Ontario government decision puts an end to Heating and Cooling Incentive

The Heating, Refrigeration & Air Conditioning Institute of Canada announced today that Ontario’s Minister of Energy, Northern Development and Mines, Greg Rickford, has directed the Independent Electricity System Operator (IESO) to discontinue the Conservation First Framework, including the  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 in those 13 years. 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:

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:

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 HVAC/R 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 800.267.2231 ext. 235 or e-mail mluymes@hrai.ca.

The full text of the government’s announcement can be found here:https://news.ontario.ca/mndmf/en/2019/03/ontario-reducing-costs-by-centralizing-and-refocusing-conservation-programs.html.

Files from HRAI