Contract Administrator Report
December - February 2008
EEU Contract Obligations
The Department of Public Service (DPS) has begun its savings verification
process by issuing a draft schedule and preparing to receive the 2007 EVT database of
installed measures. On or before March 31st, VEIC will submit Efficiency Vermont's
2007 Preliminary Results and Annual Savings Claim. The DPS expects to issue its
savings verification report to the Contract Administrator (CA) on June 7th. The CA plans
to review the DPS report and provide the Board with his recommendations by the end of
June.
Contract re-negotiations brought about by the Board's June 2007 Final Order in
Docket 7081 are proceeding. That Order approved a Memorandum of Understanding
between the DPS and Settling Parties that established a requirement that the EEU
produce, "estimates, looking 20 years ahead, of DSM savings expected from statewide
programs." Issues being resolved include defining the scope-of-work and associated
timeline for deliverables and setting a 2008 budget cap for project completion. As soon as
an amended contract is signed, VEIC will begin work on the forecast. Preliminary
estimates are that the work will require approximately 8 months to conclude.
EEU Reports
VEIC provided EVT's December 2007 Report on February 1st. Preliminary year
2007 results report an annualized energy reduction of 98,693 MWH and EVT
expenditures of $19,334,7201. This is a significant increase over previous year's energy
savings and expenditures. For example, this is equivalent to a cost per MWH of $1802, a
significant improvement over contract expectations of approximately $243 per MWH. If
EVT is able to maintain that high yield rate, it may achieve or surpass the three year
annualized energy performance goal of 263,600 MWH.
The increase in this year's results were primarily driven by the lighting end-use.
Lighting is traditionally a more cost-effective end-use than other end-uses and over the
last four years, lighting efficiency has increased as a percentage of EVT's total annualized
energy savings from approximately 50% to just over 75% in 2007.
EVT's statewide winter and summer peak capacity reduction levels also rose at
approximately twice the 2006 rate and are now both at 60% of the three year goal. Given
this same level of reduction, the three year performance goals also look within reach.
Information on EVT's progress towards geotargeting goals will be provided in the
Annual Savings Claim. However, since geotargeting activities were still ramping up in
1
Reported expenditures include Year 2007 Customer Credit costs of $1,545,890 and EVT's ISO-NE
Forward Capacity Market costs of $182,070.
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 December - February 2008 Report
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2007, a more detailed look will be available in the Year 2008 First Quarter Report due in
May.
Total EVT Year 2007 expenditures were 15% under budget and VEIC has filed a
formal request for their carry-over to 2008. They noted in their request that expenditures
lagged expectations primarily due to a longer than anticipated lead time to establish
geotargeted efficiency services and initiatives.
Burlington Electric Department (BED)
BED submitted its Year 2007 4th Quarter Report on February 6th. They record
Year 2007 efficiency utility annualized energy savings of 7,103 MWh or 194% of their
annual goal and year to date spending of $1,101,677 or 87% of the annual budget. This
converts to an annualized energy savings cost of approximately $155 MWh. These
impressive results were driven by Business New Construction which has achieved 345%
(3,008 MWh/yr.) of its yearly goal. Overall, BED reports having attained 120% of its
years 2006 - 2008 annualized energy reduction goal, an outstanding achievement.
Other Issues of Significance
The Fiscal Agent's March 11th, 2008 report totals EEU fund contributions for the
2007 EEC year at 1.13 % (-$257,682) under budget. However, the Fiscal Agent
contribution budget included taxes adding up to 1% of the total while the contributions
were net of taxes. When taxes are included in the contribution totals, the shortfall is
negligible at 0.3% (-$69,089). A preliminary analysis indicates that the majority of the
shortfall is from the residential sector (-$108,000) with the commercial sector
contributing the remaining portion (-$30,000). The industrial sector contributed
approximately $69,000 or ~2% over budget. The February 28, 2007 Closing Fund
balance is a robust $4,866,931. This is larger than usual and is due to the accounting
practice of reflecting February disbursements in the 2008 EEC year to be reported in
April. The February report closes out the 2007 EEC fiscal year. Thus, as usual, the April
report will contain two months of program and administrative disbursements. EVT
contractual customer commitments are at $1,014,656 indicating a substantial
accumulation of analyzed potential projects.
Both EVT and BED have successfully submitted twelve months of projects into
the Independent System Operator-New England's (ISO-NE) Transitional Capacity
Market. Year 2007 payments for capacity reductions totaled $247,000. VEIC and BED
year 2007 expenses totaled $210,034. Combined with VEIC Year 2006 costs, net
revenue is still negative (-$48,116). However, net revenue is expected to be positive by
mid-year with a 2008 year surplus projected of approximately $114,000.
The ISO-NE Forward Capacity Market Auction #1 (FCMA#1) was held in
February and VEIC successfully participated with a bid of approximately 40 MW of
energy efficiency to be delivered by June 1st, 2010. The auction was oversubscribed at the
base price of $4.50 per kw-month. Consequently, the ISO-NE will be providing bidders
with options for their consideration. EVT and BED will hold a workshop in April to
discuss their plans for FCMA#2 and update participants on FCMA#1. They have been
contacted to provide the Board with some possible dates for that workshop.
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The Forward Capacity Market Oversight Committee met for the third time on
February 29th. It is composed of representatives from VEIC, BED, the DPS, and is
chaired by the CA. VEIC reported on the following FCM workgroups: Policy, Financial
Assurance, New Bids and Qualification, Claims, and M&E. The financial assurance
workgroup reported that because of the recent change in the credit rating of the bank
sponsoring VEIC's Letter of Credit, VEIC was required to find an alternative funding
source for its financial assurance. Given ISO-NE's 10 day time limit, VEIC was forced to
fund it with $400,000 cash. VEIC has since initiated another line-of-credit that satisfies
ISO-NE's requirements and will be refunded the $400,000. The M&E workgroup
reported that it is meeting weekly as it explores the issues surrounding the
implementation of the qualification package verification plan.
The DPS residential and non-residential (C&I) evaluation contractors have begun
their work. The residential evaluation team had an earlier start and is further along in its
research activities. The C&I team is finalizing its research surveys and on-site data
collection forms. They expect to begin field data collection presently.
CA December - February 2008 Report
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