Efficiency Manitoba fails to hit energy-savings target – Winnipeg Free Press

A fledgling Crown corporation, created to slash consumer and industrial energy use, will get new powers from the NDP government after it failed to hit its legislated savings targets.

Environment and Climate Change Minister Tracy Schmidt said the Efficiency Manitoba Act and its regulations are under review to ensure the four-year old corporation can cut electricity use by 1.5 per cent annually as demand for clean power increases rapidly.

“The reality is we quite simply have not done enough to meet our environmental, climate and efficiency targets,” Schmidt told a legislative committee looking into the corporation’s 2022-23 annual report Tuesday.

Efficiency Manitoba missed its statutory energy savings targets by 17 per cent for electricity and nine per cent for natural gas, and underspent its budget by nearly $28 million in the past fiscal year.

Efficiency Manitoba chief executive officer Colleen Kuruluk told legislators she was unhappy with the result, but not surprised.

Opportunities to find new electricity savings in Manitoba are declining as more non-residential customers switch to high-efficiency lighting and energy reductions become harder to achieve, she explained.

“The non-residential lighting opportunity is largely disappearing at a rate faster than anyone predicted and I would say that goes for a lot of utilities and energy efficiency providers in the U.S. as well,” Kuruluk said.

However, the targets are not out of reach, she said.

The corporation will file its next efficiency plan with the Public Utilities Board this year and will present three scenarios to reduce energy consumption, including two aggressive approaches to hitting its targets.

“It would require more investment, but we can get there,” Kuruluk said. “That is our intent.”

The plan could include expanded demand response initiatives (shifting electricity use to off-peak times) and increased recognition of beneficial electrification (switching customers from natural gas to electricity without a net energy savings), Kuruluk said.

However, regulatory or legislative changes would be required.

“We had our hands full meeting our energy savings targets, but we think now is the appropriate time to talk with the environment and climate change department to open up opportunities with some changes in our mandate,” she said.

To date, Efficiency Manitoba has “picked the low-hanging fruit” as it has gone about fulfilling its purpose, owing to the current regulatory framework and a “less than ambitious” mandate, Schmidt said.

With the province’s energy transition imminent, the role of Efficiency Manitoba must be prioritized to reduce the strain on the electricity grid, she said.

It’s estimated Manitoba Hydro may need to bring new generating capacity on line by 2030 to meet demand. However, efficiency and demand-side management programs could defer the need for new infrastructure.

“With a renewed mandate and some changes to the regulatory framework, I have full confidence that Efficiency Manitoba going into the future will be able to hit those targets,” Schmidt said.

On Tuesday, Schmidt declined to discuss forthcoming changes to the Crown corporation’s mandate. It is currently tasked with reducing electricity and natural gas consumption and to deliver programs that reduce the use of other fossil fuels in home heating.

However, adding demand-side management of transportation fuels to support electric vehicle uptake has been discussed as an option, the committee heard.

“Efficiency Manitoba, their executive and their board should be the first people that see those specific details, but again we’re very excited to share that with all of Manitoba shortly,” Schmidt said.

The government is taking a look at the corporation’s board of directors to make sure its members align with the NDP’s values and vision, she said.

To increase future electric savings, Schmidt said the projects and initiatives undertaken by Efficiency Manitoba will be slightly more complicated and require more dedicated work. During the fall election, the NDP promised to launch an affordable home energy program to help 5,000 households switch to geothermal heating and cooling.

The first phase of the program is under development and will be available to Manitobans in the coming fiscal year, Schmidt said. The province has signed an agreement in principle with the federal government, valued at $37.5 million, to convert 2,500 households that use home heating oil to heat pumps.

The committee was told 15 ground source heat pumps and 33 air source heat pumps were installed in 2022-23 through Efficiency Manitoba’s residential heat pump program.

The total number of heat pumps installed through its partnerships with First Nations communities was not immediately available.

Despite missing its energy savings targets, Efficiency Manitoba programs still reduced electricity bills by an estimated $11.5 million and natural gas bills by about $2.7 million, including the federal carbon charge.

The electricity saved was enough to power about 121 big-box stores while natural gas savings would have heated 52 big-box stores, based on the annual report.

“In a time, especially now with affordability being so important for both residential and business customers alike, the bill savings are significant,” Kuruluk said.

Opposition environment critic Greg Nesbitt praised the work of Efficiency Manitoba while raising concerns the corporation may be overburdened by the NDP government’s heat pump promise.

“We’re not sure they can do 5,000 over four years. We heard at committee (today) that 48 had been done in the past fiscal year,” Nesbitt said. “It leaves a lot of questions in our mind.”

danielle.dasilva@freepress.mb.ca