December 52007
Re: DPS Comments on the December 3, 2007 Draft of the a recommendation for a new
energy efficiency utility structure
All -I am currently working from the draft that Nancy Wasserman distributed on December 3,
2007. As I indicated in my earlier email, at this time the Department is limiting it
comments to structural and related issues, largely focusing on the areas identified by the
Board’s staff memo in this inquiry earlier today. In the interest of allowing the process to
advance, and with some encouragement from others, I am making best efforts to provide
at least some response at this stage. I am not prepared at this time to provide a detailed
redline and am not sure that it would be time well spent at this stage.
To be clear, my comments at this stage do not to address issues that relate to planning
processes or scope of services as contained in the current draft. Those represent areas
that we feel require considerable more time and consideration before the DPS is prepared
to take a position. The same can be said of other sections, such as the proposed changes
to the Advisory Group, that are separable from the structural changes proposed.
The Department does, however, view the issues of compensation and performance
contracting as integral to the proposals to change the structure. We also believe that the
issues related to revocation and termination are closely linked to structure.
The Department will need to carefully review features of Title 30 that may apply or that
may serve as a relevant backstop to the proposals made here. I believe that this will
require careful review by both DPS legal staff and others in the DPS. I am not able to
provide any detailed recommendations at this time. My expectation is that Part IV of the
proposal may require some additions. I have highlighted our current thinking below on
the relevant sections that may apply.
The comments and proposals below reflect best efforts on my part to reflect the
Department’s current thinking on the proposal. We reserve the right to further modify
our position as further time and opportunity for deliberation on the issues allows.
I feel that the drafting that was done was done well. That is at least part of the reason that
I have am not offering detailed redline edits at this time. I have tried to focus on the
higher level concepts and attempted to indicate the Department’s level of agreement at
this time with the proposed concepts.
The Department supports the efforts by the Board to focus on the core structural elements
of the proposal and the related items. I have attempted to separate out what I view as
core structural and related items from issues of scope by highlighting in red below the
Sections of the draft that appear to be implicated by the core structural changes proposed.
Here are the DPS’s Comments section by section at this time.
Part I
Part 1, Section 1 The DPS supports the addition of Subsection B. The DPS agrees that
reliance on 30 VSA § 209 may be the appropriate avenue to follow. Nevertheless, we
will continue to consider whether the alternative, i.e., making statutory changes to treat
the EEU as a “company” under title 30 might work well.
Part I, Section 2. No comment at this time. The issues here relate to the scope of
services which require more time and consideration.
Part I, Section 3 regarding the EEC. No comment at this time.
Part I, Section 4 The issues related to the Advisory Committee are not ripe and deserve
further consideration at a later time. The proposals contained in the current draft seem to
stand independent of the structure and may be worthy of consideration and deliberation
regardless of the structure forward.
Part II
The DPS does not have comments on Part II at this time except as it relates to the
following:
Part II, Section 1 The DPS supports the basic framework that links planning cycles to
evaluation of performance. More could be spelled out about how the Minimum
Requirements are used.
Part II, Section 1, Subsection A The DPS supports the linkage between the
establishment of 3 year budgets to 3-year performance goals.
Part II, Section 1, Subsection C The DPS supports the timeframes contemplated in
subsection C.
Part II, Section 1, Subsection D.i. The DPS supports the updating of budgets and
performance targets on a 3-year cycle.
Part II, Section 1, Subsection D.iii. The DPS believes the budget proposals should
initially come from the DPS rather than both the EEU and the DPS. The Department
otherwise supports the list of factors in D.iii.
Part II, Section 1, Subsection D.v - viii. The DPS supports as it relates to the 3 year
budget cycle.
Part II, Section 2 In general the Department supports the language of this section.
The proposal does a good job of taking what we currently know works reasonably well in
the context of the contract structure and applies it to an appointment models. The
Department supports the establishment of performance indicators that differentiate a set
of Quantitative Performance Indicators from a set of Minimum Requirements, although
the draft as it currently reads seems to indicate that the minimum requirements may be
entirely separate indicators. The DPS believes that the Minimum Requirements may
borrow the same metrics in determining minimum performance and QPI targets.
Part II, Section 3 The Department supports the concept of an Overall Performance
Assessment as describes in this section.
Part II, Section 4 The Department supports the concept of an End of Cycle Performance
Assessment. We leave it for later discussion whether the End of Cycle Performance
Assessment should under Section 4 and the Overall Peformance Assessment
contemplated under Section 3 should be the same. At this time, the DPS supports the
current construct.
Part II, Section 5 This is not a core concern at this time, although the DPS supports the
provision
Part II, Section 6 The DPS supports.
Part II, Section 8 The DPS supports although that proposal does not seem central to the
core structural and related issues we are addressing at this time.
Part III The DPS agrees that a contested case proceeding is likely needed to address the
transition issues and determine whether a competitive solicitation is needed. At this
point, we believe that something analogous to an Overall Performance Review would be
needed before awarding the initial appointment.
Part IV Summary of Roles and Responsibilities The roles and responsibilities will
need to be spelled out in detail in relation to any structural changes. The DPS does not
have details to offer at this time.
Part V Administration As proposed, we conclude that this section will require some
careful by the legal staff and others at the DPS to ensure that all the relevant provisions of
title 30 would apply. At a minimum we conclude the following would probably need to
apply.
§ 18 - Production and examination of books; subpoena of witnesses
§ 19 – Board’s ability to hire experts
§ 20 - DPS and Board ability to hire experts
§ 21 - Bill-back statute
§ 30 – Penalties for not providing access to records or violating statutes or board orders
§ 31 – Ability to take depositions
§ 32 – Ability to use injunctions
§ 203 – Jurisdiction of the PSB and DPS and examination of plant, equipment
§ 205 - Duty to furnish copies of contracts
§ 206 – Information to be furnished the DPS
§ 207 – Reports of accidents; investigations
§ 208 – Complaints; investigations; procedures
§ 209 - The Board’s Jurisdiction; general scope
§ 219 – Non-discrimination
§ 221 – Forms of books, accounts, records; Board orders
Part VI Compensation, Revocation, Termination
Part VI, Section 1 At this stage, the Department supports the distinction between the
cost-of-service items and the resource acquisition compensation.
Part VI, Section 2We agree that we should be clear in this section about revocation and
termination of the appointment. We will need to work through what constitutes “for
cause”. The current language seems to suggest that it is for a “material breech of
contract” which seems like a high bar.
Part VII Definitions The Department does not have any issues with the definitions at
this stage. The only definitions that really seem to be implicated by the structural
changes proposed relate to the definition “1” for the “appointment” and the and the
“quantifiable performance indicators”. . We believe that some additions may be
necessary to cover concepts such as Minimum Requirements and other concepts that are
may appear in different sections of the document.
.
Regards,
J. Riley Allen