Contract Administrator Report
January - March 2007
EEU Contract Obligations
On March 30th, VEIC submitted Efficiency Vermont's 2006 Preliminary Results
and Savings Estimate Report. Accordingly, the Department of Public Service (DPS) has
begun its savings verification process. The DPS expects to issue its savings verification
report to the Contract Administrator (CA) on June 7th. I will review the DPS report and
provide the Board with my recommendations on or before June 14th, 2007.
Contract re-negotiations1 are near completion with all major issues resolved. A
final Board / VEIC review is scheduled for April 20th, followed by the required review by
the Office of the Administration and the Attorney General's Office.
As noted in my last report, VEIC will be presenting a combined Efficiency
Vermont Annual Plan for 2007 and 2008 due to the re-budgeting and resulting renegotiation of the Efficiency Vermont (EVT) Contract. The Efficiency Vermont Annual
Plan is to be filed with the Board on or before June 1, 2007. A Board workshop will be
held shortly thereafter.
EEU Reports
VEIC provided EVT's January - February Report on March 3rd. Because the renegotiated contract has yet to be signed, EVT Services and Initiatives spending and
energy savings are compared to the original contract budget and goals. Thus, given the
increased budget and savings targets in the re-negotiated contract, the reported "%
Annual Budget Estimate Unspent" is lower and the "% of 3-Year MWH Goal is higher
than what would be reported under the new contract terms. For example, the reported "%
of 3-Year MWH goal" is 33% . Using the newly negotiated 3-year goal, the percentage
falls to 25%. This situation is of some concern. The lack of significant increases in
energy savings over those originally projected in the 2006 - 2008 contract may suggest
that the combination of new challenges including increased budgets, increased energy
savings goals, and targeted strategies, may be overly ambitious.
The cost per MWh ($246/MWh), calculated using total EVT costs and energy
savings from 1/1/2006 thru 2/1/2007, is the same amount as projected for the life of the
contract. Thus, EVT appears to be capturing energy savings at budgeted levels. Since
this report covers only 14 months of the 36 month contract, projections should be viewed
as preliminary.
1
Contract re-negotiations were initiated due to Board's August 2, 2006 Order Re: Energy Efficiency Utility
Budget for Calendar Years 2006, 2007, and 2008.
CA January - March 2007 Report
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Burlington Electric Department (BED)
BED’s Year 2005 Annual Report is due to be filed on May 1st and includes
detailed reporting of their EEU services as well as the other energy efficiency programs
that they implement in their service territory.
BED submitted its February report on April 6th. They record efficiency utility
annualized energy savings to date of 1,195 MWh or 39% of their annual goal and year to
date spending of $152,211 or 13% of the annual budget. This converts to an annualized
energy savings cost of approximately $127/MWh. These impressive results were driven
by Business Existing Facilities which has achieved 47% (640 MWh/yr.) of its yearly
goal. Overall, BED reports having attained 85% of its 3 year annualized energy
reduction goal, an impressive achievement.
Other Issues of Significance
The Fiscal Agent's March 17, 2007 Report totals EEU fund contributions for the
2006 EEC year at 3.2 % ($651,000) over budget. A preliminary analysis indicates that
the majority of the surplus is from the industrial sector ($454,000) with the commercial
sector contributing the remaining portion. The February 28, 2007 Closing Fund balance
is a robust $3,972,710. This is larger than usual and is due to the accounting practice of
reflecting February disbursements in the 2007 EEC year to be reported in April. The
February report closes-out the 2006 EEC year. Thus, as usual, the April report will
contain two months of program and administrative disbursements. EVT contractual
customer commitments are at $869,650, indicating a substantial accumulation of
analyzed potential projects.
Both EVT and BED have successfully submitted two months of projects into the
Independent System Operator-New England's (ISO-NE) Transitional Capacity Market.
Payments for capacity reductions have been received and have been forwarded to the
Fiscal Agent. The Fiscal Agent's April report will tabulate income and expenses for this
revenue stream. Work continues on the next milestone for participation in ISO-NE's
Forward Capacity Market. The Forward Capacity Auction #1 Qualification Package is
due June 15, 2007 and requires a detailed Measurement and Evaluation Plan. If the ISONE accepts the proposals, the first bids will be due in February 2008.
On March 5th, the DPS submitted its 2006 - 2008 Evaluation Plan to the Board.
The Plan described EEU evaluation goals and objectives and contained a preliminary
budget totaling $2,313,395. On March 14th, the Board approved the plan with the caveat
that if additional activities are required to address ISO-NE's Regional Forward Capacity
Market, the DPS is to proceed to track those costs separately and inform the Board. In a
previous Order, the Board determined that the costs of any additional required evaluation
could be applied against the capacity payments.
CA January - March 2007 Report
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