DRAFT OF A RECOMMENDATION FOR A
NEW ENERGY EFFICIENCY UTILITY STRUCTURE
This draft for a recommendation has been developed by 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 discussion, contributions
and input from a range of participants. Where the deliberative process to date has suggested
potential consensus on structural issues, this document proposes language that could reflect such
agreement for further review. However, none of those who have contributed to this draft have
agreed to or endorse the current draft document, in whole or in part. It is now simply offered to all
participants as a potentially useful document to focus further deliberation.
Summary
Part I – (p.2 -10) – outlines general structure and conditions. Defines an Order of Appointment as
the legal mechanism to be used by the Board to establish one or more EEUs for the purpose of
acquiring cost-effective demand side resources. Defines the general scope of EEU’s role
including new responsibilities working with utilities on forecasting, planning and
implementation strategies to avoid T&D upgrades. EEU Advisory Committee, selected by
EEU, is expressly constituted to advise EEU.
Part II – (p. 11-19 and timeline) – Details the framework for planning, performance review,
evaluation and ongoing appointment (as well as reconsideration at any time for cause.). This
includes the following components with description of their respective purpose, process,
requirement and timeframe:




development and PSB adoption of a 20-Year Efficiency Resource Plan, updated every
three years;
setting, reviewing and resetting quantitative performance indicators every three years
(similar to the current process, but subject to a Board proceeding)
a new overall performance assessment of the EEU every six years (default is ongoing
appointment);
a new appointment reconsideration process every 12 years;
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


continuation of the existing independent third party audit every three years
continued ongoing monitoring and savings verification
details of comprehensive evaluation procedures and who is responsible for conducting
them
Part III – (p. 21) – provides for transition from the current contract structure to the new structure,
including the initial appointment.
Part IV – (p. 24) – Summary of Roles and Responsibilities for the Board, DPS, EEUs, Distribution
Utilities and VELCO.
Part V – (p.28 - 37) - details administrative requirements and procedures for EEUs including
budgeting, financial management, contract and staff management, dispute resolution,
information technology, data collection and operational requirements including confidentiality,
public education, cost-effectiveness screening, reporting, coordination and quality assurance.
Part VI – (p.37-44) – outlines a new compensation concept which includes “cost-of-service
compensation” for activities that don’t directly contribute to savings goals (e.g., training,
forecasting, code support, ISO participation) and “resource acquisition compensation” for work
contribution to savings. Details termination procedure
Part VII – (p. 44-47) Definitions
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
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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.
2.
General Scope of EEU Responsibilities
A. An EEU shall be responsible for, on behalf of Vermont ratepayers and their utilities, the
acquisition of maximum cost-effective demand-side resources through comprehensive
approaches to reducing customer electricity requirements, including:
i. Increasing the efficiency of buildings, equipment, products and other electricity end
uses;
ii. Reducing electric system and generation capacity requirements through peak load
reduction and management in targeted areas as a part of DUP and transmission
planning;
iii. Reducing absolute energy use through controls, sizing, operation and maintenance
practices and other consumer actions;
iv. Participating in electric system planning and cooperating with the Department and
Vermont Utilities in the provision of least-cost service under 30 V.S.A. § 218c;
v. Public information and education that will empower consumers to manage their
electricity use;
vi. Promoting market transformation strategies to improve the efficient use of electricity;
and
vii. Development and support of policy instruments that can serve as useful tools for
electricity savings through voluntary action or government adoption.
B. An EEU shall balance the pursuit of short-term and resource acquisition with long-term
resource acquisition that may be achieved through market transformation strategies. The
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balance between these objectives shall be reflected in the definition and weighting of EEU
performance indicators.
C. An EEU shall plan and implement demand-side resource acquisition activities both at the
system-wide (statewide) level and, sub-levels defined by the electric transmission and
distribution system in coordination with the Vermont Utilities, as directed by the Board.
D. Implementation Strategies and Incentives to Customers. In designing and implementing
demand-side efficiency resource acquisition initiatives and strategies an EEU shall:
i.
seek to maximize the acquisition of Net Benefits for all retail electric customers;
ii.
prioritize lost opportunity markets;
iii.
pursue market transformation strategies;
iv.
coordinate with and leverage regional and national efficiency efforts;
v.
seek to provide all retail electric customers with the opportunity to participate in EEU
services and initiatives;
vi.
provide information, technical assistance and/or financial incentives to overcome
market barriers to the implementation of measures that provide cost-effective
demand-side resources
vii. seek to maximize and facilitate customer contribution to measure costs;
viii. pursue flexible and robust strategies to cost-effectively avoid capacity and energy as
part of utility IRP; and
ix.
pursue innovative approaches to cost-effective acquisition of demand-side resources.
E. Distributional Equity. Over time, the benefits of System-Wide services, initiatives and
other activities carried out by EEUs, exclusive of Geographically-Targeted demand-side
resource acquisition initiatives approved by the Board, should generally reflect the level of
contribution to EEU costs by ratepayers, as reflected in EEC payments, by customer class
and geographic region of the State. [note: this reflects current contract, but constrains
ability to maximize net benefits and may merit reconsideration in new structure]
F. DUP and Transmission Planning Responsibilities. To provide support for DUP and
transmission planning processes, an EEU should develop or arrange for both planning and
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enhanced implementation capabilities. To the extent required in the application of DUP
and transmission planning principles to solve target area supply and Reliability
Deficiencies, an EEU should:
i. arrange for such end-use forecasting capability as appropriate;
ii. utilize such avoided costs as are approved by the Board or in accordance with study
requirements established for DUP and transmission planning utilizing the processes
developed in Docket Nos. 6290 and 7081;
iii. participate in the VSPC created under Docket No. 7081 and other utility planning
committees;
iv. cooperate with the electric and gas DUs and VELCO in the provision of integrated
utility service subject to the jurisdiction of the PSB under 30 V.S.A. §§ 209 and 218c;
v. be assigned responsibility for the provision of Comprehensive Energy Efficiency
Programs in satisfaction of the DUs responsibilities therefore under 30 V.S.A. §218 c;
vi. maintain information on System-Wide and geographically-targeted demand-side
resource acquisition services, initiatives and other EEU activities, including
development and maintenance of a data base(s) to support DUP, transmission planning,
load forecasting, and program design, monitoring and evaluation activities; and
vii. co-ordinate the provision of DSM information for use in DUP, NTA Analysis and
transmission planning studies.
G. VSPC Participation. An EEU shall be a participant in the VSPC and shall be responsible
for the provision of the following information and services in the conduct of DUP and
transmission planning:
i. determining, as necessary and appropriate, the achievable demand-side resource
potential in areas designated for DUP analysis;
ii. determining, as necessary and appropriate, the amount and acquisition rate of demandside resource potential that is anticipated to be captured through EEU System-Wide
demand-side resource acquisition;.
iii. determining the amount and acquisition rate of the target area cost-effective demandside resource potential that is incremental to amounts anticipated to be acquired
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through EEU System-Wide demand-side resource acquisition;
iv. developing Geographically-Targeted services, initiatives and other activities to capture
the cost-effective incremental demand-side resources within the areas designated for
DUP analysis;
v. determining the pace pursuant to which both the system-wide and cost-effective
geographically-targeted demand-side resources can be acquired;
vi. determining, if appropriate, the extent to which potential Geographically-Targeted
demand-side resource acquisition may impact the power factor of the remaining net
load in a area designated for DUP analysis; and
vii. estimating the costs of to be incurred in the acquisition of the cost-effective incremental
demand-side resources by the customers and in total.
The Parties agree that in the performance of said services, an EEU shall develop its
estimates with an appropriate degree of certainty and in a manner suitable for use in
connection with the performance of IRP.
H. Contribution to DPS Forecasts and Plans. An EEU shall make information available to the
Department as may reasonably be required to assist the DPS in its energy planning
responsibilities.
I. Forward Capacity Market Participant. EEUs should participate in the ISO-NE Forward
Capacity Market (“FCM”) to secure, for the benefit of Vermont ratepayers, any FCM
capacity payments that may be available for demand-side resource measures implemented
by the EEU. EEUs should submit claims for such capacity during the Transition Period
and participate in the development and implementation of the FCM.
J. Codes and Standards An EEU shall provide technical support and training regarding energy
codes and standards. Any support activities that are paid by EEU EEC Funds shall be
described in Annual Plans. The anticipated support includes, but is not limited to:
i. direct technical assistance, including a telephone “hot line”;
ii. development, production and delivery of educational materials;
iii. development and delivery of workshops and professional training; and
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iv. technical support for the development of new provisions for energy codes and standards
K. Act 250 Compliance Assistance. An EEU shall provide compliance assistance regarding
energy requirements of Act 250 to applicants to the extent that an EEU deems such
assistance will support EEU demand-side resource acquisition goals..
L. Combined Heat and Power. An EEU may, as part of comprehensive treatment of
customers, include certain combined heat and power systems as an eligible demand-side
resource option. The guidelines specifying eligible criteria, applications and economic
screening procedures for EEU treatment of combined heat and power systems shall be
developed jointly by the DPS and EEUs.
M. Demand Response. An EEU may, as part of comprehensive treatment of customers, include
demand response as an eligible demand-side resource option. The guidelines specifying
eligible demand response applications and economic screening procedures for EEU
treatment of demand response shall be developed jointly by the DUs, the DPS and EEUs,
and shall be designed to work in concert with the host DUs demand response strategy and
initiatives (including any rate designs). Where an EEU recommends demand-response, it
will not provide demand-response implementation services on the customer side-of any
utility meter, but will refer the customer to its DU and other potential demand response
providers.
N. Applied Research, Development and Demonstration. An EEU may conduct a reasonable
level of applied research, development and demonstration that it believes likely to be costeffective in meeting long-term goals of an EEU. Such activity shall be included in Annual
Plans and Annual Reports of and EEU.
O. Marketing, Public Information, and Education. An EEU shall implement marketing, public
education and consumer information activities as part of a strategy to (1) promote customer
participation in and market awareness of EEU services and initiatives, (2) increase
consumer awareness and understanding of the benefits of reducing energy use, (3) increase
consumer demand for energy-saving products and services, and (4) affect consumer
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decision-making in consumer-driven energy efficiency choices. At a minimum, an EEU
will provide: (1) a toll-free number as further described in 30 V.S.A. § 209(d)(3); (2) a web
page describing services available to customers; (3) effective customer response and
referral procedures; and (4) a system for tracking, addressing and resolving customer
complaints promptly.
P. Training and Workforce Development. An EEU shall develop and implement energy
education and technical training initiatives, consistent with long-term EEU goals and
objectives, including cooperative activities with Vermont educational institutions,
vocational training, and continuing education.
Q. Energy Education in Schools and Colleges. An EEU may develop and/or support energy
education initiatives in Vermont schools, colleges and universities to the extent an EEU
deems such activities to be cost-effective in meeting long-term goals of an EEU. Such
activity shall be included in Annual Plans and Annual Reports of and EEU.
3.
Energy Efficiency Charge (EEC)
The EEU budgets should be funded through a separately stated, non-bypassable, volumetric
system benefits charge on the bill from the DU to customers known as the EEC. The EEU
budget for system-wide program planning and implementation of demand-side resource
acquisition shall be recovered from the customers of all DUs in accordance with the
requirements of PSB Rule 5.300. The EEU budget for geographically-targeted planning and
acquisition of demand-side resources shall be recovered via EEC adders based on budget
allocations made utilizing cost allocation principles [to be determined].
4.
EEU Advisory Committee
An EEU Advisory Committee shall be established with the following objectives:
A. Stakeholder input that effectively challenges and advises EVT planning, program design
and development
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B. Increased public confidence in EVT processes
C. Greater public transparency and understanding of EVT oversight and accountability
processes
D. Public advocacy to ensure the integrity and accountability of the EEUs
E. Independent and informed support and criticism
F. Committed members who participate
G. EEUs will develop stated expectations of Advisory Committee members, including the
expected roles and time commitment for participation. Responsibilities may include:
i. Input into and review of EVT annual plan
ii. Review of savings claims and annual report
iii. Annual review of EVT stakeholder input process
iv. Meet the requirements of Vermont open meeting law
v. Interested Party status at any PSB proceeding concerning an EEU
H. The EEU Advisory Committee shall:
i. Be composed of 12-15 members
ii. Chaired by a member selected by the EEUs
iii. Staffed and supported by EVT
iv. Meet at least 3 times per year
I. EEU Advisory Committee Membership
i. The DPS will propose and be represented by one member for the EEU Advisory
Committee
ii. DUs will propose and be represented by at least two members.
iii. The Legislature will propose and be represented by a member from the House and a
member from the Senate.
iv. All members of the EEU Advisory Committee will be appointed by the EEUs.
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v. The EEUs will appoint other members of the Advisory Committee, including:
(a) at least one industrial customer representative (selected in consultation with AIV
and VBR)
(b) at least one commercial customer representative (selected in consultation with
RDCs and Chambers of Commerce)
(c) at least one low-income customer representative (selected in consultation with CAP
directors, AARP and VLIAC)
(d) at least one environmental or renewable energy advocate
vi. Others who can effectively contribute to the work of the Committee
vii. Will include geographic representation to the extent possible
J. Advisory Members shall have staggered 3-year terms
K. Public members shall receive a per diem for their participation provided by EVT
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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 interrelated (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 longterm (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
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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 year-by-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;
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(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..
2. 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 threeyear 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).
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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.
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(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.
3. 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
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(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.
4. 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.
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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.
5. 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 cost-effectiveness of
programs delivered by EEU implementers. This audit shall be completed every three years as
proscribed by statute.
6. 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.
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7. 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 performancereview cycles is intended to inform the fulfillment of this obligation in a timely manner.
8. Ongoing Monitoring, Savings Verification and Evaluation
Key elements of ongoing monitoring, savings verification and evaluation, and responsibility
for each, are summarized as follows:
Function
Measure Savings Characterization
Market Characterization & Baseline Studies
Implementation Tracking
Measurement, Including Metering
Savings Verification
Impact Evaluation
Process Evaluation
Responsibility
EEUs and DPS
DPS, EEUs (optional)
EEUs
EEUs
DPS
DPS
EEUs, DPS (optional)
A. Measure Savings Characterization is the process of specifying the assumptions and
algorithms for calculating savings for individual electricity-saving measures. It includes
specification of any assumed energy and demand values, hours of use, adjustment (inservice rates, free rider rates, etc.) and other factors that affect electrical savings. For
custom measures, it may specify simply the key variables that need to be calculated or
measured and the formulas to be used in calculating savings. These characterizations shall
be documented in a “Technical Reference Manual” that is maintained by an EEU. The
Technical Reference Manual shall be expanded and updated as deemed appropriate by a
standing joint committee of the DPS and EEUs.
B. Market Characterization and Baseline Studies are processes of gathering and analyzing
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side resource potential, development of market intervention strategies and establishment of
baselines from which efficiency savings can be measured. It includes building, appliance
and equipment saturation surveys, sales data, consumer attitude and behavior surveys and
market structure analysis. The DPS shall be responsible for carrying out the market
characterization work it deems necessary and appropriate. The DPS shall consult and
coordinate with EEUs in planning and conducting this work. EEUs shall carry out
additional market characterization work as they deem necessary to plan their services and
initiatives, as well as to support their long-range resource planning responsibilities.
C. Implementation Tracking is the process of gathering and systematically storing customer,
measure, project, and activity data in a database system. This shall be carried out by the
EEUs as part of routine operations and shall include all relevant information for evaluation
activities.
D. Measurement, Including Metering is the process directly measuring quantities that
contribute to determination of electricity savings. It includes direct metering of individual
or multiple end-use loads, counts of measures, and testing. It shall be carried out by An
EEU either as part of implementation (e.g. commissioning) or as part of post-installation
evaluation activities.
E. Savings Verification is the annual process carried out by the DPS to assess an EEU’s
annual savings claims (MWh, MW and TRB). This process shall result in a
recommendation to the Board for a quantitative adjustment to EEU savings claims. In shall
include analysis of measure and project data from EEU tracking systems, review of project
files, and any field verification visits that are deemed to be appropriate.
F. Impact Evaluation is the formal assessment of quantitative savings (MWh, MW and TRB),
typically at the initiative or portfolio level. This includes studies that analyze of pre- and
post-installation measured electricity use and studies that seek to determine market effects
of efficiency initiatives. The DPS shall carry out such evaluations if and when it deems
them to be beneficial.
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G. Process Evaluation is the range of activities that can be carried out to evaluate the design
and implementation of EEU operations. It uses surveys, interviews and activity data to
understand and assess EEU processes, quality and effectiveness. Such evaluations shall
develop recommendations for strategy and/or process improvement. The DPS shall include
any elements of process evaluation that it deems beneficial into its other EEU evaluation
activities. An EEU shall conduct process evaluations as it deems appropriate and useful.
The DPS and EEUs shall coordinate their assessment of the need for process evaluation
and the conduct of process evaluation activities. The DPS and EEUs shall share results of
any process evaluations.
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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
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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
2009
2010
2011
2012
2013
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"
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2014
2
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.
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Part IV. Summary of Roles and Responsibilities
This section summarizes the roles and responsibilities of various parties, organized by party.
Highlighted sections are new or changed responsibilities
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.
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[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 area-specific 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
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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 associates 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?]
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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:
§ 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
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§ 221 - Forms of books, accounts, records; Board orders
1. Budgeting.
An EEU shall develop, monitor and manage the overall budget for its operation.
Budget and
forecast categories and the detail of breakdown shall be as specified by the Board
2. Financial Management.
An EEU shall maintain the necessary budgeting, invoicing, expenditure approval, payroll, and
financial accounting systems to review, approve, and track budgets, invoices and payments
associated with carrying out the responsibilities of the Appointment. An EEU shall maintain
financial and accounting records consistent with Generally Accepted Accounting Principles
consistently applied. An EEU shall provide information and documentation required for an OMB
A-133 audit, which an EEU shall have performed on an annual basis as required by law. The
Board may prescribe the forms of all books, accounts, papers and records of an EEU which shall
keep and render its books, accounts, papers and records accurately and faithfully in the manner and
form prescribed by the Board. An EEU shall comply with all orders and directions of the Board
relating to such books, accounts, papers and records consistent with the terms of 30 V.S.A. § 221.
3. Contract Management.
An EEU shall solicit, hire and/or contract with all necessary staff and subcontractors to effectively
perform the responsibilities of the Appointment. An EEU shall maintain the administrative
capability to manage these resources, ensure the completion of each task and sub-task effectively,
and ensure that subcontractors are compensated in a timely manner.
4. EEU’s Dispute Resolution Process.
In conjunction with the Director of the Consumer Affairs and Public Information Division at the
DPS, an EEU shall maintain protocols for addressing and resolving complaints concerning
performance of its responsibilities from customers and stakeholders such as electric utilities and
subcontractors. Said protocols shall establish a process for quickly bringing such disputes to a
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resolution. To facilitate the resolution of disputes, provisions regarding the Board’s continuing
jurisdiction over an EEU should be included the Appointment and the Docket where the
Appointment is made should be kept open in order to provide the Board continuing jurisdiction to
act in all matters respecting the activities and services of an EEU, where appropriate.
5. Information Technology, Data Collection, Reporting.
An EEU shall maintain and enhance, as it deems necessary and or appropriate, information
technology and data collection and reporting systems. Information in this system shall include, but
not be limited to, tracking data on customers, energy product and service providers, service
activity, projects, measures, costs and savings. The system shall have the capability to satisfy an
EEU’s planning requirements and to work with Vermont Utilities in all activities as required under
the Appointment. The system shall have the ability to produce ad hoc reports for information
requests from the Board and the DPS.
6. Manage Customer-Specific and Competitively-Sensitive Information.
An EEU shall maintain a Confidential Information Management System. The purpose of this
system is to provide appropriate protections in the collection, processing, storage and retrieval of
information that is customer-specific or could otherwise provide an unfair competitive advantage
to an entity engaged in the provision of energy services outside the scope of responsibilities of the
Appointment. An EEU shall be responsible for managing this system. When appropriate an EEU
may provide customer-specific and/or competitively-sensitive information to its employees, EEU
contractors, regulators, and DUs. Any EEU contractors given such information shall also protect
its confidentiality and shall agree in their contract(s) with an EEU (1) to abide by the guidelines
detailed in the Confidential Information Management System referenced above, and (2) not to
provide any confidential information to affiliates not directly involved with EEU activities.
Regardless of whether an EEU follows its system for managing confidential information, an EEU
is solely responsible for the intentional or accidental release of any confidential information. An
EEU agrees to indemnify the Board for any claims resulting from the release of any confidential
information.
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7. Data Collection.
An EEU shall collect and electronically compile data that is: (1) directly related to its energy
service planning and implementation activities; (2) easily obtainable by an EEU as part of its
routine implementation and planning activities; and (3) needed to monitor, assess, verify, and
evaluate its performance, to report on its activities, and to improve the planning, design and
delivery of services. Data from Vermont Utilities, subcontractors and employees shall be collected
and stored electronically in a consistent format in the following categories:
A. Customer/Client/Circuit Data;
B. Planning and Forecasting Data:
C. Customer Usage Data including circuit data;
D. Measures and Services Data;
E. Data on Other Relevant Persons, Businesses or Organizations;
F. Distribution Utility Account Data; and
G. Other Data for Market Assessment and Evaluation Purposes.
An EEU shall make this information available to the Board, the DPS, the Vermont Utilities, and
any independent evaluation firms under contract to the Board or the DPS, subject to the
establishment of reasonable confidentiality procedures.
An EEU shall coordinate, manage and secure all such data identified in the above list that it needs
to obtain from the Vermont Utilities. If a Vermont Utility is not reasonably responsive to a request
for information from an EEU after a reasonable period of time, then an EEU may ask the Board to
resolve the dispute.
The parties agree that this paragraph is not intended to require an EEU to secure data from
Vermont Utilities that fail to respond to such requests for information.
8. Vermont Utilities Planning and Ratemaking Support Data.
An EEU shall gather particular data elements for use by Vermont Utilities in planning and
ratemaking. Upon reasonable request, an EEU shall provide DUs and VELCO with reasonable
estimates of electricity savings resulting from EEU operations, including information or
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assumptions an EEU collects or develops as a matter of course in its normal business activities.
The EEUs shall work with the DPS and the Vermont Utilities to establish reasonable information
and data protocols for the efficient exchange of information.
9. Administrative and Financial Data.
An EEU shall keep records of administrative and financial data consistent with Generally
Accepted Accounting Principles consistently applied as defined by the Board, Governmental
Accounting Standards Board and the Financial Accounting Standards Board. This includes
systems to track general project management, invoicing, payroll and contractor payments, and to
produce the necessary reports for monitoring these duties. The DPS and the Board shall be
provided access to this data as may be required by the DPS or the Board.
10. Data System Documentation/User's Manual.
An EEU shall maintain, and update as necessary, the documentation of the Customized Software
used for data tracking and reporting. An EEU shall provide notice to the Board and the DPS with
any substantive changes to this data system documentation.
11. Required Reports.
An EEU shall prepare and submit Monthly, Quarterly and Annual Reports as further specified in
the Order of Appointment. In developing reporting requirements, the Board shall consider the
reports currents being provided under the contract model. In addition, the Board shall consider any
additional or alternative reporting that might better satisfy the needs of the Board, the Fiscal
Agent, the DPS, the Vermont Utilities and/or simplify or clarify the presentation of information,
and/or lower the costs of reporting. Such additional reporting would address the needs of Vermont
Utilities for information on resource acquisition in designated geographically-targeted areas.
12. Information Requests.
An EEU shall respond in a timely and complete manner to any information requests regarding
budgets, expenditures, savings, and activities submitted by the Board, the Fiscal Agent, the DPS or
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a Vermont Utility. An EEU shall also respond in a timely and complete manner to any information
requests submitted by members of the Vermont General Assembly or legislative staff, including
providing legislative testimony on EEU -related activities or energy issues when requested.
13. Annual Plan.
An EEU shall prepare and submit to the Board an Annual Plan by November 1 of the preceding
year. However, an EEU shall not be required to prepare an Annual Plan for any period beyond the
period of its Appointment.
In these Plans, an EEU shall summarize market intervention strategies, service offerings, markets
initiatives and other planned implementation activities for the coming year. These components
shall be presented as part of an integrated market strategy for each of the two primary market
sectors: Business and Residential. These plans shall be developed in consultation with the DPS
and the Vermont Utilities. In developing these Annual Plans, an EEU shall also make full use of
the following information:
A. reports from an EEU market assessment and evaluation activities undertaken by the DPS;
B. the EEU’s formal Quality Assurance system (including participant satisfaction/feedback
records);
C. feedback from subcontractors;
D. ongoing, informal feedback from individual participants;
E. ongoing solicited and unsolicited input from business, professional and trade associations,
trade allies, and other groups with which an EEU interacts over the year; and
F. the EEU’s knowledge of regional and national information regarding energy efficiency
technologies and opportunities, program experience and evaluation results.
14. Coordination of Service Delivery with BED.
Any other EEU shall make every reasonable effort to coordinate with BED’s EEU selfadministration within BED service territory, consistent with the Board’s August 1, 2002 “Decision
in re: Report of the Department of Public Service to the Board on Vermont’s Energy Efficiency
Utility” (pp. 5-7); the Board’s Orders in Docket 5980. An EEU shall maintain ongoing
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coordination agreements with BED. An EEU shall also attempt to negotiate a cost-sharing
agreement with BED which recognizes (1) that parallel or overlapping efforts may be more
efficiently and economically performed by either BED or an EEU on behalf of both entities, and
(2) that many services and activities that an EEU necessarily provides on a statewide basis fulfill
or reduce certain of BED’s obligations related to delivery of EEU services in BED service
territory. This cost-sharing agreement between an EEU and BED shall provide a mechanism for
fair exchange of compensation for EEU services among the two entities.
Any disputes between another EEU and BED regarding the coordination efforts or compensation
detailed above shall be mediated by the Board.
15. Quality Assurance.
An EEU shall maintain quality assurance standards and procedures, to be set forth by an EEU in a
written Quality Assurance Plan, copies of which shall be provided to the Board, and the DPS. An
EEU shall ensure that both direct employees and contractors apply the quality assurance standards
and methods set forth in the Quality Assurance Plan. Any substantive changes to the Quality
Assurance Plan shall be provided to the Board and the DPS. The Quality Assurance Plan shall
include the dates for submission of Quality Assurance Reports.
16. Coordinate With Other Energy Efficiency Activities.
An EEU shall coordinate its EEU activities with those of state, regional and national energy
efficiency efforts, including (1) the U.S. Department of Energy/ Environmental Protection Agency
Energy Star Program; (2) Northeast Energy Efficiency Partnerships; (3) the Vermont
Weatherization Assistance Program; (4) the School Energy Management Program of the Vermont
Superintendents' Association; and (5) the Act 250 process (10 V.S.A. §§ 6081-6092). Other state,
regional or national initiatives or organizations may emerge in the future; an EEU shall be
expected to evaluate the potential benefits of those efforts and coordinate with and participate in
them in a manner that is consistent with an EEU’s mission and the State’s policy objectives for
energy efficiency.
17. Coordinate With Vermont Utilities.
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An EEU shall coordinate with any demand-side resource acquisition planning or implementation
carried out by Vermont Utilities on their own behalf (e.g., voluntary programs provided by a DU in
its own service territory), where appropriate. An EEU shall also coordinate with Vermont DUs to
determine whether power quality and power factor may be affected in situations in which the
application of demand-side resource technologies might have a significant material impact on the
integrity of a distribution or transmission utility’s transmission and distribution system or a
customer's facility. If problems are identified, an EEU shall cooperate with the affected Vermont
Utility and/or customer to resolve the problem.
18. Working With and Through Vermont Product and Service Providers.
To both achieve resource acquisition and accomplish the Board's market transformation goals, an
EEU shall work with and through Vermont providers of energy-related products and services,
including design professionals (architects, engineers and designers), energy service providers,
contractors, retailers, distributors, suppliers and manufacturers. An EEU shall strive to affect
critical decision points in the supply chain that impact energy efficiency decisions in the
marketplace by providing targeted, strategic support to these Market Actors, including, but not
limited to:
A. training and education to build efficiency-related skills and knowledge;
B. project-specific technical assistance;
C. provision of software, design guides, manuals and other technical resources;
D. promotion to consumers of the products and services offered by these providers; and
E. financial incentives to these providers to overcome specific market barriers.
In carrying out this work an EEU shall seek to expand the availability of energy-saving products
and services available from Vermont providers and seek to increase the standard-practice levels of
efficiency in these products and services. In providing EEU services, an EEU shall not use its own
employees to provide any design or engineering services that are required to be provided by
licensed professional architects and engineers, and shall not provide certifications of designs or
engineering that assume professional liability.
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19. Installation of Measures.
An EEU shall promote, utilize and support the development of the broad network of Vermont
businesses to provide for the installation of demand-side resource measures. An EEU will rely on
this network of building, electrical, mechanical, HVAC, and other contractors to provide and
install measures.
20. Develop Independent Funding Sources.
An EEU shall, to the best of its ability, facilitate the development of, and/or develop, independent
funding mechanisms that leverage non-EEU Funds (such as grant and Federal funds) that will
increase the acquisition of cost-effective demand-side resources. An EEU shall develop and
implement mechanisms to help overcome lack of customer access to financing for demand-side
resource investments so that customer contributions to measure costs can be maximized consistent
with the Board’s principles of sound program design.
21. Cost-Effectiveness Screening.
When assessing the cost-effectiveness of efficiency measures, an EEU shall utilize the Societal
Test as further described by the Board in its April 16, 1990 Order in Docket No. 5270. An EEU
shall use statewide cost-effectiveness screening tools provided by the DPS in its planning and
implementation activities. An EEU shall incorporate the externality values provided by the Board
and shall incorporate in its screening tools, as well as any new avoided costs and externality
adjustments approved by the Board, but shall not be responsible for development, maintenance,
distribution or support of statewide cost-effectiveness screening tools other than for the EEU’s
own use and convenience in carrying out the responsibilities of the Appointment. The Board shall
provide a reasonable amount of time for an EEU to implement any new avoided costs or
externality adjustments approved by the Board.
An EEU shall keep current documentation on all measure and program assumptions. Changes to
existing measure characterizations and program assumptions, and all assumptions for new
measures and programs, shall be coordinated with the DPS. All changes shall be documented in
the Technical Reference Manual, including the basis for the new assumption. An EEU shall
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provide annually the Technical Reference Manual to the Board, DPS and the Vermont Utilities.
An EEU shall provide on an ongoing basis any substantive changes in the TRM to the Board, DPS
and the Vermont Utilities.
22.
Support for State Resource Planning, Market Assessment and Evaluation Activities.
An EEU has primary responsibility, unless otherwise directed by the Board, for determining
whether and to what extent it will collect, compile, and assess information on the characteristics
and current status of markets targeted by current strategies and markets that are potential targets
for new strategies and service offerings. This information may include changes or expected
changes in these markets, opportunities for emerging energy efficiency technologies and practices,
and the status and progress of EEU -funded programs in capturing the potential for cost-effective
energy savings. An EEU’s responsibilities with respect to collecting information related to market
transformation effects shall be limited to data about its efforts (e.g., an EEU will collect
information about its installations, but is not responsible, for example, for collecting information
about awareness of new energy efficient technologies among Vermont residents).
An EEU shall provide data and information collected under this Paragraph to support the DPS’s
demand-side management resource planning and evaluation activities, in particular, the DPS’s
obligation to conduct EEU program evaluation and the DPS’s evaluation of an EEU’s
performance, market conditions, and available demand-side resource potential. In addition, an
EEU shall be available for consultation with the DPS regarding the development of the DPS’s
Twenty Year Electric Plan, pursuant to 30 V.S.A. § 202. An EEU shall also cooperate to the best
of its ability and within its budget constraints in the identification and prioritization of information
needs and the exchange of information with the Board and DPS as necessary to effectuate strategic
planning, multi-year program planning and budgeting, market assessment, and program evaluation.
23. Limitations on Performance Contracting.
If an EEU or any of its contractors advises a customer to use performance contracting and the EEU
or its contractor desires to bid for that contract, said EEU or its contractor shall notify the Board
and DPS in advance of submitting a bid. The Board or DPS may contact the customer and/or use
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other mechanisms to ensure that said EEU, or its contractor’s relationship with said EEU, does not
give either of them an unfair advantage in the bidding process.
24. Standards of Performance.
An EEU shall perform the responsibilities of the Appointment consistent with all service quality
requirements set forth in the Appointment, and applicable professional standards, to the reasonable
satisfaction of the Board.
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.
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(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 0.
(ii) Contribution and support to DPS potential studies, forecasts and plans as further
described in Part I section 1.H.
(iii)Support for DPS Evaluation activities as further described in Part II section 8..
(iv) DUP and transmission planning activities as further described in Part I section
1.F.
(v) VSPC participation as further described in Part I section 1.G.
(vi) ISO-NE Forward Capacity Market participation as further described in Part I
section 1.I
(vii)
Applied R&D activities as further described in Part I section 1.N
(viii) Training and workforce development activities as further described in Part I
section 1.P
(ix) Energy education activities as further described in section 1.O
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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 2
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 2.B and 2.D.ii; and
ii. The degree to which the EEU has met Scaled Performance Indicators as described in
Part II, section 2.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
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with such wages and salaries; an equitable allocated share of the An EEU’s organizationwide 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 payroll-related costs
and an EEU’s organization-wide indirect costs; and
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(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.
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(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.
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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 1.A and 1.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 1.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 1.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
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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.
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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 self-administer 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
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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 self-implementation 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 demand-side 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
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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.
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