1. Conservation & Demand Management July 2004 – September 2007 Joyce McLean Director, Strategic Issues Toronto Hydro 416 542 3047 jmclean@torontohydro.com April 7, 2005

2. Ontario can not meet its long-term energy needs without a combination of increased generating capacity and significant conservation efforts

3. The government requires electric utility conservation and demand management (CDM) Target of conservation & demand management -5% demand reduction by 2007 – up to 250 MW from Toronto Hydro grid system Direction of conservation & demand management -Smart meters – 800,000 in place by 2007 – useful management tool -Conservation – $225 million available to LDCs for CDM -System loss reduction – Incentives for system improvements -Cleaner energy, ie. renewables and natural gas – 300 MW

4. As of March 1, 2005, Toronto Hydro will be allowed to achieve its full Market Adjusted Rate of Return … Conditional on Toronto Hydro Corporation reinvesting the equivalent of one-year of these monies in conservation and demand management initiatives $ 40 million for Toronto Hydro Corporation The OEB proposes a 3-year spending window July 2004 – September 2007 First generation of electricity CDM initiatives Not unlike the requirements for Enbridge and Union Gas

5. Toronto Hydro sees CDM as an opportunity CDM fits THC’s business strategy To follow the Shareholder’s Direction – City of Toronto has environmental and conservation goals related to cost-cutting and emission targets To comply with Ontario Energy Board requirement It sends the right message to the public THC’s overall CDM strategy Customer education CDM enabling monies help more projects get developed Distributed Energy enabling

6. DR/EE DE IndustrialCommercialResidential Our CDM strategy opens many opportunities in the electricity business Central Generating Station Receiving Station Transmission Distribution Substation Developers/Retailers EE: Energy Efficiency, DR: Demand Response, DE: Distributed Energy Smart Metering

7. We were granted a final and unconditional approval of our CDM Plan from the OEB on Dec. 7th, 2004 Final approval Quarterly reporting Annual reporting

8. We need your participation in the delivery of the Toronto Hydro CDM Plan CDM Task Force How does Toronto Hydro organize its CDM Task Force? CDM Plan What programs are included in Toronto Hydro’s CDM Plan? CDM Participation How could you participate in the program delivery of the CDM Plan? Together We contribute to the emergence of a “Conservation Culture” We support the reduction of electricity peak demand by 5% by 2007

9. What programs are included in the CDM Plan? Full range, well balanced CDM programs CDM: Residential and Small Commercial (< 50 kW) Commercial, Industrial, Institutional (> 50 kW) Distribution Loss Reduction: A broad network based initiatives Distributed Energy: Load Displacement Program Stand-by Generators Program THESL Conservation and Demand Management Plan Ontario Energy Board File No. RP-2004-0203 November 4 th, 2004

10. Toronto Hydro pilots to date CDM: Residential and Small Commercial (< 50 kW) Commercial, Industrial and Institutional (> 50 kW)

11. Toronto Hydro pilots to date Distributed Energy: Load Displacement Program Stand-by Generators Program Total Power Generated: 16,832 kWh Peak Generated: 31.5 kW Total Dollar Value Generated: $1397.11

12. Opportunities for new technologies EE: Energy Efficiency, LM: Load Management, DE: Distributed Energy EE/LM DE IndustrialCommercialResidential Central Generating Station Receiving Station Transmission Distribution Substation Developers/Retailers Smart Metering THC Control Centre

13. These CDM programs will enable Toronto Hydro to reduce its daily peak demand for electricity

14. Social Housing Incentives What did the Ontario Energy Board approve? A province wide centralized energy management service for the social housing sector may be developed in collaboration with the provincial government, utilities and others. A pilot program will be conducted to determine feasibility with an expectation that a full scale program would follow. Target users Local social housing corporations, non-profit homes and co-op housing. Synergies Synergies may be created through the combined initiatives of the various agencies.

15. Budget 2004 to 2007 Toronto Hydro Budget for Social Housing program $405K for 2004/05 $405K for 2006 $405K for 2007 Total - $1.215 million Other budgets within CDM plan may be applicable All approved projects must be substantially complete by September 2007 This is not project financing, rather it is investment in existing or anticipated expenditures to reduce demand.

16. Discussions to date Along with the Coalition of Large Distributors, meetings with Social Housing Services Corporation on the design of and support for their pilot 4000 unit audit/retrofit program. Series of meetings with Toronto Community Housing Corporation on a suite of initiatives relating to their properties, including support for Regent Park redevelopment (phase 1), scattered housing audit and retrofit program (currently being run by Green$aver), appliance change-out program, multi-residential audits and retrofits. Proponent-driven exercise. Every $1 = 6 kW reduction

17. Collaboration with Enbridge Gas The CDM program provides a real opportunity for Toronto Hydro to learn from Enbridge on their program success in supporting conservation activities for their customers. Toronto Hydro/Enbridge collaborating with EnerAct and City Councillors on the Smart Living program in certain City wards with identified low income populations.

18. How could you participate in our CDM program delivery? Contact us & get your CDM projects qualified for the incentive Documents 1.Letter of Intent/Cooperation 2.Non-Disclosure Agreement 3.Project Justification/Contract 4.Project Status Reports 5.OEB Reports Purpose 1.Engage partners or channels 2.Protect proprietary (especially customer) information 3.Cost/Benefit analysis / Scope of work and delivery schedule 4.Ensure that project spending and benefits are delivered on schedule 5.Ensures OEB is satisfied with the progress

19. “ A MW saved is every bit as good as a MW built “ Toronto Hydro Corporation Conservation & Demand Management $40 Million 250 MW You Are Invited to Participate In!