163 ACORN LANE ∎ COLCHESTER, VT 05446 ∎ VOICE (802)655-8454 ∎
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April 18, 2008
VIA EMAIL
Susan Hudson, Clerk
Vermont Public Service Board
112 State Street, Drawer 20
Montpelier, Vt 05602
RE: Comments requested on EEU budget estimates and disposition of Forward
Capacity Market funds
Dear Mrs. Hudson
The following comments are provided by Green Mountain Power Corporation
(“GMP”) in response to the Public Service Board’s (“Board”) April 9, 2008
memorandum requesting comments on three items;
1) Comments on other parties comments regarding recommendations on how to
set the budget levels for the Energy Efficiency Utility’s (“EEU”) 20-year efficiency
forecast and whether that forecast should include geographic targeting,
2) Comments on what GMP believes would be appropriate EEU budget levels for
2009 through 2011, and
3)
The disposition of Forward Capacity Market (“FCM”) revenues.
In answer to the first question, GMP agrees with the Department of Public Service
(“DPS”) comments (which are quite similar to GMP’s original comments) that the
EEU should use current budget levels, adjusted for inflation, in its 20-year
efficiency forecast. One area of minor difference is that GMP believes that
geographic targeting should be included throughout the 20-year forecast.
In answer to the second question, GMP would like to see the 2009 through 2011
EEU budgets remain equal to the 2008 budget, which would mean only
inflationary modifications would be made to the 2008 budget level. GMP agrees
with the DPS’ reasons for level funding. As the DPS detailed in its memo dated
April 4, 2008, it has concerns over potential federal legislation related to baseline
considerations, updates to the Technical Reference Manual, rapid compact
fluorescent light market transformation, EEU stability in regards to keeping pace
with the recent large budgetary increases, the effects of recent legislation on the
EEU, and recent Vermont State Planning Committee activities. GMP finds the DPS
reasoning to be compelling.
GMP continues to support geographic targeting based mainly on the premise that
energy and demand saved in certain areas of the State has greater value than
energy and demand saved in other areas of the State. GMP does not expect that
conducting additional processes to determine the next three years of efficiency
budgets would yield fundamentally different conclusions from the funding levels
recommended by the Department and GMP.
In regards to the disposition of FCM revenues GMP believes that net FCM revenues
should go towards reducing the impact of customer’s electric bills. In order to do
this GMP recommends that these net revenues be used to offset a portion of the
Energy Efficiency Charge (“EEC”). It should be remembered that the assignment of
FCM revenues to the EEU (as opposed to distribution utilities) puts upward
pressure on distribution utility rates. By lowering the EEC that each customer is
obligated to pay, total electric costs to the customer should remain substantially
equal.
Furthermore, GMP recognizes that the FCM is in its infancy and revenue and cost
estimates are difficult to ascertain with any great accuracy. GMP believes that
these estimates should be done on a yearly basis and assimilated into the yearly
EEC budgeting process that occurs late in the fall of each year. These estimates
could then be trued up with actual net revenues thus making any over/under
collection possibilities moot. This process is currently being used regarding other
aspects of the EEC rate setting procedure.
Thank you for the opportunity to comment. If you have any questions about these
comments or if we can provide additional information to assist the Board, please
let me know.
Sincerely,
David P. Martin
David P. Martin
cc: EEU Service List