Natural Resources Committee on Nov. 29th, 2018

[The Chair, Liberal, James Maloney]

Yes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Okay.

Maybe I'll save my folks from Ontario for the next round and continue with Mr. White here.

In your company, obviously you have energy managers, as I believe you call them, and you say that has worked very well in British Columbia. You said that when you cross provincial borders, in some cases you notice the difference right away.

What recommendations or what advice do you have for other provinces that may be looking to incorporate that, or other businesses looking to include that kind of model?

[Brad White]

I was very happy to hear the gentlemen from Ontario, the Independent Electricity System Operator, say they are supporting a similar program here in Ontario.

I think the model we have in B.C., quite frankly, works quite well. The utilities basically pay part of the salary of these energy managers embedded within organizations, and in return, they ask for a certain performance in terms of energy reductions. They're expecting to see those energy managers generate incentives that are equivalent to their salary. For ineffectual energy managers, the funding is cut off after a year or two, and they don't continue in their position; and ones who are very successful in finding energy reductions for their organizations get to keep their jobs and keep doing that. As I've said, we've seen some of those folks then move into more senior positions, whether in operations or different parts of those organizations. And having people with that kind of training in those positions, I think, is a really great way to catalyze organizational change on a broader level, and it gets the whole organization thinking about that rather than just one energy manager soldiering alone.

[The Chair, Liberal, James Maloney]

Great. I'll have to stop you there.

Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for being here before us. I'm going to start with Mr. White and pick up on that energy manager theme.

You mentioned that UBC and BCIT train energy managers. In your company, I assume you hire people with that kind of expertise. I imagine you hire other sorts of engineers and technicians.

We've been hearing from other witnesses that this sort of training is very much needed in Canada. I just wonder if you can comment on that, the need for training for all sorts of levels of energy efficiency, for experts, be they just tradespeople or engineers or managers.

[Brad White]

Certainly. Yes, we don't hire exclusively from programs like that out of UBC and BCIT, but I actually would say the majority of our staff do come through those programs. We tend to hire new graduates for the simple reason that there are not a lot of people with experience in the job market who have the right kind of experience that we're looking for.

I would say, though, that the greatest need is at the trades level, and that is where we often find there's a skills gap. I would say the other aspect is the building operators, the staff who are in the buildings responsible for day-to-day operations. Very often, they will have a trades background, sometimes even a janitorial background. They're expected to come into a modern building with a computerized control system with maybe embedded data analytics, and they simply don't have the skills needed to manage those systems effectively.

Again I'll point to BCIT. It has launched some programs around these sophisticated systems. The British Columbia Institute of Technology does a lot of trades training. They have programs around building control systems. Some of our staff instruct in the course and help teach the next generation of technicians how to use these systems. But that's one program, and we probably need a dozen or more programs like that across the country.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Have you ever run into anybody from the sustainable building management program from Okanagan College?

[Brad White]

Yes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

You also mentioned the step code in British Columbia. I just wonder if you could expand on that. If other provinces had such a program, how might that change things in energy efficiency?

[Brad White]

I've done some committee work with the Standards Association to support some of the codes and standards that back up the step codes. I think it will do great things for energy efficiency. Unfortunately, I see it as a tool mainly for new buildings and new construction. It's less applicable to existing buildings, simply because existing buildings don't trigger code reviews very often unless they're doing a major renovation. I think it's an important tool in the tool kit, and I would certainly think that other provinces could adopt B.C.'s model.

I like that it provides an incentive. It's not saying you have to adopt this higher level of energy performance, but if you do so, municipalities will provide certain incentives that make it worth your while.

Existing buildings, which, as you know, make up the majority of our building stock, are much more challenging, which is why I said I tend to look at data transparency. It is actually a better regulatory tool than are energy codes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'll turn to the folks from IESO in Ontario.

Talking about incentives again, I think we've all been mentioning those, and I'm just wondering if you could expand on those incentives. What do you have for homeowners versus companies and commercial operations, and where does that money come from? I've heard that one of the incentives for retrofits for one of those programs in Ontario has been cancelled. Mr. White mentioned how difficult that is for companies like his or for companies that are actually doing the retrofits.

I hear from the building association about the difficulties they face when those are cancelled. I just wonder if you could comment on that and on how we could best incentivize both homeowners and commercial operations to do this.

[Terry Young]

I would maybe expand a bit on Mr. White's comments with respect to energy managers.

We do see this as really one of the keys to driving energy efficiency in businesses and industries. As I mentioned, we're funding over 110 energy managers. In doing so, I like to think of these energy managers as earning their job every day. They are working with senior managers. They're working with the line in the industry. I talked about going up to Lake Shore Gold last week and sitting down with the energy managers.

What we're trying to do through this—again, maybe expanding on a theme I heard earlier this morning too—is around awareness and making people and businesses aware of some of the successes they have. Each year, we recognize the successes we've had in energy managers, and we're going to continue to do that this year.

With respect to incentives, you also see a portion of their targets that are both incented and non-incented. Again, these are results that they're not being incented to achieve. While I agree that we do need some level of incentive, we should always be looking at what the appropriate level of incentive is.

With respect to the programs we have in place—I'll ask my colleague Mr. Schruder to speak to some of these—we have about a dozen province-wide programs plus the 65 or so local distribution companies that they have. Some of those have also put in programs of their own to drive savings that may be particular to their area of the province.

[Nik Schruder, Director, Energy Efficiency, Independent Electricity System Operator]

On the residential file, our main program is our heating and cooling program, our HVAC program. We've also been having an online retailer program, through which people come in and have an instant discount on some of their energy efficiency products. For small businesses, we actually have a direct install program. We'll go directly into the small businesses and install some of the efficient lighting and efficient refrigeration. A lot of these are mom-and-pop stores. They just don't have the time to be the energy manager and be the HR representative and finish the payroll.

In terms of businesses, our flagship program is our retrofit program. We pay a portion of the project cost, whether that be on prescriptive measures or large custom projects. We also have audit funding programs, as I mentioned. We fund audits so they can understand where they should better utilize their dollars and on which projects.

Finally, we have a large industrial program focused on large industrial process and system improvements. It can also get into lighting, but a lot of these are larger projects, such as combined heat and power projects that take multiple years to complete.

We have a suite of these programs. These programs are all funded through the electricity ratepayer. Right now, they're all funded through our global adjustment fund.

[Terry Young]

As I mentioned, as we look at funding this, what we've seen is that—

[The Chair, Liberal, James Maloney]

I'm going to have to interrupt you there. I'm sorry. We've run out of time. We're going to have to move on to the next question.

I think Mr. Serré will go next and then we'll suspend for a couple of minutes while the next witness comes in. We can carry on with the questions after that and do a complete second round.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

Thank you, witnesses.

I have a question for Mr. White, but I'm just a bit surprised, Mr. Young, by your comment that it's reached maturity on the business and residential. That's not what we're hearing from Loblaw, which came to testify, or from Mr. White.

I want to understand a bit more, but before I get to that question, I want to understand from both of you how we can expand the issue with the energy manager program. What we're hearing about audits is that companies don't have the dollars to do the audits. Either companies don't have the necessary capital itself or the education and awareness are not out there.

I want to know what the recommendations would be in order to expand that energy manager program so that companies could more often have someone to work with on the audit side, on access to capital and on the education side.

Mr. White.

[Brad White]

I think there are a few ways that could be approached.

The traditional energy audits tend to be fairly intense undertakings, especially the ones that are usually funded by utility programs. These will often be $5,000, $10,000 or $20,000 studies. They require a significant amount of effort and there are only so many trained auditors in the country. Our firm is probably one of the largest, certainly in western Canada, that is dedicated to that, and we're just 30 people. There's a limit to how many buildings even we can audit.

I actually think there's a technology solution to that portion of the problem, where greater investment in data analytics.... For the utilities, we look at ways that we can do lighter-touch audits, where we come in and do walk-through audits or something with much less effort. In our experience, if you have someone who really knows buildings well, you actually can get 75% of the value with 20% of the effort, for example. I think that's a way to scale the amount of work that can be done.

The first barrier is just identifying what the opportunities are. Doing that effectively, quickly and inexpensively is going to be one way to scale the impact.

In terms of the energy manager program, it's really just incentives—whether through utility programs or other programs, or maybe some tax credits that are possible—for organizations to hire these energy managers and for them to understand what the value is. I'm not sure what the mechanism is, but just get those people into medium to large organizations. Not every mom-and-pop shop needs an energy manager, but once you're of a certain size, it absolutely makes sense.

[Marc Serré, Liberal, Nickel Belt, ON]

Mr. Young.

[Terry Young]

I want to clarify my comments on the maturity level.

I was intending to say that we're reaching that level of maturity where we don't need the prescriptive programs that we've had in the past. You're seeing a customer awareness of some of the opportunities that are there, and they want more choice in terms of getting those results. As we reach that, I think we can continue to look at both the number of programs and the level of investment that are required.

I'm not suggesting that we should exit this business at this point in time. I'm suggesting that we can continue to look at this business and try to drive down costs. In particular, try to drive down some of those costs associated with administering this program.

You mentioned Loblaw. Mark Schembri is one of the brightest minds in this. Their organization has done a heck of a lot to become more energy efficient. Mark doesn't need that level of support. He knows what they can do and he has been able to do that. That's what I mean with respect to that level of maturity.

I also think that on the energy manager program...is that driving that awareness? While there are some businesses that may be too small to have an energy manager on their own, as they work with others in that business, they may be able to take advantage of an energy manager who would actually be applied to that sector and who could look for opportunities to improve their efficiency.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

Mr. White, you talked about stronger building codes. We heard from the Construction Association, a month or so ago that that was a no-no; the sky's going to fall. It's going to cost a lot of money. It was very negative from an economic perspective. I just want to better understand why you say that changing the building codes will have a better business outcome for many of the businesses that are thinking of upgrading or changing to be more efficient. I want to get your thoughts on that.

[Brad White]

Maybe I should clarify my comments. Really what I was intending to say is that building codes do get thrown around a lot, in some respects, as a good regulatory mechanism. Obviously, that opinion is not shared. The point I really wanted to make is that, actually, for existing buildings, building codes do very little, because you don't trigger code reviews in an existing building very often, unless you're doing a major renovation.

Given that 75% plus of what will be the building stock over the next 30 years exists today, building codes, while they're a tool to address new construction, are not necessarily going to do very much in terms of the vast majority of buildings that are out there. I would recommend other policy tools. Building codes get a lot of attention and I think they're an important forward-looking mechanism, but in terms of tackling the problem we have today, I don't think we should put too much emphasis on how much difference they're going to make.

I do think it's important for building codes.... They set a floor on the market. The way I always look at incentives is that they are really great for enticing the leaders in the market, but you need some regulatory sticks to compel some of the laggards to do the right thing. I think that's where building codes can come in, but as I said, certainly for existing buildings—which is where I spend the vast majority of my time—building codes aren't going to make much of a difference at all.

[The Chair, Liberal, James Maloney]

We're going to have to stop there.

Mr. White, you'll stay with us, and if Mr. Young and Mr. Schruder will indulge us for a couple of minutes, we're going to resume in about three to four minutes, probably, when the next witness gets here.

We'll suspend for a couple of minutes and then start.

[The Chair, Liberal, James Maloney]

We're going to resume.

Mr. Rebel, thank you very much for coming back. I appreciate you taking the time to come back and answer a few questions.

We had suspended for a few minutes pending your arrival, and we're going to turn the floor over to Mr. Schmale right now for five minutes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Does he not get 10 minutes?

[The Chair, Liberal, James Maloney]

No, he's already done a presentation once before.