Driving Energy Innovation and EfficiencyCOOPERATIVE

NAVIGATING THE FUTURETOGETHER

2019 - 2020REPORT

NAVIGATING THE FUTURE TOGETHERThe GridSmartCity Cooperative® (GSCC) draws its strength from our individual local distribution company (LDCs)

members and the communities in which we operate. Our 15 member LDCs manage approximately $2.5 billion in assets, serving close to 765,704 customers across more than 40 communities.

We are an extension of GridSmartCity®, one of Ontario’s leading consortiums.

The Cooperative bridges the need for innovation and infrastructure renewal, with the benefits of collaboration and cost efficiency.  We share resources, insights and systems that

help run smarter companies, while advancing innovation, reliability and efficiency across Ontario’s electricity grid.

® Registered trademarks of GridSmartCity

Driving Energy Innovation and EfficiencyCOOPERATIVE

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INNOVATIONWe implement innovative solutions for the benefit of our customers, shareholders and the communities we serve.

COMMUNITY FOCUSWe leverage our local ownership and proximity to the customer to set the gold standard for service, reliability and responsiveness, and help build strong, sustainable communities.

COLLABORATIONWe work together to achieve scale efficiencies and purchasing power, while maintaining individual autonomy.

EFFICIENCYWe increase efficiency and reduce operating costs in our 15 customer regions, while modernizing the electricity grid to the benefit of Ontario as a whole. 

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MESSAGESLE

ADER

SHIP

FROM THE CHAIR

The GridSmartCity Cooperative (GSCC) focuses on pursuing economies of scale and efficiencies through collaboration and collective purchasing power. By bringing together fifteen like-minded local distribution companies (LDCs) we are able to create a wider spectrum of expertise, resources, and the collective will to build sustainable electricity utilities.

The cooperative model continues to deliver its advantages, including the ability to maintain long-standing and trusted relationships within our individual service territories. This keeps us responsive to local needs, and affords us the ability to reinvest directly into our own communities. It’s a connective bond encompassing over 40 communities that stretch from Windsor to Kingston.

By its very nature the GSCC creates opportunities to collaborate, particularly through our committee structure - sharing best practices, while providing a forum to spark innovation. As such, it is helping partners to better manage transitional risk and transitional opportunity in the LDC space.

Ontario’s policy makers at all levels are aware of the need to manage rising electricity prices while preparing the electricity system for future innovation. The Cooperative’s approach aligns with these principles, with an emphasis on achieving successful outcomes.

From our partnership with McMaster University’s Integrated Community Energy (ICE) research project to unique industry partnerships that are modelling ‘Feeders of the Future’, we continue to look forward at emerging technologies and the opportunities they present.

This report lays out our successes in 2019, and embraces the challenges we face as we look to the future.

I would be remiss if I didn’t preface my remarks with the recent impact of COVID-19 on our industry. Electricity consumers across Ontario are depending on LDCs to maintain distribution systems and keep the lights on - as essential workplaces, we are doing just that. Like so many other businesses we too are feeling the financial impact brought on by the pandemic. Many of our customers are struggling and so are many of our local businesses. From mid-March to mid-April, electricity demand was down 10 to 12% across Ontario.

Once again, GSCC Cooperative’s 15 partners have come together – albeit virtually – to share ideas, develop pandemic plans and deal with issues to safeguard our employees, while continuing to reach out to our customers in ways that will assist those who are most at risk. We can’t describe this as business as usual, but by sharing and adopting best practices we’re keeping our best options open for our businesses, our customers, and our communities.

15 utilities strong, representing over 40 Ontario communities

Rene Gatien, ChairGridSmartCity CooperativePresident and Chief Executive Officer, Waterloo North Hydro Inc.

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We saw a number of encouraging and positive results in 2019. By continuing to work together and find common ground we were able to realize collective savings and a number of cost avoidance advantages. Just as importantly, sharing expertise and best practices has provided a level of collective experience that continued to enrich our network of LDC partners.

We saw progress on so many fronts. Our collective transformer orders will see savings of half a million dollars annually, in addition to an

estimated $200,000 in cost avoidance. We’re exploring shared software services, and cyber security subscription service models. Clearly, our work to develop common standards and specs has successfully avoided unnecessary duplication and costs. It’s also clearing a path for future fleet purchases by the group.

The benefits of the cooperative model go well beyond its purchasing power. A great example of that is our partnership with Mohawk College Enterprise which saw our specially designed GSCC ‘Future Ready Leadership Essentials Development’ program implemented with 50 graduates so far, and another 25 participants set to complete the program over the summer of 2020. Not only are we developing our next generation of leaders but also establishing a cooperative GridSmartCity culture amongst our LDC members.

Best practices and shared expertise is not only helping us to embrace innovative initiatives, it has also netted some positive and practical applications for Cooperative members. Strategies for effective campaigns to drive the uptake of paperless billing, customer engagement vendor session presentations and branding of the GSCC - including a social media presence - have all contributed to a positive forward momentum.

One of the starkest examples of how collaboration has benefitted the group, came only recently with the onslaught of the COVID-19 pandemic. I want to express my deep appreciation to the Human Resources Committee, who spent every day meeting virtually to work through the many crisis issues impacting LDC businesses. Bringing together many moving parts that seemed to change almost daily, and helping our partners put plans and policies in place to provide continuity to our workplaces, was a monumental effort.

It’s a great example of the rewards we reap as members of the Cooperative. As we navigate that future together, I see positive signs that we’ll carve a path to a “new” normal for our sector. I have no doubt that there will be challenges ahead, but we will be better prepared to face down those challenges as members of a strong and productive Cooperative.

Navigating a progressive path forward

Rene Gatien, ChairGridSmartCity CooperativePresident and Chief Executive Officer, Waterloo North Hydro Inc.

Mark Henderson, PresidentGridSmartCity & the GridSmartCity Cooperative

FROM THE PRESIDENT

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BY THE NUMBERSThe GridSmartCity Cooperative is a leader in Ontario’s electricity distribution sector, by size and performance, and has a clear trajectory to achieve even greater efficiencies, to lead sector innovation, and to maintain high levels of customer satisfaction and approval.

Our combined service territories have 22,946 kilometres of powerlines, and encompass an area of 5,893 square kilometres, second only to Hydro One.

Utility Total Service Area (sq km) Total km of Line

Hydro One 961,498 123,176

GridSmartCity 5,893 22,946

Alectra 1,830 19,722

Toronto Hydro 630 28,722

*All statistics from the OEB’s 2018 Yearbook of Electricity Distributors

Top 4 Ontario LDCs by Customer Size

Hydro One1,333,601

customers

Alectra991,102Customers

Toronto Hydro772,624Customers

GridSmartCity Cooperative765,704Customers

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LDC CUSTOMER COUNT SERVICE TERRITORY

Brantford Power Inc. 39,904 City of Brantford

Burlington Hydro Inc. 67,940 City of Burlington

Energy + Inc. 65,402 City of Cambridge, Township of North Dumfries and Brant County

Entegrus Powerlines Inc. 59,186 Chatham-Kent, St. Thomas, Strathroy-Carodoc, Mount Brydges, Parkhill, Dutton and Newbury

ENWIN Utilities Ltd. 88,978 City of Windsor

ERTH Power Corp. 19,238 Ingersol, Port Stanley, Goderich and other communities across Elgin, Oxford, Huron and Perth Counties

Essex Powerlines Corp. 30,012 Amherstburg, LaSalle, Leamington and Tecumseh

Halton Hills Hydro Inc. 22,442 Town of Halton Hills

Kingston Hydro Corp. 27,658 Central Kingston, Canadian Forces Base Kingston and parts of Barriefield Village

Kitchener-Wilmot Hydro Inc. 96,827 City of Kitchener and Township of Wilmot

Milton Hydro Distribution Inc. 39,579 Town of Milton

Niagara Peninsula Energy Inc. 55,593 City of Niagara Falls, Town of Lincoln, Town of Pelham and Township of West Lincoln

Oakville Hydro Electricity Distribution Inc. 72,108 Town of Oakville

Waterloo North Hydro Inc. 57,471 City of Waterloo, Townships of Wellesley and Woolwich

Welland Hydro Electric System Inc. 23,366 City of Welland

Our 15 member LDCs manage

approximately $2.5 billion in assets, serving 765,704

customers across morethan 40 communities

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Sharing best practices and the active

exchange of information and resources is

a driving force behind GSCC Committees.

Emphasis is placed on the areas where the

highest net savings and efficiency gains

are anticipated. Progress has been made

on a number of important files in 2019:

2 19 HIGHLIGHTS

Driving Energy Innovation and EfficiencyCOOPERATIVE

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A Transformer RFP was awarded in late 2019 which is expected to see savings of $500,000 annually, as well as an estimated $200,000 in avoided costs. An RFP was also issued in December for pole line hardware - insulators, brackets and arrestors to be awarded by June 1, 2020.

We continue to take benefit and realize significant savings in the hundreds of thousands of dollars from our previously issued Wood Pole RFP and our Wire and Cable RFP.

Work progressed on plans to develop a common specification for a single bucket truck to support an upcoming large vehicle RFP.

Further exploration of the potential for a metal recycling and hazardous waste disposal program and a vendor-managed inventory pilot program are ongoing.

Continuing to explore possible cyber security SAAS subscription service models, in addition to ongoing collaboration with USF in the cyber security space.

Proposal submitted in collaboration with AESI and Mohawk College to access Provincial Government funding under the Ontario Research Excellence Fund to explore Cyber Security threat scenarios and proactive responses.

Further exploration of shared software service models continues, along with potential hardware saving opportunities.

1st and 2nd cohorts of ‘Future Ready Leadership Essentials’ custom program for GSCC LDC supervisors completed with 50 graduates. 3rd cohort being run in 2020 with 25 participants. Costs savings estimated at $50,000 for similar (generic not industry specific) training programs available in-market. Discussions initiated and initial custom design completed with Mohawk College Enterprise (MCE) on the next level leadership course for GSCC Managers/Directors.

A Labour Relations Strategy template, supported by a Costing Tool and a generic Contract Language Summary document were all built to support members with Collective Bargaining.

All-member Cost of Service (COS) joint session with communications and regulatory personnel presented potential vendor options for COS customer engagement.

Proposals were received for effective campaign strategies to drive the uptake of paperless billing, as well as ongoing community engagement platform services.

Scenarios and model parameters have been agreed upon for the ‘Feeder of the Future’ project with corporate partner S&C Electric and LDC partners, Burlington Hydro and Energy+.

Continued GSCC support for McMaster’s ICE Harvest Project. Efforts and discussions to accelerate finding several pilot sites in LDC service areas are underway.

Education workshops are being planned with Corporate Partners: ‘Future Impacts of Increased EVs’ with Hatch; and, ‘Global Best GIS Practices’ with Esri.

Supply Chain Advisory Committee (Material Standardization Sub Committee and Purchasing Evaluation Sub Committee) • IT and Cyber Security Committee • New Technology Committee • HR Committee • Communications Committee

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DRIVING ENERGY INNOVATION AND EFFICIENCY

CONSORTIUM PARTNERS

The GridSmartCity approach aligns with the provincial government’s desire for Ontario’s LDCs to find ways to achieve greater efficiencies of scale and scope in their operations in order to provide cost benefits to electricity customers.

The GridSmartCity consortium builds on the core group of LDC members with commercial, industry and academia members.

Aladaco

Black & McDonald

Enbridge Union Gas

Electrical Safety Authority (ESA)

Esri Canada

Hatch

Honeywell

K-Line Group

McMaster University

Mohawk College

NBM Engineering

OEC

Olameter

Plug‘n Drive

S&C Electric Company

TD Commercial Banking

University of Waterloo

COMMUNITY INTEGRAL TO COOPERATIVEMODEL

1 Municipal Value

5 Regional Employment2 Local Care

6 Direct Access3 Responsiveness

7 Philanthropy4 Local Grid Insight

GridSmartCity Cooperative LDC’s are entrenched in their local communities. This delivers benefits that cannot be easily replicated with other ownership models.

The Cooperative provides access to expertise, resources and scale, to provide value to customers,to manage delivery costs effectively, and, as thought leaders, to prepare for industry change. Leveraging local insight and identifying common needs and opportunities is a key enabler.

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LEADERSH

IP COU

RSE

Driving Energy Innovation and EfficiencyCOOPERATIVE

“This course is ideal for the employee who is making the transition into a leadership role. The facilitator was very good and kept the group engaged throughout the course. There was a good balance between the course material and interactive activities. Thanks for a great experience.”Richard Lang, Milton Hydro

The Human Resources Committee worked closely with Mohawk College Enterprise (MCE) to formulate a customized GridSmartCity Cooperative (GSCC) program that draws on concepts and principles relevant to the LDC sector. Developed specifically with supervisors and emerging leaders in mind, the ‘Future Ready Leadership Essential Skills’ program has proven to be a popular training choice for LDC GSCC partners. The initial two program cohorts were completed in 2019 with 50 graduates. The third cohort is expected to wrap up this summer, with an additional 25 partner participants.

The program consists of five introductory leadership training courses – each one day in duration - delivered over a four month period:

• Creating Accountability Through Respectful Leadership • Powerful Communication and Leading with Professionalism • The Art of Coaching and Learning to Delegate and Empower Your Employees • Managing Challenging Situations Through Successful Negotiation • Managing the Performance of Your Employees

Learning outcomes are identified in each module and consist of, among others, evaluating effective coaching skills, behaviours and recognizing conflict and, identifying barriers of communication and developing solutions to overcome them.

GSCC Training Program Prepares Emerging Leaders with the Essentials

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McMaster University’s oversight of ICE is done in cooperation with Carleton University and in partnership with the GridSmartCity Cooperative, Siemens Canada, Enbridge Gas, Alectra Utilities, S2E Technologies, GeoSource Energy and HCE Energy.

ICE-Harvest brings forward solutions addressing core climate change issues including adaptation, mitigation, resiliency and has a focus on innovation and creating community energy networks of the future. It utilizes a holistic and innovative energy system approach that increases resiliency and energy utilization which ultimately redefines the way in which communities interact with energy. 

The ICE-Harvest holistic approach has created unique synergies across traditionally siloed sectors of the energy system that allows harvesting and sharing of normally lost energy. The modular system superstructure creates seamlessly coupled thermal and electrical generation embedded in communities through integrated micro-electrical and micro-thermal grids to meet demand while maximizing total energy utilization. This integration creates multiple economical and environmental benefits.

CommunityCENTRE

EMCENERGY MANAGEMENT CENTRE

The ICE-Harvest system packages technologies and energy storage in repeatable building blocks, allowing them to be optimally combined and then intelligently controlled to support both the thermal requirements and the electrical grid.  Components are modularized into a “three-size solution” to be scalable to communities of varying sizes.  This model provides solutions that are economically and technically feasible, flexible, resilient and effective in making a significant impact on GHG emissions.

McMaster Engineering has created a globally unique research facility to develop the needed tools to design and commercialize the system. This facility takes advantage of the fossil fuel-free baseload energy grid of Ontario to deliver thermal and electrical energy to pre-charge storage so as to reduce the peak electrical and thermal demand on the university campus. ICE-Harvest has the flexibility to accommodate future renewable energy sources and other technologies.

Among its many benefits, ICE encourages local economic development opportunities to create new clean-tech jobs in participating communities to manage the operation of more efficient ICE-Harvest community nodes, paid for by a reduction in thermal and electrical energy expenditures that would otherwise leave the community.  ICE enhances community resilience to energy outages caused by extreme weather events by having self-powered micro-electrical and thermal grids with inherent multi-generation redundancy for heating, cooling and electricity.  It has the potential to reduce GHG emissions, relative to the status-quo, by up to 100%.

An Unparalleled Energy Cooperative

Led by McMaster University, integrated Community Energy and Harvesting systems (ICE-Harvest) advance the idea of Distributed Energy Resources (DER’s) by embedding integrated thermal and electrical generation as well as storage within a community. This allows our communities to be powerd, heated and cooled in an economic and carbon-reduced way.

ENGINEERING

1000 Potential Sites 30+ Municipalities19 Industry Partners5 Pilot Projects

INTEGRATED COMMUNITY ENERGY AND HARVESTING SYSTEM (ICE) RESEARCH PROJECTMcMaster University – Institute of Energy Studies

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McMaster University’s oversight of ICE is done in cooperation with Carleton University and in partnership with the GridSmartCity Cooperative, Siemens Canada, Enbridge Gas, Alectra Utilities, S2E Technologies, GeoSource Energy and HCE Energy.

ICE-Harvest brings forward solutions addressing core climate change issues including adaptation, mitigation, resiliency and has a focus on innovation and creating community energy networks of the future. It utilizes a holistic and innovative energy system approach that increases resiliency and energy utilization which ultimately redefines the way in which communities interact with energy. 

The ICE-Harvest holistic approach has created unique synergies across traditionally siloed sectors of the energy system that allows harvesting and sharing of normally lost energy. The modular system superstructure creates seamlessly coupled thermal and electrical generation embedded in communities through integrated micro-electrical and micro-thermal grids to meet demand while maximizing total energy utilization. This integration creates multiple economical and environmental benefits.

The ICE-Harvest system packages technologies and energy storage in repeatable building blocks, allowing them to be optimally combined and then intelligently controlled to support both the thermal requirements and the electrical grid.  Components are modularized into a “three-size solution” to be scalable to communities of varying sizes.  This model provides solutions that are economically and technically feasible, flexible, resilient and effective in making a significant impact on GHG emissions.

McMaster Engineering has created a globally unique research facility to develop the needed tools to design and commercialize the system. This facility takes advantage of the fossil fuel-free baseload energy grid of Ontario to deliver thermal and electrical energy to pre-charge storage so as to reduce the peak electrical and thermal demand on the university campus. ICE-Harvest has the flexibility to accommodate future renewable energy sources and other technologies.

Among its many benefits, ICE encourages local economic development opportunities to create new clean-tech jobs in participating communities to manage the operation of more efficient ICE-Harvest community nodes, paid for by a reduction in thermal and electrical energy expenditures that would otherwise leave the community.  ICE enhances community resilience to energy outages caused by extreme weather events by having self-powered micro-electrical and thermal grids with inherent multi-generation redundancy for heating, cooling and electricity.  It has the potential to reduce GHG emissions, relative to the status-quo, by up to 100%.

DIGITALENGAGEMENT

SOCIAL MEDIA2019 saw the unveiling of GridSmartCity pages

on Twitter and LinkedIn, followed by a steady schedule of Tweets and posts highlighting

consortium members. Visit @gridsmartcity and www.linkedin.com/company/gridsmartcity

Our online presence at gridsmartcity.com continues to evolve and expand reflecting the

mission of the GridSmartCity Cooperativeand Consortium. During 2019, we launched a refreshed design

with expanded content.

WEB SITE REFRESH

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BURLINGTON HYDRODesignated a 2019 Hamilton-Niagara Top Employer by the editors of Canada’s Top 100 as an exceptional place to work.

ENERGY +Cambridge Chamber of Commerce 2019 Spirit ofCambridge award for outstanding corporate leadership and the Association of Marketing & Communications Professionals (AMCP) Platinum Hermes Creative Award for its new website.

ENWIN2019 WEST New Business Partner VIP Award for supporting a community of diversity and inclusion.

ESSEX POWERLINESRecipients of the Electricity Distributors Association (EDA) 2019 OPG LDC Performance Excellence Award for overall utility excellence.

HALTON HILLS HYDROEDA 2019 Communications Excellence Award for its innovative approach to engaging customers for its Cost of Service rate application.

KINGSTON HYDRO2019 Canadian Electricity Association (CEA) award for Service Excellence for its Outage Management System.

KITCHENER-WILMOT HYDRO2019 Canada’s Safest Employers’ Gold Award in the Utilities and Electrical category and two awards from the IESO for billing accuracy and data synchronization with the Meter Data Management and Repository.

NIAGARA PENINSULA ENERGY2019 EDA Public Relations Excellence Award for its Utility Box Artwork Program. 

OAKVILLE HYDRO2019 EDA Environmental Excellence Award for striving to protect and improve the environment.

WATERLOO NORTH HYDRO 2019 Canada’s Safest Employer Gold Award, Psychological Safety, and Silver Award in the Utilities & Electrical category.

AWAR

D W

INN

ING

PAR

TNER

S

Optimize energy use and expenses in buildings and planning, and implementation of LDC conservation initiatives.

Operates and maintains electricity distribution systems for over 58,000 customers in Southwestern Ontario.

Fully integrated GIS solutions for web systems, mapping, asset management and facilities management.

Owned by 9 municipal shareholders, ERTH is a leading provider of energy solutions & services for 25,000 customers in 15 communities.

Grid modernization and asset management, hybrid power and microgrids, transmission and distribution.

WE’

RE G

ROW

ING

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OPERATIONSDURING

It’s the new realityCOVID-19

The COVID-19 pandemic has dramatically impacted the way we do business. Designated by the Province as ‘Essential Workplaces’, LDCs continue to operate, albeit in a very different manner than what we are used to. Physical distancing and ensuring the health and safety of employees and the public has become the new norm.

Like LDCs across the province, GSCC partners are committed to ensuring that the lights stay on – that our local hospitals, essential services and the many people who are self-isolating at home can depend on the safe and reliable distribution of power in their communities. As such, we’re maintaining business continuity across all aspects of our organizations, from IT to billing, to line construction and maintenance activities, to customer service, and more.

We’re also responding to the growing needs of many through this outbreak. GSCC LDC partners have made donations to local food banks, shelters, healthcare units, and donated Personal Protection Equipment (PPE) to community hospitals, among others.

The Cooperative collaborated on a daily basis through much of March and April ensuring that our safety and health protocols followed best practices, and that measures were in place to keep our employees and customers protected. Our collective expertise and experience enabled a thorough but measured response that was able to comply quickly with evolving provincial health policies and directives while transitioning from ‘business as usual” to working from home, revised shift schedules, and multiple location reporting.

As many businesses and individuals are financially affected by the pandemic, so too will GSCC partner businesses be impacted. Electricity demand is down 10% in the province - the greatest decline in electricity use among the four largest Canadian provinces since COVID-19 restrictions shuttered many businesses in mid-March. LDC partners are working with customers to provide assistance where possible for those who are struggling to pay their electricity bills, however it’s anticipated that payment defaults will become more prevalent.

It’s expected that the ‘new norm’ in operations will impact and delay some of this year’s GSCC projects and initiatives.

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Driving Energy Innovation and EfficiencyCOOPERATIVE

Our 15 member LDCs manage approximately $2.5 billion in assets,serving 765,704 customers across more than 40 communities.

Learn more at gridsmartcity.comFollow us @gridsmartcity and www.linkedin.com/company/gridsmartcity