26. 11. 97

STRATEGY AND RESOURCES COMMITTEE

ENVIRONMENTAL COMMITTEE

17 NOVEMBER 1997

A special joint meeting of the Strategy and Resources Committee

and Environmental Committee

was held on Monday 17 November 1997 at 3.00 pm

PRESENT:	Councillor David Close (Chairman), The Mayor, Councillors Anna Crighton, Carole Evans, Pat Harrow, Alister James, Charles Manning, Margaret Murray, Denis O'Rourke, Barbara Stewart and Ron Wright.
APOLOGIES:	Apologies for absence were received and accepted from Councillors Newton Dodge, Ian Howell and Garry Moore.

The Committee reports that:

PART A - MATTERS REQUIRING A COUNCIL DECISION

1. CLEAN AIR INCENTIVES PROGRAMME RR 6538

Officer responsible	Author
Environmental Policy and Planning Manager	Terence Moody, Principal Environmental Health Officer
Corporate Plan Output: Environmental Health Policy Vol II P.7.2.Text.12

The purpose of this report is to put forward a proposed programme by which the Christchurch City Council will make available financial incentives to encourage city residents to convert to non-polluting forms of heating.

INTRODUCTION

The Council at its meeting on the 30 July 1997 decided to make funding available for a package of incentives to encourage more city residents to convert to non-polluting forms of energy. The programme was to be conducted with the Canterbury Regional Council's plans to reduce air pollution by regulation through their draft air plan, and their proposal for the prohibition on open fire use.

The Council has made the following funding available for the Incentives Scheme in its Annual Plan and Budget.

1997/98	$500,000
1998/99	$500,000
1999/2000	$670,000
2000/01	$670,000
2001/02	$ 80,000

At its meeting on 24 September 1997 the Council adopted the following as the policy for the incentives programme subject to the Legal Services Manager confirming that the Council has the power to spend money for the purpose, as the policy for the incentives programme:

1. The incentives be granted for changing to non-polluting forms of home heating to householders and home owners closing off or removing open fireplaces.
   
   
2. These incentives be provided in conjunction with any energy efficiency measures as provided for from any Energy Saver Fund.
   
   
3. That the Council pursue this programme irrespective of whether any proposed regulatory measures are or are not introduced by the Canterbury Regional Council under the Resource Management Act.
   
   
4. That discussions be continued with the Regional Council; energy supply authorities; and relevant industry groups to develop the specific details of the incentives scheme for reporting back to the November meeting of the Council.

The Council resolved further:

1. That consideration also be given to introducing a programme of incentives for the replacement of non-complying wood and coal burners.
   
   
2. That the specific details of the incentives scheme be considered at a special joint meeting of the Strategy and Resources Committee and Environmental Committee to be held immediately prior to the 17 November meeting of the Strategy and Resources Committee.
   
   
3. That the Council invite Housing New Zealand to meet to discuss a plan to implement energy efficiency measures (such as insulation) in all their housing stock in Christchurch.

A PROPOSED PROGRAMME FOR CLEAN AIR INCENTIVES

It was decided to arrange for experienced energy consultants to undertake the task of the development of a programme for implementing the recommendations relating to details of the incentives scheme. It was fortunate that a very experienced energy consultancy firm, SRC International Pty Ltd, were able and willing to undertake the task at short notice and within the timetable required. They produced an draft preliminary programme design for the purposes of preparing this report. The final version has been separately circulated to all Councillors.

The preliminary design of the programme is along the following lines:

• Defines the programme objectives and target performance measures.
• Proposes the initial financial levels of the programme.
• Defines the target market.
• Determines the relationship with other funding options (such as the Energy Saver Fund) and potential measures for inclusion in a programme.
• Provides an indicative timeline of implementation stages.
• Outlines possible staffing requirements and organisational responsibilities.
• Estimates initial budget allocation for programme elements such as financial assistance, marketing activities and materials, staff and contractors.

The Consultants have estimated the total target market, from the Christchurch Inventory of Total Emissions and of open fireplaces and coal burners to be 16,064 of which 12 409 would be eligible if Government owned premises are excluded from the incentives programme. In regard to the latter they consider government organisations can fund their own replacement programmes.

On the basis of analysis of 1991 Census Date they have estimated the heating type by tenure and this shows that a disproportionate number of Housing New Zealand households have open fires compared to privately rented premises. There will be further analysis done to confirm these figures on the basis of 1996 Census data when it becomes available.

On the basis of their past experience with such programmes a certain percentage will not participate under any circumstances, anywhere up to 20%. They estimate the long run acceptance figure for the clean air incentives programme to be about 60% based on a number of factors such as fuel costs etc for new equipment.

The Consultants have suggested the following as the basis for the programme.

1. The programme will be available to Christchurch City residents who have open fires and coal burners. Housing New Zealand or other government agencies which own houses are not eligible. Participating residents will be required to permanently seal the open fire or remove the burner. A permanent seal will involve the complete air tight seal of the open fire place with suitable materials, such as: bricks and mortar; sealed frame with wood/metal panel; or eligible heater (ie., heater designed as a fireplace insert) The aim is to ensure that fireplaces can not be easily made re-operatable.
   
   
2. Eligible technologies for the replacement of open fires and coal burners would be:

• flued gas heaters
• fixed electric heaters with thermostatic controls
• flued diesel heater
• complying wood fired heater (that meets the CRC target for year 2000 compliance)
• electric heat pumps

3. Eligible technologies for improving home energy efficiency would be:

• ceiling insulation (no existing insulation present)
• under floor insulation
• weather strip

4. Only those residents that are replacing their open fires or coal burners would be eligible for the home energy efficiency incentives.

On the basis of their preliminary analysis the Consultants suggest the residents that participate in the clean air programme be offered a grant of $500 for the conversion of open fireplaces or coal burners to eligible heating appliances, including heat pumps, but excluding fixed electric heaters. For the latter category they consider a grant of $100 is more applicable.

In the case of the home energy efficiency measures they suggest an incentive of 50% of the installed cost of measures that meet the requirements of the Energy Saver Fund would be sufficiently attractive to encourage participation. The pay back period for those using day rate electricity would be less than two years.

The programme application process will be developed to ensure it is easy for householders to understand and participate and include sufficient quality control to ensure funds are being utilised efficiently. Staffing requirements for the programme have been estimated as approximately 1000 hours in application processing, approval and data entry/checking plus 500 to 1000 hours answering telephone enquiries, marketing the programme and reporting on programme progress. This suggests a need for a full time person for the administration and marketing of the programme.

A preliminary budget for the programme, out to the year 2002, covers the following matters:

• Estimated financial incentives paid to programme participants
• Staff costs at approximately 2 500 hours per year
• Marketing material development
• Marketing material printing
• Advertising
• Contractors/Consultants/Market Research costs

LEGAL OPINION

The Legal Services Manager's opinion is attached.

Recommendation:

That the programme, in general, follow the principles set out in the report, and in particular: (i) That the programme be available to residents with regularly used open fires and coal burners. (ii) That eligible replacements be flued gas heaters, fixed electric heaters, flued diesel heaters and electric heat pumps. (iii) That eligible energy efficiency improvements be ceiling insulation, underfloor insulation and weather strip (draught stopping). (iv) That incentives be by way of cash grants or rebates, not by loans. (v) That grants for energy efficiency improvements be available only to applicants also changing to clean air heating methods. That the City Manager be requested to designate an officer to oversee the programme. That grants for the installation of fixed electric heaters be set at not less than 80% of the cost to a maximum of $300. That a further report be prepared for the December meeting of the Strategy and Resources Committee on the following issues: (i) Whether complying log burners should be considered as an eligible replacement and the appropriate conditions. (ii) The most appropriate body, whether a community trust or registered energy appliance retailers, for making payment of the grants to participants. (iii) The most appropriate body, whether the City Council, a community trust or registered appliance retailers, to administer the programme. (iv) The procedures for registration of contractors and calling of tenders for supply and installation of a range of standard heating appliances and insulation. (v) The role of contractors in verifying installation of heating appliances and insulation in accordance with the required standards. (vi) The method of paying the rebate, whether to the contractor or the resident. (vii) Estimates of tender prices for the supply and installation of heating appliances and insulation. (viii) Ways and means of minimising publicity costs by making use of existing publications such as "City Scene" and Southpower's "Energy News". (ix) On incentives in regard to dwellings with more than one fireplace. (x) Adequacy of incentives for low income groups and means of assistance. That the legal opinion be received.

 

PART C - REPORT ON DELEGATED DECISIONS TAKEN BY THE COMMITTEE

2. SUPPLEMENTARY ITEMS

LEGAL OPINION AND CHAIRMAN'S RECOMMENDATION

The Chairman sought the Committee's approval to introduce the following supplementary items:

1. A report from the Legal Services Manager on the Council's legal powers in respect of the Clean Air Initiatives programmes.
   
   
2. The Chairman's recommendations.

The reasons why the above items were not on the agenda and why they could not wait for the next meeting were explained to the Committee.

It was resolved that the above reports be received and considered at the present meeting.

The meeting concluded at 4.09 pm.

 

CONSIDERED THIS 26TH DAY OF NOVEMBER 1997

 

MAYOR

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