Vermont-VEIC Contract for EEU
ATTACHMENT B
COMPENSATION, PAYMENT AND PERFORMANCE PROVISIONS
2006-2009
The State shall compensate Contractor for satisfactory performance of this Agreement as
follows:
1. Total Compensation
The total compensation amount for all eligible costs, expenses and performance incentives
under this Agreement may not exceed the maximum amount set forth in Paragraph 5 of the
main body of this Agreement.
For the period of January 1, 2006 through December 31, 2008 it is agreed that the Contractor
will manage the budget for this Agreement as a single, three-year budget. However, in any
single calendar year, the Contractor shall not actually be paid more then the total Contractor
EEU Funds available for that year.
For the period of January 1, 2006 through December 31, 2008 this Agreement shall include a
three-year budget sub-divided into the following categories: Business; Residential; General
Administration (as defined in Paragraph 5 below), ISO-NE Regional Capacity Activities and
Information Technology.
Any Contractor EEU Funds not expended during a calendar year may be carried over to the
subsequent year of this Agreement pursuant to the terms of Paragraph 11 of this Attachment.
2. Eligible Costs and Expenses
The Contractor shall be compensated for reasonable and appropriate services provided and
expenses incurred in order to perform the Work. Compensation for such services and
expenses shall be based on the Contractor’s actual costs incurred throughout the term of this
Agreement, except that compensation for actual costs incurred while performing Work
pursuant to Paragraph II.P of Attachment A will be made according to the provisions of
Paragraph 4 below.
Contractor’s actual costs shall include: wages or salaries of staff working directly on the
Work; fringe-benefit and payroll-related costs associated with such wages and salaries; an
equitable allocated share of the Contractor’s organization-wide indirect costs; any and all
out-of-pocket costs (e.g., telecommunications, travel, copying/printing, postage/delivery,
marketing, equipment) directly attributable to performing the Work; mileage reimbursement
at the Internal Revenue Service-approved rate only for use of a personal motor vehicle; any
and all costs to develop and produce Customized Software; any and all subcontractor costs
directly attributable to the Work; funds disbursed to program participants (e.g., customer or
Market Actor incentives, cooperative marketing); and other reasonable and appropriate costs
that the Contractor incurs to accomplish the Work. The State and the Contractor agree to
use the guidelines established by the Federal Government for Federal cost reimbursable
grants as the basis for determining whether or not a particular direct or indirect cost item
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incurred under this Agreement is reasonable and appropriate. Such Federal guidelines are
contained in OMB Circular A-122 dated May 10, 2004.
In addition to the above costs, Contractor shall also be reimbursed its actual cost as charged
to the Contractor by Chittenden Bank under the Contractor’s line of credit with Chittenden
Bank, to borrow funds to finance any eligible costs and expenses incurred and paid for by the
Contractor prior to receiving its monthly payment from the Fiscal Agent or due to a shortfall
in funds available from the Fiscal Agent. Failure of the Fiscal Agent to pay an approved
Contractor invoice on a timely basis due to the lack of available funds shall not constitute an
acceptable basis on which the Contractor may terminate this Agreement; however, a material
failure of this type may (if of such magnitude and duration as to impede or prevent expected
operations) constitute grounds for modification or reduction of Contractor’s energy
efficiency activities and obligations (but only to the extent directly required by such delay or
failure of payment).
The Contractor shall also be paid an Operations Fee of 0.75% of its total eligible monthly
costs and expenses incurred.
The Contractor shall operate in accordance with the guidelines detailed in OMB Circular A122. The Contract Administrator and the Contractor shall come to agreement on the
following items:
 The types of costs that constitute the Contractor’s fringe-benefit and payroll-related
costs and the Contractor’s organization-wide indirect costs; and
 The method for allocating an equitable share of the Contractor’s fringe-benefit and
payroll-related costs and the Contractor’s organization-wide indirect costs to the
Work.
Any modifications to the above two items must be agreed upon in advance by the Contract
Administrator.
Notwithstanding the above, all eligible costs, expenses and fees paid to the Contractor are
subject to the Total Compensation limitation detailed in Paragraph 5 of the main body of this
Agreement.
3. Revenues From and Costs Associated With Regional Capacity Market Activities
It is expected that Contractor will receive payments from ISO-NE related to the Contractor’s
participation in the regional capacity market pursuant to Paragraph II.T of Attachment A. It
is further expected that these payments from ISO-NE will be the amount approved by ISONE for delivered capacity less any fees or charges imposed by ISO-NE. Within 10 business
days of receiving a payment from ISO-NE, Contractor shall forward the gross amount
approved by ISO-NE for delivered capacity to the Fiscal Agent. Contractor shall include any
fees deducted by ISO-NE as an expense on its monthly invoice pursuant to Paragraphs 2 and
7 of this Attachment.
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4. Reimbursement for Costs Associated with Distributed Utility Planning
In accordance with Paragraphs 38, 40, and 41 of the MOU, if a Vermont electric distribution
utility requests the Contractor to perform any Work pursuant to Paragraph II.P of Attachment
A of this Agreement, the Contractor must be directly compensated for such Work by the
requesting utility or as otherwise directed by the Board. Any such compensation is not
included in the total compensation cap in Paragraph 5 of the main body of this Agreement.
5. Limitation on Recovery of General Administrative Costs
General Administrative Costs shall include the following tasks: budgeting and financial
management; contract management; data collection and reporting; and support for resource
planning and program evaluation activities. Administrative costs associated with serving an
individual core market shall be included in the budget allocation for that core market and are
not considered General Administrative Costs for the purposes of this paragraph.
For the period of January 1, 2006 through December 31, 2008, compensation for such
General Administrative Costs identified in Attachment F, shall not exceed $1,116,600 by
more than 10% unless Contractor is granted prior written approval from the Board to exceed
this limit.
6. Limitation on Recovery of Information Technology Costs
The Contractor shall provide the information technology services and equipment set forth in
the Work. For the period of January 1, 2006 through December 31, 2008 compensation for
such information technology costs identified in Attachment F shall not exceed $2,136,800 by
more than 10% unless Contractor is granted prior written approval from the Board to exceed
this limit.
7. Invoice Requirements
The Contractor shall submit monthly invoices of eligible costs and expenses for payment by
the 25th day of the subsequent month, or the next business day if the 25th is not a business
day. All invoices shall, at a minimum, include the name, address, and tax I.D. number of the
Contractor; an itemized summary identifying and describing the Work performed and
expenses incurred; the amount claimed for each task or expense category; and the total
amount of the invoice. Invoices shall clearly separate requests for compensation for labor
expenses and other expenses including payments to subcontractors, and reimbursement for
funds disbursed to EEU program participants. The invoice format that has been established
and approved for the period of January 1, 2003 to December 31, 2005 by the Contract
Administrator shall be used for this Agreement. This format may be modified only with the
pre-approval of the Contract Administrator.
The Contractor shall require that invoices to Contractor from subcontractors or other third
parties shall, at a minimum, conform to the Contractor’s invoice requirements stated above
and to any format and requirements established by the Contract Administrator.
8. Invoice Review and Approval
Unless notified of a different (or additional) address, as provided herein, the Contractor shall
submit invoices for review and approval to:
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Michael Wickenden, Contract Administrator
446 Tenney Hill Road
Hyde Park, VT 05655
802-888-6231
Fax 802-888-4296
The Contract Administrator, no later than (five) 5 business days after receipt of the invoice,
shall review the invoice and either approve the invoice for payment or inform the Contractor
in writing of any disputed amount and the basis for such dispute. Any undisputed amounts
shall be approved for payment by the Contract Administrator.
If an invoice is disputed by the Contract Administrator, the Contractor shall answer the
Contract Administrator’s concerns in writing within five (5) business days of the receipt of
written notice from the Contract Administrator. If the Contractor and the Contract
Administrator cannot resolve the dispute within ten (10) working days after receipt of the
Contractor’s reply, the Board and Contractor shall attempt to resolve the dispute upon a
written request by the Contractor to the Board. If the Board and the Contractor cannot
resolve the dispute within ten (10) working days after receipt of Contractor’s request, each
party may pursue its available judicial or other remedies.
9. Payment of Invoices
Upon approval of an invoiced amount, the Contract Administrator shall immediately send
the invoice and its accompanying supporting documentation to the Fiscal Agent for payment.
Disbursements by the Fiscal Agent will be made once each month; the Fiscal Agent will pay
approved monthly invoices by the last business day of the following month.
The parties understand that the Fiscal Agent may not have collected adequate EEU Funds in
a particular month to pay Contractor’s approved invoices in full. In order to be made aware
of these shortfalls, the Board will direct the Fiscal Agent to inform the Contract
Administrator (who shall then inform the Contractor) on a monthly basis of the total funds
available to pay Contractor’s invoices. The total funds available shall be the Contractor
EEU Funds collected to date. Any unpaid Contractor invoices from prior months shall be
paid first and then a partial payment shall be made on Contractor’s current monthly invoice.
All Contractor’s approved invoices shall be paid in full, as funds become available.
At the expiration of this Agreement, the Contractor will most likely still be due payments for
one or more monthly invoices and for any performance incentives earned pursuant to
Attachment C to this Agreement. In such a case, the Contractor’s approved unpaid invoices
shall be paid prior to any payments being made to any other contractor who has been hired
by the State to serve as the EEU.
10. Performance Incentive Mechanism
The Contractor is eligible to receive performance incentives as described in Attachment C to
this Agreement.
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The parties agree that after the Contract Administrator and the Board have made a final
determination on the performance incentive award for the Contractor in accordance with the
procedures in Attachment C, any funds available for the performance incentive but not
earned by the Contractor shall not be paid to the Contractor.
11. Annual Request for Carryover of Funds
On or before November 1, 2007, the Contractor shall, if necessary, file with the Board, DPS,
and each Vermont electric distribution utility a request to carry over any unspent Contractor
EEU Funds from Year 2007 to 2008.
Such a request to carry forward any anticipated unspent Contractor EEU Funds shall be
required only if the unspent Contractor EEU Funds for 2007 are greater than 5% of the total
Contractor EEU Funds available in that year, as shown on Attachment E; if the unspent
Contractor EEU Funds for 2007 are less than 5% of the total Contractor EEU Funds
available in that particular year, the unspent Contractor EEU Funds shall automatically be
carried forward to 2008. In no event may such request seek a change, for a given year, in the
total annual amount to be collected from Vermont electric ratepayers as approved in any of
the corresponding Board orders or rules that sets out the EEC in each of the three years.
If the request to carryover Contractor EEU Funds from 2007 to 2008 is not approved and the
result of such non-approval is that the overall three-year budget for the Contractor is
reduced, then a corresponding reduction in the overall Work as set forth in Attachment A will
be agreed upon. In addition, the Performance Incentive Mechanism set forth in Attachment
C will be adjusted to reflect the lower budget available for the Contractor to accomplish the
various milestones and goals detailed in Attachment C. The Contractor will make such a
request for a reduction in the Work and an adjustment to the goals and milestones in writing
to the Board. The Contractor and the Board will mutually agree on such reductions and
adjustments.
The Board will provide the DPS, the Vermont electric distribution utilities, and all parties on
the service list in Docket No. 5980 an opportunity to submit comments and request a
technical workshop prior to acting on the Contractor’s request for the carry forward of
unspent Contractor EEU Funds. After comments are submitted, the Board shall review the
Contractor’s request, and reject it, approve it or approve it with modifications.
12. Use of Additional Contractor EEU Funds Pursuant to the Targeting Order
Contractor shall endeavor to use the additional Contractor EEU Funds provided pursuant to
the Budget Order in a manner consistent with the Targeting Order and Paragraph II.A.2 of
Attachment A. The performance goals set forth in Attachment C have been established with
the understanding that the additional Contractor EEU Funds will be used for targeted
activities.
13. No Employee Benefits for Contractor
The Contractor understands that the State will not provide Contractor or Contractor’s
employees or subcontractors with any individual retirement benefits, group life insurance,
group health and dental insurance, vacation and sick leave, Workers Compensation or other
benefits or services available to State employees, nor will the State withhold any state or
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federal taxes except as required under applicable tax laws, which shall be determined in
advance of execution of this Agreement. The Contractor understands that all tax returns
required by the Internal Revenue Code and the State, including but not limited to income,
withholding, sales and use, and rooms and meals, must be filed by the Contractor, and
information as to contract income will be provided by the State to the Internal Revenue
Service and Vermont Department of Taxes.
14. Reliance by State on Representations
All payments by the State under this Agreement will be made in reliance upon the accuracy
of all prior representations by the Contractor, including but not limited to bills, invoices,
progress reports and other proofs of work.
15. Set Off
The State may set off any sums which the Contractor owes the State against any sums due
the Contractor under this Agreement; provided, however, that any set off of amounts due the
State as taxes shall be in accordance with the procedures more specifically provided
hereinafter.
16. Taxes Due to the State
a. Contractor understands and acknowledges responsibility, if applicable, for compliance
with State tax laws, including income tax withholding for employees performing services
within the State, payment of use tax on property used within the State, and corporate
and/or personal income tax on income earned within the State.
b. Contractor certifies under the pains and penalties of perjury that, as of the date this
Agreement is signed, the Contractor is in good standing with respect to, or in full
compliance with a plan to pay, any and all taxes due the State.
c. Contractor understands that final payment under this Agreement may be withheld if the
Vermont Commissioner of Taxes determines that the Contractor is not in good standing
with respect to, or in full compliance with a plan to pay, any and all taxes due to the
State.
d. Contractor also understands the State may set off taxes (and related penalties, interest
and fees) due to the State, but only if the Contractor has failed to make an appeal within
the time allowed by law, or an appeal has been taken and finally determined and the
Contractor has no further legal recourse to contest the amounts due.
17. Suspension of Payment to Contractor
In addition to other remedies, the State reserves the right to suspend all payments to
Contractor if required reports are not provided to the Board or its designated representatives
on a timely basis; if there are continuing deficiencies in Contractor’s reporting, record
keeping or invoicing responsibilities and requirements; or if the performance of the Work is
not adequately evidenced.
18. No Resale
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Contractor will not buy materials for performance of this Agreement and resell to the State
at a profit, excluding the fee the Contractor will be collecting on all costs pursuant to
Paragraph 2 of this Attachment.
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