HomeMy WebLinkAboutCOD-019-10c~o~~
REPORT
CORPORATE SERVICES DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: May 3, 2010 Resolution#: GPf") -a F9-/6 By-law#: N/A
Report: COD-019-10 .File#:
Subject: ONTARIO POWER AUTHORITY -DEMAND RESPONSE PROGRAM
(DR3)
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
THAT Report COD-019-10 be received;
THAT staff be authorized to investigate the Ontario Power Authority -Demand
Response Program in order to determine if opportunities exist for the Municipality
of Clarington to participate;
3. THAT if positive results of the investigation are produced during the summer
recess, staff be authorized to enter into an operating agreement for participation
in the Ontario Power Authority -Demand Response Program; and
4. THAT staff provide a report back to Council with recommendations on the
findings of their investigation.
Submitted by: Reviewed by: ~-/ ~~ "-"~--Q - ~~
arie Marano, H.B.Sc., C.M.O., Franklin Wu,
Director of Corporate Services Chief Administrative Officer
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REPORT NO.: COD-019-10
PAGE 2
1.0 BACKGROUND AND COMMENT
1.1 The Ontario Power Authority has developed a program designed engage the
industrial, commercial and public sectors in a program designed to deal with
periods of peak demand on the Ontario energy grid by providing controlled
reduction in energy consumption.
1.2 The Ontario Power Authority has contracted with a number of firms to act as
aggregators. It is the mandate of these firms to register agencies each prepared
to reduce power consumption at selected facilities on demand. For clarification,
the following explanation is provided on the OPA website:
"The DR3 Program provides incentives to major power users who contractually
agree to reduce their power use by apre-determined amount when called upon
by the Ontario Power Authority (OPA). This guaranteed demand reduction
allows power planners to reduce the total system demand for electricity and
therefore all ratepayers' electricity costs, over the long term."
"By participating in the OPA DR3 program, Local Distribution Company (LDC)
customers are acting as insurance policies against grid failure."
1.3 In order to determine if it is possible for the municipality to participate in the
Demand Response Program (DR3) an aggregator is required to undertake a
review of selected facilities such as Garnet B. Rickard Recreation Complex,
South Courtice Arena or Municipal Administration Centre to determine if the
facility operation can accommodate a planned reduction in electricity
consumption for a specified period.
REPORT NO.: COD-019-10
PAGE 3
2.0 ANALYSIS
2.1 Until such time as an aggregator can complete a survey it is not possible to
provide details on the level of participation, amount of energy reduction or the
financial benefit.
2.2 With Council's authorization staff, with the assistance of an aggregator, will
determine whether participation is viable and if so, the level of participation and
the opportunities and benefits of enrolling in the program.
2.3 In the event the findings are positive staff will proceed to the next phase that
being the selection of an aggregator, confirm the facilities that are appropriate for
participation with the level of curtailment along with the negotiation of an
agreement. The agreement would be considered an operating agreement, and
as such, if positive results are determined during the summer recess, staff is
seeking authorization to enter into the agreement and report back to Council with
the results.
3.0 FINANCIAL
3.1 Participation in the DR3 program does provide a revenue stream. By
participating and committing to the program OPA customers received two
payments from OPA: one payment for being a standby power resource for the
grid, and a second payment for responding to the demand curtailment calls made
by OPA. The amount of payment cannot be determined until such time as the
review is completed and curtailment potential is determined.
3.2 For clarification, the DR3 program is a contractual arrangement and failure to
meet the demand curtailment when called upon will reduce any potential revenue
stream.
REPORT NO.: COD-019-10 PAGE 4
4.0 CONCLUSION
4.1 Based on the information available and discussions with other DR3 program
registrants such as Richmond Hill and Aurora there is sufficient interest to pursue
additional information to determine if there is an opportunity to participate, what
the contribution could be and the potential revenues available by participating.
4.2 On completion of the review and if the Municipality's participation is viable and
the benefits advantageous, staff is proposing that the opportunity be explored in
detail. The selection of an aggregator as well as the level of participation will
have to be finalized as will the terms of the agreement including financial details.
4.3 Given the time required for the assessment and the time required to negotiate
the operating agreement, it may be the summer months when the conclusion of
the assessment is reached. The agreement would be structured as operating in
nature, therefore staff is requesting authorization to enter the agreement and
provide a report on the findings of the investigations and the details of any
agreement.
5.0 INPUT FROM OTHERS SOURCES
5.1 This matter has been discussed at the Energy Management Committee and in
particular with the Community Services and Operations Department and there is
agreement that the matter of Demand Response (DR3) be investigated further.
Concurrence: Joe Caruana, Director of Community Services
Fred Horvath, Director of Operations