accepted view of the program is as a
reliable source of incentives for high efficiency options.
As indicated in the “Background” section of the Table above, new efficiency regulations are
currently being considered by the Government of Canada (Natural Resources Canada). The
proposed regulation would see the required minimum efficiency standard of larger gas fired
boilers rise from 80 percent to 90 percent by 2018. Successful installation and commissioning of
high efficiency boilers requires a knowledge level beyond that of standard efficiency boilers. The
Companies believe the program sends a strong signal to the market that the selection of high
efficiency options should be adopted as standard practice. By encouraging the installation of
high efficiency boilers today, the program is contributing to the development of the required
knowledge and capacity within the market, significantly easing the implementation of new
regulation over the coming years.
By year end, the efficient boiler program had committed to pay as much as $1,367,000 (not
including pending applications) to participants who successfully complete their boiler installation
within one year of submitting their program application. This exceeds the previous largest ever
annual commitment of $1,075,455 from 2006. As in 2009, the objective moving forward is to
build upon the current market momentum and the relationships that have been built with market
participants to drive the rate of participation in the program in order to maximize commercial
sector gas savings.
When total program spending is compared to the avoided cost of the gas, the program turns in a
respectable TRC ratio of 1.4. With the free rider rate estimated to be approximately 18 percent,
the annual net energy savings derived from the program’s 2010 participants is over 42,000 GJs,
or over 2,000 tons of GHG emissions reductions. This represents a volume of gas equivalent to
the annual consumption of approximately 450 typical single family homes.
That said, room for improvement in the program remains. While the program largely met its
objectives for participation on Vancouver Island, participants from the new construction market
remain sparse. According to the available Major Projects Inventory quarterly publications, the
value of building permits remains well below the peak activity level observed in 2007 and 2008,
indicating new construction activity remained generally subdued in 2010. Still, 55 projects of $15
million or more completed construction between January and September, while 65 began
construction. Having garnered only nine new construction participants in 2010, it seems evident
that raising the program’s profile and generating participation in the new construction market
remains a priority. This is despite the Companies’ efforts at promoting the program to design
professionals via advertisements in both ASHRAE BC and APEGBC’s regular publications.
More work at promoting the program to decision makers in the new construction marketplace is
a must. The Companies’ new energy solutions manager positions (see Section 11) will play a
SECTION 4: COMMERCIAL ENERGY EFFICIENCY PROGRAM AREA Page 57