DRAFT OF A RECOMMENDATION FOR A
NEW ENERGY EFFICIENCY UTILITY STRUCTURE
DPS Proposed Revision to Address Structural and Related Issues
January 16, 2008 revision
This draft has been developed from the earlier draft of a number of participants in the
workshop process established by the Vermont Public Service Board on July 12, 2007 to
address possible alternative structures for Vermont’s Energy Efficiency Utility. It reflects
the Departments view of what it regards as the core structural and related items consistent
with the Board’s scope of this proceeding. The Department offers this narrow-down
version in the spirit of establishing areas of consensus, broad agreement, and to highlight
areas where there are some lingering differences on the core issues of structure and
aspects of the proposal related to structure.
Part I. General Structure, Terms and Conditions of EEU Appointment
1. Legal Mechanism.
A. The Parties agree that the Board should, at this time, establish a single
mechanism, one or more EEUs, for the acquisition of cost-effective demand-side
resources, including planning and delivery of Comprehensive Energy Efficiency
Programs that are called for as a part of the provision of regulated utility service
under 30 V.S.A. § 218c. An EEU shall be the subject of an Order of Appointment
to be issued by the Board under its existing authority conferred pursuant to 30
V.S.A. §209(d)(2).
B. An EEU, if not otherwise defined as such, shall not become a “company” under
30 V.S.A. § 201 as a result of becoming subject to an Order of Appointment.
Entities may petition the Board to be appointed an EEU. Upon appointment, an
EEU may not abandon or curtail any responsibilities associated with the
appointment without first obtaining the approval of the Board.
Part II. Planning, Performance Review, Evaluation and Ongoing
Appointment
An Order of Appointment shall establish the following framework for Planning,
Operations, Performance Review, Evaluation and Ongoing Appointment:
1. Basic Framework
A. Schedule. EEUs cycles of planning, evaluation and performance review are all
inter-related (see timeline presenting “Cycles for Planning, Performance Review,
Evaluation and Ongoing Appointment,” at the end of this section). These can
usefully be broken down into the following components, each of which has a
unique purpose, timing and process, which is further defined below:

EEU Long-Term Demand Resources Plan (DRP)

Setting, Review and Resetting of Quantitative Performance Indicators
including the establishment of applicable minimum requirements

Overall Performance Assessment of Appointed Entity

End-of-Cycle Reconsideration of Appointment

Independent 3rd-Party Audit

Ongoing Opportunity to Consider the Appointment

Ongoing Monitoring, Savings Verification and Evaluation
2. EEU Long-Term Demand Resources Plan
A. Purpose. The EEU Long-Term Demand Resources Plan will provide a set of
operating assumptions for future resource acquisition and costs. This DRP will
provide short-term (e.g., 3-year) savings goals and budgets that can serve as the
basis of performance indicators to assess EEUs performance. It will also provide
operating assumptions for long-term (e.g. 20-year) budgets and savings that can
be used for long-term resource planning by the EEUs, the DPS, Distribution
Utilities and VELCO. Proposed budgets shall address the objective of achieving
all reasonably available, cost-effective energy efficiency savings in accordance
with 30 V.S.A. §209(d)(4) The 20-year values can also be used by an EEU as the
basis for bids in the ISO New England Forward Capacity Market and potential
financing agreements.
B. Description. The EEU Long-Term Demand Resources Plan will be a set of yearby-year values for EEU demand-side resource acquisition savings goals and
associated budgets by calendar year for the twenty-year period following a Board
Order adopting the plan.
C. Timeframe. The process for developing a DRP shall normally be timed to
conclude one year before the year when it would become effective. In the
transition period, the first DRP may conclude no later than six months prior to the
year where it would become effective
D. Requirements and Process
i. The EEU Long-Term Demand Resources Plan will be for a twenty-year
period and will be updated every three years.
ii. The starting point for any changes in values for savings and goals will be the
values from the last Twenty-Year EEU Demand Resources Plan
iii. Resource acquisition goals and associated budgets will be proposed to the
Board by the DPS,. EEUs and other parties may also propose goals and
budgets. Proposals shall be informed by:
(a) relevant evaluations and potential studies conducted by the DPS and EEUs
implementers, as well as any relevant evaluations or market assessments
presented by other interested parties
(b) changes in technology, markets, and baseline considerations such as may
be impacted by codes and standards that affect the need for market
intervention through an EEU, including:
(i) the extent to which baseline efficiency levels have changed;
(ii) the extent to which markets have been transformed;
(iii) the extent to which market-based energy service and product
providers are able to capture cost-effective efficiency opportunities
(iv) the extent to which new technologies and/or strategies can be expected
to create new opportunities for cost-effective resource acquisition;
(v) changes in avoided costs, rates, and the development of other markets
that may impact assessments of cost-effective resource potential (e.g.,
ISO-NE FCM, RGGI)
iv. Proposals shall contain supporting analyses for one or more sets of proposed
values for twenty-year resource acquisition goals and associated budgets.
v. The determination of demand-side resource goals and associated budgets shall
be guided by the objectives and criteria of 30 VSA §218c, §209(d), §209(e),
§202(a), and other applicable sections of Vermont statutes, as well as prior
Board Orders.
vi. Any interested party including EEUs may present additional proposals,
recommendations, or responses to proposals made. If the parties present
markedly different proposals or recommendations, the Board may seek to
resolve the disputes after notice and opportunity for hearing.
vii. The Board should provide any EEU, the DPS, Vermont Utilities, other
stakeholders, and any other person or entity which qualifies for intervention
under Board Rule 2.209, an opportunity to submit comments and participate
in a technical workshop prior to adopting an EEU Long-Term Demand
Resources Plan.
3. Set, Review and Reset of Quantitative Performance Indicators (QPIs)
A. Purpose. The Board shall set Quantifiable Performance Indicators by which the
performance of an EEU can be measured over specified time periods.
B. Description. EEU Quantifiable Performance Indicators shall be of two types:
“Scaled Performance Indicators” (e.g., MWh, MW, TRB, market penetration) and
“Minimum Requirements” (e.g., portfolio cost-effectiveness, yield, equity
indicators). The Board shall conduct a process to determine which indicators to
use for each category, and the values to be set for each indicator. While many
indicators may be set to be achieved over a three-year performance period (e.g.,
MWh, MW, TRB), some may lend themselves to other performance periods (a
market transformation indicator might set to a six year or longer period).
At all times subject to the term of any Appointment, the activities and
performance of an EEU shall be subject to such minimum performance
requirements as may be established by the Board. The Board shall have the
authority to amend an EEU’s minimum performance requirements at any time
during the term of an Order of Appointment after notice and an opportunity for
hearing.
C. Timeframe. Performance of EEU implementers relative to specified Quantitative
Performance Indicators (i.e., MW, MWh, market indicators, equity indicators,
etc.) shall be assessed no less frequently than every three years in a process
conducted by the PSB.
This process shall be timed to inform the processes whereby the Board reviews
the provide results in advance of the Overall Performance Assessment of the
Appointed Entity and the End-of-Cycle Reconsideration of Appointment.
D. Requirements and Process.
i. Setting and Re-setting Quantifiable Performance Indicators and Values
(a) Setting and re-setting QPIs for an EEU includes determining what
indicators shall be measured, identifying minimum or target values for
each indicator, the weighting assigned to each indicator and the scaling for
target values.
(b) The Board shall set the QPIs through a process that shall include one or
more technical workshops and the opportunity for presentation of
proposals to the Board.
(c) The initial QPIs to be measured shall be those previously used to assess
the EEUs. The Department shall propose any changes to such
Quantifiable Performance Indicators in consultation with the EEUs and
industry experts.
(d) The values and weighting shall be proposed by the DPS and EEUs.
(e) All interested parties may propose revisions to the list of indicators and the
values proposed for QPIs.
(f) Notice shall be provided so that any interested party may present
additional proposals, recommendations, or responses to proposals made.
ii. Evaluation & Incentive Award Determination
(a) EEU implementers shall submit documentation to support claims of
performance relative to QPIs.
(b) The DPS shall review claims of performance relative to current-period
QPIs and prepare a recommendation regarding their findings.
(c) The DPS and the EEU shall seek to resolve any differences regarding the
recommendations.
(d) The DPS shall submit its recommendation to the PSB.
(e) The EEU may offer comments on the recommendation to the PSB.
(f) The Board shall then make a final determination of the extent to which
QPIs have been met and the amount of any held-back compensation that
should be provided to EEU Implementers.
(g) The Board may conduct the processes detailed above concurrently.
4. Overall Performance Assessment
A. Purpose. The Overall Performance Assessment will be conducted by the Board to
determine if there are probable net-benefits from going to the market to consider
offers from alternate implementation entities.
B. Timeframe. The Overall Performance Assessment shall occur no less frequently
than every six years. The process is expected to take approximately six months.
C. Requirements and Process
i. The Board shall conduct a public performance review process that will
include:
(a) Consideration of the record of the appointed entity in meeting three-year
Quantitative Performance Indicators for the past two review cycles
(b) Consideration of the relative benchmarks of entities conducting similar
efficiency resource acquisition efforts in other jurisdictions, using
appropriate indicators of relative performance (to be developed)
(c) Notice to the public that the Board is conducting an Overall Performance
Assessment of an EEU and soliciting comment from the public on an
EEU’s performance
(d) A review of trends in the overall efficiency of the appointed entity’s
performance, considering the entity’s historical record using indicators
such as overall yield (i.e., MWh/$ and MW/$)
(e) Consideration of any other market information that may be useful in
comparing the appointed entity’s performance to what might be available
from an alternate entity, for example, bids made for comparable resources
in the ISO-NE Forward Capacity Market
ii. The Board shall provide the EEUs, the DPS, Vermont Utilities, other
stakeholders, and any other person or entity which qualifies for intervention
under Board Rule 2.209, an opportunity to submit comments and participate
in a technical workshop on this performance review.
iii. The Board shall issue a finding regarding whether it has found cause to go to
the market to solicit proposals from alternate entities.
iv. If the Board determines a proposal solicitation process is needed, it shall
commence a process that would result in a new Appointment.
v. The Board may use RPQs, RFPs or similar mechanisms to more definitively
ascertain whether an alternate entity would better meet EEU objectives.
vi. Poor performance relative to minimum requirements serves as a presumptive
basis for initiating the process of ”Overall Performance Assessment” earlier
than it would otherwise be scheduled to take place.
5. End-of-Cycle Reconsideration of Appointment
A. Purpose. After a certain period of time, if it has not been triggered by other
events, the Board will presumptively go to the market to determine whether an
alternate EEU entity might provide greater net-benefits to Vermont ratepayers
relative to a currently-appointed EEU.
B. Timeframe
i. On a twelve-year cycle, the Board shall conduct a process that goes to the
market to consider competitive offers from potential alternate entities to be
appointed as an EEU implementation entity.
ii. This process would be expected to take as much as one year and shall be
commenced no later than two years before the end of a three-year QPI period.
C. Requirements and Process
i. The Board shall initiate this process.
ii. The process may be a simple competitive solicitation (like the current contract
re-bid RFP process) or a staged process that would begin with a request for
expressions of interest or request for qualifications
iii. The Board shall retain the option to defer the implementation of a competitive
solicitation if it finds, after notice and opportunity for comment and through
application of established criteria (to be determined), that the benefits in
performance likely to result from the process are not worth the cost of going
to the market at the specified time
iv. The Board shall provide the EEU, the DPS, Vermont Utilities, other
stakeholders, and any other person or entity which qualifies for intervention
under Board Rule 2.209, an opportunity to submit comments and participate
in one or more technical workshops regarding this performance review.
6. Independent Third Party Audit
In accordance with 30 V.S.A. 209(e)(12), the Board shall require verification by an
independent auditor of the reported energy and capacity savings and costeffectiveness of programs delivered by EEU implementers. This audit shall be
completed every three years as proscribed by statute.
7. Ongoing Opportunity to Consider Appointment
At any point in the cycle of Appointment outlined above, the DPS, or any other party,
may request that the Board initiate a review of an EEU Appointment for cause that
shall be stated in the request. Such a review would be equivalent to an Overall
Performance Review or the End of Cycle Reconsideration, but occur sooner than the
default six and twelve-year cycles. The Board shall review such requests and
determine whether to initiate a review process.
8. Interaction with Long-Range Transmission Plan
Under the Board’s Order in Docket 7081, an EEU is assigned responsibilities for
developing a long-term (twenty-year) forecast of the capacity reductions that will
occur from system-wide efficiency efforts conducted by an EEU, both at the
statewide level and in designated T&D areas specified by the VSPC. The scheduling
of EEU planning, evaluation and performance-review cycles is intended to inform the
fulfillment of this obligation in a timely manner.
Part III. Initial Appointment and Transition
This section addresses one-time issues associated with initial Appointment and transition
to the new EEU structure. It is expected that the Board would open a contested-case
proceeding to make the initial appointment and address the transition details exercising
its authority under 30 V.S.A. § 209(d)(2).
1. Initial Selection of Entities
The Parties agree that the Board should issue an order under 30 V.S.A. §209(d)(2)
appointing VEIC and BED to serve as EEUs until such time as the Board selects any
other entities through the review and reconsideration of Appointment processes
described in this document. Said orders shall establish VEIC’s continuing
authorization to the use of the name Efficiency Vermont in its provision of EEU
services. The Board may, or may not, choose to conduct a review similar to the
Overall Performance Assessment as described above in Section II. 3.prior to the
initial appointment.
2. Transition Time Line – In order to move to a regular cycle of new processes that
synchronizes with other utility planning dates (e.g., the Long-Range Transmission
Plan), some transition planning and performance periods are shorter than they will be
once the transition is complete. A chart on the following page summarizes key
milestones in the transition plan.
3. Transition Process
A. Extend the current Contract (as Backstop) - Under the current EVT contract, the
Board is required to notify the contractor (VEIC), by June 30, 2008, of the
Board’s decision as to whether it will exercise the option to extend the contract at
the end of 2008. Because the recommended change in the EEU structure may not
be fully resolved by that date, the Board would need to provide a backstop
regarding timing of the transition to a new structure. The Board would notify the
contractor of the intent to extend the contract for the next three-year term, with
the provision that this could be superceded by a Board Order of Appointment.
Based on the assumption that the Board intends to alter the structure, there would
be no changes in scope or budget with the contract extension. Goals and
performance indicators would reflect a level of activity consistent with 2008
levels.
Transition Time Line
2008
Notice of EVT Contract Extension (backstop)
Contested Case Proceeding to Finalize Structure and Details of
Appointment (Docket Remains Open)
Board Order of Appointment, Including Budget & Goals and
Performance Indicators for 2009 (same as 2008)
Verified Results from 2007 Available
Verified Results from 2008 Available
Set Transition Period Quantifiable Performance Indicators
(2009, same as 2008)
Transition Performance Period
First Efficiency Resource Plan Proceeding to Set 20-Year
Budgets and Goals
Board Order on First 20-Year Efficiency Resource Plan and Set
Performance Indicators for First Performance Period
First Regular Performance Period
Verified Results from 2009 Available
Verified Results from 2010 Available
Second Efficiency Resource Plan Proceeding to Set 20-Year
Budgets and Goals
Board Order on Second 20-Year Efficiency Resource Plan and
Set Performance Indicators for Second Performance Period
Second Regular Performance Period
Verified Results from 2011 Available
Verified Results from 2012 Available
Verified Results from 2013 Available
Third Efficiency Resource Plan Proceeding to Set 20-Year
Budgets and Goals
Board Order on Third 20-Year Efficiency Resource Plan and Set
Performance Indicators for Second Performance Period
6-Year "Overall Performance Assessment"
2009
2010
2011
2012
2013
2014
2015
B. Contested Case Proceeding on New Structure - The Board would convene a
contested case proceeding to finalize the details of the new EEU structure. The
conclusion of the proceeding would be the issuance of an Order of Appointment.
C. Interim Goals, Budgets and Performance Indicators - The period between the end
of 2008 and the start of the first QPI three-year performance period would be
treated as a transition period. Under either a contract extension or the initial
Order of Appointment, the budget, goals and performance indicators for this
transition period would be set to be equivalent to the 2008 values under the
current contract.
4. First Efficiency Resource Plan Proceeding - Following the issuance of an Order of
Appointment, the Board would convene the first proceeding to adopt year-by-year
EEU goals and budgets for the next twenty years (2010-2029). The same proceeding
would address the choice and setting of Quantifiable Performance Indicators for the
first regular three-year performance period (assumed to be 2010-2012). This process
would culminate in a Board order for a three-year performance period, beginning no
sooner than the first day of the seventh month after the order date or at the beginning
of the next calendar year, whichever occurs later.
5. Further Transition Details
The transition from a contract to an appointment would entail review of numerous
administrative details in order to build upon existing systems and avoid unintended
negative consequences. We recommend forming a working group composed of
representatives of the Board, DPS and EEUs to consider the administrative details of the
appointment and the transition period. This group would propose draft language
regarding administrative elements for consideration by the ongoing Working Group and
the Board.
Part IV. Summary of Roles and Responsibilities
This section summarizes the roles and responsibilities of various parties, organized by
party.
1. Board
A. Regulatory Responsibilities
i. Issue Order of Appointment to one or more EEUs
ii. Determine long-term demand-side resource acquisition goals and associates
investment budgets for EEUs
iii. Set EEC required to support EEU investment budgets
iv. Set Quantifiable Performance Indicators for measuring EEU performance
including Minimum Requirements
v. Approve Monitoring and Verification Plans of EEUs
vi. Determine whether Quantifiable Performance Indicators have been met
vii. Award payment of any hold-back compensation to EEUs
viii.
Review Annual Plans and Annual Reports of EEUs
ix. Conduct periodic Overall Performance Assessment of EEUs
x. Conduct periodic Reconsideration of Appointment of EEUs
xi. Determine whether to revoke or terminate any EEU Order of Appointment
B. Administrative Responsibilities
i. Manage contract with Fiscal Agent
ii. Engage independent auditor to provide report to Legislature as required by 30
V.S.A. § 209(e)(12)
iii. Review EEU invoices to the Fiscal Agent [?]
C. EEU Facilitator – The Board may contract with an individual or company to
serve as an EEU Facilitator to assist the Board in carrying out the above roles and
responsibilities. [The intent of this provision is to provide the Board such
administrative support as it may require to continue the completion of the
functions carried out under the current contract model by the Contract
Administrator].
2. EEUs
A. Operational Responsibilities
i. Acquire maximum cost-effective demand-side resources on behalf of Vermont
ratepayers and their utilities
ii. Provide support for DUP and transmission planning processes including
participation in the VSPC
iii. Implement targeted acquisition of demand-side resources as part of both
statewide resource acquisition plans and as part of the implementation of areaspecific DUP resource acquisition plans.
iv. Participate, on behalf of Vermont ratepayers, in the ISO New England
Forward Capacity Market
v. Conduct the implementation tracking, saving measurement activities and
process evaluations that are appropriate and useful for evaluating EEU
performance
vi. Provide such data and reports as are required of the EEU including any
support for utility planning and ratemaking
vii. Development, maintenance and monitoring of its own management and
operational systems.
viii.
Provide transition assistance in the event of a termination or revocation of
an appointment
B. Regulatory Process Responsibilities
i. Propose long-term demand-side resource acquisition goals and associated
investment budgets
ii. Propose Quantifiable Performance Indicators
iii. Submit documentation to support claims of performance relative to QPIs
iv. Collaborate with DPS to expand and update the EEU Technical Reference
Manual as appropriate
v. Participate in the Vermont System Planning Committee
vi. Participate in regulatory proceedings that affect, or are affected by, EEU
demand-side resource acquisition activities
3. DPS
A. Planning Responsibilities
i. Propose long-term demand-side resource acquisition goals and associated
investment budgets for EEUs
ii. Propose Quantifiable Performance Indicators
iii. Propose Avoided Costs to be used in demand-side resource acquisition
activities
B. Evaluation Responsibilities
i. Review claims of performance and make recommendations to the Board about
incentive compensation
ii. Collaborate with EEUs to expand and update EEU Technical Reference
Manual
iii. Conduct market characterization and baseline studies
iv. Conduct annual savings verification
v. Conduct impact evaluations
4. Distribution Utilities
A. Collect EEC as per PSB Rule 5.300
B. Participate on EEU Advisory Committee
C. Participate in the VSPC
D. Coordinate with EEUs in connection with Demand Response
E. [more?]
Part _V. Administration
An EEU is responsible for the maintenance, ongoing development and monitoring of its
own management and operational systems, including: (1) general project management;
(2) budgeting; (3) financial management; (4) contract management; (5) customer dispute
resolution; and (6) information technology system management and data collection. An
EEU shall maintain and enhance as it deems appropriate a management reporting system
that enables its management to ensure proper control over its operational activities and
strategic direction and facilitates the preparation of required reports and evaluation of its
performance as an EEU.
It shall be the goal, when interpreting any Order of Appointment, that an EEU identified
in such an Order would be subject to the jurisdiction of the Board to the same extent as a
“company” defined under 30 V.S.A. § 201 pursuant to the following sections of Title 30:
i. § 18 - Production and examination of books; subpoena of witnesses
ii. § 19 - Board’s ability to hire experts
iii. § 20 - DPS and Board ability to hire experts
iv. § 21 - Bill-back statute
v. § 30 - Penalties for not providing access to records or violating statutes or
board orders
vi. § 31 - Ability to take depositions
vii. § 32 - Ability to use injunctions
viii. § 203 - Jurisdiction of the PSB and DPS and examination of plant,
equipment
ix. § 205 - Duty to furnish copies of contracts
x. § 206 - Information to be furnished the DPS
xi. § 207 - Reports of accidents; investigations
xii. § 208 - Complaints; investigations; procedures
xiii.
§ 209 - The Board’s Jurisdiction; general scope
xiv.
§ 219 - Non-discrimination
xv. § 221 - Forms of books, accounts, records; Board orders
Part _VI. Compensation, Revocation and Termination
For the entire term of the Appointment, an EEU shall coordinate its activities and the
fulfillment of the responsibilities of its Appointment with the Fiscal Agent, the DPS and
other entities that may be specified by the Board.
1. Compensation.
In consideration of the fulfillment of the responsibilities of Appointment, the Board shall
authorize EEU to receive payments in accordance with the payment provisions detailed
below.
A. The maximum amount payable to EEU shall be the amount of EEU EEC Funds
established by the Board. This maximum amount is inclusive of all eligible costs,
expenses and all earned performance incentives.
B. Two types of compensation shall be provided to an EEU: (i) Cost-of-Service
Compensation and (ii) Resource Acquisition Compensation. Both types of
compensation shall be provided from EEU EEC Funds, but the basis of
compensation is different for each.
i. Cost-of-Service Compensation
(a) Cost-of-Service Compensation shall be provided to an EEU for certain
Eligible Services and Initiatives specifically designated in the Order of
Appointment, and any subsequent modifications made by the Board.
(b) When the Board establishes year-by-year EEU budgets through adoption
of Efficiency Resource Plans, a portion of the total EEU budget will be set
for Cost-of-Service Compensation.
(c) The budget for Cost-of-Service Compensation shall be a not-to-exceed
amount covering the three years after the budget is established.
(d) The three-year, not-to-exceed budget for Cost-of-Service Compensation
may be modified for certain causes beyond an EEU’s control… [note:
need more here about how this would work]
(e) An EEUs Cost-of-Service Compensation shall compensate an EEU for
reasonable actual costs incurred providing the Board-designated Eligible
Services and Initiatives, plus, where appropriate, the current operations fee
with the percentage to be set and/or changed by the Board, plus any
earned performance-based payments as described further in section xxx.
(f) Eligible Services and Initiatives shall be specifically defined [note:
definitions to be provided here? Or in another section? Or later?], and
shall include:
(i) Technical assistance and educational support for energy code activities
as further described in Part I section Error! Reference source not
found..
(ii) Contribution and support to DPS potential studies, forecasts and plans
as further described in Part I section Error! Reference source not
found..
(iii)Support for DPS Evaluation activities as further described in Part II
section Error! Reference source not found...
(iv) DUP and transmission planning activities as further described in Part I
section Error! Reference source not found..
(v) VSPC participation as further described in Part I section Error!
Reference source not found..
(vi) ISO-NE Forward Capacity Market participation as further described in
Part I section Error! Reference source not found.
(vii)
Applied R&D activities as further described in Part I section
Error! Reference source not found.
(viii)
Training and workforce development activities as further described
in Part I section Error! Reference source not found.
(ix) Energy education activities as further described in section Error!
Reference source not found.
ii. Resource Acquisition Compensation
(a) Resource Acquisition Compensation shall be provided to an EEU for
services and initiatives that acquire demand-side resources specified in
Efficiency Resource Plans (e.g., MW, MWh, TRB).
(b) When the Board establishes year-by-year EEU budgets through adoption
of Efficiency Resource Plans, a portion of the total EEU budget will be set
for Resource Acquisition Compensation which is equal to annual EEU
EEC Funds less the portion set aside for performance-based payments,
less the annual budgets Cost-of-Service Compensation.
(c) From the funds available for Resource Acquisition Compensation, an EEU
shall be provided Resource Acquisition Compensation for EEU’s actual
costs incurred to secure resource acquisition, plus an operations fee of
xx%, plus payment for any earned performance incentives.
C. Of the total budget for the three-year period following establishment of the
budget, a percentage specified by the Board shall be held back and set aside for
performance-based payments that may be earned only by an EEU’s attainment of
Quantifiable Performance Indicators, as described in Part II, section 3
D. The award and amount of performance-based incentives to an EEU shall be
determined by the Board based upon:
i. The EEU meeting Minimum Performance Requirements, as further described
in Part II, section 3.B and 3.D.ii; and
ii. The degree to which the EEU has met Scaled Performance Indicators as
described in Part II, section 3.D.ii.
E. Eligible Costs and Expenses
i. Subject to the limitations of the budget, as described above, an EEU shall be
compensated for reasonable and appropriate labor and expenses incurred in
fulfilling the responsibilities of the Appointment. Compensation for such
services and expenses shall be based on an EEU’s actual costs incurred.
ii. An EEU’s actual costs shall include: wages or salaries of staff working
directly to fulfill the responsibilities of the Appointment; fringe-benefit and
payroll-related costs associated with such wages and salaries; an equitable
allocated share of the An EEU’s organization-wide indirect costs; any and all
out-of-pocket costs (e.g., telecommunications, travel, copying/printing,
postage/delivery, marketing, equipment) directly attributable to performing
the responsibilities of the Appointment; mileage reimbursement at the Internal
Revenue Service-approved rate only for use of a personal motor vehicle; any
and all costs to develop and produce Customized Software; any and all
subcontractor costs directly attributable to fulfillment of the responsibilities of
the Appointment; funds disbursed to program participants (e.g., financial
incentives, cooperative marketing); and other reasonable and appropriate costs
that the An EEU incurs to fulfill the responsibilities of the Appointment. An
EEU shall use the guidelines established by the Federal Government for
Federal cost reimbursable grants, or other comparable standards agreed upon
by the Board, as the basis for determining whether or not a particular direct or
indirect cost item incurred under the Appointment is reasonable and
appropriate. Such Federal guidelines are contained in OMB Circular A-122
dated May 10, 2004.
iii. In addition to the above costs, an EEU shall also be reimbursed its actual cost
as charged by a lending institution under the an EEU’s line of credit with that
lending institution, to borrow funds to finance any eligible costs and expenses
incurred and paid for by the an EEU prior to receiving its monthly payment
from the Fiscal Agent or due to a shortfall in funds available from the Fiscal
Agent. Failure of the Fiscal Agent to pay an approved EEU invoice on a
timely basis due to the lack of available funds shall not constitute an
acceptable basis on which an EEU may terminate an Appointment; however, a
material failure of this type may (if of such magnitude and duration as to
impede or prevent expected operations) constitute grounds for modification or
reduction of an EEU’s obligations under the Appointment (but only to the
extent directly required by such delay or failure of payment).
iv. An EEU shall operate in accordance with the guidelines detailed in OMB
Circular A-122, or other comparable standards agreed upon by the Board. The
Board an EEU shall come to agreement on the following items:
(a) The types of costs that constitute an EEU’s fringe-benefit and payrollrelated costs and an EEU’s organization-wide indirect costs; and
(b) The method for allocating an equitable share of an EEU’s fringe-benefit
and payroll-related costs and an EEU’s organization-wide indirect costs.
(c) Any modifications to the above two items must be agreed upon in advance
by the Board.
v. Notwithstanding the above, all eligible costs, expenses and fees paid to an
EEU are subject to the Total Compensation limitation detailed in Paragraph
xx.
F. Invoice Requirements
i. An EEU shall submit monthly invoices of eligible costs and expenses for
payment by the 25th day of the subsequent month, or the next business day if
the 25th is not a business day. All invoices shall, at a minimum, include the
name, address, and tax I.D. number of the EEU; an itemized summary
identifying and describing the activities performed and expenses incurred; the
amount claimed for each task or expense category; and the total amount of the
invoice. Invoices shall clearly separate requests for compensation for labor
expenses and other expenses including payments to contractors, and
reimbursement for funds disbursed to EEU program participants. The form of
the invoice shall be agreed upon by the EEU and the Board.
G. Invoice Submission and Review
i. An EEU shall submit invoices for review and payment by the Fiscal Agent,
ii. Payment of Invoices
(a) Unless instructed otherwise by the Board, disbursements by the Fiscal
Agent will be made once each month; the Fiscal Agent will pay monthly
invoices by the last business day of the following month.
(b) The parties understand that the Fiscal Agent may not have collected
adequate funds from the distribution utilities in a particular month to pay
EEU invoices in full. In order to be made aware of these shortfalls, the
Board will direct the Fiscal Agent to inform EEUs on a monthly basis of
the total funds available to pay EEU invoices. The total funds available
shall be the EEU EEC Funds collected to date. Any unpaid EEU invoices
from prior months shall be paid first and then a partial payment shall be
made on EEU’s current monthly invoices. All EEU invoices shall be paid
in full, as funds become available.
(c) At any termination or expiration of the Appointment, an EEU will most
likely still be due payments for one or more monthly invoices and for any
performance incentives earned pursuant to section xxx. In such a case, an
EEU’s unpaid invoices shall be paid prior to any payments being made to
any other new entity who has been Appointed as a replacement EEU.
H. Carryover of Funds. An EEU may carry over unspent funds from one year to the
next. The amount of any carryover funds shall be reflected in appropriate EEU
reports, plans and budgets.
I. Reliance by Board on Representations. All payments made under an Appointment
will be made in reliance upon the accuracy of all prior representations by an EEU,
including but not limited to bills, invoices, progress reports and other proofs of
work.
2. Revocation or Termination of Appointment.
A. Revocation For Cause
i. In the event that an EEU materially breaches the terms of the Appointment, the
Board may without prejudice to any of its other legal remedies revoke the
Appointment upon (xx period of time) written notice to EEU and be relieved
of the payment of any amount due to EEU for costs after the date of such
revocation, except as provided in subparagraph “xx” below. Alternatively, the
Board may, in its sole discretion, provide an EEU with time to cure any
breach..
ii. In the event an Appointment is revoked for cause, the Board may proceed in
any manner it deems proper. EEU shall be compensated for satisfactory
services rendered and eligible costs and expenses as provided in subparagraph
“xx” below; however, in its discretion, the Board may deduct from any sum
due to EEU under the Appointment, all expense, damage or other harm
incurred by the Board or its agents as a result of EEU’s failure to perform its
obligation under the Appointment
B. Revocation – Bankruptcy. In the event proceedings in bankruptcy are commenced
against an appointed EEU, it is adjudged bankrupt, or a receiver is appointed, the
Board may terminate the Appointment by giving (xx period of time) notice in
writing to the EEU.
C. Termination by Board to Appoint a Different Implementing Entity, or to
Terminate Appointment of any EEU. As a result of the process outlined in Part 2,
Sections 3, 4 or 6 the Board may terminate the Appointment of an EEU in order
to appoint a different entity to act as an EEU. The Board may also terminate an
Appointment if it chooses to no longer use an EEU to perform the functions
identified in 30 V.S.A. §209(d). Any such termination shall be effective no sooner
than 18 months after notice of the Board to the affected EEU of its determination
to terminate the Appointment and subject to the conditions of termination below.
D. Responsibility of Parties Upon Expiration or Revocation of Appointment
i. An EEU shall provide reasonable transition assistance as requested by the
Board to the Board and any entity designated by the Board to ensure that the
functions of an EEU are continuously carried out without interruption. In
such event, EEU agrees to use all reasonable efforts to mitigate its expenses
and obligations hereunder.
ii. In the case of Revocation by Board under sub-paragraphs 2.A and 2.B above,
the EEU shall be compensated for all satisfactory services rendered and
eligible costs and expenses prior to the notice of termination and until the end
of the termination notice period. The EEU shall be paid for all reasonable
services rendered and costs and expenses incurred by an EEU subsequent to
revocation, but only for reasonable transition assistance which could not, by
reasonable efforts of an EEU, have been avoided.
iii. If this Appointment is terminated pursuant to subparagraph 2.C above, the
EEU shall receive all performance incentives that are earned and verified as of
the date of such termination. In addition, the Board agrees to work with an
EEU to determine an appropriate performance incentive to be paid to an EEU
based on actual results toward performance goals for the current performance
period.
iv. If this Appointment is terminated pursuant to subparagraph 2.C above, then
the Board and the EEU shall negotiate in good faith to reimburse the EEU for
costs incurred as a result of termination. Any obligation to reimburse an EEU
for the above costs and performance incentives will be limited to available
funds.
v. All costs to be reimbursed to an EEU for either termination without good
cause under subparagraph XX above or termination under subparagraph XX
above shall not exceed any of the limits detailed above, shall be limited to the
actual reasonable out-of-pocket costs incurred by an EEU, and shall be
determined in accordance with Generally Accepted Accounting Principles
consistently applied.
vi. All records and data related to Work performed under this Appointment in the
possession of an EEU and its subcontractor(s) shall be made available and
turned over to the Board or its designated representative upon the revocation
or termination of an Appointment, at the Board's request. These transfers shall
be accomplished within a reasonable amount of time after the dates of
notification to an EEU to transfer the data and documents. However, an EEU
and its subcontractor(s) must be provided with any records and data that it will
need to undertake any transition assistance after these records and data have
been turned over to the Board.
E. Committed Incentive Payments. It is expected that, on the date of any termination
of Appointment, an EEU will have outstanding contracts for customer incentive
payments. The EEU shall be relieved of those obligations, and responsibility for
them will be assigned to the new entity serving as an EEU.
F. Other EEU Commitments. It is expected that, on the date of any termination of
Appointment, an EEU will have outstanding commitments made as part of its
responsibilities as an EEU, including, but not limited to loans, loan guarantees,
partnership agreements and committed capacity in the ISO-NE FCM. An EEU
shall be relieved of those obligations, and responsibility for them will be assigned
to the new entity serving as an EEU.
Part _VII. Definitions
When capitalized and italicized, whether in the singular or plural, the following words
and phrases shall have the following meanings in constructing the Appointment.
1. Appointment means the appointment of an entity by the Board, as further described
in 30 VSA §209 (d)(2), to act as an energy efficiency utility, carrying out the
responsibilities established in an Order of Appointment under the terms and
conditions set forth in the Order of Appointment, and any subsequent Orders of the
PSB related to the appointment.
2. BED means the City of Burlington Electric Department.
3. Board or PSB means the Vermont Public Service Board identified in 30 V.S.A. § 3.
4. Customer Credit Net Pay Option Available Incentive Funds are the total funds
available to customers who qualify under the Customer Credit program pursuant to
Board Memorandum dated January 27, 2004. These are the EEC Funds that are
rebated back to the qualifying customers and are not available as compensation to an
EEU to perform the responsibilities of the Appointment.
5. Comprehensive energy efficiency program means a coordinated set of activities
carried out by a regulated electric or gas utility or other entity as appointed by the
Board pursuant to 30 V.S.A. §209(d) to meet the public’s need for energy services
through efficiency, conservation or load management in all customer classes and
areas of opportunity which is designed to acquire the full amount of cost effective
savings from such investments or programs as contemplated under 30 V.S.A.
§218c(a)(2).
6. Customized Software means any computer software that is not readily available for
purchase and that is modified, developed, and/or written by an EEU or its
subcontractor(s) specifically for the purpose of performing the responsibilities of the
Appointment.
7. Department or DPS means the Vermont Department of Public Service.
8. DSM means demand side management.
9. Distribution Utilities or DUs means utilities providing retail electric service to
Vermont customers in Vermont under the supervision of the Board.
10. DUP means distributed utility planning.
11. EEC means the Energy Efficiency Charge, which is the volumetric charge to retail
customers of electric Distribution Utility customers for the support of demand-side
resource acquisition pursuant to 30 V.S.A § 209(d)(3) and Board Rule 5.300
12. EEC Funds means all funds collected via the EEC.
13. EEU means an entity appointed by the Board to act as an EEU under §209 (d)(2).
The term specifically includes BED so long as they have Board approval to selfadminister EEU responsibilities for their retail customers.
14. EEU EEC Funds means the portion of the EEC Funds that are available to an EEU
to perform the responsibilities of the Appointment. For an entity other than BED, an
EEU EEC Funds for a calendar year are comprised of the total EEC Funds approved
for collection (not including any true-up from over/under collections of the EEC from
prior years) by the Fiscal Agent for that calendar year plus carryover of unspent EEC
Funds from prior calendar years less the following deductions:
A. DPS EEU monitoring and evaluation costs;
B. Fiscal Agent fees;
C. Fiscal Agent audit fees;
D. Customer Credit Net Pay Option Available Incentive Funds;
E. EEC Funds collected from BED’s ratepayers that are for BED’s selfimplementation of EEU services within BED’s service territory, as ordered by the
Board, including BED’s share of DPS EEU monitoring and evaluation costs,
Fiscal Agent fees, Fiscal Agent audit fees; and
F. Any other costs the PSB determines are required in order to effectively
administer, monitor or evaluate an EEU.
15. EVT means Efficiency Vermont.
16. FCM means the ISO-New England Forward Capacity Market.
17. Fiscal Agent means the person or entity selected and retained by the Board to receive
the EEC Funds from utility companies, those funds having been paid to utility
companies by electricity consumers in Vermont for the provision of demand-side
resource acquisition, and to disburse those funds under the direction of the Board.
18. IRP means integrated resource planning, including DUP and transmission planning,
as contemplated pursuant to 30 V.S.A. § 218c.
19. Minimum Requirements means such minimum performance requirements as may be
established by the Board at all times subject to the term of any Appointment, that
apply to the activities and performance of an EEU for any category of service that is
subject to an Appointment.
20. NTA means non-transmission alternative and includes Generation and/or demandside resource acquisition measures that may defer or avoid construction of
transmission system facilities.
21. NTA Analysis means an analysis to identify cost-effective and viable NTAs to address
a Reliability Deficiency that provide Equivalence, compare those alternatives to the
likely transmission-only alternative(s) to address the deficiency, and evaluate which
alternative is the best choice to address the deficiency. Such identification and
analysis also shall include viable alternatives to address the deficiency that
encompass both transmission and non-transmission element.
22. Parties mean the Department and those entities on behalf of which a signature
appears at the end of this document.
23. QPIs means Quantifiable Performance Indicators.
24. Reliability Deficiency or Reliability Deficiencies means an existing or forecasted
violation, pre- or post-contingency, of applicable bulk transmission system or
subsystem design or operating criteria, with consideration given to the reliability and
availability of individual system elements.
25. State means the State of Vermont.
26. System-wide Programs means the DSM programs being delivered under the EEU
structure pursuant to the Board’s regular budget-setting cycle under 30 V.S.A. §
209(d), and does not include any additional DSM offered or required to be offered
under DUP or as part of an NTA to address a supply problem or Reliability
Deficiency.
27. T&D means transmission and distribution
28. VEIC shall mean the Vermont Energy Investment Corporation.
29. VELCO means Vermont Electric Power Company, Inc. and Vermont Transco LLC.
30. Vermont Utility or Vermont Utilities includes VELCO and the DUs.
31. V.S.A. means the Vermont Statutes Annotated.
32. VSPC means the Vermont System Planning Committee.