The Board expects that the gas utilities will begin to investigate how a pay-for-performance mechanism, which combines both the cost recovery and shareholder incentive amounts into one standard rate for all cubic meters of natural gas saved ($/m3), can be introduced into the multi-year DSM plans. The Board is of the view that this type of funding and incentive structure can provide both increased incentives to the gas utilities as well as a greater amount of verified natural gas savings and bill reductions for customers. The gas utilities should include a proposal in their multi-year DSM plans for how they plan to analyze pay-for-performance designed programs and the general structure of the mechanism for the Board to consider. This is an area which will benefit from a better understand of the opportunities and challenges that are present. The Board expects to consider this option further at the mid-term review.
The Board expects that the shareholder incentive structure outlined above will continue to be a motivating factor in the gas utilities’ pursuit of significant natural gas savings, energy conservation awareness throughout Ontario, and bill reductions for customers
2015-2020 Natural Gas DSM Framework
Report of the Ontario Energy Board - 25 - December 22, 2014
over the course of the new DSM framework period. The Board will review all shareholder incentive components at the mid-term review to ensure they are producing the anticipated and expected results and have helped to appropriately align the efforts of the gas utilities with the guiding principles and key priorities outlined in the framework.