EEU Contract Administrator Report
March – April 2009
EEU Contract Obligations
The Department of Public Service (DPS) is making significant progress toward
concluding its 2008 savings verification activities and has provided Efficiency Vermont
and the Contract Administrator (CA) with their preliminary verification findings. The
DPS expects to issue their final savings verification report to the CA on June 4th. The CA
plans to review the DPS report and provide the Board with his recommendations June
16th. Concurrently, the CA will provide his 2006 - 2008 Performance Incentive Award
recommendations. Payment to VEIC for any Performance Award is due on or before July
1, 2009.
Pursuant to the Contract, Attachment N, Performance Incentive Mechanism,
Section II. H, the DPS, VEIC, and I have been working on finalizing the details of the
Unregulated Fuels Activity Performance Indicator. The goal is to reach an agreement by
the end of May.
On April 1st, VEIC submitted its claim and supporting documentation for the
successful completion of 2006 – 2008 Performance Indicators #7 and #81. VEIC also
submitted documentation supporting VEIC’s claim for successful completion of the
Contract’s 2006 – 2008 Minimum Performance Indicators. I am reviewing VEIC’s
documentation and will issue my findings and award recommendations in June.
EEU Reports
VEIC provided EVT's 1st Quarter Report on May 1st. They report a three-month
cumulative annualized energy reduction of 19,494 MWh or 5% of their three-year goal
(360,000 MWh). The 2009 energy savings were attained at a cost per MWH of $2812, inline with three-year contract expectations of approximately $262 per MWh. Capacity
reductions, TRB, and total VEIC expenditures also seem reasonable. Despite the
economic downturn, energy savings and spending for the Residential and Business New
Construction Initiatives remains within budget.
VEIC spending for administrative ISO-New England Regional Capacity
Activities is within budget limits. The DPS’s evaluation contractor is actively
implementing the measurement and evaluation (M&E) plan submitted to ISO-NE in
compliance with forward capacity market (FCM) eligibility requirements.
1
Attachment C, Performance Incentive Mechanism Section V (Documentation and Verification). B details
the verification process for PI #6, C.5 for PI #7, and D.1 for the Minimum Performance Requirements.
2
This calculation excludes the cost of the Customer Credit Program and the cost of EVT's participation in
the FCM in order to match the methodology used to calculate the contract estimate.
CA March – April 2009 Report
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Burlington Electric Department (BED)
BED‘s March Monthly Report states that year-to-date energy savings are 1,251
MWh or 19% of their annual goal and spending is $216,590 or 19% of their annual
budget. This converts to an annualized energy savings cost of approximately $173 per
MWh. Given the limited time that this report covers, it is difficult to identify significant
trends.
Other Issues of Significance
On April 21st, VEIC’s David Cawley notified me and the Board’s Chief
Economist, Ann Bishop, that VEIC has begun a search for a manager to replace David at
his current position of VEIC’s Chief Operating Officer. David is a “Key Personnel” as
defined in Attachment T of the PSB – VEIC Contract. David stated that VEIC expects to
find a replacement by September 1st. Pursuant to Section 173 of the Main Body of the
Contract, VEIC will formally notify the Board and CA when David’s replacement has
been selected.
On April 24th, the Board issued a memo requesting comments on the distribution
of Year 2008 Uncommitted EEU Funds or unspent EEU funds. The EEU uncommitted
funds total $1,475,768. The 2006 – 2008 contract period unspent funds, which includes
the uncommitted sum, total $2,808,043. These funds are only those that originate from
EEC charges and do not include any funds collected as a result of the EEU’s participation
in ISO-NE’s forward capacity market transition period. Parties had until May 15th to file
initial comments and until May 29th to file reply comments.
The Fiscal Agent's April 15th report states that as of March 31st, total Electrical
Efficiency Fund assets are $5,375,302. The majority of the assets are the accruals of
potential EVT Performance Awards4 ($2,473,833) and the unspent 2006 – 2008 EEC
funds of approximately $2,808,0435. EVT contractual customer commitments are at
$690,997. This is lower than previously reported and most likely reflects the economic
downturn. With only one month of the EEC year past, ratepayer contributions are 0.9%
($24,393) ahead of budget. No unusual activity is noted.
Both EVT and BED have successfully submitted twenty-seven months of projects
into the Independent System Operator-New England's (ISO-NE) Transitional Capacity
Market. EEU capacity reduction ISO-NE income6 totals $2,117,608. Administrative and
evaluation expenses total $919,925. Thus, as of March 31st, net revenue available for
Unregulated Fuel Implementation activities was $1,034,225. Unregulated Fuels
Implementation Activity as of March 31st totaled $313,784 resulting in net available
funding of $720,440.
3
Section 17 allows the Board 30 days after notification to reject the replacement of key personnel.
The 2006 – 2008 contract period maximum total is $2,347,000. The additional difference ($126,888) is
accruing for the 2009 – 2011 contract period potential performance award.
5
Total 2008 EEC DU remittances were under budget by $103,776. Thus, $103,776 of the unspent funds
will be collected in 2009.
6
Income started accruing in January of 2007.
4
CA March – April 2009 Report
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ISO-NE’s Forward Capacity Market Auction #2 (FCMA #2) was successfully
completed in December and EVT’s bid was accepted for 7,037 kW. This capacity
reduction is due for delivery starting June 2011. EVT submitted the Qualifications
Package for FCMA#3 for 10,738 kW for delivery starting June 2012. EVT is awaiting
formal ISO-NE acceptance of this bid7.
The DPS residential and non-residential (C&I) evaluation contractors have
concluded their 2006 – 2009 evaluations. The DPS is developing a timeline for a
summary evaluation report, public workshop, and the submission of a 2009 – 2011
evaluation plan and budget breakdown.
On April 1st, I received an EVT customer complaint forwarded to me by Board
staff, Ann Bishop. I contacted VEIC and was informed that they had received the
complaint and were actively working to resolve it following the approved EVT customer
complaint process. On May 21st, I received written verification that the complaint had
been resolved on April 17th to the customer’s satisfaction.
As previously noted in my last report, BED has developed a budget for the 2009 –
2011 time period and is working with the Department to develop a set of efficiency goals.
After reaching agreement on the goals with the DPS, BED will submit its plans, budgets
and goals for Board review and approval.
7
ISO-NE’s notification is due on or before May 29, 2009.
CA March – April 2009 Report
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