Contract Administrator Report
March – May 2008
EEU Contract Obligations
The Department of Public Service (DPS) is making significant progress toward
concluding its 2007 savings verification activities and has provided Efficiency Vermont
and the Contract Administrator (CA) with its preliminary verification findings. The DPS
expects to issue its final savings verification report to the CA on June 25th. The CA plans
to review the DPS report and provide the Board with his recommendations in early July.
Contract modifications brought about by the Board's June 2007 Final Order in
Docket 7081 are awaiting approval from the Office of the Administration and the
Attorney General’s Office. The modifications include sections detailing EVT’s
participation on the Vermont System Planning Committee, EVT’s preparation of a 20
year estimate of electrical energy efficiency savings, and EVT’s provision of nontransmission alternatives information to electrical distribution utilities.
The contract, Main Body, Section 6, “Terms of Agreement”, states:
The Board, in its discretion, may, with the Contractor’s concurrence, extend this
Agreement for up to thirty-six (36) additional months upon the giving of written
notice thereof to the Contractor not less than 180 days before December 31, 2008.
The Contractor shall provide a written response to the Board’s request to extend this
Agreement not later than 150 days before December 31, 2008. Compensation for the
Work to be provided pursuant to any extension of this Agreement shall be agreed
upon in writing between the Board and the Contractor.
July 3, 2008 is the 180 day deadline to provide a written notice to VEIC.
EEU Reports
VEIC provided EVT's April Report on June 2nd. They report a 28 month
cumulative annualized energy reduction of 189,698 MWh or 72% of their three year goal
(261,700 MWh). If EVT is able to maintain the pace of annualized energy savings that
they experienced in the first 4 months of 2008 (40,480 MWh), they could exceed the 3year goal by approximately 3% (~9,000 MWh). The 2008 energy savings were attained at
a cost per MWH of $2071, a significant improvement over contract expectations of
approximately $243 per MWh. Applying the same methodology to estimate total
capacity savings, both the summer and winter peak coincident three year savings goals
could be exceeded by 3% and 8% respectively. However, the TRB savings are estimated
to fall just short of the 3-year goal at 99% of the total of $198,000,000.
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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 – May 2008 Report
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Total VEIC expenditures are approximately 3% under budget. VEIC spending for
ISO-New England Regional Capacity Activities is running slightly ahead of budget. This
spending is primarily in support of the implementation of the measurement and
evaluation (M&E) plan submitted to ISO-NE by VEIC in compliance with forward
capacity market (FCM) eligibility requirements. Due to the need for timely action, VEIC
is currently incurring some consultant costs that might otherwise be billed against the
ISO-NE FCM revenue stream by the Department of Public Service. Thus, the total FCM
M&E expenditures are within expectations, but VEIC’s share is slightly higher than
anticipated. The DPS plans to assume its full share of the expenditures as the FCM M&E
process matures. Efficient Products spending is reported as having 53% of its budget
expended for 33% of the year past. This increase spending is the result of the continued
success of CFL sales2. No other unusual activity is noted.
Burlington Electric Department (BED)
BED‘s April Monthly Report states that year to date energy savings are 2,698
MWh or 57% of their annual goal and spending is $428,385 or 27% of their annual
budget. This converts to an impressive annualized energy savings cost of approximately
$159 per MWh. Efficient Products3 accounted for approximately 55% of BED's total
annual energy savings. Over the 28 month period, the percentage falls to 22%.
BED winter (29%) and summer capacity savings (26%) claims are significantly
below the annualized energy savings level (57%). Some of the difference is due to
BED’s reporting methodology. In contrast to the way EVT reports capacity reductions,
BED does not include the effects due to line losses, free riders, and spillover. Line loss
effects are significant contributors to capacity reduction values as they increase net
savings estimates by over 10%. In addition, Efficient Product CFL’s have a year 2007
combined free rider and spillover effect of 1.19. This DPS approved estimate has the net
effect of increasing savings by 19%. As more importance is placed upon capacity
reductions, differences in reporting and calculation are being reviewed by the DPS, BED
and VEIC with the long-term goal of statewide consistency.
Other Issues of Significance
In June, Beth Sacks is stepping down as VEIC’s Executive Director and will be
replaced by Scott Johnstone. In an April 11th email from Beth, she states that Scott
comes to VEIC from the Chittenden County Metropolitan Planning Organization, where
he has been the Executive Director since 2005. Prior to that, Scott was a senior project
director at Stone Environmental, a private environmental consulting firm, with a focus on
water resources. He served as the Secretary of the Vermont Agency of Natural
Resources from 2000 – 2003. Scott is a Professional Engineer with an engineering degree
from the University of Maine. Beth will continue at VEIC leading business development
activities and special projects.
2
Given the high percentage of energy and capacity savings resulting from
residential CFL sales, the DPS has recently expanded the scope of 2008 CFL evaluation
activities.
3
BED titles the initiative “Retail Products”.
CA March – May 2008 Report
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The Fiscal Agent's May 19th, 2008 report states that the March 31st , 2008 closing
fund balance is $3,106,582. EVT contractual customer commitments are at $1,003,526
indicating a substantial accumulation of analyzed potential projects. With two months of
the EEC year past, ratepayer contributions are 2.4% ahead of budget. No unusual activity
is noted.
Both EVT and BED have successfully submitted sixteen months of projects into
the Independent System Operator-New England's (ISO-NE) Transitional Capacity
Market. Year 2007 and 2008 payments for capacity reductions total $416,454. VEIC,
BED, DPS, and CA expenses to date total $420,676. Thus, the FCM transitional period
net revenue is still negative (-$4,222). Net revenue is expected to turn positive next
month with a 2008 year surplus projected of approximately $114,000. As directed by
Year 2008 legislation, FCM revenue is deposited into the Electric Energy Efficiency
Fund.
The Qualifications Package for ISO-NE Forward Capacity Market Auction #2
(FCMA#1) was submitted in April and the Show of Interest for FCMA#3 is due by
September 16, 2008.
The DPS residential and non-residential (C&I) evaluation contractors have begun
their work and the residential contractor has submitted several draft reports for comment.
The C&I contractor has finalized its research surveys and on-site data collection forms.
The EEU Fund independent annual audit contract has been awarded and the
contractor has begun work.
I received one customer inquiry regarding Energy Efficiency Savings Accounts. I
contacted the Board’s Clerk and asked that the customer be added to the Board’s contact
list.
CA March – May 2008 Report
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