Ontario’s Industrial Conservation Initiative (ICI) is a program that has been designed to offer energy savings to large electricity consumers and help the province manage supply.
Running a business is expensive and paying more for power than other Canadian businesses has long been a burden for Ontario-based industries. Statistics show that the price of electricity for companies in the province has consistently gone up. Between 2010 and 2016 electricity costs in Toronto increased by 48 per cent. In Ottawa the costs increased by 50 per cent. That was at a time when the average increase for Canadian cities was 15 per cent.
Participants of Ontario’s ICI pay a portion of the total system demand during the five peak hours every year. In addition to reducing energy costs for businesses, the program helps the province by eliminating the need to build peaking generation, according to the government website. When consumers reduce their use during peak hours the entire system benefits.
The ICI program works by adjusting the Global Adjustment (GA) charge, which is the fee that consumers pay and which allows suppliers to cover generation capacity as well as conservation programs. GA charges can fluctuate as the price of electricity goes up or down. So, when the price of electricity is low, the GA rate is higher. Provincial conservation programs and any shift in electricity demands will also impact the GA rate.
Thus, the ICI program offers a reduction in the GA charge to consumers in exchange for a cutback in the customer’s consumption during peak hours. Consumers can see energy savings of up to one-third of their total costs with ICI participation.
Originally, the program was offered to consumers using over three megawatts of electricity. However, in 2017, the program was expanded to include customers who use more than one megawatt each month. This change is expected to boost the program’s participation from 300 to over 1,000 customers.
The change will also mean that smaller institutions and commercial businesses will be able to participate and gain in energy savings, according to the government website. By reducing their use of electricity during those peak hours, companies will be able to lower their overall operational costs.
While ICI does generate energy savings for businesses, there are challenges, including the need to predict when the peak demand times will be, and also finding ways to reduce electricity consumption without disrupting a company’s productivity.
Understanding the ICI program and how it may impact one’s business energy costs can be complicated. However, energy management firms can educate companies on how to navigate energy programs like the Industrial Conservation Initiative. Firms like Active Business Services also have the tools and knowledge to provide customized energy management solutions for businesses, while helping them better mitigate costs associated with operating during peak hours.