Natural Resources committee  Good morning. My name is Terry Young, and I'm the vice-president of policy, engagement and innovation at the Independent Electricity System Operator, or IESO. I'm joined here by my colleague, Nik Schruder. Nik is the director of energy efficiency with the IESO. Thanks for inviting us here today to speak to you about the economic benefits of energy efficiency.

Natural Resources committee  I would suggest to you that both have reached a level of maturity. I think what we've seen, particularly on the residential side, is a significant uptake on LED lighting, so improved lighting. We are getting that. In the businesses, I absolutely agree with you that, as a business owner, you're looking for ways to reduce your costs.

Natural Resources committee  I suggest that we don't need to supplement to the extent that we have been. We have been continuing to reduce the level of incentives. We're continuing to look at this. When we look at the programs that we have in the field.... We look at free ridership all the time and determine whether or not incentives are needed.

Natural Resources committee  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.

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

Natural Resources committee  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.

Natural Resources committee  I have no awareness of that arrangement; I apologize for that. I'm not up to speed on that one.

Natural Resources committee  I don't have the article, but yes, it's true that their demand did drop. The increase in demand that was projected did not emerge. If you look at the statistics, you'll see both a lower peak demand as well as a lower overall energy use, if you will, than we had in 2006.

Natural Resources committee  As you may be aware, since June the government in Ontario has taken a number of steps to reduce the cost of electricity. A number of wind and solar contracts were cancelled. There have been a number of steps. I had the opportunity to listen to the Minister of Energy, Northern Development and Mines speak yesterday about some of this.

Natural Resources committee  The global adjustment is a component of the electricity cost. The people who pay electricity bills in Ontario are also paying that global adjustment. The global adjustment was set up a number of years ago. It covers certain fixed costs. If you're paying a fixed cost for a particular source of generation that may be over and above what the market price is or the hourly price is, the cost of that contract is recovered through the global adjustment.

Natural Resources committee  I would suggest a couple of things. Generally speaking, it's very much focused on electricity and energy efficiency. We run the province's electricity grid. I would note that the grid we operate was essentially 96% carbon-free in 2017. Of the electricity sources we relied on in 2017, 96% were not emitting carbon.

Natural Resources committee  No. All businesses are eligible to participate. In the programs we offer, we look for an investment from the business itself. I mentioned the level of investment we provide, but there's a greater level of investment, cumulatively, that businesses would make to be part of this program, as well.

Natural Resources committee  The energy managers are employed in the industrial programs. They are employed by a company itself. It's an incremental position that's been set up, and they are a member of that company.

Natural Resources committee  No. What you'll see are these energy managers, who are getting familiar with supply chains that are there as well, who use them to help drive efficiencies in their own organizations. This is a program that we're funding that companies are able to access.

Natural Resources committee  In growing the grid, I think you're doing so at a cost. I think what we want to see is that it's an efficient growing, if you will, of the grid. I've been in this business long enough to remember when demand for electricity was increasing at 7% per year, so every 10 years you were essentially doubling your needs, if you will.