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Home My WebLink AboutCSD-12-066 - Updates - 2011 LEAF & Kitchener Home Energy Imp & REEPStaff Re apt KITCHEI~'ER Communr'ty SeruicPS Department www.kitchenertu REPORT TO: Community & Infrastructure Services Committee DATE OF MEETING: April 16, 2012 SUBMITTED BY: Jeff Willmer, Deputy CAO Community Services Department PREPARED BY: Barbara Steiner, Senior Environmental Planner 519-741-2293 WARD(S) INVOLVED: All DATE OF REPORT: April 10, 2012 REPORT NO.: CSD -12 - 066 SUBJECT: UPDATE: 2011 LEAF GRANT KITCHENER HOME ENERGY IMPROVEMENT PROGRAM REEP GREEN SOLUTIONS RECOMMENDATION: For information. BACKGROUND: In 2007, Kitchener City Council approved the creation of a $5 million environmental fund called the Local Environmental Action Fund (LEAF). One of the 2011 grants was made to Waterloo Region Green Solutions (operating as REEP Green Solutions) for their Kitchener Home Energy Improvement Program. This project provides incentives to the owners of pre-1970s homes to complete energy audits and install insulation and air-seal their homes using the federal government's ecoENERGY model including those accepted procedures for grant verification. Only pre-1970s homes installing insulation and doing air-sealing-the two most effective retrofits to reduce energy use, but the most challenging for homeowners to undertake-are eligible for the incentives. A concern was raised by a Kitchener resident who works for a local, for-profit energy audit service provider that the program was "unfair" because eligible Kitchener homeowners can only receive the incentive provided through LEAF if their energy audits are conducted by REEP. On November 7, 2011, Community and Infrastructure Services Committee considered staff report CSD-11-143 which outlined an analysis of possible options to address the resident's concern about these perceived "unfair" incentives. Staff recommended that the Kitchener Home Energy Improvement Program continue to be implemented by REEP Green Solutions as outlined in their 2011 grant application. 9-1 Staff Re apt KITCHEI~'ER Communr'ty SeruicPS Department www.kitchenertu After consideration at committee and Council, it was resolved on November 14, 2011: "That consideration as to who should implement the Kitchener Home Energy Improvement Program, supported by the Local Environmental Action Fund (LEAF), be deferred to the Community and Infrastructure Services Committee meeting of April 16, 2012; and further, That Council consider the implications of funding for this type of program from all other orders of government." REPORT: REEP's Kitchener Home Energy Improvement Program provides an additional incentive only for Kitchener owners of pre-1970s homes who wish to undertake insulation and air-sealing retrofits. No advantage (unfair or otherwise) would exist for energy audit service providers to homeowners whose homes were built after December 31, 1969 or where no insulation or air- sealing would be taking place (i.e. those who are interested in federal ecoENERGY grants for window /door /furnace replacement). Four (4) options were analyzed in CSD-11-143. They were: Amend Council's approval of the 2011 grant to REEP so that the $440,037 earmarked in the report for direct homeowner incentive would become available to homeowners using all other audit service providers. 2. Offer all other audit service providers operating in Kitchener the opportunity to apply for a LEAF grant in 2012 3. Offer a hybrid solution where REEP would take on customers who have had the pre- audit completed by another service provider for a nominal transfer /administrative fee'. 4. Status Quo -Continue to run this program through REEP per: the work program in their LEAF grant application. Options (1) through (3) presented challenges such as: • compromising the integrity of the LEAF Operating Framework (the "rules and regulations" for applying for and receiving a grant) approved by Council (Option 1); • the potential for "bonusing" under the Ontario Municipal Act, and the related need therefore to amend the City's Energy and Water Efficiency for Land and Buildings (June 2010, DTS 10-097) Community Improvement Plan (CIP) (Options 1 and 2); • limited City staff capacity to administer /support an expanded program (Options 1 and 2); • the probable discontinuation of both federal and provincial incentives for home energy efficiency projects (Options 1, 2 ,and 3); REEP did take on files where the original energy audit was completed by another service provider, and where that original audit (by others) was completed prior to the announcement of the matching incentives through the Kitchener Home Energy Improvement Plan, i.e. prior to July 18, 2011. 9-2 Staff Re apt KITCHEI~'ER Communr'ty SeruicPS Department www.kitchenertu the 2012 review and suspension of the LEAF grant program which would prevent for- profit energy audit service providers from applying for a LEAF grant this year (Option 2); and REEP's limitations with respect to limited customer service and audit staff capacity to take on files from Kitchener residents who entered the program (had their initial audit done) after July 18, 2011 (Option 3). Current Context of the Kitchener Home Energy Improvement Program The federal government's ecoENERGY program which was re-instated on June 6, 2011 as part of the 2011 budget through Canada's Economic Action Plan and its Clean Energy Fund was closed to new registrants on January 28, 2012, two months earlier than planned with the targeted 250,000 homeowners having registered for the program by that date. In order for registered homeowners to receive an ecoENERGY grant, home energy projects must have been completed by March 31, 2012 and the post-retrofit audit completed by June 30, 2012. The ecoENERGY program was not renewed in the recent 2012 federal budget. The provincial incentive ($150) for the pre-retrofit energy audit was not renewed by the Province in the recent Ontario budget. The incentive program ended on March 31, 2012. The Kitchener Home Energy Improvement Program has been so successful over the last eight (8) months, having so much uptake by Kitchener residents who own pre- 1970s homes that, as of March 31, 2012, the program was finished and grants (to the LEAF grant total of $440,037) fully awarded. The cheques to award these grants are currently being issued to those who have already completed their retrofits and post- retrofit audits, and whose file verifications are currently being completed by Green Communities Canada. Two hundred and ninety-eight (298) pre-1970s homes have been insulated and/or air- sealed in Kitchener as a result of the LEAF-supported Kitchener Home Energy Improvement Program, surpassing the goal of two hundred and thirty-five (235) homes targeted by REEP in their LEAF application and work program. The program exhausted the "first-come, first-served" homeowner incentive funds in 8 months rather than the 24 months originally anticipated. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Community Priorities Leadership and Community Engagement Financially supporting local environmental initiatives through LEAF enhances our partnership with citizens, business, agencies, organizations, school boards and all orders of government in all Healthy Community initiatives (Strategic Direction 1). 9-3 Staff Re apt KITCHEI~'ER Communr'ty SeruicPS Department www.kitchenertu Environment Funding important environmental projects through LEAF helps achieve the Citizens' Vision for the Environment (2027), in which our community focuses significant energy and resources on becoming more environmentally friendly. FINANCIAL IMPLICATIONS: None. COMMUNITY ENGAGEMENT: The LEAF Steering Committee, which includes five (5) citizen advisors (50% of committee membership), reviewed and commented upon a draft of staff reports CSD - 11 - 143 and CSD - 12 - 066 prepared to address this matter. CONCLUSION With both the federal and provincial incentive programs for home energy retrofits having ended, the demand for energy audits is anticipated to decline, although highly motivated homeowners may pursue audits to guide their un-incented home energy retrofit programs. It is likely, therefore, that for-profit firms offering energy audit services will have to re-tool their marketing and business strategies in light of the absence of government incentives to homeowners for energy retrofits. In addition, the LEAF-funded Kitchener Home Energy Improvement Program operated by REEP for the last eight (8) months has now fully awarded the total amount of $440,037 for homeowner incentives approved by Council for REEP's 2011 LEAF grant application. REEP is working with the University of Waterloo to calculate the emission reductions that have been achieved through these retrofits, and will report these to the City of Kitchener as part of its report for this grant. In light of the factors noted above, there is no need to further consider who should implement the Kitchener Home Energy Improvement Program. ACKNOWLEDGED BY: Jeff Willmer, Deputy CAO Community Services Department 9-4