Contract Administrator Report
April - June 2007
EEU Contract Obligations
The Department of Public Service (DPS) has completed its verification of EVT's
Year 2006 Energy Savings/TRB Claim and provided its June 18th report to the Contract
Administrator. The DPS report recommended that EVT’s claimed savings be reduced by
approximately 3,366 MWh’s1 or about 7.3% of that claimed in the EVT's April 1 Year
2006 Preliminary Report. EVT agreed to all recommended reductions. With this
reduction, EVT's first year total of annualized energy savings are approximately 20% of
their three year contractual goal (270,000 MWh). This was achieved while they spent
approximately 21% of their three year budget.
As in previous years, upon acceptance of the DPS Verification Report, EVT
calculates a “realization rate” for specific market initiatives and applies those realization
rates in the KITT database tracking system to the energy and capacity project level
savings. Then, EVT uses those adjusted values to recalculate the total resource benefits
and energy and capacity net benefits at generation. These are the values that I will be
recommending for Board adoption. This process is underway and expected to be
completed this month.
This proposed reduction is significantly less (26% less) than the reduction
approved in 2005. Although this is only a single year data point, I am encouraged that as
Efficiency Vermont has continued to grow, it has been able to implement quality control
procedures that result in improved accuracy of the quantification of energy savings.
EEU Reports
VEIC provided EVT’s May Monthly Report on July 2nd. EVT Services and
Initiatives monthly spending is increasing slowly. Energy savings are also increasing with
32% of the three year goal being claimed with 47% of the contract period past. Increasing
energy and capacity savings at the rate needed to meet contract goals remains a
formidable challenge. For example, to achieve the performance goal of 270,000 MWH,
average monthly energy savings will have to be 60% higher than that achieved in May.
The Efficient Products Initiative continues to contributes significant annualized
energy savings with a contract cumulative total of 39,459 MWh or 46% of contract totalto-date. Overall, annualized energy savings continue to be acquired at a cost slightly
below projections ($222/MWh versus $246/MWh). No other unusual activity is noted.
The DPS’s recommendation is a reduction in annualized energy savings of MWh “gross at customer
meter”. VEIC’s performance incentives are based upon energy savings “net at generation” and thus
include adjustments for line losses, free-riders and spillover. These adjustments are calculated by VEIC in
KITT, the Efficiency Vermont database.
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BED
BED submitted its May Monthly Report in July and recorded year to date energy
savings of 1,953 MWh or 53% of their annual goal and spending of $336,024 or 29% of
their annual budget. Thus, BED appears to be heading for another impressive costeffective year. Business Existing Facilities accounts for the largest contribution of energy
savings (922 MWh or ~47% of total savings) while Efficient Products is the second
largest category contributing 24% or 468 MWh. No unusual activity is noted.
Other Issues of Significance
The 2006 EEU Fund audit is underway and the final report is expected to be
completed by the end of July 2007.
The Fiscal Agent's June report shows that the May 31st, 2007 Closing Fund
balance is a robust $3,502,662. This is a reflection of the difference between EEC
collections and EVT program spending. That is, EVT spending has yet to ramp-up to the
average monthly level of collections. The contact recognized this possibility and contains
a three-year budget rather than annual budgets. EVT contractual customer commitments
are at $1,026,957, indicating a substantial accumulation of analyzed potential projects.
Customer contributions are as expected at 99.93% of projections.
As of May 31st, total funding received from EEU participation in ISO-NE's
Forward Capacity Market Transition Period equaled $27,912. Expenses totaled $67,390
for a net loss of (-$39,478). The net loss is due to the low winter peak period capacity
reduction fees combined with high start-up costs associated with EVT's and BED's
Qualification packages required for their participation in the Forward Capacity Market
Auction #1. Starting in May, one receives Summer Peak Capacity Reduction payments
which are substantially higher than winter payments. In addition, administrative costs
should decrease for several months (July to October) while our Qualification Package is
being reviewed by ISO-NE. No unusual elements were noted in the Fiscal Agent's report.
In June, the DPS issued two RFP's for EEU evaluation work. Proposals are due
July 18 . One RFP is for commercial and industrial activities, the other for residential
activities.
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