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Pollution Probe is taking the Ontario Energy Board to court over demand-side management (DSM) for gas utilities. DSM refers to programs that utilities use to assist and encourage their customers to conserve. For example, electric utilities use DSM programs to encourage customers to use less energy and/or to shift demand away from peak hours, and include familiar initiatives such as Peaksaver. Gas and water utilities can also encourage conservation with DSM programs, which can have significant impact on demand.

Pollution Probe is asking the Divisional Court to quash an Ontario Energy Board  document,  “Demand Side Management (“DSM”) Guidelines for Natural Gas Utilities: Issues for Further Comment” (“DSM Guidelines Document”). According to Pollution Probe, this document improperly capped the amount that any Ontario gas utility can spend on DSM for the next three years.

Pollution Probe says that DSM currently represent about 2.8% and 4.1 % of the total budgets (Le. the distribution revenues) of Enbridge Gas Distribution Inc. (“Enbridge”) and Union Gas Limited (“Union”) respectively, which are Ontario’s two main natural gas distributors. Despite Staff recommendations that this should increase to about 6% of total budget, an increase over 3 years that Pollution Pro calculates at $89 million. Instead, the DSM Guidelines Document says:

“(a) The Board has concluded, however, that the justification for gas DSM cross subsidies is eroding, and that expansion of DSM initiatives funded by natural gas ratepayers is not warranted at this time. [emphasis added]”; and

(b) “The Board finds it appropriate at this time to limit the ratepayer funded portion of the natural gas DSM budgets to their current levels.”

In the meantime, the Board is continuing with its review of the existing DSM framework and the development of new guidelines for DSM. The Board received 26 stakeholder comments on the March DSM Guidelines Document.

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