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					                                         STATE OF VERMONT
                                        PUBLIC SERVICE BOARD

Docket No. 6741

Investigation Into the Energy Efficiency            )
Charge for the Year 2003                            )

                                                                      Order Entered: 8/1/2002

                           ORDER OPENING INVESTIGATION

                                                I. I NTRODUCTION

        This Order commences an investigation pursuant to 30 V.S.A. § 209(d)(3) to set the
Energy Efficiency Charge for the year 2003 for customers of all Vermont electric distribution
utilities. 30 V.S.A. § 209(d)(3) authorizes the Public Service Board ("Board") to establish a
volumetric charge to customers for the support of energy efficiency programs delivered in
multiple service territories. This charge, known as the Energy Efficiency Charge ("EEC"), is
currently paid by customers of all of the state's electric utilities except the City of Burlington
Electric Department ("BED")1 and, for the year 2002, was set pursuant to the Board's
November 26, 2001, Order in Docket 6564.

        For calendar years 2000 through 2002, the amount to be collected via the EEC was
determined individually for each service territory, according to the terms of the settlement
approved by the Board in Docket 5980.2 This settlement also specified preliminary amounts to
be collected statewide via the EEC in 2003 and 2004, and described the process to be followed to
determine the final amounts to be collected statewide in 2003 and 2004 (referred to herein as the

    1. Customers of BED currently do not pay an EEC because BED has used the proceeds of a bond issuance to fund
the implementation of energy efficiency "Core Programs" within its service territory. However, in the Memorandum
attached to this Order, the Board has approved BED's request to fund the Core Programs implemented in its service
territory with funds collected via an EEC , beginning on January 1, 2003.

   2. Docket 5980, Order of 9/30/99 at 46-47.
Docket No. 6741                                                                                     Page 2

"Paragraph 18 Process"). 3 The settlement did not address how much should be collected via the
EEC in 2005.
         Subsequent agreements among many of the parties in Docket 5980, which were approved
by the Board in its November 19, 1999, Order in that docket, specified the methodology to be
used to collect the EEC for the year 2000 – a straight percentage charge on each customer's bill.
The percentage charge was the same for all customer classes in a given service territory.
However, the percentage charge was different for customers in different service territories. A
similar methodology was used to collect the EEC for the years 2001 and 2002.4

The EEC for 2003
         As described in the attached Memorandum from the Board, after following the Paragraph
18 Process, the Board has determined that the following amounts should be collected via the
Energy Efficiency Charge in 2003, 2004, and 2005:5
                  2003     ----     $16,172,252
                  2004     ----     $16,321,795
                  2005     ----     $17,500,000.
In addition, the Board has determined that the EEC for 2003 should be uniform throughout the
state, except for BED and the Washington Electric Cooperative, Inc. ("WEC"). These decisions
will not be revisited in this Docket.
         Rather, this Docket will focus on the methodology used to calculate the EEC. In the
Paragraph 18 Process, there was significant support from a variety of parties for a "uniform
statewide charge." However, there was disagreement over whether that charge should be a
uniform percent of bill, or a uniform mills per kwh charge, with some accommodation for
customers on a demand rate, or something else. Other issues related to the design of the EEC

   3. This process is described in P aragraph 18 o f the M emo randum of Und erstand ing approved by the B oard in its
September 30, 1999, Order in Docket 5980.

   4. See, Docket 6429 , Order of 12/5/00 at 4 (finding 2); Docket 6564, Orde r of 11/26/01 at 3 (finding 2).

   5. See the attached M emorandum from the Board which explains this decision and others resulting from the
process set out in Paragraph 18 of the MOU.
Docket No. 6741                                                                                    Page 3

were raised in the Paragraph 18 Process, including issues associated with unspent funds, 6 and
how to provide an opportunity for parties to comment before the EEC is recalculated. These and
other issues related to the methodology for calculating the uniform statewide EEC for 2003 will
be considered in this Docket.

Prehearing Conference and Technical Workshop
         Because this Docket must be concluded in time for utilities to change their billing
software and implement the new charge on bills rendered on or after February 1, 2003, the
schedule for this proceeding will be expedited. A prehearing conference will be held before a
Hearing Officer at 9:30 a.m. on August 9, 2002, in the Board's Hearing Room, Third Floor,
Chittenden Bank Building, 112 State Street, Montpelier.
         At the prehearing conference, parties should be prepared to discuss how best to proceed in
this Docket so that a final order can be issued by mid-November, 2002. Parties should also be
prepared to identify any substantive issues associated with the methodology for calculating the
uniform statewide EEC for 2003 that are not listed above and that should be addressed in this
Docket. Any person or entity wishing to intervene should appear at the August 9 prehearing
conference as well, with a clear statement of its asserted interest circulated to all parties listed on
the attached service list at least one day prior to the prehearing conference. Absent unusual and
compelling circumstances, motions to intervene will not be considered if presented after the
completion of the prehearing conference.
         Immediately following the prehearing conference, a technical workshop will be held to
engage the parties in a preliminary discussion of the substantive issues being considered in this
Docket. Parties should be prepared to address the substantive issues listed above, as well as the
topic of notice to customers of changes in the EEC (including questions concerning the manner of
giving notice and responsibility for notice costs).

   6. There is also a timing problem since the precise amount of unspent funds, if any, will not be known at the time
the EEC is set for the following year.
Docket No. 6741                                                                                              Page 4

                                                         II. O RDER
         IT IS H EREBY O RDERED , A DJUDGED AND D ECREED by the Public Service Board of the
State of Vermont that:
         1. Pursuant to 30 V.S.A. Section 209(d)(3), an investigation is hereby opened into the
Energy Efficiency Charge for the year 2003 for all of the state's electric distribution utilities. All
Vermont electric distribution utilities shall be parties to this proceeding.
         2. Pursuant to 30 V.S.A. Section 8, Ann Bishop, Policy Analyst, is appointed to serve as
the Hearing Officer in this proceeding.
         3. Pursuant to 30 V.S.A. Section 11(a)(2), a prehearing conference and Technical
Workshop will be held in this matter on Friday, August 9, 2002, commencing at 9:30 A.M., at the
Public Service Board Hearing Room, Third Floor, Chittenden Bank Building, 112 State Street,
Montpelier, Vermont.

          D ATED at Montpelier, Vermont, this 1st day of August, 2002.

                                       s/Michael H. Dworkin                          )
                                                                                     ) PUBLIC SERVICE
                                       s/David C. Coen                               )    BOARD
                                                                                     ) OF VERMONT
                                       s/John D. Burke                               )

Filed: August 1, 2002
Attest: s/Susan M. Hudson
                 Clerk of the Board

          N O T IC E TO R EADERS : This d ecision is subject to revision o f techn ical erro rs. Rea ders a re requested to
notify the Clerk of the Board (by e-mail, telephone or in writing) of any apparent errors, in order that any
necessary corrections may be made. (E-ma il address:

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