Exhibit DPS-WP-2
Part II. Planning, Performance Review, Evaluation and Ongoing Appointment 1
An Order of Appointment shall establish the following framework for Planning, Operations,
Performance Review, Evaluation and Ongoing Appointment:
******
4. Overall Performance Assessment
A. Purpose. The Overall Performance Assessment (OPA) 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. An Overall Performance Assessment shall be completed as part of the
appointment transition process described in Part III of this document. Beginning in 2015,
and every three years thereafter, an Overall Performance Assessment shall be conducted by
the Board, unless it determines based upon the findings and recommendations resulting
from the Department’s Preliminary Performance Review, that an Overall Performance
Assessment is not necessary. An Overall Performance Assessment shall occur no less
frequently than every six years.
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)
1
This exhibit is an excerpt of the Revised Draft Recommendation filed with the Board by the Department on 5/29/09.
However, the Department has further revised this document and will create and provide an index of those changes
upon request of the Board.
Page 1 of 7
Exhibit DPS-WP-2
(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, as described in Part II.7 below.
v. The Board may use RFQs, RFPs or similar mechanisms to more definitively ascertain
whether an alternate entity would better meet EEU objectives.
vi. If the Board determines a proposal solicitation process is not needed, it shall issue an
appointment under the guidelines of section II.6 of this document.
vii. Poor performance relative to minimum requirements serves as a presumptive basis for
initiating the process of an Overall Performance Assessment earlier than it would
otherwise be scheduled to take place.
5. Preliminary Performance Review
A. Purpose. The Preliminary Performance Review (PPR) will be conducted by the
Department in order to determine if there is sufficient reason to defer an Overall
Performance Assessment for three years.
Page 2 of 7
Exhibit DPS-WP-2
B. Timeframe. The PPR shall occur following every three year appointment performance
period when an Overall Performance Assessment is not otherwise required.
C. Requirements and Process.
i. The Department shall conduct a Preliminary Performance Review that shall include:
(a) Consideration of the appointee’s previous record relative to performance indicators
(b) Consideration of the relative benchmarks of entities conducting similar efficiency
resource acquisition efforts in other jurisdictions, using appropriate indicators of
relative performance
(c) Other information that may be useful in determining whether an Overall
Performance Assessment should be deferred
ii. The Department shall provide its findings and recommendations to the Board with
opportunity for comment by EEU’s, Vermont Utilities, and other stakeholders
iii. The Board shall issue a finding regarding whether it has found cause to defer an OPA.
iv. If the Board determines that an Overall Performance Assessment is necessary, it shall
conduct the process described by Part II.4 above.
v. If the Board determines an Overall Performance Assessment is not needed, it shall
issue an appointment under the guidelines of Part II.6 of this document.
6. Continuation of Appointment
A. If the Board determines after an Overall Performance Assessment that there is not
sufficient cause to go to the market to solicit proposals from an alternate entity to perform
services as an EEU, then it will issue a new Order of Appointment that extends the current
appointment for three years.
B. If the Board determines, based on the findings of the Department’s PPR, that an Overall
Performance Assessment is not necessary, the Board shall issue a new Order of
Appointment that extends the current appointment for three years as soon as practicable.
Page 3 of 7
Exhibit DPS-WP-2
C. Any appointment that retains an incumbent EEU without a competitive bid process should
be issued no later than twenty one months prior to the end of an appointment.
7. Solicitation Process
A. Purpose. If the Board determines, following an Overall Performance Assessment, or by
any other Order, that a proposal solicitation process is needed to select an EEU, it shall
commence a process that would result in a new appointment.
B. Timeframe. The solicitation process would be expected to take as much as one year and
should be, to the extent possible, commenced no later than twenty-one months 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 solicitation.
8. 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
Page 4 of 7
Exhibit DPS-WP-2
programs delivered by EEU implementers. This audit shall be completed every three years as
proscribed by statute.
9. 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 Assessment, but
occur sooner than the default three-year cycles. The Board shall review such requests and
determine whether to initiate a review process.
********
Page 5 of 7
Exhibit DPS-WP-2
Part III. Initial Appointment and Transition
This section addresses one-time issues associated with initial Appointment and transition to the
new EEU structure.
1. Initial Selection of Entities
The Board shall conduct a process where a preliminary review of the current contractor is
undertaken similar to the Overall Performance Assessment as described above in Part II.4
prior to the initial appointment. If the Board does not find cause to solicit bids for an
appointee, then 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.
2. Transition Time Line – In order to move to a regular cycle of new processes that
synchronizes with currently effective processes (e.g. the 3 year performance periods) some
transition planning and performance periods are shorter than they will be once the transition is
complete.
3. Transition Process
A. VEIC is contracted to the Board through 2011. If VEIC appointed as an EEU, the contract
between VEIC and the Board would be superseded by the Appointment.
B. Interim Goals, Budgets and Performance Indicators - The period between the Appointment
of an EEU and the start of the first QPI three-year performance period (2012) would be
treated as a transition period. Under the initial Order of Appointment, the budget, goals and
performance indicators for this transition period would adopt the values under the
negotiated 2009-2011 contract.
Page 6 of 7
Exhibit DPS-WP-2
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 (2012-2031). The same proceeding would address the
choice and setting of Quantifiable Performance Indicators for the first regular three-year
performance period (assumed to be 2012-2015). This process would culminate in a Board
order for a three-year performance period, beginning no sooner than the start of the next
calendar year.
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.
Page 7 of 7