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					Guide to the Grid

Navigation                                                                                                                Policy Change Indicator:
The grid is designed to give users a broad overview of current utility energy efficiency policies in U.S. states.         Each cell will be color-coded to indicate policy areas where change has occurred recently or may occur soon. Colors
Begin your navigation with the "Grid" worksheet by clicking on the "Grid" tab at the bottom of the screen.                range from blue (no change is likely) to violet (change is imminent).
This worksheet contains a summary overview for all states of all the information in the document.                                    Policy stable, complete, and functioning (for 24 months or more)
Within the "Grid" worksheet, policies are organized into 5 broad recommendations that follow the National                            Policy stable, but some elements missing or implementation incomplete
Action Plan and 2 other policy areas of interest. Within each recommendation are many policy options.                                Policy is new (put into place during previous 24 months)
Click on the black +/- signs to the left of the screen to expand and collapse the policy lists.                                      Policy may change (informal discussion of policy changes, or proposed statute)
Individual worksheets for each state describe individual states' policies in greater detail. Worksheets are                          Action likely soon (docket has been opened or a Commission has expressed intent)
labeled by state abbreviations at the bottom of the screen.                                                                          New policy required by statute or order; details in development
Within the "Grid" worksheet, some policies are hyperlinked to the corresponding state page policy. For                    Cross-hatching indicates that two or more of the above apply. For example:
these, you may click on the Y/N designation to quickly navigate to the corresponding policy on that state's
page. From the state page, you may click on the Y/N to go back to the "Grid" page.                                                   Blue/Yellow: Indicates that a major change has recently been made to a pre-existing policy
Acronyms used are listed at the bottom of each worksheet.                                                                            Yellow/Purple: Indicates that a new policy exists, AND an additional policy is in development
                                                                                                                              Y      Blue/Purple: Indicates that a new policy is in development, in addition to preexisting policy

Explanation of Grid Symbology

Policy Origin:

A letter next to each policy explanation
(on the state pages) indicates the
policy's origin as follows:
          S Statutory policy
          R Regulatory policy resulting from a decision, order, or MOU
          A Policy codified in state rules or administrative code
          F Federal Policy
        EO Executive Order
          U Utility-specific policy


 Criteria for specific policy options: A designation of "Y" or "N" is generally self-explanatory.
                                           A designation of "C" indicates the state's policy status is complete, regarding certain federal metrics, as described below.
                                           A designation of "P" indicates the state's policy status is partial, regarding certain federal metrics, as described below.
                                           Order = regulatory or Executive orders

             Some options are designated with a qualifier (e.g. Y+, Y, or Y-) based on the following policy-specific criteria:
             Recommendation 1

                 1.1   Y+ indicates that EE has greater priority than supply resources, or that all cost-effective energy efficiency should be procured.
                       Y indicates that efficiency is considered an equivalent resource in statute or order.
                       Y+ indicates that a robust resource planning process exists and is designed to procure maximum cost-effective EE.
               1.2.1   Y indicates that a resource planning process exists and is designed to procure significant EE.
                       Y- indicates that a resource planning process exists that results in EE savings goals and targets but it is not designed to procure
                       significant EE.
                       Y indicates that EE must be procured as a resource for default or standard offer service (restructured states only)
               1.2.2   Y- indicates that EE is presently procured as a resource, but is not required to be.
                   N+ indicates that EE may be procured as a resource, but is not required to be.
             Recommendation 2
                       Y+ indicates that statute requires the procurement of all cost-effective EE.
                 2.1   Y indicates that statute requires EE as a systematic and required part of electric resource procurement.
                       Y- indicates that statute is supportive of EE, but falls short of requiring it or is no longer used.
                       Y+ indicates that TRC and/or SC or similar cost/benefit test is a primary EE program cost-effectiveness test.
                       Y indicates that TRC and/or SC or similar test are required, but not considered primary.
                 2.2   Y- indicates that TRC and/or SC or similar test are used, but not required.
                       N / P indicates that a docket is open to consider TRC and/or SC
                       N / P may also indicate that TRC and/or SC are allowed but are not used (however, RAP does not have to pro-actively determine this)
                       Y indicates that established EE programs reach all customer classes, including low-income customers
               2.3.2   Y may also indicate that established EE programs reach all customer classes, but allows customers to opt out who participate in self-
                       directed EE programs
                       Y+ indicates that goals are designed to capture all cost-effective EE.
               2.5.1   Y indicates that goals are designed to be "stretch" goals, or to increase administrators' ability to procure EE.
                       Y- indicates that goals exist as a by-product of budget constraints.
                       Y+ indicates that EE is required as part of an RPS or EEPS or other resource standard, and any type of efficiency may be used.
               2.5.3   Y indicates that EE may be used to meet resource standard requirements, but is not required, or that only certain types of EE may
                       qualify for the resource standard.
               2.6.1   Y indicates a robust EM&V process is in place including impact, market and process evaluations
               2.7.1   Y indicates EE program administration has been clearly established by statute, order or contract
                       Y+ indicates the same resource planning process referred to in 1.2.1 is regularly updated and that it quantifies and integrates energy
                 2.8   savings from building codes.
                       Y indicates that the same resource planning process referred to in 1.2.1 is regularly updated

               2.10    Y+ indicates that Commission or other agency has authority to update standards as needed without specific legislative authorization.
                   Y indicates that standards have been updated recently.
             Recommendation 3

                   Y indicates that all state-approved EE program portfolios include any type of public education programs.
               3.1.1
                   Y- indicates that state-approved EE program portfolios serving at least one-half of the state's customers of regulated utilities include
                   any type of public education programs.
                   Y indicates stakeholders were involved in an advisory or collaborative role with program administrators, while developing EE program
               3.1.2
                   plans or determining best use of efficiency or sustainable energy funds.
             Recommendation 4
                       Y indicates that a cost recovery process exists for EE programs offered to all ratepayer classes.
               4.1.1   Y- indicates that cost recovery exists for only some programs or some classes of ratepayers, is done on a case-by-case basis, or is
                       impacted by legislative diversion of SBC funding.
             Recommendation 5
                    Y+ indicates that disincentives are fully addressed for all utilities and disincentives are removed via a regularly updated decoupling
                    mechanism designed to promote EE.
              5.1.1 Y indicates that disincentives are addressed for all utilities via a mechanism other than decoupling (e.g. third party administration, lost
                    revenue recovery, or bonus rate of return).
                    Y- indicates that disincentives are addressed, but not for all utilities or not for all rate classes, is rarely used; or the decoupling
                    mechanism is not designed to promote conservation.
                    Y+ indicates that a significant incentive mechanism is in place, encouraging implementors to meet "stretch" goals, with clear rules
                    regarding the incentive process.

               5.2.1   Y indicates that an incentive mechanism is in place, but doesn't encourage "stretch" goals or rules are unclear.
                       Y- indicates that incentives may be available, but a regular, predictable incentive system does not exist.
                       N / C indicates that a state has considered incentive mechanisms within the last three years, and has ruled them out; this status was
                       not proactively determined for every state
                 5.3   Y- indicates a one-time provision; not a regular part of ratesetting activities.
              5.3.2    Y- indicates that most, but not all, declining block rate structures have been eliminated.
              5.4.1-
              5.4.2    Y- indicates that the rate structure or mechanism in question is in place for some, but not all, customers.
                       Y+ / C indicates one or more utilities have implemented AMI
               5.4.3   Y / C indicates one or more utilities have contracted for AMI
                       Y- / P indicates that AMI is planned or utilities are running pilots
               5.4.4 Y indicates specific customer mechanisms are listed on the state page.
             7. Distributed Generation Policies
             A statewide interconnection policy is in place
                      Y+ indicates that there is a well-defined interconnection policy in place that has at least one or more beneficial attributes such as
                      standard forms, a reasonable timeline for application approval, low or no additional insurance requirements, allows for fairly large DG
                      units to interconnect and may have additional positive attributes.
                 7.1   Y indicates that there is an interconnection policy, but overall the policy cannot be considered either beneficial or detrimental to DG.
                       Y- indicates that the policy may be available, but has unfavorable requirements such as only allowing very small units (up to 10 kW for
                       residential and 100 kW for commercial) to interconnect, having high liability insurance requirements, requiring owners/operators to pay
                       large interconnect study fees, and may have other burdensome requirements like only allowing systems that qualify under net
                       metering rules to interconnect.
             A statewide net metering policy is in place
                      Y+ indicates that there is a favorable net metering policy in place, meaning that the limits on overall enrollment are fairly high, a wide
                      variety of DG systems and sizes are allowed to net meter, the utility compensates the DG owner for net excess generation, and
                      possibly other beneficial attributes.
                      Y indicates that there is a net metering policy, but the policy cannot be considered either beneficial or detrimental to DG, there may be
                7.2
                      some portions of the policy that are helpful and some that are not.
                      Y- indicates that the policy may be available, but it has unfavorable requirements, such as overall enrollment limits are very low, only
                      non-emitting renewables that are a small size may be allowed to net meter, customers are not compensated for their net excess
                      generation, and possibly other negative requirements.
             A statewide exit fee policy is in place
                       Y+ indicates that, under the statewide policy, DG owners/operators are not charged an exit fee.
                 7.3   Y indicates that, under the statewide policy, utilities are not allowed to charge DG owners an explicit exit fee. However, under certain
                       circumstances, utilities may still be able to recover costs.
                      Y- indicates that there is a statewide policy in place that allows utilities to charge DG owners an exit fee.
             A statewide standby rate policy is in place
                       U+ Utility policy that is beneficial/positive for DG projects - small or no reservation fee and no demand ratchets.
                7.4     U Utility policy that is neither completely positive or negative towards DG - may have several opposing attributes
                       U - Utility policy that is detrimental/negative for DG projects - high demand reservation fees, high demand ratchets.

             Utility DG Policies, state-level pages only
                U+     Utility policy that is beneficial/positive for DG projects.
                  U    Utility policy that is neither completely positive or negative towards DG - may have several opposing attributes
                 U-    Utility policy that is detrimental/negative for DG projects.
                                                                         Washington, DC
                                                                                      Electric                                  Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority
         resource, equivalent or superior to supply      N
  1.1    resources

         1.2.1 EE is integrated into an active IRP or
                                                         N
         Portfolio Management process.

         1.2.2 Efficiency is procured as a resource          PEPCO has proposed a plan (the "Blueprint") to provide EE
         for default service/standard offer customers        programs as part of their default service responsibilities.
                                                             PEPCO’s Blueprint is being considered by the DC PSC in
                                                             FC 945. The DC Council adopted the Clean and Affordable
                                                             Energy Act (CAEA) of 2008 effective October 1, 2008.
                                                         N   Section 207 of the CAEA, codified at DC Code section 8-
                                                             1774.07, establishes a timetable for processing the DSM
                                                             programs proposed by PEPCO in FC 945. The PSC
                                                             conditionally approved five DSM programs proposed by
                                                             PEPCO by Order issued in FC 945 on December 18, 2008.

  1.2                                                       http://www.pepco.com/_res/documents/DCBlueprintfiling040
                                                            407.pdf                                            DC Code
                                                            section 8-1774.07.
                                                            http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                            %28NCFC1C4F0B0%2DD811DDAE4A8%2D92D643A0D08
                                                            %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                            pbc=4BF3FCBE&rlt=CLID%5FFQRLT313927458276&rp=%
                                                        S,R 2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=Fi
                                                            nd&spa=DCC%2D1000&sr=TC&vr=2%2E0

                                                             December 18, 2008 Order in FC 945.
                                                             http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?ca
                                                             seno=FC945&docketno=1979&flag=C&show_result=Y


         EE is an alternative to transmission based
         on a long-term transparent IRP or                   No, but demand response is identified as alternative to local
         transmission system plan                        N   generation in the 2005 DOE Potomac River Order. This
                                                             indicates a potential opportunity for EE to be considered in
  1.3                                                        the same way, but there is no current proposal.
                                                             See DOE Order 02-05-03 in Docket EO-05-01 at
                                                        F, R http://www.oe.energy.gov/DocumentsandMedia/mirant_122
                                                             005_2.pdf
         1.4.1 EE is a biddable commodity
                                                             PJM conducts a regional planning process for 13 states,
                                                             and DC. PJM uses its Reliability Pricing Model (RPM) to
                                                             procure capacity on a multi-year forward basis through an
                                                             auction mechanism. In March 2008, several parties asked
                                                             FERC to review the reasonableness of the RPM process. On
                                                             June 30, 2008, PJM filed a responsive report. On September
                                                             19, 2008, FERC issued an Order addressing the report and
                                                         N   supporting creation of a stakeholder process to address
                                                             pending RPM issues. On December 12, 2008, PJM filed a
                                                             report with FERC summarizing results of the stakeholder
                                                             process, proposing changes to the RPM, including allowing
  1.4                                                        energy efficiency to participate in the RPM in Docket Nos.
                                                             ER05-1410-000, EL05-148-000. Also on December 12, 2008,
                                                             PJM filed corresponding tariff revisions for effect on March 27,
                                                             2009 in Docket No. ER09-412-000.
                                                             PJM Report filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?document_id=13
                                                             672172                                PJM tariff filing to
                                                         R
                                                             implement proposed changes to RPM filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?document_id=13
                                                             672185
        1.4.2 Bids occur in the following markets:
        (a) energy, (b) capacity, or (c) other        N


        State Implementation Plans (SIPs) include
                                                      N
  1.5   EE set-asides

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
      Efficiency commitment is in statute      The DC Council adopted the Clean and Affordable Energy
                                                          Act (CAEA) of 2008 effective October 1, 2008. Section 201
                                                          of the CAEA, codified at DC Code section 8-1774.01 (d)
                                                          provides the following:
                                                          “The SEU contract shall provide that the SEU shall, at a
                                                          minimum, achieve the following:
                                                            (1) Reduce per-capita energy consumption in the District
                                                          of Columbia;
                                                          (2) Increase renewable energy generating capacity in the
                                                          District of Columbia;
                                                            (3) Reduce the growth of peak electricity demand in the
                                                      N   District of Columbia;                                            N
                                                            (4) Improve the energy efficiency of low-income housing in
                                                          the District of Columbia;
                                                            (5) Reduce the growth of the energy demand of the District
                                                          of Columbia's largest energy users; and
  2.1                                                       (6) Increase the number of green-collar jobs in the District
                                                          of Columbia.”




                                                          DC Code section 8-1774.01.
                                                          http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                          %28N8E373470B0%2DD811DDB0CE9%2DEF51D9313DA
                                                          %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                      S   pbc=4BF3FCBE&rlt=CLID%5FFQRLT2715645259276&rp=                   S
                                                          %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
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                                                        The All-Ratepayers Test is used. Programs with a
                                                        cost/benefit ration of 0.8 and 1.0 may be evaluated for
                                                        other benefits, such as long-term savings, market
                                                        transformation, peak savings, and societal benefits. See p.
                                                        19 of Order 13475 at
                                                        http://www.dcpsc.org/pdf_files/commorders/orderpdf/ordern
                                                        o_13475_fc945.pdf The DC Council adopted the Clean
                                                        and Affordable Energy Act (CAEA) of 2008 effective
                                                     Y- October 1, 2008. Section 202 of the CAEA, codified at              Y-
                                                        section 8-1774.02 (d) provides that “[t]he SEU contract
                                                        shall require that the SEU program shall, when taken as a
                                                        whole, meet the societal benefit test on an annual and
                                                        contract-term basis.”

  2.2    The TRC or Societal Cost Test is
         used to evaluate EE programs
                                                         Order No. 12778, issued on 7/9/03, rejects use of the Price
                                                         Restrictive Test (similar to RIM) on the grounds that rate
                                                         impacts are already addressed by capping the SBC.
                                                         Section 8-1774.02.
                                                         http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                         %28N9A2F0460B0%2DD811DDA3C5A%2D0BC1430DB98
                                                     S,R %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&                  S
                                                         pbc=4BF3FCBE&rlt=CLID%5FFQRLT47201289276&rp=%2
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                                                         d&spa=DCC%2D1000&sr=TC&vr=2%2E0
      2.3.1 Potential for cost-effective EE
      has been established through a
      potential study
      2.3.2 Established EE programs                     PEPCO has proposed a plan (the "Blueprint") to offer a
      reach all customer classes                        variety of programs to customers. PEPCO’s Blueprint is
                                                        being considered by the DC PSC in FC 945. The PSC
                                                        conditionally approved five DSM programs proposed by
                                                        PEPCO by Order issued in FC 945 on December 18, 2008.
                                                        The Blueprint proposal included 10 programs. These
                                                    N
                                                        programs are discussed at pages 3-9 of the December 18th
2.3                                                     Order. In the Order, the PSC conditionally approved five of
                                                        the 10 proposed programs.



                                                        http://www.pepco.com/_res/documents/DCBlueprintfiling040
                                                        407.pdf                                     December
                                                        18, 2008 Order in FC 945.
                                                    R
                                                        http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?ca
                                                        seno=FC945&docketno=1979&flag=C&show_result=Y

      Funding requirements for all long-
      term, cost-effective EE have been             N
2.4
      established

      2.5.1 Quantitative MW and MWh
      savings goals have been
      established and are producing
      incremental investment.




                                                    N




      2.5.2 Goals are established: (a)
2.5   connection with IRP or other planning
      process; (b) as part of an EEPS or similar
      system; (c) as part of program approval and
      budget-setting process; (d) other

      2.5.3 Energy Efficiency can be                    The DC RPS statute is codified at section 34-1431 et seq.
      used to fulfill requirements of an            N
      RPS or similar standard
                                                        Section 34-1431 et seq.
                                                        http://weblinks.westlaw.com/toc/default.aspx?Abbr=dc%2Ds
                                                        t%2Dweb&Action=ExpandTree&AP=N9A402B40914111DB
                                                        9BCF9DAC28345A2A&ItemKey=N9A402B40914111DB9B
                                                    S
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                                                        1000&pbc=4BF3FCBE&fragment#N9A402B40914111DB9B
                                                        CF9DAC28345A2A
      2.5.4 Expected Capacity Savings
      (Annual MW in 2006)
      2.5.5 Energy Savings (Annual
      MWh in 2006)

      2.6.1 A robust M&V process has               Accountability Guidelines were established in 2005. The
      been established                             Guidelines direct the development of an M&V process. As
                                                   discussed in 1.2.2 above, PEPCO’s Blueprint is being
                                                   considered by the DC PSC in FC 945. The PSC
                                                   conditionally approved five DSM programs proposed by
                                                   PEPCO by Order issued in FC 945 on December 18, 2008.
                                                   The PSC discusses M&V at pager 14 (footnote 103) of the
                                                   December 14th Order.


                                               N




                                                   The Guidelines are online at
                                                   http://www.dcpsc.org/pdf_files/commorders/orderpdf/ordern
                                                   o_13601_fc945.pdf
                                               R   December 18, 2008 Order in FC 945.
2.6                                                http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?ca
                                                   seno=FC945&docketno=1979&flag=C&show_result=Y

      2.6.1.1    M&V is adequately funded


      2.6.1.2 Energy savings are used to
      measure performance

      2.6.1.3 M&V is done according to
      a defined schedule

      2.6.1.4 M&V is conducted by an
      independent party

      2.6.1.5 Review of M&V is done in
      a transparent process
      2.6.2 M&V is done using: (a) deemed
      savings; (b) actual savings; (c) other
      2.7.1 EE delivery structure has                  PEPCO has filed a proposal (the "Blueprint") requesting
      been established                                 permission to administer DSM programs for all customers,
                                                       except the DDOE would continue to mange low-income
                                                       programs. The District of Columbia Office of Energy
                                                       administers the Reliability Energy Trust Fund and energy
                                                       efficiency programs. See Order No. 12778, issued on
                                                       7/9/03. Beginning in 2005, the District Department of
                                                       Environment (DDOE or Energy Office) was responsible for
                                                       administering EE programs. The DC Council adopted the
                                                       Clean and Affordable Energy Act (CAEA) of 2008 effective
                                                       October 1, 2008. Section 201 of the CAEA, codified at
                                                       section 8-1774.01, authorizes the Energy Office to contract
                                                       with a “Sustainable Energy Utility” (SEU) for the
                                                       implementation of EE programs. Section 210 of the CAEA,
                                                  Y    at section 8-1774.10, authorizes the continuation of existing   Y
                                                       EE programs administered by electric and gas utilities with
                                                       oversight by the PSC. Section 207 of the CAEA, codified at
                                                       section 8-1774.07, requires that utility administered EE
                                                       programs not replicate programs offered through the SEU
                                                       (section 8-1774.07 (b)(3)). Subsection 8-1774.07 (d)
                                                       requires utility run programs to be operated in coordination
                                                       with the brand managed by the Energy Office.




                                                     See Order No. 12778, issued on 7/9/03. Section 8-1774.01.
                                                     http://weblinks.westlaw.com/result/default.aspx?cite=UUID
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                                                     %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
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                                                     Section 8-1774.10.
                                                     http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                     %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
                                                     %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
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                                                 S,R Section 8-1774.07.                                                S
                                                     http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                     %28NCFC1C4F0B0%2DD811DDAE4A8%2D92D643A0D08
                                                     %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                     pbc=4BF3FCBE&rlt=CLID%5FFQRLT313927458276&rp=%
                                                     2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=Fi
                                                     nd&spa=DCC%2D1000&sr=TC&vr=2%2E0




      2.7.2 Delivery is via: (a) utility               See 2.7.1 above.
      administration; (b) third-party            a,c                                                                   c
      administration; or (c) government agency


      Resource plans are regularly
                                                  N
2.8   updated
       2.9.1 Building Energy Codes for               Builders may use either the 2008 DC Construction Codes
       residential buildings are in place and        (based on the 30% Solution,” which is more stringent that
                                                     the 2009 IECC) or the previous code adopted in 2003
       regularly updated                             (which is based on the 2000 IECC). Builders must use the
                                                     2008 DC codes beginning December 26, 2009. Codes are
                                                     usually reviewed every three years with the publication of
                                                     the new editions of the model code. The DC Green Building
                                                 Y   Act of 2006 requires that updated building codes be
                                                     submitted to the City Council by January 1, 2010 and again
                                                     every three years thereafter. See BCAP summary for
                                                     details.




                                                     BCAP summary of DC building code status. http://bcap-
                                                     energy.org/node/60
2.9                                              S


       2.9.2 Building Energy Codes for               Builders may use either the 2008 DC Construction Codes
       commercial buildings are in place             (based on ASHRAE 90.1-2007) or the previous code
                                                     adopted in 2003 (which is based on the 2000 IECC).
       and regularly updated                         Builders must use the 2008 DC codes beginning December
                                                     26, 2009. Codes are usually reviewed every three years
                                                     with the publication of the new editions of the model code.
                                                     The DC Green Building Act of 2006 requires that updated
                                                 Y
                                                     building codes be submitted to the City Council by January
                                                     1, 2010 and again every three years thereafter. See BCAP
                                                     summary for details.




                                                     BCAP summary of DC building code status. http://bcap-
                                                     energy.org/node/60
       Appliance and Equipment Efficiency            In 2007, the DC Council enacted the Energy Efficiency
       Standards are in place and regularly          Standards Act of 2007, codified at DC Code section 8-
                                                     1771.01 et seq. The Act created efficiency standards for six
       updated                                   N   products, four of which were immediately preempted by
                                                     federal law. See DSIRE link for details.


                                                     Section 8-1771.01 et seq.
                                                     http://weblinks.westlaw.com/toc/default.aspx?Abbr=dc%2Ds
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                                                     e=TOC&RS=WEBL9.06&VR=2.0&SPa=DCC-
                                                 S   1000&pbc=4BF3FCBE&fragment#NAF0C7090AFE211DC9
                                                     88AE1C647D5A799             DSIRE link to DC appliance
                                                     standards.
                                                     http://www.dsireusa.org/incentives/incentive.cfm?Incentive_
                                                     Code=DC10R&re=1&ee=1



       Energy efficiency is a high priority in       Government agencies must adhere to energy efficiency
       state buildings and state funded              procurement requirements, including the purchase of
                                                     Energy Star labeled equipment. See D.C. Code § 2-304.02.
       buildings as evidenced in capital             The section 501 of the CAEA (codified at section 6-1451.01
       planning and enabling performance         Y   et seq.) requires government buildings to be benchmarked
       contracts                                     annually using ENERGY STAR Portfolio Manager, and
                                                     requires the disclosure of benchmarking results.




2.11
                                                           D.C. Code § 2-304.02 is available at
                                                           http://www.dsireusa.org/documents/Incentives/DC08R.htm
  2.11                                                     Section 6-1451.01 et seq.
                                                           http://weblinks.westlaw.com/toc/default.aspx?Abbr=dc%2Ds
                                                           t%2Dweb&Action=ExpandTree&AP=NC56CF3E0F19311DB
                                                           9C4FBD73C68952B6&ItemKey=NC56CF3E0F19311DB9C
                                                           4FBD73C68952B6&RP=%2Ftoc%2Fdefault%2Ewl&Service
                                                       S   =TOC&RS=WEBL9.06&VR=2.0&SPa=DCC-
                                                           1000&pbc=4BF3FCBE&fragment#NC56CF3E0F19311DB9
                                                           C4FBD73C68952B6




Recommendation 3: Miscellaneous Policies
      3.1.1 Public education programs on                   As described in the PSC’s FY 2009 Performance Plan, the
      EE are in place. (See Guide Tab for                  PSC will combine the current Heat Smart Campaign with an
                                                           “EducateDConsumers” component that among other things
      Y/N criteria.)                                       will include the creation and distribution of several new
                                                           brochures; the addition of a “green” section of the PSC’s
                                                       N   website; preparation of presentations to several ANCs, civic
                                                           organizations and other citizen groups; and expanded
                                                           media contacts.”



                                                           PSC’s FY 2009 Performance Plan.
                                                           http://www.dcpsc.org/pdf_files/reports/2009_PSC_Performa
                                                           nce.pdf
  3.1
         3.1.2 Process is in place, such as a
         state or regional collaborative, to
         pursue EE as a high-priority         N
         resource. (See Guide Tab for Y/N
         criteria.)
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         75% of state access to ENERGY STAR
  3.2    New Homes
         What proportion is due to regulated utility
         program? (who is sponsor) Performance
         75% of state access to Home
         with ENERGY STAR?
         What proportion is ue to regulated utility
         program? (who is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
      4.1.1 Cost recovery process exists                    PEPCO Blueprint proposes use of a DSM surcharge to
                                                            support expanded efficiency programs Present status: An
                                                            SBC funds the Reliable Energy Trust Fund, which is used to
                                                            fund energy efficiency and renewable energy programs. A
                                                            2005 Order increased funding levels. As discussed in 2.7.1
                                                            above, the DC Council adopted the Clean and Affordable
                                                            Energy Act (CAEA) of 2008 effective October 1, 2008.
                                                            Section 201 of the CAEA, codified at section 8-1774.01,
                                                            authorizes the Energy Office to contract with a “Sustainable
                                                         Y- Energy Utility” (SEU) for the implementation of EE             Y-
                                                            programs. Section 210 of the CAEA, at section 8-1774.10,
                                                            establishes the Sustainable Energy Trust Fund (SETF).
                                                            Subsections 8-1774.10 (b)(1) and (b)(2) establish SBC
                                                            levels for gas and electric customers respectively for FYs
                                                            2009 through 2011 and out years. Subsection 8-1774.10
                                                            (c) lists the specific purposes the SETF can be used for.
                                                            Proceeds from RGGI auctions will be deposited into the
                                                            SETF. (See subsection 8-1774.10 (a)(1).)

                                                             The SBC was established by statute. See DC ST 34-
                                                             1514.http://weblinks.westlaw.com/Find/Default.wl?DB=DC%
                                                             2DST%2DTOC%3BSTADCTOC&DocName=DCCODES34
                                                             %2D1514&FindType=W&AP=&fn=_top&rs=WEBL6.08&vr=
                                                             2.0&spa=DCC-1000&trailtype=26                           A
                                                             2005 Order increased funding levels. See DC PSC Order
                                                             No. 13475, issued March 7, 2005, p. 60-62.
                                                             http://www.dcpsc.org/pdf_files/commorders/orderpdf/ordern
                                                             o_13475_FC945.pdf
                                                             Section 8-1774.01.
                                                             http://weblinks.westlaw.com/result/default.aspx?cite=UUID
4.1                                                      S,R %28N8E373470B0%2DD811DDB0CE9%2DEF51D9313DA                    S
                                                             %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                             pbc=4BF3FCBE&rlt=CLID%5FFQRLT2715645259276&rp=
                                                             %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
                                                             Find&spa=DCC%2D1000&sr=TC&vr=2%2E0
                                                             Section 8-1774.10.
                                                             http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                             %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
                                                             %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                             pbc=4BF3FCBE&rlt=CLID%5FFQRLT40328113611276&rp
                                                             =%2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service
                                                             =Find&spa=DCC%2D1000&sr=TC&vr=2%2E0

      4.1.2 Recovery occurs via: (a) rider; (b)
      regular rate case; or (c) system benefits           c                                                                c
      charge
      4.1.3 Funding is for multi-year periods                 As discussed in 4.1.1 above, SBC levels are set for FY
                                                              2009-2011 and out years in subsections 8-1774.10 (b)(1)
                                                          Y   and (b)(2). Spending caps for SEU run and utility run EE     Y
                                                              programs are codified at subsections 8-1774.10 (c).

                                                              Section 8-1774.10.
                                                              http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                              %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
                                                              %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                          S   pbc=4BF3FCBE&rlt=CLID%5FFQRLT40328113611276&rp               S
                                                              =%2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service
                                                              =Find&spa=DCC%2D1000&sr=TC&vr=2%2E0


      A base energy efficiency spending level
      exists, with opportunity to justify higher level    N
4.2

      % of net (retail) utility revenue                       .
      presently used for energy efficiency
4.3   [no unit = %; m/k = mils/kWh]
         Funds from carbon trading program           As discussed in 4.1.1 above, proceeds from RGGI auctions
         support EE                                  will be deposited into the SETF which is used to fund EE
                                                     programs. (See subsection 8-1774.10 (a)(1).)
                                                 Y                                                                   Y



                                                     Section 8-1774.10.
                                                     http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                     %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
                                                     %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
  4.4                                                pbc=4BF3FCBE&rlt=CLID%5FFQRLT40328113611276&rp
                                                     =%2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service
                                                     =Find&spa=DCC%2D1000&sr=TC&vr=2%2E0
                                                 S                                                                   S




Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking prac
      5.1.1 Utility throughput incentive is          PEPCO has a decoupling proposal before the PSC, calling
      addressed and disincentives are                for a "Bill Stabilization Adjustment" in Formal Case 1053,
                                                     which would adjust actual revenues to match anticipated
      removed                                        revenues. If approved, PEPCO proposed to reduce the
                                                    ROE and ROR. This filing was in the context of PEPCO’s
                                                    “Blueprint” which proposes proactive EE programs. In
                                                    Decision 14712, January 2008, the Commission decided to
                                                    consider the legal and implementation issues of PEPCO's
                                                    BSA in Formal Case 1053 Phase II before ruling on the
                                                    BSA. The first action under Phase II was to request parties
                                                    to brief the Commission on their views of the legal ability of
                                                    the Commission to institute a BSA under existing statutes.
                                                 Y- Those briefs were filed on March 31, 2008, and reply briefs      Y-
                                                    were due later that month. PEPCO’s proposed BSA is still
                                                    pending in FC 1053 Phase II. As discussed in 2.7.1 above,
                                                    the DC Council adopted the Clean and Affordable Energy
                                                    Act (CAEA) of 2008 effective October 1, 2008. Section 201
                                                    of the CAEA, codified at section 8-1774.01, authorizes the
                                                    Energy Office to contract with a “Sustainable Energy Utility”
                                                    (SEU) for the implementation of EE programs. Section 210
                                                    of the CAEA, at section 8-1774.10, authorizes the
                                                    continuation of existing EE programs administered by
                                                    electric and gas utilities with oversight by the PSC.


                                                    http://www.dcpsc.org/hottopics/pepco_ratecase.shtm
                                                    Section 8-1774.01.
                                                    http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                    %28N8E373470B0%2DD811DDB0CE9%2DEF51D9313DA
                                                    %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                    pbc=4BF3FCBE&rlt=CLID%5FFQRLT2715645259276&rp=
                                                    %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
                                                    Find&spa=DCC%2D1000&sr=TC&vr=2%2E0
                                                    Section 8-1774.10.
                                                S,R http://weblinks.westlaw.com/result/default.aspx?cite=UUID        S
                                                    %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
  5.1                                               %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                    pbc=4BF3FCBE&rlt=CLID%5FFQRLT40328113611276&rp
                                                    =%2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service
                                                    =Find&spa=DCC%2D1000&sr=TC&vr=2%2E0
5.1




      5.1.2 Method used is: (a) decoupling; (b)       Decoupling has been proposed. As discussed in 5.1.1
      lost revenue recovery; or (c) non-utility       above, the DC Council adopted the Clean and Affordable
      implementaion of EE                             Energy Act (CAEA) of 2008 effective October 1, 2008 which
                                                      authorizes the Energy Office to contract with a “Sustainable
                                                      Energy Utility” (SEU) for the implementation of EE programs
                                                  c                                                                   c
                                                      but also allows the continuation of existing EE programs
                                                      administered by electric and gas utilities with oversight by
                                                      the PSC.


                                                      Section 8-1774.01.
                                                      http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                      %28N8E373470B0%2DD811DDB0CE9%2DEF51D9313DA
                                                      %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                      pbc=4BF3FCBE&rlt=CLID%5FFQRLT2715645259276&rp=
                                                      %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
                                                      Find&spa=DCC%2D1000&sr=TC&vr=2%2E0
                                                      Section 8-1774.10.
                                                      http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                  S                                                                   S
                                                      %28NEDBC5470B0%2DD811DDB6438%2DFC7863C9E02
                                                      %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                      pbc=4BF3FCBE&rlt=CLID%5FFQRLT40328113611276&rp
                                                      =%2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service
                                                      =Find&spa=DCC%2D1000&sr=TC&vr=2%2E0




      5.2.1 Utility/shareholder EE                     The DC Council adopted the Clean and Affordable Energy
      incentives are provided                         Act (CAEA) of 2008 effective October 1, 2008 which
                                                      authorizes the Energy Office to contract with a “Sustainable
                                                      Energy Utility” (SEU) for the implementation of EE
                                                      programs. Section 202 of the CAEA, codified at section 8-
                                                      1774.02, governs the structure of the SEU. Subsection 8-
                                                      1774.02 (c) specifies that the contract between the DC
                                                      Energy Office and the SEU “shall be performance based
                                                      and shall provide financial incentives for the SEU to surpass
                                                  Y                                                                   Y
                                                      the performance benchmarks set forth in the SEU contract.
                                                      The SEU contract shall also provide financial penalties to
                                                      be applied to the SEU if the SEU fails to meet the required
                                                      performance benchmarks.”


5.2


                                                      Section 8-1774.02.
                                                      http://weblinks.westlaw.com/result/default.aspx?cite=UUID
                                                      %28N9A2F0460B0%2DD811DDA3C5A%2D0BC1430DB98
                                                      %29&db=1000869&findtype=VQ&fn=%5Ftop&ifm=NotSet&
                                                  S   pbc=4BF3FCBE&rlt=CLID%5FFQRLT7698346127286&rp=                  S
                                                      %2FSearch%2Fdefault%2Ewl&rs=WEBL9%2E06&service=
                                                      Find&spa=DCC%2D1000&sr=TC&vr=2%2E0


      5.2.2 Incentives exceed amount of
      lost revenues

      5.3.1 Impact on EE is a
      consideration when designing retail
      rates
5.3
      5.3.2 Declining block rates and
      fixed variable rate designs have
      been eliminated
         5.4.1 Time sensitive rates in place                   PEPCO rates approved in January 2007 include inclining
                                                           Y   block rates that vary with season
                                                               http://www.dcpsc.org/pdf_files/commorders/orderpdf/ordern
                                                           R
                                                               o_14171_FC1017.pdf
         5.4.2 Usage sensitive rates in                        PEPCO rates approved in January 2007 include inclining
                                                           Y   block rates that vary with season
         place
                                                            http://www.dcpsc.org/pdf_files/commorders/orderpdf/ordern
                                                           R
                                                            o_14171_FC1017.pdf
         5.4.3 AMI deployment planned                       Smart meter pilot is underway. See Formal Case No. 1002.
                                                            Smart Meter Working Group established to address EPAct
                                                            of 2005. See Formal Case No. 1049. Also, PEPCO has
                                                            proposed AMI deployment for all residential customers
                                                       Y-/P within next 5 years. On July 2, 2008 in FC 1002, the PSC
  5.4                                                       approved the revised smart metering tariff proposed by
                                                            PEPCO and the DC Smart Meter Pilot Program, Inc. for
                                                            PEPCO’s smart meter pilot program “PowerCentsDC.”

                                                               Formal Case No. 1002. Order 14166. Formal Case No.
                                                               1049. Order 14239.                            July 2,
                                                               2008 Order in FC 1002.
                                                           R
                                                               http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?ca
                                                               seno=FC1002&docketno=270&flag=C&show_result=Y

         5.4.4 Other mechanisms exist
         (e.g., on-bill financing, benefit
         sharing)

State Fiscal Policy
         Sales Tax reduction or exemption
  6.1    for energy efficient products

         Investment Tax Credit for energy              Y       Income tax credit for residential energy efficiency
  6.2    efficient investments                                 investments.
                                                               http://www.dccouncil.washington.dc.us/images/00001/20060
                                                               217102300.pdf
         State supported low cost financing
         for energy efficient investments:
  6.3    buildings (x), equipment (y)



Distributed Generation Policies

         A statewide interconnection policy is in         In 2008 the DC PSC was considering adopting a federal
         place                                            interconnection standard for DG, pursuant to EPAct 2005.
                                                           N
                                                          The District has draft interconnection rules completed,
                                                          formal case no. 1050.
                                                          Case no. 1050, can be found here,
                                                          http://www.dcpsc.org/edocket/docketsheets.asp?SearchStri
   7.1                                                    ng=Search&cbofctype=all&CaseNumber=1050&ItemNumbe
                                                       R
                                                          r=&PartyFiling=&FilingType=&Keywords=&FromDate=&ToD
                                                          ate=&Search=Submit+Search&toggle_text=Full+Text&show
                                                          _result=Y&hdn_orderNumber=
                                                          PEPCO, the only electric distribution company that serves
                                                       U DC filed an interconnection tariff that addresses larger
                                                          qualifying facilities (QF) under PURPA.
         A statewide net metering policy is in place      Net metering is available to residential and commercial
                                                          customers under DC ST § 34-1518 and CDCR 15-900.
                                                          Renewable energy systems, chp, fuels cells, and/or
                                                       Y+ microturbines up to 100 kW are eligible to net meter. Net
                                                          excess generation is credited to the customer's next bill at
   7.2
                                                          the utility's full retail rate. There is a standard net-metering
                                                          contract.
                                                          CDCR 15-900 can be accessed from here,
                                                       A http://www.dsireusa.org/documents/Incentives/DC01Rd.htm
      A statewide exit fee policy is in place
                                                        DC currently has no orders or other rules regulating exit
                                                    N   fees for DG. Exit fees may be addressed in Formal Case
7.3
                                                        No. 1050 mentioned above, however nothing on this topic
                                                        has been added to the draft regulations as of August 2007.

      A statewide standby rate policy is in place
                                                    N
                                                       DC does not have a statewide policy on standby rates
                                                       Potomac Electric Power Company - Schedule S - A minor
                                                       reservation fee is charged per kilowatt to secure standby
7.4                                                    capacity while actual energy service is charged under the
                                                    U+ appropriate rate schedule for the facility size. Billing
                                                       demand is based on the maximum 30 minute demand of
                                                       the month with no ratchet. Rate available at:
                                                       http://www.pepco.com/home/choice/dc/tariffs/
      As part of resource planning process, CHP        DC does not have an IRP process. PEPCO has proposed a
      is reviewed and incorporated where            N plan to provide EE programs as part of their default service
      effective                                        responsibilities.

                                                        PEPCO's plan is currenty being considered with the DC
7.5
                                                        PSC in FC 945
                                                        http://www.pepco.com/_res/documents/DCBlueprintfiling040
                                                        407.pdf
Natural Gas
efficiency as a resource
             The DC Council adopted the Clean and
             Affordable Energy Act (CAEA) of 2008
             effective October 1, 2008. Section 201 of the
             CAEA, codified at DC Code section 8-1774.01
             (d) provides the following:
             “The SEU contract shall provide that the SEU
             shall, at a minimum, achieve the following:
               (1) Reduce per-capita energy consumption in
             the District of Columbia;
             (2) Increase renewable energy generating
             capacity in the District of Columbia;
               (3) Reduce the growth of peak electricity
             demand in the District of Columbia;
               (4) Improve the energy efficiency of low-
             income housing in the District of Columbia;
               (5) Reduce the growth of the energy demand
             of the District of Columbia's largest energy
             users; and
               (6) Increase the number of green-collar jobs
             in the District of Columbia.”




             DC Code section 8-1774.01.
             http://weblinks.westlaw.com/result/default.asp
             x?cite=UUID%28N8E373470B0%2DD811DD
             B0CE9%2DEF51D9313DA%29&db=1000869
             &findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
             4BF3FCBE&rlt=CLID%5FFQRLT2715645259
             276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
             EBL9%2E06&service=Find&spa=DCC%2D10
             00&sr=TC&vr=2%2E0
             The DC Council adopted the Clean and
             Affordable Energy Act (CAEA) of 2008
             effective October 1, 2008. Section 202 of the
             CAEA, codified at section 8-1774.02 (d)
             provides that “[t]he SEU contract shall require
             that the SEU program shall, when taken as a
             whole, meet the societal benefit test on an
             annual and contract-term basis.”




             Section 8-1774.02.
             http://weblinks.westlaw.com/result/default.asp
             x?cite=UUID%28N9A2F0460B0%2DD811DD
             A3C5A%2D0BC1430DB98%29&db=1000869
             &findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
             4BF3FCBE&rlt=CLID%5FFQRLT4720128927
             6&rp=%2FSearch%2Fdefault%2Ewl&rs=WEB
             L9%2E06&service=Find&spa=DCC%2D1000
             &sr=TC&vr=2%2E0
Beginning in 2005, the District Department of
Environment (DDOE or Energy Office) was
responsible for administering EE programs.
The DC Council adopted the Clean and
Affordable Energy Act (CAEA) of 2008
effective October 1, 2008. Section 201 of the
CAEA, codified at section 8-1774.01,
authorizes the Energy Office to contract with a
“Sustainable Energy Utility” (SEU) for the
implementation of EE programs. Section 210
of the CAEA authorizes the continuation of
existing EE programs administered by electric
and gas utilities with oversight by the PSC.
Section 207 of the CAEA, codified at section 8-
1774.07, requires that utility administered EE
programs not replicate programs offered
through the SEU (section 8-1774.07 (b)(3)).
Subsection 8-1774.07 (d) requires utility run
programs to be operated in coordination with
the brand managed by the Energy Office.




Section 8-1774.01.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28N8E373470B0%2DD811DD
B0CE9%2DEF51D9313DA%29&db=1000869
&findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
4BF3FCBE&rlt=CLID%5FFQRLT2715645259
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
Section 8-1774.10.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28NEDBC5470B0%2DD811DD
B6438%2DFC7863C9E02%29&db=1000869&
findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
BF3FCBE&rlt=CLID%5FFQRLT40328113611
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
Section 8-1774.07.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28NCFC1C4F0B0%2DD811DD
AE4A8%2D92D643A0D08%29&db=1000869
&findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
4BF3FCBE&rlt=CLID%5FFQRLT3139274582
76&rp=%2FSearch%2Fdefault%2Ewl&rs=WE
BL9%2E06&service=Find&spa=DCC%2D100
0&sr=TC&vr=2%2E0


See 2.7.1 above.
fficiency where cost-effective.
As discussed in 2.7.1 above, the DC Council
adopted the Clean and Affordable Energy Act
(CAEA) of 2008 effective October 1, 2008.
Section 201 of the CAEA, codified at section 8-
1774.01, authorizes the Energy Office to
contract with a “Sustainable Energy Utility”
(SEU) for the implementation of EE programs.
Section 210 of the CAEA, at section 8-
1774.10, establishes the Sustainable Energy
Trust Fund (SETF). Subsections 8-1774.10
(b)(1) and (b)(2) establish SBC levels for gas
and electric customers respectively for FYs
2009 through 2011. Subsection 8-1774.10 (c)
lists the specific purposes the SETF can be
used for. Proceeds from RGGI auctions will
be deposited into the SETF. (See subsection
8-1774.10 (a)(1).)


Section 8-1774.01.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28N8E373470B0%2DD811DD
B0CE9%2DEF51D9313DA%29&db=1000869
&findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
4BF3FCBE&rlt=CLID%5FFQRLT2715645259
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
Section 8-1774.10.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28NEDBC5470B0%2DD811DD
B6438%2DFC7863C9E02%29&db=1000869&
findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
BF3FCBE&rlt=CLID%5FFQRLT40328113611
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0




As discussed in 4.1.1 above, SBC levels are
set for FY 2009-2011 and out years in
subsections 8-1774.10 (b)(1) and (b)(2).
Spending caps for SEU run and utility run EE
programs are codified at subsections 8-
Section 8-1774.10.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28NEDBC5470B0%2DD811DD
B6438%2DFC7863C9E02%29&db=1000869&
findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
BF3FCBE&rlt=CLID%5FFQRLT40328113611
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
              As discussed in 4.1.1 above, proceeds from
              RGGI auctions will be deposited into the SETF
              which is used to fund EE programs. (See
              subsection 8-1774.10 (a)(1).)



              Section 8-1774.10.
              http://weblinks.westlaw.com/result/default.asp
              x?cite=UUID%28NEDBC5470B0%2DD811DD
              B6438%2DFC7863C9E02%29&db=1000869&
              findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
              BF3FCBE&rlt=CLID%5FFQRLT40328113611
              276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
              EBL9%2E06&service=Find&spa=DCC%2D10
              00&sr=TC&vr=2%2E0




energy efficiency and modify ratemaking practices to
              As discussed in 2.7.1 above, the DC Council
              adopted the Clean and Affordable Energy Act
              (CAEA) of 2008 effective October 1, 2008.
              Section 201 of the CAEA, codified at section 8-
              1774.01, authorizes the Energy Office to
              contract with a “Sustainable Energy Utility”
              (SEU) for the implementation of EE programs.
              Section 210 of the CAEA, at section 8-
              1774.10, authorizes the continuation of
              existing EE programs administered by electric
              and gas utilities with oversight by the PSC.




              Section 8-1774.01.
              http://weblinks.westlaw.com/result/default.asp
              x?cite=UUID%28N8E373470B0%2DD811DD
              B0CE9%2DEF51D9313DA%29&db=1000869
              &findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
              4BF3FCBE&rlt=CLID%5FFQRLT2715645259
              276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
              EBL9%2E06&service=Find&spa=DCC%2D10
              00&sr=TC&vr=2%2E0
              Section 8-1774.10.
              http://weblinks.westlaw.com/result/default.asp
              x?cite=UUID%28NEDBC5470B0%2DD811DD
              B6438%2DFC7863C9E02%29&db=1000869&
              findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
              BF3FCBE&rlt=CLID%5FFQRLT40328113611
              276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
              EBL9%2E06&service=Find&spa=DCC%2D10
              00&sr=TC&vr=2%2E0
As discussed in 5.1.1 above, the DC Council
adopted the Clean and Affordable Energy Act
(CAEA) of 2008 effective October 1, 2008
which authorizes the Energy Office to contract
with a “Sustainable Energy Utility” (SEU) for
the implementation of EE programs but also
allows the continuation of existing EE
programs administered by electric and gas
utilities with oversight by the PSC.

Section 8-1774.01.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28N8E373470B0%2DD811DD
B0CE9%2DEF51D9313DA%29&db=1000869
&findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
4BF3FCBE&rlt=CLID%5FFQRLT2715645259
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
Section 8-1774.10.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28NEDBC5470B0%2DD811DD
B6438%2DFC7863C9E02%29&db=1000869&
findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=4
BF3FCBE&rlt=CLID%5FFQRLT40328113611
276&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
The DC Council adopted the Clean and
Affordable Energy Act (CAEA) of 2008
effective October 1, 2008 which authorizes the
Energy Office to contract with a “Sustainable
Energy Utility” (SEU) for the implementation of
EE programs. Section 202 of the CAEA,
codified at section 8-1774.02, governs the
structure of the SEU. Subsection 8-1774.02
(c) specifies that the contract between the DC
Energy Office and the SEU “shall be
performance based and shall provide financial
incentives for the SEU to surpass the
performance benchmarks set forth in the SEU
contract. The SEU contract shall also provide
financial penalties to be applied to the SEU if
the SEU fails to meet the required
performance benchmarks.”

Section 8-1774.02.
http://weblinks.westlaw.com/result/default.asp
x?cite=UUID%28N9A2F0460B0%2DD811DD
A3C5A%2D0BC1430DB98%29&db=1000869
&findtype=VQ&fn=%5Ftop&ifm=NotSet&pbc=
4BF3FCBE&rlt=CLID%5FFQRLT7698346127
286&rp=%2FSearch%2Fdefault%2Ewl&rs=W
EBL9%2E06&service=Find&spa=DCC%2D10
00&sr=TC&vr=2%2E0
                                                                  DELAWARE
                                                                    Electric                              Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
       EE is established as a high
       priority resource, equivalent or
       superior to supply resources
                                          N
 1.1



       1.2.1 EE is integrated into an       The Electric Utility Retail Customer Supply Act of 2006
       active IRP, portfolio                amended Title 26 on Public Utilities of the Delaware
       management, or other planning        Code. Del. C. §1007 to require utilities to use an IRP
       process                              process for procurement of Standard Offer Service which
                                            considers both supply and demand-side options over a
                                            ten-year planning period. November 2007 Docket No. 60
                                            Order No. 7318 includes stronger language; it requires
                                            Delmarva to undertake IRP planning which must
                                            "[compare] a comprehensive resource mix of supply- and
                                            demand-side and Transmission Service resource costs
                                            and attributes." Delmarva's Third Updated Integrated
                                            Resource Plan submitted on November 3, 2008
                                            considers energy efficiency as a resource option. The
                                            2008 IPR proposes to develop a plan for coordinating
                                            with DE Sustainable Energy Utility (SEU) which it
                                          Y assumes will implement cost effective DSM programs as
                                            outlined in Delmarva's March 16, 2007 document,
                                            Blueprint for the Future. June 2007 legislation, SB No.
                                            18, created a Sustainable Energy Utility for Delaware to
                                            promote energy efficiency and renewables. The law
                                            creates a nonprofit under the State Energy Coordinator
                                            within the Energy Office, Department of Natural
                                            Resources and Environmental Control. The SEU
                                            programs will be funded by public and private funds, and
                                            "shared savings" from special-purposed bond proceeds.
 1.2
                                            The Contract Administrator was scheduled to be
                                            determined in December 2008, but the process was
                                            delayed until 2009. Further details being developed.



                                            SB No. 18 (2007) is available at http://www.seu-
                                            de.org/docs/legislation/DE_Senate_Bill_SS1toSB18_200
                                            7.pdf. Electric Utility Retail Customer Supply Act of 2006,
                                          S Del. Laws Title 26, Ch.10 § 1007.
                                            http://delcode.delaware.gov/title26/c010/index.shtml#P12
                                            3_15363.
                                            Proposed IRP Regulations, PSC Order No. 7318
                                            (December 4, 2007) is available at
                                            http://depsc.delaware.gov/orders/7318.pdf. PSC Docket
                                          R No 07-20, Delmarva's November 3, 2008 IRP is
                                            available at http://depsc.delaware.gov/dplirp.shtml.
                                            Delmarva's Blueprint for the Future is available at
                                            http://depsc.delaware.gov/electric/0728appl.pdf.

       1.2.2 Efficiency is procured as
       a resource for default
                                          Y
       service/standard offer customers


       EE is an alternative to                November 2007 Docket No. 60 Order No. 7318 requires
       transmission based on a long-          Delmarva to undertake IRP planning for its Standard
       term transparent IRP or                Offer Service, which must "[compare] a comprehensive
       transmission system plan               resource mix of supply- and demand-side and
 1.3                                          Transmission Service resource costs and attributes,"
                                              however it is unclear if EE has served as an alternative
                                              to date.
       1.4.1 EE is a biddable                 PJM conducts a regional planning process for 13 states,
       commodity                              including DE. PJM uses its Reliability Pricing Model
                                              (RPM) to procure capacity on a multi-year forward basis
                                              through an auction mechanism. In March 2008, several
                                              parties asked FERC to review the reasonableness of the
                                              RPM process. On June 30, 2008, PJM filed a
                                              responsive report. On September 19, 2008, FERC
                                              issued an Order addressing the report and supporting
                                            N creation of a stakeholder process to address pending
                                              RPM issues. On December 12, 2008, PJM filed a report
                                              with FERC summarizing results of the stakeholder
                                              process, proposing changes to the RPM, including
                                              allowing energy efficiency to participate in the RPM in
                                              Docket Nos. ER05-1410-000, EL05-148-000. Also on
 1.4
                                              December 12, 2008, PJM filed corresponding tariff
                                              revisions for effect on March 27, 2009 in Docket No.
                                              ER09-412-000.

                                              PJM Report filed 12 12 08
                                              http://elibrary.ferc.gov/idmws/File_list.asp?document_id=
                                              13672172. PJM tariff filing to implement proposed
                                            R
                                              changes to RPM filed 12 12 08
                                              http://elibrary.ferc.gov/idmws/File_list.asp?document_id=
                                              13672185.
       1.4.2 Bids occur in the following
       markets: (a) energy, (b)          N/A
       capacity, or (c) other

       State Implementation Plans
 1.5   (SIPs) include EE set-asides

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
       Efficiency commitment is in              A 2007 law, SB 18, establishes an independent non-
       statute                                  profit, Sustainable Energy Utility, which "will use
                                                competitive markets and leveraged private-financing to
                                                deliver cost-effective end-use energy services" to
                                                achieve an average 30% reduction in annual energy
                                                usage for SEU participants, targeted at 33% of
                                            Y   Delawareans, by 2015. The Contract Administrator was
                                                scheduled to be determined in December 2008, but the
                                                process was delayed until 2009. SEU details are still
                                                being developed. ALSO, Delaware's IRP statute states
 2.1                                            that "DP&L shall explore in detail all reasonable short-
                                                and long-term procurement or demand-side
                                                management strategies".
                                                See DE Senate Bill No. 18,
                                                http://legis.delaware.gov/LIS/lis144.nsf/7712cf7cc0e9227
                                                a852568470077336f/1f432fcb78503ead852572ab00746
                                            S   98f?OpenDocument. Also, see Del. Laws Title 26, Ch.10
                                                § 1007,
                                                http://www.delcode.state.de.us/title26/c010/index.htm#P1
                                                29_15363
                                                The TRC and SCT tests were used to screen DSM
                                                programs in Delmarva's 2008 IRP. See: p. 25 of the
                                            Y   Blueprint; PSC DOCKET No. 07-20, Delmarva's Third
       The TRC or Societal Cost Test is         Updated IRP (November 3, 2008), Appendix B: Demand-
 2.2   used to evaluate EE programs             side Resources, pp. 3-6.
                                                The Blueprint is available online at
                                                http://depsc.delaware.gov/electric/0728appl.pdf;
                                            R
                                                Delmarva's 2008 IRP is available at
                                                http://depsc.delaware.gov/dplirp.shtml.
       2.3.1 Potential for cost-effective       SB 18 creates a Contract Administrator, responsible for
       EE has been established                  undertaking a comprehensive resource analysis of
       through a potential study                energy efficiency potential by which program designs will
                                            N
                                                be guided. As of the end of 2008, the Contract
                                                Administer had not yet been selected, and the analysis
                                                not yet initiated
                                                See SB No. 18 (g)(1)
                                                http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                                +18/$file/legis.html?open
      2.3.2 Established EE programs         Under SB 18, the Contract Administrator of the SEU is
      reach all customer classes            charged with designing a portfolio of programs that allow
                                            "all energy end-users, regardless of electricity or gas
                                            retail providers, and regardless of market segment or
                                            end-use fuel, to participate in the SEU programs." The
                                            law also states that "SEU shall assess strategies and
                                            funding mechanisms to weatherize at least eight hundred
                                            (800) low-income households per year, not counting
                                            those households served with Weatherization Assistance
                                            Program funding. The SEU shall target services to
2.3
                                         Y- households living in single-family owner-occupied units
                                            and mobile homes, single-family rental units, rental
                                            buildings with five (5) units or less, and large multifamily
                                            buildings with greater than five (5) units. The SEU shall
                                            target three low-income levels: 200% of the federal
                                            poverty level, 60% of the state median income, and 80%
                                            of the state median income." In the SEU Final Report,
                                            one of the SEU's stated goals is to double the rate of low
                                            income household weatherization. Delmarva has
                                            proposed a plan (the "Blueprint") to offer a variety of
                                            programs to customers, including 4 non-residential and 4
                                            See page energy efficiency programs; low-income users
                                            residential5 of SEU Final Report for low-income goal,
                                            available at http://www.seu-
                                            de.org/docs/SEU_Final_Report.pdf. SB 18 (g)(1)(d) is
                                         S, available at
                                         R http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                            +18/$file/legis.html?open; The Blueprint is available
                                            online at http://depsc.delaware.gov/electric/0728appl.pdf

      Funding requirements for long-         No requirements per se, but annual investment for
      term, cost-effective EE have           energy efficiency through the SEU is expected to be $6.7
      been established                       million from 2008 to 2010; average annual investment is
2.4                                          expected to be $8.7 million from 2008 through 2018.

                                           See SEU Final Report at http://www.seu-
                                           de.org/docs/SEU_Final_Report.pdf
      2.5.1 Quantitative MW and            SB 18 requires the Sustainable Energy Utility to achieve
      MWh savings goals have been          an average 30% reduction in annual energy usage for
      established and are producing        SEU participants, targeted at 33% of Delawareans, by
      incremental investment.              2015. SEU's 30% target has been broken down into
                                           annual incremental MWh goals for some energy
                                         N efficiency programs in the SEU Final Report. The target
                                           was set at 30% due to a 2003 assessment of energy
                                           efficiency potential by the Governor's Energy Task
                                           Force. Delmarva's 2008 IRP outlines projected MW and
                                           MWh savings, but not goals.

                                             See page 27 of Synapse Report, available at
                                             http://depsc.delaware.gov/documents/Synapse.pdf. See
                                             page 2 of Appendix B of the 2008 IRP, available at
                                             http://depsc.delaware.gov/electric/irp/DE%20IRP%20Nov
                                             %20Appen%20B%20Demand%20Resources.pdf. SEU
                                             Final Report at http://www.seu-
                                             de.org/docs/SEU_Final_Report.pdf. Governors Energy
                                             Task Force, Conservation and Energy Working Group,
                                             Final Report (June 2003) is available at http://www.seu-
                                             de.org/docs/Governors_Energy_TF_EE_Report.pdf.
      2.5.2 Goals are established: (a)     (c/d) SB 18 requires the Sustainable Energy Utility to
2.5 connection with IRP or other           achieve an average 30% reduction in annual energy
      planning process; (b) as part of     usage for SEU participants, targeted at 33% of
      an EEPS or similar system; (c)       Delawareans, by 2015. There are reward/penalty
      as part of program approval and      incentives in place for meeting/missing targets. SB 18
                                        Y-
      budget-setting process; (d) other    states: "the Energy Office shall define performance
                                           incentives such that if the SEU exceeds program targets
                                           by 120% it shall receive a bonus, and if the SEU
                                           achieves less than 80% of program targets it shall be
                                           charged a penalty." Details are pending.
                                           http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                           +18/$file/legis.html?open
       2.5.3 Energy Efficiency can be         Delaware has an RPS, but EE is not an eligible resource.
       used to fulfill requirements of an   N See Title 26, Chapter 1, Subchapter IIIA of the Delaware
       RPS or similar standard                Code.
                                            S http://www.delcode.state.de.us/title26/c001/sc03a/index.
       2.5.4 Expected Capacity                htm#TopOfPage
       Savings (Annual MW in 2006)


       2.5.5 Energy Savings (Annual
       MWh in 2006)

       2.6.1 A robust M&V process              Under SB 18, the Contract Administrator of the SEU is
       has been established                    charged with monitoring and evaluating programs run by
                                               all Implementation Contractors. Also, In its DSM Plan
                                            Y- ("The Blueprint"), Delmarva proposes to implement an
                                               evaluation of its DSM programs. Details are pending.
                                               Commission has opened Docket 07-28 to consider the
                                               Blueprint.
                                               See SB 18 (g)(1) at
2.6
                                               http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                            S,
                                               +18/$file/legis.html?open; See p. 32 of the Blueprint,
                                            R
                                               available online at
                                               http://depsc.delaware.gov/electric/0728appl.pdf
       2.6.2 M&V is done using: (a)
       deemed savings; (b) actual
       savings; (c) other

       2.7.1 EE delivery structure has        SB 18 establishes a delivery (and oversight and finance)
       been established                       structure through the Department of Energy, the Contract
                                            Y Administrator, Implementation Contractors, and the SEU.
                                              The Commission has opened Docket 07-28 to consider
                                              the Blueprint.
                                               See SB 18 at
                                               http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                            S,
2.7                                            +18/$file/legis.html?open; See page 30 of the Blueprint,
                                            R
                                               available online at
                                               http://depsc.delaware.gov/electric/0728appl.pdf
       2.7.2 Delivery is via: (a) utility      SB 18 stipulates the role of Implementation Contractors.
       administration; (b) third-party
                                            b
       administration; or (c)
       government agency
                                                http://legis.delaware.gov/LIS/lis144.nsf/vwLegislation/SB
                                                +18/$file/legis.html?open.
       Resource plans are regularly             2006 legislation, Title 26 Del. C. §1007, requires
       updated                                  Delmarva, as the SOS supplier, to file an IRP on Dec 1,
                                                2006, and on that date every other year thereafter. As of
                                            Y   the end of 2008, IRP Regulations were being finalized by
2.8                                             Commission Staff through PSC Reg. Docket No. 60;
                                                draft Regulations do not specifically incorporate energy
                                                efficiency building codes.
                                            R   http://delcode.delaware.gov/title26/c010/index.shtml
       2.9.1 Building Energy Codes              Title 26 Del C. §7601-2 requires compliance with the
       for residential buildings are in     N   2000 IECC standards. There is no set schedule for
       place and regularly updated              reviewing and updating.
                                                http://delcode.delaware.gov/title16/c076/index.shtml; and
                                                http://bcap-energy.org/node/59
2.9 2.9.2 Building Energy Codes                 State Code requires compliance with the 2001
       for commercial buildings are in          Supplement of the 2000 IECC, referencing ASHRAE
                                            N
       place and regularly updated              90.1-1999, mandatory statewide since 2004. There is no
                                                set schedule for reviewing and updating.
                                                http://bcap-energy.org/state_status.php?state_ab=DE; ;
                                                and http://bcap-energy.org/node/59
       Appliance and Equipment
       Efficiency Standards are in place    N
2.10
       and regularly updated
     Energy efficiency is a high                 Delaware has adopted energy standards for public
     priority in state buildings and             buildings. Title 29 § 6939 requires mandatory
     state funded buildings as                Y- procurement of Energy Star products by state
2.11 evidenced in capital planning               government.
     and enabling performance
                                                  http://delcode.delaware.gov/title29/c069/sc03/index.shtm
                                              S
                                                  l#P375_48575;
Recommendation 3: Miscellaneous Policies
       3.1.1 Public education programs          Delmarva's Blueprint plan includes an Energy Awareness
       on EE are in place. (See Guide           Campaign, expected to spend $2.85 million over 3 years.
       Tab for Y/N criteria.)                   Though the SEU is authorized to undertake public
                                              N
                                                awareness activities with approval from the DEO, it's not
                                                explicitly within the scope of SEU responsibilities.


       3.1.2 Process is in place, such            SEU is in the process of being established
 3.1 as a state or regional
       collaborative, to pursue EE as a       Y
       high-priority resource. (See
       Guide Tab for Y/N criteria.)
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       75% of state access to ENERGY
                                              Y
       STAR New Homes
 3.2   What proportion is due to
       regulated utility program? (who
       is sponsor)
       75% of state access to Home
       Performance with ENERGY                N
       STAR?
       What proportion is ue to
       regulated utility program? (who
       is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
       4.1.1 Cost recovery process               SUMMARY: Order No. 7420, Regulation Docket No. 59
       exists                                    (September 2008), the Commission approved revenue
                                                 decoupling, but not the surcharge method of
                                                 implementation. A modified fixed-variable rate design
                                                 method of implementation was favored by the
                                                 Commission. The order requires the companies to
                                                 undertake to implement Staff’s recommended modified
                                                 fixed-variable rate design revenue decoupling in the
                                              Y- context of their next rate case. The Commission opened      Y-
                                                 Docket No. 07-28 to consider the Blueprint in 2007 and
                                                 later merge the docket with Regulation Docket No. 59 on
                                                 revenue decoupling.




 4.1
                                                Order No. 7420, Regulation Docket No. 59 (September
                                                2008) is available at
                                                http://depsc.delaware.gov/orders/7420.pdf. Order No.
                                                7154, Docket 07-28 is online at
                                              R http://depsc.delaware.gov/orders/7154.pdf. See p.12 of
                                                the Blueprint, available online at
                                                http://depsc.delaware.gov/electric/0728appl.pdf. See
                                                Blueprint Proposed Cost Recovery report available at
                                                http://depsc.delaware.gov/dockets/reg59/dplcostrec.pdf.
                                              R
       4.1.2 Recovery occurs via: (a)
       rider; (b) regular rate case; or (c)   b
       system benefits charge
       4.1.3 Funding is for multi-year
       periods

       A base energy efficiency
       spending level exists, with
 4.2   opportunity to justify higher level


       % of net (retail) utility revenue
       presently used for energy
 4.3   efficiency [no unit = %; m/k =
       mils/kWh]

       Funds from carbon trading               Up to 65% of RGGI Auction Proceeds are Earmarked for
       program support EE                      clean energy investments, including energy efficiency,
                                             Y renewable energy and other clean energy investments.
 4.4
                                               The details on distributions of the proceeds are yet to be
                                               worked out.

Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify
       5.1.1 Utility throughput                SUMMARY: Order No. 7420, Regulation Docket No. 59
       incentive is addressed and              (September 2008), the Commission approved revenue
       disincentives are removed               decoupling, but not the surcharge method of
                                               implementation. A modified fixed-variable rate design
                                               method of implementation was favored by the
                                               Commission. The order requires the companies to
                                               undertake to implement Staff’s recommended modified
                                               fixed-variable rate design revenue decoupling in the
                                             Y                                                              Y
                                               context of their next rate case. The Commission opened
                                               Docket No. 07-28 to consider the Blueprint in 2007 and
                                               later merge the docket with Regulation Docket No. 59 on
                                               revenue decoupling.




                                             R                                                              R
 5.1                                           Order No. 7420, Regulation Docket No. 59 (September
                                               2008) is available at
                                               http://depsc.delaware.gov/orders/7420.pdf. Order No.
                                               7154, Docket 07-28 is online at
                                               http://depsc.delaware.gov/orders/7154.pdf. See p.12 of
                                               the Blueprint, available online at
                                             R http://depsc.delaware.gov/electric/0728appl.pdf. See         R
                                               Blueprint Proposed Cost Recovery report available at
                                               http://depsc.delaware.gov/dockets/reg59/dplcostrec.pdf.
                                               Order 7153 is available at
                                               http://depsc.delaware.gov/orders/7153.pdf; the on-going
                                               docket site is:
                                               http://depsc.delaware.gov/dockets/reg59/reg59.shtml.
       5.1.2 Method used is: (a)
       decoupling; (b) lost revenue
                                             a                                                              a
       recovery; or (c) non-utility
       implementation of EE
                                                 http://depsc.delaware.gov/orders/7485.pdf
       5.2.1 Utility/shareholder EE
       incentives are provided
 5.2
       5.2.2 Incentives exceed
       amount of lost revenues

       5.3.1 Impact on EE is a
       consideration when designing
       retail rates



 5.3
       5.3.2 Declining block rates and        Some declining block rates and fixed variable rate
       fixed variable rate designs have       designs were in place as of April 2005. Order No. 7420,
 5.3   been eliminated                        Regulation Docket No. 59 (September 2008)
                                           N
                                              recommended the adoption of a modified fixed variable
                                              rate design in the context of a rate case proceeding for
                                              distribution utilities.
                                              Order No. 7420, Regulation Docket No. 59 (September
                                              2008) is available at
                                              http://depsc.delaware.gov/orders/7420.pdf.
       5.4.1 Time sensitive rates in          Some TOU rates are in place in the state. Development
       place                                  of widespread time sensitive rates is a component of
                                           Y-
                                              Delmarva's AMI proposal. See Section 5.4.3 below.


       5.4.2 Usage sensitive rates in           Some inclining blocks were in place as of April 2005.
                                           Y-
       place

       5.4.3 AMI deployment planned           SUMMARY: In Order No. 7420, Regulation Docket No.
                                              59 (September 2008) the PSC approved the deployment
                                              of AMI technology into the electric and natural gas
                                              distribution system networks. It permitted Delmarva to
                                              propose a regulatory asset for cost recovery. Previously
                                              in May 2006, Order No. 6912 in Docket 57 was opened
                                            Y to investigate advanced metering. In its DSM Plan,           Y
                                              Delmarva has proposed to install advanced meters
 5.4                                          throughout its service territory and requested a cost
                                              recovery mechanism for the installation.




                                              Order No. 7420, Regulation Docket No. 59 (September
                                              2008) is available at
                                              http://depsc.delaware.gov/orders/7420.pdf.
                                            R                                                              R
                                              http://depsc.delaware.gov/orders/6912.pdf. The Blueprint
                                              is available online at
                                              http://depsc.delaware.gov/electric/0728appl.pdf.
                                            R
       5.4.4 Other mechanisms exist
       (e.g., on-bill financing, benefit
       sharing)

State Fiscal Policy
       Sales Tax reduction or
       exemption for energy efficient
 6.1   products

       Investment Tax Credit for energy
 6.2 efficient investments

       State supported low cost            x,y State grant program provides support for residential
       financing for energy efficient          appliances and for commercial audits and purchase of
       investments: buildings (x),             efficient equipment.
       equipment (y)
 6.3                                            http://www.delaware-
                                                energy.com/energy_an$wers_program_business.htm
                                                http://www.delaware-
                                                energy.com/energy_an$wers_program-for-home-
                                                Appliances.htm
Distributed Generation Policies
       A statewide interconnection            The DE PSC issued a ruling in October 2007, PSC
       policy is in place                     Docket No. 07-234, finding that the state-wide
                                              interconnection standard currently in effect for Delmarva
                                              Power and Light Company is adequate and no further
                                            N interconnection requirements will be adopted at this point
                                              in time. See a description of Delmarva's standards
                                              below. Docket 07-234 can be found here,
                                              http://depsc.delaware.gov/orders/7304.pdf
                                            Delmarva IOU has 6 categories of interconnection based
                                            on system size, type, and energy source. There is a
                                            simplified application for systems less than 25 kW,
                                            systems less than 25kW are exempt from the pre-
                                            interconnection study requirement and do not require an
                                            external disconnect. There are standard requirements
                                          U and applications for systems up to 1 MW; systems
                                            greater than 1 MW require a detailed engineering study,
                                            there is no standards procedure. All systems must meet
                                            applicable NEC, IEEE and UL safety standards.
                                            http://www.delmarva.com/_res/documents/20070911Les
                                            sthan1MWDPLTechManual16pg.pdf
7.1                                           Delaware Electric Cooperative's (DEC) interconnection
                                              guidelines are similar to Delmarva's. Customers with
                                              systems greater than 25 kW are required to carry at least
                                              $1 million in liability insurance per occurrence and $1
                                              million in property-loss insurance. Higher amounts of
                                              coverage may be required at the discretion of the DEC.
                                          U - There is no similar specification in Delmarva's
                                              interconnection guidelines. An external disconnect switch
                                              is required for these larger systems. More information
                                              and interconnection guidelines can be found here:
                                              http://www.delaware-energy.com/green-energy-program-
                                              delaware-electric-cooperatives.htm

                                              City of Dover, Public Utility - has interconnection
                                              standards for net-metered systems. Capacity cannot be
                                              more than 50 kW and the primary fuel source must be
                                              renewable. The utility has standard application forms.
                                          U - Pre-interconnection studies may be required. An external
                                              disconnect is required. Interconnection guidelines can be
                                              accessed here,
                                              http://www.cityofdover.com/government/citycouncil/com
                                              mitteeminutes/1433/.

      A statewide net metering policy       Delaware passed SB 8 in 2007, which allows for all
      is in place                           customer classes to net meter and classifies generators
                                            using solar, wind, hydro, anaerobic digesters, or fuel
                                            cells as eligible. A previous net metering rule, 26 Del. C.
                                            § 1014(d), was first established in 1999. The maximum
                                            capacity allowable is 25 kW for residential customers of
                                          Y DP&L, DEC and municipal electric utilities; 2 MW per
                                            meter for non-residential customers and 500 kW per
7.2
                                            meter for non-residential customers of DEC and
                                            municipal utilities. Net excess generation is carried over
                                            essentially at the utility's retail rate to subsequent billing
                                            periods or after 12-months is forfeited.

                                               26 Del. C. § 1014(d), can be accessed from here,
                                          S
                                               http://delcode.delaware.gov/title26/c010/index.shtml
                                          S    SB 8 can be accessed from here,
      A statewide exit fee policy is in        There are no exit fees in the state of Delaware. PSC
      place                                    Order 5424 issued in 2000 exempts Delaware Electric
                                               Collaborative DG systems from exit fees. The
                                          Y+
7.3                                            Commission also ordered that Conectiv could not
                                               recover stranded costs through competitive transition
                                               charges.
                                          R    Order 5424
      A statewide standby rate policy          Delaware does not have a statewide policy on standby
                                          N
      is in place                              rates
                                               Delmarva Power and Light Company - there is currently
                                               no specific standby rate in Delmarva's rate schedule but
7.4                                            customers desiring standby service would be supplied
                                          U    under the primary general service rate which has very
                                               high demand charges but no demand ratchet. Rate
                                               available at:
                                               http://www.delmarva.com/_res/documents/DE-Tariff.pdf
      As part of resource planning      SUMMARY: 2006 legislation requires utilities to use an
      process, CHP is reviewed and      IRP process for procurement of standard offer service,
      incorporated where effective      Delmarva is the only utility in the state required to submit
                                        an IRP. The IRP definition states that the electric
                                        distribution company must evaluate "all supply options,"
                                        CHP is not directly mentioned. Docket No. 60, Order No.
                                     N 7318, issued in November 2007, requires Delmarva to
                                        undertake IRP planning which must "[compare] a
                                        comprehensive resource mix of supply- and demand-
                                        side and Transmission Service resource costs and
                                        attributes." Docket No. 60 is currently still open, and
7.5                                     further changes to the IRP process are expected to be
                                        made under this docket.
                                        The 2006 statute addresses IRP requirements. See Del.
                                        Laws Title 26, Ch.10 § 1007.
                                     S http://delcode.delaware.gov/title26/c010/index.shtml#P12
                                        3_15363 and Docket # 60 can be accessed from here,
                                        http://depsc.delaware.gov/dockets/reg60.shtml
                                        Delmarva Power and Light Company's third updated IRP
                                     U-
                                        for 2008 does not assess CHP.
                                                http://depsc.delaware.gov/dplirp.shtml
        Natural Gas
urce.
ffective energy efficiency as a resource
Under SB 18, the Contract Administrator of
the SEU is charged with designing a
portfolio of programs that allow "all energy
end-users, regardless of electricity or gas
retail providers, and regardless of market
segment or end-use fuel, to participate in
the SEU programs."
SB 18 establishes a delivery structure
through the Department of Energy, the
Contract Administrator, Implementation
Contractors, and the SEU.
eliver energy efficiency where cost-effective.
              SUMMARY: Order No. 7420, Regulation
              Docket No. 59 (September 2008), the
              Commission approved revenue decoupling
              for both gas and electric utilities, but not
              the surcharge method of implementation.
              A modified fixed-variable rate design
              method of implementation was favored by
              the Commission. The order requires the
              companies to undertake to implement
              Staff’s recommended modified fixed-
              variable rate design revenue decoupling in
              the context of their next rate case. The
              Commission opened Docket No. 07-28 to
              consider the Blueprint in 2007 and later
              merge the docket with Regulation Docket
              No. 59 on revenue decoupling.


              Order No. 7420, Regulation Docket No. 59
              (September 2008) is available at
              http://depsc.delaware.gov/orders/7420.pdf.
cost-effective energy efficiency and modify
             SUMMARY: Order No. 7420, Regulation
             Docket No. 59 (September 2008), the
             Commission approved revenue
             decoupling, but not the surcharge method
             of implementation. A modified fixed-
             variable rate design method of
             implementation was favored by the
             Commission. The order requires the
             companies to undertake to implement
             Staff’s recommended modified fixed-
             variable rate design revenue decoupling in
             the context of their next rate case. The
             Commission opened Docket No. 07-28 to
             consider the Blueprint in 2007 and later
             merge the docket with Regulation Docket
             No. 59 on revenue decoupling.

             Order No. 7420, Regulation Docket No. 59
             (September 2008) is available at
             http://depsc.delaware.gov/orders/7420.pdf.
             Order 7153 is available at
             http://depsc.delaware.gov/orders/7153.pdf;
             the on-going docket site is:
             http://depsc.delaware.gov/dockets/reg59/r
             eg59.shtml. The proposal in Docket 06-
             284 is available at
             http://depsc.delaware.gov/naturalgas/0628
             4application.zip
SUMMARY: In Order No. 7420, Regulation
Docket No. 59 (September 2008) the PSC
approved the deployment of AMI
technology into the electric and natural gas
distribution system networks. It permitted
Delmarva to propose a regulatory asset for
cost recovery. Previously in May 2006,
Order No. 6912 in Docket 57 was opened
to investigate advanced metering. In its
DSM Plan, Delmarva has proposed to
install advanced meters throughout its
service territory and requested a cost
recovery mechanism for the installation.
Order No. 7420, Regulation Docket No. 59
(September 2008) is available at
http://depsc.delaware.gov/orders/7420.pdf.
The Blueprint is available online at
http://depsc.delaware.gov/electric/0728app
l.pdf
                                                        KENTUCKY (as of 12/31/08)
                                                                             Electric                         Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority
         resource, equivalent or superior to supply      N
  1.1
         resources
         1.2.1 EE is integrated into an active IRP or       Rules adopted in 1990 establish an
         Portfolio Management process.                      Integrated Resource Planning process
                                                            which must include a summary of existing
                                                            DSM activities and consideration of new
                                                            DSM activities. A Docket opened on
                                                         Y-
                                                            11/13/08 will consider several requirements
                                                            of the Energy Independence and Security
                                                            Act of 2007, including Integrated Resource
  1.2                                                       Planning for electric utilities.

                                                             See 807 KAR 5:058:
                                                         A   http://www.lrc.ky.gov/kar/807/005/058.htm;
                                                             Docket 2008-00408, Order 11/13/08
         1.2.2 Efficiency is procured as a resource
         for default service/standard offer customers


         EE is an alternative to transmission based
         on a long-term transparent IRP or
  1.3
         transmission system plan

         1.4.1 EE is a biddable commodity                  PJM conducts a regional planning
                                                           process for 13 states and DC, including
                                                           a portion of KY. PJM uses its Reliability
                                                           Pricing Model (RPM) to procure capacity on
                                                           a multi-year forward basis through an
                                                           auction mechanism. In March 2008, several
                                                           parties asked FERC to review the
                                                           reasonableness of the RPM process. On
                                                           June 30, 2008, PJM filed a responsive
                                                           report. On September 19, 2008, FERC
                                                           issued an Order addressing the report and
                                                           supporting creation of a stakeholder
                                                         N process to address pending RPM issues. On
                                                           December 12, 2008, PJM filed a report with
                                                           FERC summarizing results of the
                                                           stakeholder process, proposing changes to
                                                           the RPM, including allowing energy
  1.4                                                      efficiency to participate in the RPM in
                                                           Docket Nos. ER05-1410-000, EL05-148-000.
                                                           Also on December 12, 2008, PJM filed
                                                           corresponding tariff revisions for effect on
                                                           March 27, 2009 in Docket No. ER09-412-
                                                           000.


                                                             PJM Report filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                             ocument_id=13672172
                                                         R   PJM tariff filing to implement proposed
                                                             changes to RPM filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                             ocument_id=13672185
         1.4.2 Bids occur in the following markets:
         (a) energy, (b) capacity, or (c) other
        State Implementation Plans (SIPs) include
  1.5   EE set-asides

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
        Efficiency commitment is in statute                KY has a statute that allows the
                                                           Commission to review and approve/deny
                                                           DSM plans that utilities initiate, but the
                                                           statute does not encourage DSM activities.
                                                           Rules establish an Integrated Resource
                                                           Planning process which must include a
                                                           summary of existing DSM activities and
                                                           consideration of new DSM activities.
                                                           Legislation passed in 8/07, the Incentive for
                                                           Energy Independence Act, required the
                                                        N Commission to examine statutes and
                                                           regulations and make recommendations to
  2.1                                                      the Legislature on four aspects of energy
                                                           policy and regulation. In that set of
                                                           recommendations issued 7/1/08, the
                                                           Commission recommends that the existing
                                                           DSM statute (KRS 278.285) be amended to
                                                           broaden the Commission's authority to
                                                           require utilities to implment specific DSM
                                                           programs in order to ensure that proven
                                                           and cost-effective programs are not being
                                                           overlooked.
                                                           Electric Utility Regulation and Energy
                                                           Policy in Kentucky , KY PSC, 7/1/08, in
                                                           Docket 2007-00477.
        The TRC or Societal Cost Test is used to           No specific tests are required, but many
        evaluate EE programs                               utilities use TRC and/or other tests. Big
                                                           River uses the TRC test. Louisville Gas and
                                                           Electric prescreens programs with a
                                                           "quantitative" analysis approach. Programs
                                                           that pass this screening are subjected to
                                                           "qualititative screening", which includes
                                                        Y- TRC and participant cost tests. In response
  2.2                                                      to LGE's last IRP, Commission staff
                                                           recommended conducting qualitative
                                                           screening on programs that didn't pass the
                                                           quantitative screening process. See pp. 12-
                                                           17 of the Staff Report on LGE's IRP.


                                                            The Report on IRP is online at
                                                        R   http://psc.ky.gov/agencies/psc/hot_list/irp/2
                                                            00200367_122003_sr.pdf.
        2.3.1 Potential for cost-effective EE has
        been established through a potential study      N


        2.3.2 Established EE programs reach all             Duke Energy offers an EE program to
        customer classes                                    commercial and industrial customers;
                                                            several utilities offer programs to residential
                                                            customers; and there are some programs in
                                                            place for low-income customers. The
  2.3                                                       existing statute regarding DSM allows
                                                            industrial customers with energy intensive
                                                        Y   processes to implement EE measures
                                                            instead of paying for the cost of DSM
                                                            programs in the industrial sector. However,
                                                            the Commission has stated that it plans to
                                                            issue a regulation that will clarify and
                                                            standardize rules governing industrial
                                                            customer exclusion from utility DSM
                                                            programs.
                                                            KRS 278.285
        Funding requirements for all long-term, cost-
        effective EE have been established
                                                        N
  2.4
2.4

      2.5.1 Quantitative MW and MWh savings
      goals have been established and are           N
      producing incremental investment.


      2.5.2 Goals are established: (a)
      connection with IRP or other planning
      process; (b) as part of an EEPS or similar
      system; (c) as part of program approval and
      budget-setting process; (d) other

      2.5.3 Energy Efficiency can be used to            An energy plan released by the Governor in
      fulfill requirements of an RPS or similar         11/08 calls for a Renewable and Efficiency
      standard                                          Portfolio Standard (REPS), whereby 25
                                                        percent of Kentucky’s energy needs in 2025
                                                        will be met by reductions through EE,
2.5                                                     conservation, and renewable energy. An
                                                    N   Energy Efficiency Resource Standard is
                                                        called for to achieve a portion of the REPS,
                                                        with a goal of reducing energy consumption
                                                        by 16% below projected 2025 energy
                                                        consumption. Both utility and non-utility
                                                        programs would be called on to achieve this
                                                        goal.
                                                        Gov. Steve Beshear, Intelligent Energy
                                                        Choices for Kentucky's Future , November
                                                        2008
      2.5.4 Expected Capacity Savings (Annual
      MW in 2006)

      2.5.5 Energy Savings (Annual MWh in
      2006)

      2.6.1 A robust M&V process has been               Legislation passed in 8/07, the Incentive for
      established                                       Energy Independence Act, required the
                                                        Commission to examine statutes and
                                                        regulations and make recommendations to
                                                        the Legislature on four aspects of energy
                                                        policy and regulation. In that set of
                                                    N
                                                        recommendations issued 7/1/08, the
                                                        Commission states that it will promulgate a
                                                        DSM regulation that will establish standards
                                                        for evaluation of proposed and ongoing
                                                        DSM programs.

                                                        Electric Utility Regulation and Energy
                                                        Policy in Kentucky , KY PSC, 7/1/08, in
                                                        Docket 2007-00477.
      2.6.1.1   M&V is adequately funded
2.6
      2.6.1.2 Energy savings are used to
      measure performance

      2.6.1.3 M&V is done according to a
      defined schedule

      2.6.1.4 M&V is conducted by an
      independent party

      2.6.1.5 Review of M&V is done in a
      transparent process

      2.6.2 M&V is done using: (a) deemed
      savings; (b) actual savings; (c) other
        2.7.1 EE delivery structure has been                 DSM is done by utilities on their own
        established                                      N   initiative.


  2.7
        2.7.2 Delivery is via: (a) utility                   The majority of DSM programs are
        administration; (b) third-party                  a   delivered by the jurisdictional electric       a
        administration; or (c) government agency             utilities. Third parties assist, mainly with

        Resource plans are regularly updated                 Plans are filed triennially.
                                                         Y
  2.8
                                                             See KAR 807.5:058:
                                                         A
                                                             http://www.lrc.ky.gov/kar/807/005/058.htm
        2.9.1 Building Energy Codes for                      The Kentucky Residential Code, based on
        residential buildings are in place and               the 2006 IRC with amendments, is
        regularly updated                                Y   mandatory statewide. Codes are reviewed
                                                             every three years, and the last update was
                                                             in 2007.
                                                             http://bcap-
                                                         S   energy.org/state_status.php?state_ab=KY
  2.9   2.9.2 Building Energy Codes for                      The Kentucky Building Code, based on the
        commercial buildings are in place and                2006 IBC with amendments, is mandatory
        regularly updated                                Y   statewide. Codes are reviewed every three
                                                             years, and the last update was in 2007.

                                                             http://bcap-
                                                         S   energy.org/state_status.php?state_ab=KY

        Appliance and Equipment Efficiency
        Standards are in place and regularly             N
 2.10
        updated
        Energy efficiency is a high priority in state       Executive Order 2005-122 established a
        buildings and state funded buildings as             Utility Savings Council, which was created
        evidenced in capital planning and enabling          to evaluate state agencies' energy costs
        performance contracts                               and make recommendations, with the goal
                                                            of saving 10% in energy costs annually
                                                            throughout state govt. The Governor also
                                                            announced that KY was to improve the EE
                                                            of state-owned buildings by 10%.
                                                            Legislation passed in 4/08 required that
                                                            beginning 7/1/09, construction or renovation
                                                            of public buildings for which 50% or more of
                                                            the total capital cost is paid by the state
                                                         Y must be renovated or designed to meet
                                                            high-performance building standards.
 2.11
                                                            Those standards will be established by the
                                                            Finance and Administration Cabinet,
                                                            working with a High-Performance Buildings
                                                            Advisory Committee. The legislation also
                                                            requires that building leases for all state
                                                            agencies must meet the same standards
                                                            after 7/1/18. An energy plan released by
                                                            the Governor in 11/08 calls for an energy
                                                            efficiency program for state government
                                                            that has aggressive internal energy savings
                                                            targets.
                                                            http://apps.sos.ky.gov/Journal/EJimages/20
                                                        EO,
                                                            05-CRREST-172806.pdf; KRS 56.770 et
                                                         S
                                                            seq: http://www.lrc.state.ky.us/KRS/056-
Recommendation 3: Miscellaneous Policies
        3.1.1 Public education programs on EE are          KY supports education and outreach
        in place. (See Guide Tab for Y/N criteria.)     Y- programs using State Energy Program              Y-
                                                           funding.




  3.1
         3.1.2 Process is in place, such as a state
         or regional collaborative, to pursue EE as a
                                                            N
         high-priority resource. (See Guide Tab for
  3.1    Y/N criteria.)
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         75% of state access to ENERGY STAR
                                                            Y
         New Homes
  3.2    What proportion is due to regulated utility            Black Hills Energy (formerly Aquila
         program? (who is sponsor)                              Networks), Kansas City Power & Light.
                                                                E.oN is a sponsor of ENERGY STAR New
         75% of state access to Home Performance
         with ENERGY STAR?                                  N

         What proportion is ue to regulated utility
         program? (who is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
         4.1.1 Cost recovery process exists                     Statute allows the Commission to approve
                                                                cost recovery for proposed DSM plans it
                                                            Y   considers to be reasonable. Cost recovery        Y
                                                                is done through a rider.

                                                                KRS 278.285 is online at
                                                            S   http://www.lrc.ky.gov/KRS/278-00/285.PDF         S

         4.1.2 Recovery occurs via: (a) rider; (b)
  4.1    regular rate case; or (c) system benefits          a                                                    a
         charge

         4.1.3 Funding is for multi-year periods               Funding is usually for multiple years;
                                                               however, there is no specific requirement.
                                                            Y- Funding is addressed on a case by case            Y-
                                                               basis when considering each utility's DSM
                                                               proposal.

         A base energy efficiency spending level
  4.2    exists, with opportunity to justify higher level
         % of net (retail) utility revenue presently
  4.3    used for energy efficiency [no unit = %; m/k
         Funds from carbon trading program support
  4.4    EE
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify
ratemaking practices to promote energy efficiency investments.
         5.1.1 Utility throughput incentive is                 Kentucky allows lost revenue recovery for
         addressed and disincentives are removed               both electric and gas DSM programs.
                                                               Recovery mechanisms are determined on a
                                                               case-by-case basis. Legislation passed in
                                                               8/07, the Incentive for Energy
                                                               Independence Act, required the
                                                               Commission to examine statutes and
                                                               regulations and make recommendations to
                                                               the Legislature on four aspects of energy
                                                               policy and regulation. In that set of
                                                            Y-                                                   Y-
                                                               recommendations issued 7/1/08, the
                                                               Commission agreed that it is desirable to
                                                               align the financial interests of utilities with
                                                               the goals of achieving EE through the
                                                               modification of rate structures and cost
                                                               recovery mechanisms. A Docket opened
  5.1                                                          on 11/13/08 will consider several
                                                               requirements of the Energy Independence
                                                               and Security Act of 2007, including rate
                                                               design modifications for electric utilities.
5.1



                                                        Electric Utility Regulation and Energy
                                                        Policy in Kentucky , KY PSC, 7/1/08, in
                                                        Docket 2007-00477.
      5.1.2 Method used is: (a) decoupling; (b)
      lost revenue recovery; or (c) non-utility     b                                                  b
      implementaion of EE
                                                        The statute enabling lost revenue recovery
                                                        is Kentucky Revised Statutes, Chapter 278,
                                                        Title 285. See
                                                    S   http://www.lrc.ky.gov/KRS/278-00/285.PDF       S



      5.2.1 Utility/shareholder EE incentives are      The Commission may approve incentive
      provided                                         mechanisms on a case-by case basis.
                                                       Legislation passed in 8/07, the Incentive for
                                                       Energy Independence Act, required the
                                                       Commission to examine statutes and
                                                       regulations and make recommendations to
                                                       the Legislature on four aspects of energy
                                                    Y- policy and regulation. In that set of           Y-
                                                       recommendations issued 7/1/08, the
5.2                                                    Commission stated that although it has the
                                                       authority to offer incentives to encourage
                                                       EE, the Commission believes the
                                                       Legislature should explicitly affirm that it
                                                       supports these ratemaking options.

      5.2.2 Incentives exceed amount of lost             See Administrative Case 341, 7/14/19944
      revenues                                          Order. See
                                                    R                                                  R
                                                        http://psc.ky.gov/order_vault/Orders_1994/1
                                                        9000341_07141994.pdf, p. 4.

      5.3.1 Impact on EE is a consideration
      when designing retail rates

      5.3.2 Declining block rates and fixed             The Commission's goal is to eliminate such
5.3
      variable rate designs have been eliminated        rates; however a small number of utililties
                                                    N                                                  N
                                                        have not done so. Nearly all utilities now
                                                        have flat residential rates.

      5.4.1 Time sensitive rates in place              Most utilities offer TOU rates. All investor-
                                                       owned utilities have implemented or are in
                                                       the process of implementing RTP programs
                                                       for industrial customers. A representative
                                                       number of the distribution cooperatives
                                                    Y- served by Ky's two G & T cooperatives are
                                                       developing pilot RTP programs for industrial
                                                       customers. LG&E is the only jurisdictional
                                                       electric utility developing a pilot RTP
                                                       program for residential customers. See
                                                       5.4.3.

      5.4.2 Usage sensitive rates in place




5.4
         5.4.3 AMI deployment planned                        In 2006, the Commission declined to adopt
                                                             PURPA Standard 14 regarding time-based
                                                             metering and communications, but
                                                             encouraged utilities to consider TOU rates
                                                             and CPP. In the same Order, the
  5.4                                                        Commission directed several utilities to
                                                             develop pilot RTP programs for C&I
                                                             customers, and/or finalize proposed
                                                        Y-/P residential RTP pilot programs. Cost
                                                             recovery for an AMI pilot program from
                                                             Duke Energy Kentucky also was approved
                                                             in 2006. A Docket opened on 11/13/08 will
                                                             consider several requirements of the
                                                             Energy Independence and Security Act of
                                                             2007, including smart grid investments and
                                                             information

                                                             Order 122106, pp. 10-14:
                                                             http://psc.ky.gov/pscscf/2006-
                                                         R   00045/PSC_Order_122106.pdf; Case 2006-
                                                             00045; Case 2006-00172 (Duke); Docket
                                                             2008-00408, Order 11/13/08
         5.4.4 Other mechanisms exist (e.g., on-bill
         financing, benefit sharing)

State Fiscal Policy
         Sales Tax reduction or exemption for                HB 1, signed into law August 30, 2007
         energy efficient products                           authorizes a manufacturer in Kentucky to
                                                             apply for a refund equal to the amount of
                                                             Kentucky sales or use tax paid on the
                                                         Y
  6.1                                                        purchase of new or replacement machinery
                                                             or equipment for an energy efficiency
                                                             project purchased on or after July 1, 2008

                                                         S   http://www.lrc.ky.gov/record/07s2/HB1.htm
         Investment Tax Credit for energy efficient
  6.2    investments

         State supported low cost financing for
         energy efficient investments: buildings (x),
  6.3
         equipment (y)

Distributed Generation Policies
         A statewide interconnection policy is in           Kentucky's interconnection guidelines are
         place                                              outlined along with their net metering
                                                            requirements in KRS § 278.465 - 278.468;
                                                            the guidelines were amdended by SB 83 in
                                                            July 2008 which directed the PSC to
                                                            develop new net metering and
                                                            interconnection guildelines for all retail
                                                            electric suppliers, due in January 2009.
                                                            Kentucky's interconnection standards apply
                                                            only to PV, wind, biomass, and small
                                                            hydroelectric with a maximum capacity of
                                                            30kW. Generators must meet all applicable
                                                         Y-
                                                            NEC, IEEE, and UL safety and power
  7.1                                                       quality standards. There is a two-tiered
                                                            interconnection process: level 1 is for
                                                            systems that do not required the utility to
                                                            make modifications to its system; there are
                                                            no application fees. Level 2 is for systems
                                                            that are not inverted-based, or do not meet
                                                            the level 1 requirements. Utilities may
                                                            charge an application fee of up to $100, if
                                                            the utility determines that an impact study is
                                                            needed they may charge up to $1000 for
                                                            the study. Utilities may can be accessed
                                                            KRS § 278.465 et seq required an external
                                                            disconnect. http://www.lrc.ky.gov/KRS/278-
                                                            from here, General liability insurance is
                                                         S
                                                            00/CHAPTER.HTM
      A statewide net metering policy is in place      Kentucky enacted a statewide net-metering
                                                       policy with KRS § 278.465 et seq. All IOUs
                                                       and rural electric cooperatives must offer
                                                       net metering to customers with solar-
                                                    Y-
                                                       electric PV systems 15 kW or less. Net
7.2                                                    excess generation is credited to the
                                                       customer's next bill (there is no expiration).

                                                        KRS § 278.465 et seq can be accessed
                                                    S
                                                        from here, http://www.lrc.ky.gov/KRS/278-
      A statewide exit fee policy is in place           Kentucky does not
                                                        00/CHAPTER.HTMhave a statewide exit fee
                                                    N
7.3                                                     policy.

      A statewide standby rate policy is in place        Kentucky does not have a statewide policy
                                                    N
                                                         on standby rates
                                                         Kentucky Utilities Co - Rider SS - Standby
                                                         service is provided by an entirely demand
                                                         based charge based on the contract
                                                         demand. Actual usage is billed under the
7.4                                                      regular rate for the facility. Most regular
                                                    U rates have a high demand component when
                                                         compared to energy charges, the billing
                                                         demand is based on the maximum 15
                                                         minute demand with no ratchet. Rate
                                                         available at: http://www.eon-
                                                         us.com/bsc/ku/rates_tariffs.asp
                                                         Louisville Gas & Electric Co - Rider SS -
                                                         standby service is completely demand
                                                         based. Billing demand is based on the
                                                         maximum 15 minute demand of the month
                                                    U-
                                                         or 50% of the maximum from the previous
                                                         period of June-Sept. Rate available at:
                                                         http://www.eon-
                                                         us.com/rsc/lge/lgereselectric.pdf
      As part of resource planning process, CHP          Rules adopted in 1990 establish an
      is reviewed and incorporated where                 Integrated Resource Planning process. The
                                                    Y+
      effective                                          IRP requires the assessment of CHP. See
                                                         807 KAR 5:058.
                                                    A http://www.lrc.ky.gov/kar/807/005/058.htm
                                                         Kentucky Utilities Co and Louisville Gas
7.5
                                                         and Electric file a joint IRP with the PSC.
                                                    U-
                                                         Their latest IRP was filed in the spring of
                                                         2008 in docket number 2008-00148
                                                     http://psc.ky.gov/pscscf/2008%20cases/2008-
                                                    U- Louisville Gas & Electric Co (see above).
/08)
       Natural Gas
rce.
ective energy efficiency as a resource
The majority of DSM programs are
delivered by the jurisdictional electric
utilities. Third parties assist, mainly with
liver energy efficiency where cost-effective.
              Statute allows the Commission to approve
              cost recovery for proposed DSM plans it
              considers to be reasonable. Cost recovery
              is done through a rider.

              KRS 278.285 is online at
              http://www.lrc.ky.gov/KRS/278-00/285.PDF




              Funding is usually for multiple years;
              however, there is no specific requirement.
              Funding is addressed on a case by case
              basis when considering each utility's DSM
              proposal.




cost-effective energy efficiency and modify

              Kentucky allows lost revenue recovery for
              both electric and gas DSM programs.
              Recovery mechanisms are determined on
              a case-by-case basis. A Docket opened
              on 11/13/08 will consider several
              requirements of the Energy Independence
              and Security Act of 2007, including rate
              design modifications for natural gas.
The statute enabling lost revenue recovery
is Kentucky Revised Statutes, Chapter
278, Title 285:
http://www.lrc.ky.gov/KRS/278-
00/285.PDF; Docket examining rate design
is Docket 2008-00408, Order 11/13/08
The Commission may approve incentive
mechanisms on a case-by case basis.




See Administrative Case 341, 7/14/19944
Order. See
http://psc.ky.gov/order_vault/Orders_1994/
19000341_07141994.pdf, p. 4.




The Commission's goal is to eliminate such
rates; however a small number of utililties
have not done so. Nearly all utilities now
have flat residential rates.
                                                                       MARYLAND
                                                                                     Electric                           Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
       EE is established as a high priority resource, equivalent       In July 2007, the Governor announced an
       or superior to supply resources                                 energy efficiency goal to reduce energy use
                                                                       15% by 2015 (EmPOWER Maryland
                                                                       initiative). The EmPOWER MD Energy
                                                                       Efficiency Act of 2008 passed on 4/24/08,
                                                                   Y
                                                                       codifying the Governor's goal. The law sets
                                                                       a goal of reducing statewide per capita
                                                                       electricity consumption and per capita peak
 1.1                                                                   demand by 15% by 2015 compared to 2007
                                                                       levels.
                                                                       HB 374: EmPower MD EE Act of 2008:
                                                                       http://mlis.state.md.us/2008rs/chapters_noln/
                                                                       Ch_131_hb0374E.pdf; MCA Public Utility
                                                                   S
                                                                       Companies § 7-211:
                                                                       http://www.michie.com/maryland/lpext.dll?f=t
                                                                       emplates&fn=main-h.htm&2.0
       1.2.1 EE is integrated into an active IRP, portfolio
                                                                   N
       management, or other planning process

       1.2.2 Efficiency is procured as a resource for default          SUMMARY: 2006 legislation allows the
       service/standard offer customers                                procurement of energy efficiency as part
                                                                       of standard offer service. A docket was
                                                                       opened to address EE procurement issues
                                                                       (Case 9063). In another proceeding (Case
                                                                       9117), the Commission required IOUs to
                                                                       submit an evaluation of long-term (10-15
                                                                       years) Standard Offer Service Procurement
                                                                   N   Plans for residential and small commercial
                                                                       customers, including an evaluation of a
 1.2                                                                   variety of resource mixes including EE,
                                                                       Demand Response, and Smart Grid
                                                                       programs. The utilities subsequently
                                                                       submitted their evaluations in October, and
                                                                       hearings and follow-up comments occurred
                                                                       in December 2008 (Case 9117, Order
                                                                       82105).
                                                                       2006 legislation allows the Commission to
                                                                       authorize or require the procurement of cost-
                                                                       effective energy efficiency as part of
                                                                   S   standard offer service. See SB 1 of the 2006
                                                                       Legislative Session.
                                                                       http://mlis.state.md.us/2006s1/billfile/SB0001
                                                                       .htm
                                                                       Case 9063 was opened to address issues
                                                                       concerning the optimal structure for the
                                                                       electric industry in Maryland. Energy
                                                                       efficiency procurement for standard offer will
                                                                       be addressed in the proceeding. Related
                                                                       documents are available at
                                                                   R
                                                                       http://webapp.psc.state.md.us/Intranet/Case
                                                                       Num/CaseAction.cfm?RequestTimeout=500.
                                                                       Case 9117, Order 82105:
                                                                       http://webapp.psc.state.md.us/Intranet/Case
                                                                       num/CaseAction_new.cfm?RequestTimeout=
                                                                       500?
       EE is an alternative to transmission based on a long-term
 1.3 transparent IRP or transmission system plan
       1.4.1 EE is a biddable commodity
                                                                            PJM conducts a regional planning process
                                                                            for 13 states, including MD, and DC. PJM
                                                                            uses its Reliability Pricing Model (RPM) to
                                                                            procure capacity on a multi-year forward basis
                                                                            through an auction mechanism. In March
                                                                            2008, several parties asked FERC to review the
                                                                            reasonableness of the RPM process. On June
                                                                            30, 2008, PJM filed a responsive report. On
                                                                            September 19, 2008, FERC issued an Order
                                                                            addressing the report and supporting creation
                                                                            of a stakeholder process to address pending
                                                                            RPM issues. On December 12, 2008, PJM filed
                                                                            a report with FERC summarizing results of the
                                                                            stakeholder process, proposing changes to the
 1.4                                                                        RPM, including allowing energy efficiency to
                                                                            participate in the RPM in Docket Nos. ER05-
                                                                            1410-000, EL05-148-000. Also on December
                                                                            12, 2008, PJM filed corresponding tariff
                                                                            revisions for effect on March 27, 2009 in
                                                                    N       Docket No. ER09-412-000.
                                                                            PJM Report filed 12 12 08
                                                                            http://elibrary.ferc.gov/idmws/File_list.asp?do
                                                                            cument_id=13672172
                                                                            PJM tariff filing to implement proposed
                                                                            changes to RPM filed 12 12 08
                                                                            http://elibrary.ferc.gov/idmws/File_list.asp?do
                                                                    R       cument_id=13672185
       1.4.2 Bids occur in the following markets: (a) energy, (b)
                                                                        b
       capacity, or (c) other

       State Implementation Plans (SIPs) include EE set-asides
 1.5

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
       Efficiency commitment is in statute                                  The EmPOWER MD Energy Efficiency Act of
                                                                            2008, passed on 4/24/08, sets a goal of
                                                                            reducing statewide per capita electricity
                                                                            consumption and per capita peak demand by
                                                                            15% by 2015 compared to 2007 levels. The
                                                                            law requires utilities to reduce per capita
                                                                        Y                                                     Y
                                                                            electricity consumption by 5% by 2011 and
                                                                            by 10% by 2015 compared to 2007. (The
                                                                            entity that will achieve the remaining 5% by
 2.1
                                                                            2015 is not specified here or elsewhere. The
                                                                            Maryland Energy Administration may
                                                                            conduct some EE activities.) In addition, per
                                                                            HB 374: EmPower MD EE Act of 2008:
                                                                            http://mlis.state.md.us/2008rs/chapters_noln/
                                                                            Ch_131_hb0374E.pdf; MCA Public Utility
                                                                        S
                                                                            Companies § 7-211:
                                                                            http://www.michie.com/maryland/lpext.dll?f=t
                                                                            emplates&fn=main-h.htm&2.0
      The TRC or Societal Cost Test is used to evaluate EE          A 2007 Order (Order 81637 in Case 9111)
      programs                                                      requires utilities to use four tests (societal,
                                                                    utility, participant, and RIM), and states that
                                                                    the Commission will consider and weigh all
                                                                    of the tests. The EmPOWER MD Energy
                                                                    Efficiency Act of 2008 passed on 4/24/08,
                                                                    states that in determining whether a program
                                                                    or service encourages and promotes the
                                                                    efficient use and conservation of energy, the
                                                                    Commission shall consider its cost-
                                                                    effectiveness, but does not specify certain
                                                                    tests. The Commission addressed the use
                                                                    of cost-effectiveness tests in Orders in 2008;
                                                                    a Letter Order in re: Baltimore Gas and
                                                              Y
                                                                    Electric's EE programs rejected all its
                                                                    proposed programs except one, stating that
                                                                    the programs were not cost-effective. In
                                                                    several Orders on 12/31/08 approving
                                                                    EmPOWER MD programs, the Commission
                                                                    requires utilities to submit updated cost,
                                                                    savings, and cost-effectiveness data based
                                                                    on the results of RFPs to implement the
                                                                    plans. In these Orders, the Commission
2.2                                                                 states that it "views cost-effectiveness as
                                                                    requiring a real rate of return on ratepayers’
                                                                    investment, measured by meaningful bill
                                                                    savings for all ratepayers, and we do not
                                                                    view the outcomes of the TRC or other
                                                                    CaliforniaCase 9111: as dispositive or
                                                                    MD PSC Manual tests
                                                                    http://webapp.psc.state.md.us/Intranet/Case
                                                                    num/CaseAction_new.cfm?RequestTimeout=
                                                                    500; HB 374; EmPower MD EE Act of 2008:
                                                                    http://mlis.state.md.us/2008rs/chapters_noln/
                                                                    Ch_131_hb0374E.pdf; MCA Public Utility
                                                                    Companies § 7-211:
                                                                    http://www.michie.com/maryland/lpext.dll?f=t
                                                                    emplates&fn=main-h.htm&2.0; Letter Order
                                                             R, S   re: BGE's EE programs, ML #108061,
                                                                    8/18/08:
                                                                    http://webapp.psc.state.md.us/Intranet/maillo
                                                                    g/maillogitems_new.cfm; MD PSC Order
                                                                    82386, Docket 9156:
                                                                    http://webapp.psc.state.md.us/Intranet/Case
                                                                    num/CaseAction_new.cfm?RequestTimeout=
                                                                    500?; also see orders in Dockets 9153,
                                                                    9154, 9155, 9157.

      2.3.1 Potential for cost-effective EE has been                ACEEE estimated potential of EE programs
      established through a potential study                         to reduce consumer use of electricity in
                                                                    February 2008. This is not a true potential
                                                             Y-     study, but does provide policymakers with
                                                                    reasonable assumptions of some achievable
                                                                    efficiency goals for their states.

                                                                    http://aceee.org/pubs/e082.pdf?CFID=57111
                                                                    7&CFTOKEN=50109276
      2.3.2 Established EE programs reach all customer              Established programs underway in 2008 did
      classes                                                       not reach all customer classes. However,
                                                                    the EmPower MD Energy Efficiency Act of
                                                                    2008, passed on 4/24/08, requires electric
                                                                    companies to submit efficiency plans every 3
                                                                    years which must address "residential,
2.3                                                           N     commercial, and industrial sectors as
                                                                    appropriate, including low-income
                                                                    communities and low-to-moderate-income
                                                                    communities." The 5 EmPower orders
                                                                    approved on 12/31/08 (Dockets 9153-9157)
                                                                    stressed broad program availability for all
                                                                    customers.
2.3




                                                                         HB 374: EmPower MD EE Act of 2008:
                                                                         http://mlis.state.md.us/2008rs/chapters_noln/
                                                                         Ch_131_hb0374E.pdf; MCA Public Utility
                                                                         Companies § 7-211:
                                                                  R, S   http://www.michie.com/maryland/lpext.dll?f=t
                                                                         emplates&fn=main-h.htm&2.0; Dockets 9153-
                                                                         9157 can be accessed from:
                                                                         http://webapp.psc.state.md.us/Intranet/home
                                                                         .cfm.
      Funding requirements for all long-term, cost-effective EE          Funding varies by utility.
                                                                   N
2.4 have been established

      2.5.1 Quantitative MW and MWh savings goals have
      been established and are producing incremental
      investment.

      2.5.2 Goals are established: (a) connection with IRP or
      other planning process; (b) as part of an EEPS or similar
      system; (c) as part of program approval and budget-
      setting process; (d) other

2.5 2.5.3 Energy Efficiency can be used to fulfill                       EE is used to fulfill requirements of the
      requirements of an RPS or similar standard                         EmPOWER MD Energy Efficiency Act of
                                                                  Y+
                                                                         2008 passed on 4/24/08. See details under
                                                                         2.1 above.

      2.5.4 Expected Capacity Savings (Annual MW in 2006)


      2.5.5 Energy Savings (Annual MWh in 2006)

      2.6.1 A robust M&V process has been established                    In Orders on 12/31/08 approving EmPower
                                                                         MD plans, the Commission states that there
                                                                         is a proposal by the MD Energy
                                                                         Administration for a statewide EM&V
                                                                         component, that discussion has emerged on
                                                                         EM&V during the EmPower plan
                                                                         proceedings, that the Commission is
                                                                   N     awaiting utilities' responses on a regional
                                                                         EM&V approach, and that any EM&V
                                                                         approach must be consistent with that
                                                                         required for PJM for participation in the
                                                                         auctions. The Commission states that it is
                                                                         premature to decide on a specific approach,
                                                                         and it will defer decision on EM&V till a later
                                                                         date.
                                                                         MD PSC Order 82386, Docket 9156:
                                                                         http://webapp.psc.state.md.us/Intranet/Case
                                                                         num/CaseAction_new.cfm?RequestTimeout=
2.6
                                                                         500?; also see orders in Dockets 9153,
                                                                         9154, 9155, 9157.
      2.6.1.1   M&V is adequately funded

      2.6.1.2 Energy savings are used to measure
      performance

      2.6.1.3   M&V is done according to a defined schedule


      2.6.1.4   M&V is conducted by an independent party

      2.6.1.5 Review of M&V is done in a transparent
      process

      2.6.2 M&V is done using: (a) deemed savings; (b)
      actual savings; (c) other
       2.7.1 EE delivery structure has been established                       The Commission requires all electric
                                                                              companies to file comprehensive EE,
                                                                              Conservation, and Demand Reduction Plans
                                                                              designed to achieve usage reduction goals
                                                                              by 2015 (Case 9111, Order 81637). The
                                                                        Y
                                                                              EmPOWER MD Energy Efficiency Act of
                                                                              2008 requires electric companies to consult
                                                                              with the MD Energy Administration and
                                                                              submit an energy efficiency plan to the
2.7                                                                           Commission every 3 years.
                                                                              Case 9111:
                                                                              http://webapp.psc.state.md.us/Intranet/Case
                                                                              num/CaseAction_new.cfm?RequestTimeout=
                                                                       R, S
                                                                              500?; EmPower Act:
                                                                              http://mlis.state.md.us/2008rs/chapters_noln/
                                                                              Ch_131_hb0374E.pdf
       2.7.2 Delivery is via: (a) utility administration; (b) third-
                                                                        a
       party administration; or (c) government agency

       Resource plans are regularly updated                                   The EmPOWER MD Energy Efficiency Act of
                                                                        Y     2008, passed on 4/24/08, requires electric
                                                                              companies to consult with the MD Energy
                                                                              Administration and submit an energy
                                                                              HB 374: EmPower MD EE Act of 2008:
2.8                                                                           http://mlis.state.md.us/2008rs/chapters_noln/
                                                                              Ch_131_hb0374E.pdf; MCA Public Utility
                                                                        S
                                                                              Companies § 7-211:
                                                                              http://www.michie.com/maryland/lpext.dll?f=t
                                                                              emplates&fn=main-h.htm&2.0
       2.9.1 Building Energy Codes for residential buildings are              2006 IECC codes are mandatory statewide.
       in place and regularly updated                                         Codes are usually reviewed every three
                                                                        Y
                                                                              years, and the last update was July 1, 2007.

                                                                        S     http://www.bcap-energy.org/node/73
2.9
       2.9.2 Building Energy Codes for commercial buildings                   2006 IECC codes are mandatory statewide.
       are in place and regularly updated                                     Codes are usually reviewed every three
                                                                        Y
                                                                              years, and the last update was July 1, 2007.

                                                                        S     http://www.bcap-energy.org/node/73
       Appliance and Equipment Efficiency Standards are in                    In 2004 the Energy Efficiency Standards Act
       place and regularly updated                                            became law, creating standards for nine
                                                                              appliances, most of which were later
                                                                              federally pre-empted. Regulations officially
                                                                              adopting these standards were approved in
                                                                              2006. In 2007, amendments to the 2004 Act
                                                                              established standards for seven new types of
                                                                              appliances; the amendments required the
                                                                        Y
                                                                              Maryland Energy Administration to officially
                                                                              adopt regulations establishing the new
                                                                              standards as of January 2008. The
                                                                              standards must be reviewed by the Maryland
2.10                                                                          Energy Administration every two years and
                                                                              propose revisions to the General Assembly.


                                                                              EESA: Md Code: State Government Section
                                                                              9-2006;
                                                                              http://mlis.state.md.us/asp/statutes_respond.
                                                                              asp?article=gsg&section=9-
                                                                       S, A
                                                                              2006&Extension=HTML; COMAR 14.26.03
                                                                              MD Energy Efficiency Standards:
                                                                              http://www.dsd.state.md.us/comar/subtitle_c
                                                                              hapters/14_Chapters.htm#Subtitle26
       Energy efficiency is a high priority in state buildings and        A revolving loan fund supports energy
       state funded buildings as evidenced in capital planning            efficiency in state buildings. State buildings
       and enabling performance contracts                                 have been subject to energy performance
                                                                          standards since 1992. In April 2008, the MD
                                                                          High Performance Buildings Act, effective
                                                                     Y    July 1, 2008, passed. It requires that
                                                                          projects involving new construction or major
                                                                          renovation of state buildings achieve a silver
                                                                          rating under the LEED system, or a
2.11                                                                      comparable rating under another system.

                                                                          SB 208:
                                                                          http://mlis.state.md.us/2008rs/chapters_noln/
                                                                          Ch_124_sb0208T.pdf; Energy standards in
                                                                     S    state buildings:
                                                                          http://www.dsireusa.org/library/includes/incen
                                                                          tive2.cfm?Incentive_Code=MD12R&state=M
                                                                          D&CurrentPageID=1&RE=1&EE=1
                                                                          Revolving loan fund:
Recommendation 3: Miscellaneous Policies                                  http://energy.maryland.gov/incentives/state-
       3.1.1 Public education programs on EE are in place.
                                                                     Y-                                                    Y-
       (See Guide Tab for Y/N criteria.)

       3.1.2 Process is in place, such as a state or regional
       collaborative, to pursue EE as a high-priority resource.      Y
       (See Guide Tab for Y/N criteria.)
 3.1
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       Do not delete this row.
       75% of state access to ENERGY STAR New Homes                  Y
 3.2 What proportion is due to regulated utility program? (who            Southern Maryland Electric Cooperative,
       is sponsor)
       75% of state access to Home Performance with
                                                                     Y
       ENERGY STAR?
       What proportion is ue to regulated utility program? (who           MD Energy Admn (75% of pop)
       is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
       4.1.1 Cost recovery process exists                                 BG&E and PEPCO requested
                                                                          implementation of a DSM surcharge. See p.
                                                                          3 Of Supplement 392 to P.S.C. Md. E-6. A
                                                                          2007 Order (Order 81637 in Case 9111)
                                                                          established that costs must be recovered
                                                                          through a distribution rate surcharge, with
                                                                          annual "true-ups." The EmPOWER MD
                                                                          Energy Efficiency Act of 2008, passed on
                                                                     Y                                                     Y-
                                                                          4/24/08, requires the Commission to adopt
                                                                          rate-making policies that provide cost
                                                                          recovery. In Orders on 12/31/08 approving
                                                                          EmPower MD programs, the Commission
                                                                          states that it will address the mechanics and
 4.1                                                                      details of cost recovery at a future date in
                                                                          early 2009.

                                                                          BG&E's proposal is on p. 3 Of Supplement
                                                                     R    392 to P.S.C. Md. E-6, available at              R
                                                                          http://webapp.psc.state.md.us/Intranet/Case
                                                                          HB 374: EmPower MD EE Act of 2008:
                                                                     S    http://mlis.state.md.us/2008rs/chapters_noln/
                                                                          Ch_131_hb0374E.pdf; MCA Public Utility
       4.1.2 Recovery occurs via: (a) rider; (b) regular rate
       case; or (c) system benefits charge

       4.1.3 Funding is for multi-year periods

       A base energy efficiency spending level exists, with
 4.2 opportunity to justify higher level
       % of net (retail) utility revenue presently used for energy
 4.3 efficiency [no unit = %; m/k = mils/kWh]

       Funds from carbon trading program support EE
 4.4
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking
       5.1.1 Utility throughput incentive is addressed and                  SUMMARY: Bill Stabilization Adjustments
       disincentives are removed                                            were approved for Delmarva and PEPCO in
                                                                            2007 (Order 81518 in Case 9093 and Order
                                                                            81517 in Case 9092). The Bill Stabilization
                                                                            Adjustments decouple revenues from
                                                                            abnormal levels in kWh sales and changes
                                                                            in the number of customers from adjusted
                                                                            test-year levels, and operate on a monthly
                                                                            basis. The Bill Stabilization Adjustments are
                                                                            capped at 10 percent of the test-year
                                                                            average base rate, with amounts over that
                                                                            level to be set-aside to offset further over- or
                                                                            under-collections. The Commission ruled
                                                                     Y-                                                        Y-
                                                                            that it would consider a number of BSA
                                                                            implementation issues under another
                                                                            proceeding. The Commission approved
                                                                            decoupling for BGE's residential and small
                                                                            commercial customers in 2007. BGE also
                                                                            requested approval for decoupling for its
                                                                            large commercial customers under certain
                                                                            schedules, but in a 12/31/08 Order, the
                                                                            Commission states that it will consider the
 5.1                                                                        request in a revised rider. Allegheny Power
                                                                            requested a decoupling mechanism, but the
                                                                            Commission did not approve it in its 12/31/08
                                                                            decision in Case 9153, but said it would
                                                                            PEPCO the issue in and Delmarva Rate
                                                                            address (Case 9092)the near future. (Case
                                                                            9093) Orders accessed from:
                                                                            http://webapp.psc.state.md.us/Intranet/Case
                                                                      R     num/CaseAction_new.cfm?RequestTimeout=             R
                                                                            500?


                                                                            BGE decoupling (ML #10861, Letter Order
                                                                            11/30/07; also see Rider 25 in BGE filing):
                                                                      R
                                                                            http://webapp.psc.state.md.us/Intranet/maillo
                                                                            g/maillogitems_new.cfm
                                                                            Allegheny Power: Case 9153, Order 82383
                                                                            accessed from
                                                                      R     http://webapp.psc.state.md.us/Intranet/Case
                                                                            num/CaseAction_new.cfm?RequestTimeout=
                                                                            500?
       5.1.2 Method used is: (a) decoupling; (b) lost revenue
                                                                      a
       recovery; or (c) non-utility implementation of EE

       5.2.1 Utility/shareholder EE incentives are provided                 A 2007 Order (Order 81637 in Case 9111)
                                                                      N     allows EE, Conservation and Demand                 N
                                                                            Reduction Plans to propose incentive
                                                                            Case 9111:
                                                                            http://webapp.psc.state.md.us/Intranet/Case
 5.2                                                                 R, S
                                                                            num/CaseAction_new.cfm?RequestTimeout=
                                                                            500?; EmPower Act:
                                                                            http://mlis.state.md.us/2008rs/chapters_noln/
                                                                            Ch_131_hb0374E.pdf
       5.2.2 Incentives exceed amount of lost revenues

       5.3.1 Impact on EE is a consideration when designing
       retail rates

 5.3   5.3.2 Declining block rates and fixed variable rate                  Some declining block rates and fixed
       designs have been eliminated                                   N     variable rate designs were in place as of
                                                                            April 2005.
       5.4.1 Time sensitive rates in place                             Some time-sensitive rates were in place as
                                                                Y-
                                                                       of April 2005.

       5.4.2 Usage sensitive rates in place                            Some inclining blocks were in place as of
                                                                Y-
                                                                       April 2005.

       5.4.3 AMI deployment planned                                    SUMMARY: The Commission investigated
                                                                       AMI in 2006-2007 and decided not to order
                                                                       its deployment. Delmarva and PEPCO have
                                                                       proposed AMI, and these proceedings are
                                                                       still before the Commission. The
                                                                       Commission approved creation of a pilot
                                                                       program and regulatory asset for Baltimore
                                                                       Gas and Electric's AMI program in 2007.
                                                                       Allegheny Power has developed an
                                                                       Advanced Utility Infrastructure Pilot Project,
                                                                       which is before the Commission. SMECO is
                                                                       examining a possible TOU program. A 2007
                                                                Y-     Order (Order 81637 in Case 9111)
                                                                       establishes minimum technical standards
                                                                       and requirements for utilities who include
                                                                       AMI in their EE, Conservation, and Demand
                                                                       Reduction Plans. The EmPOWER MD
                                                                       Energy Efficiency Act of 2008, passed on
                                                                       4/24/08, requires the Commission to
                                                                       evaluate whether AMI and smart grid
                                                                       components are cost-effective in reducing
                                                                       consumption and peak demand, and if so
                                                                       gives the Commission the power to require
                                                                       each electric company to implement such
                                                                       technologies.
                                                                       Case No. 9059 was opened in 2006 to
 5.4                                                                   investigate AMI. In February 2007, the
                                                                 R     Commission issued an order deciding not to
                                                                       order AMI deployment. See the Order,
                                                                       available from
                                                                       BGE requested AMI and cost-recovery in
                                                                       Supplement 392 to P.S.C. Md. E-6, available
                                                                       at
                                                                       http://webapp.psc.state.md.us/Intranet/Case
                                                                       Num/NewIndex3_VOpenFile.cfm?filepath=%
                                                                       5C%5CColdfusion%5CEWorkingGroups%5
                                                                       CDRDG%5CBGE%20AMI%2DDR%2DCons
                                                                 R     ervation%5CBGE%201%2D23%2D07%20A
                                                                       MI%2DDRI%2DConservation%2Epdf; BGE's
                                                                       AMI component approved in Case 91111;
                                                                       ML 104518; Order on 4/13/07; accessed
                                                                       from:
                                                                       http://webapp.psc.state.md.us/Intranet/Case
                                                                       num/CaseAction_new.cfm?RequestTimeout=
                                                                       500?
                                                                       DPL and PEPCO had requested AMI and
                                                                       cost recovery. Documents are available at
                                                                       http://webapp.psc.state.md.us/Intranet/Case
                                                                       Num/submit.cfm?DirPath=%5C%5CColdfusi
                                                                       on%5CEWorkingGroups%5CDRDG%5CPHI
                                                                R, S   %20AMI%2DDR%2DConservation\&CaseN=
                                                                       Demand%20Response/Distributed%20Gene
                                                                       ration%20Working%20Group; HB 374:
                                                                       EmPower MD EE Act of 2008:
                                                                       http://mlis.state.md.us/2008rs/chapters_noln/
                                                                       Ch_131_hb0374E.pdf
       5.4.4 Other mechanisms exist (e.g., on-bill financing,
       benefit sharing)

State Fiscal Policy
Distributed Generation Policies
      A statewide interconnection policy is in place        Maryland’s final interconnection rules
                                                            became effective June 9, 2008. The rules
                                                            apply to all utilities and distributed generation
                                                            systems of less than 10 MW. Systems must
                                                            be classified into one of 4 levels before they
                                                            are reviewed: Level 1: Lab certified (in
                                                            accordance with IEEE 1547, UL 1741, and
                                                            the National Electric Code (NEC)), inverter-
                                                            based systems of 10 kW or less. Level 2:
                                                            Lab certified or field approved (generally non-
                                                            certified systems that have been tested and
                                                            approved under a prior review by a utility)
                                                            systems of 2 MW or less connected to a
7.1                                                    Y+   radial distribution circuit or to a spot network
                                                            serving one customer. Level 3: Only applies
                                                            to systems that will not export power to the
                                                            grid and that do not require new facility
                                                            construction by the utility. Systems being
                                                            located on an area network must be inverter-
                                                            based, use lab certified equipment, and have
                                                            a capacity of 50 kW or less. Systems located
                                                            on a radial network must have a capacity of
                                                            10 MW or less and not be served by a
                                                            shared transformer. Level 4: Systems 10
                                                            MW or less that cannot be approved or do
                                                            not meet the criteria for review under a lower
                                                            tier. Utilities may not charge any processing
                                                            fees final rules can be viewed here:
                                                            The to Level 1 applicants and processing
                                                       S    http://www.dsireusa.org/documents/Incentive
                                                            s/MD06R1.htm
      A statewide net metering policy is in place           Maryland has statewide net-metering policies
                                                            that have been revised several times under
                                                            Md. Public Utility Companies Code § 7-306.
                                                            Systems owned or leased by
                                                            residential/commercial customers and by
                                                            schools with solar, wind, or biomass
7.2                                                    Y    resources are eligible for net metering. The
                                                            maximum system size limit is 2 MW. NEG is
                                                            carried over at a utility's retail rate to the
                                                            customer's next bill for 12 months and any
                                                            leftover at the end of 12-months is forfeited
                                                            to the utility.




      A statewide exit fee policy is in place               There are no explicit exit fees in Maryland.
                                                            However, some utilities have still been able
                                                            to recover their stranded costs. DG owners
                                                            have to pay for upfront costs related to
                                                       Y
7.3                                                         receiving service. The MD PSC has a policy
                                                            that utilities can't "socialize costs," meaning
                                                            that costs cannot be passed along to other
                                                            customers.

      A statewide standby rate policy is in place           Maryland does not have a statewide policy
                                                       N
                                                            on standby rates

                                                            Baltimore Gas & Electric Co - Schedule S -
                                                            for standby service the customer will enter
                                                            into a service contract with the utility that
                                                            specifies the amount of standby capacity
                                                            needed. The customer is charged for energy
                                                       U
                                                            service under the Controlling Schedule (or
                                                            regular rate). Billing demand is based on the
                                                            maximum 30 minute demand of the month
                                                            with no ratchet. Rate available at:
7.4
                                                            http://www.bge.com/portal/site/bge/menuitem
                                                            .5e7b43cdabceb7c33c88ff10016176a0/
7.4


                                                                  Potomac Edison Co - Schedule AGS -
                                                                  standby service is available to QF facilities
                                                                  that contract for standby capacity. There are
                                                                  moderate demand charges and energy
                                                                  charges based on real-time pricing. Billing
                                                              U
                                                                  demand is based on the maximum 30 minute
                                                                  demand of the month with no ratchet. Rate
                                                                  available at:
                                                                  http://www.alleghenypower.com/Tariffs/MD/M
                                                                  DTariff.asp
      As part of resource planning process, CHP is reviewed       SUMMARY: 2006 legislation allows the
      and incorporated where effective                            procurement of energy efficiency as part of
                                                                  standard offer service, CHP is not
                                                              N   mentioned. HB 374, the MD EmPower Act of
                                                                  2008, requires utilities to submit an electricity
                                                                  savings and demand reduction plan (DSM
                                                                  plan).
                                                                  2006 legislation allows the Commission to
                                                                  authorize or require the procurement of cost-
7.5
                                                                  effective energy efficiency as part of
                                                              S   standard offer service. See SB 1 of the 2006
                                                                  Legislative Session.
                                                                  http://mlis.state.md.us/2006s1/billfile/SB0001
                                                                  .htm
                                                                  The MD EmPower Act requires DSM
                                                                  programs, see
                                                              S
                                                                  http://mlis.state.md.us/2008rs/bills/hb/hb037
                                                                  4e.pdf
Natural Gas
y efficiency as a resource
               Statute requires each gas company to
               "develop and implement programs and
               services to encourage and promote
               the efficient use and conservation of
               energy by consumers, gas companies,
               and electric companies." Natural gas
               utilities must implement EE programs
               deemed cost-effective and appropriate
               by the PSC.



               MCA Public Utility Companies § 7-
               211:
               http://www.michie.com/maryland/lpext.
               dll?f=templates&fn=main-h.htm&2.0
efficiency where cost-effective.
               The three largest LDCs have had
               surcharge cost recovery for their low-
               income weatherization programs for
               10 years or more. In addition, BG&E
               has requested implementation of a
               DSM surcharge. See p. 3 Of
               Supplement 392 to P.S.C. Md. E-6.




                Supplement 392 to P.S.C. Md. E-6 is
               available at
               http://webapp.psc.state.md.us/Intranet
energy efficiency and modify ratemaking
             Baltimore Gas and Electric received
             approval for a decoupling mechanism
             in 1998 that applies to residential and
             general service firm customers. The
             mechanism uses a balancing account
             that returns to customers excess
             margin when revenues exceed
             authorized levels. A conservation
             component is separate from the
             decoupling mechanism. See BGE
             monthly tariff rider. Washington Gas
             Light has implemented a decoupling
             mechanism since 2005 that is similar
             to the BGE mechanism. It applies to
             all firm customer classes and does not
             have a conservation component as
             part of its mechanism.




             BGE Case 8780 (Order 74047,
             2/27/98, and Proposed Order on
             2/25/98) and Washington Gas Case
             8990 can be accessed from:
             http://webapp.psc.state.md.us/Intranet
             /Casenum/CaseAction_new.cfm?Requ
             estTimeout=500?




             The EmPOWER MD Energy Efficiency
             Act of 2008, passed on 4/24/08,
             requires the Commission to adopt rate-
             EmPower Act:
             http://mlis.state.md.us/2008rs/chapter
             s_noln/Ch_131_hb0374E.pdf
                                                                NEW JERSEY
                                                                 Electric                               Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority        Main Goal of the Energy Master Plan:
         resource, equivalent or superior to         Reduce projected energy use by 20% by
         supply resources                            2020 and meet 20% of the State’s electricity
                                                     needs with Class 1 renewable energy
                                                     sources by 2020. The combination of
                                                     energy efficiency, conservation, and
                                                     renewable energy resources, should allow
                                                     New Jersey to meet any future increase in
                                                     demand without increasing its reliance on
                                                     non-renewable resources. NJ issued a
                                                     draft Energy Master Plan (EMP) in April
                                                 Y   2008 and held a series or roundtable           Y
                                                     discussions and hearings in June and July
  1.1                                                2008 to discuss the draft EMP. Details
                                                     about the planning process can be found at
                                                     the link to the EMP web site below. A final
                                                     draft of the EMP was issued in October
                                                     2008. Reducing energy consumption at
                                                     least 20% by 2020 would yield annual
                                                     electricity savings of 20,000 GWh per year
                                                     and annual heating savings of 119 trillion
                                                     http://nj.gov/emp/about/goals.html
                                                     Btus.
                                                     EMP web site. http://nj.gov/emp/
                                                     Energy Master Plan, October 2008.
                                                 R   http://www.pewclimate.org/docUploads/NJ%       R
                                                     20EnergyMasterPlan%20Oct2008.pdf

         1.2.1 EE is integrated into an active
                                                 N
         IRP or Portfolio Management process.

         1.2.2 Efficiency is procured as a           An EEPS is in development by the BPU and
         resource for default service/standard       Rutgers University. Straw proposal calls for
         offer customers                             savings to increase annually by 1%. See
                                                 N
                                                     summary in ACEEE's EERS Report. The
  1.2                                                DPU standard offer service rule is Title 14,
                                                     Chapter 8, Subchapter 8.
                                                     The ACEEE Report is available at
                                                     http://aceee.org/pubs/e063.pdf?CFID=2659
                                                     075&CFTOKEN=86822619. See p. 15.
                                                 R
                                                     Title 14, Chapter 8, Subchapter 8. .
                                                     http://www.michie.com/newjersey/lpext.dll?f
                                                     =templates&fn=main-h.htm&cp
         EE is an alternative to transmission
         based on a long-term transparent IRP    N
  1.3    or transmission system plan
        1.4.1 EE is a biddable commodity                     PJM conducts a regional planning process
                                                             for 13 states, including NJ, and DC. PJM
                                                             uses its Reliability Pricing Model (RPM) to
                                                             procure capacity on a multi-year forward
                                                             basis through an auction mechanism. In
                                                             March 2008, several parties asked FERC to
                                                             review the reasonableness of the RPM
                                                             process. On June 30, 2008, PJM filed a
                                                             responsive report. On September 19, 2008,
                                                             FERC issued an Order addressing the report
                                                             and supporting creation of a stakeholder
                                                        N    process to address pending RPM issues. On        N
                                                             December 12, 2008, PJM filed a report with
                                                             FERC summarizing results of the stakeholder
                                                             process, proposing changes to the RPM,
                                                             including allowing energy efficiency to
  1.4                                                        participate in the RPM in Docket Nos. ER05-
                                                             1410-000, EL05-148-000. Also on December
                                                             12, 2008, PJM filed corresponding tariff
                                                             revisions for effect on March 27, 2009 in
                                                             Docket No. ER09-412-000.



                                                             PJM Report filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                             ocument_id=13672172
                                                        R    PJM tariff filing to implement proposed
                                                             changes to RPM filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                             ocument_id=13672185
        1.4.2 Bids occur in the following
        markets: (a) energy, (b) capacity, or (c)
        other

        State Implementation Plans (SIPs)           Y        NOX SIP Call includes a 5% EE/RE set-
        include EE set-asides                                aside; see
                                                             http://www.epa.gov/cleanenergy/pdf/eere_rp
                                                             t.pdf. Proposed CAIR rules would include a
  1.5
                                                             5% set-aside; see
                                                             http://www.epa.gov/cleanenergy/pdf/eere_rp
                                                             t.pdf, p. 40.

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
        Efficiency commitment is in statute                  New Jersey statute states that it is the
                                                             policy of the state to "promote . . . the
                                                             efficient use, production and procurement of
                                                             energy." See New Jersey Statutes 48:2-
                                                             21.24. In addition, the restructuring statute
                                                             states that it is the policy of the state to
                                                             "Ensure that improved energy efficiency
                                                        Y-   and load management practices,
                                                             implemented via marketplace mechanisms
                                                             or State-sponsored programs, remain part
  2.1                                                        of this State's strategy to meet the long-
                                                             term energy needs of New Jersey
                                                             consumers." See New Jersey Statutes 48:3-
                                                             50.
                                                             http://lis.njleg.state.nj.us/cgi-
                                                             bin/om_isapi.dll?clientID=201205351&Dept
                                                             h=2&depth=2&expandheadings=on&headin
                                                        S    gswithhits=on&hitsperheading=on&infobase
                                                             =statutes.nfo&record={135BA}&softpage=D
                                                             oc_Frame_PG42
                                                    http://lis.njleg.state.nj.us/cgi-
                                                    bin/om_isapi.dll?clientID=201205351&Dept
                                                    h=2&depth=2&expandheadings=on&headin
                                                S   gswithhits=on&hitsperheading=on&infobase
                                                    =statutes.nfo&record={135BA}&softpage=D
                                                    oc_Frame_PG42
                                                    "Net present value" test (difference between
                                                    net present value and net present costs) is
                                                    used in the DSM Plan to select programs.
                                                Y   See NJAC § 14:12-3.2. Programs must              Y
                                                    achieve at least a 1.0 on the TRC test to be
      The TRC or Societal Cost Test is used         eligible for performance-based incentives.
2.2   to evaluate EE programs                       See § 14:12-3.7.
                                                    http://michie.lexisnexis.com/newjersey/lpext
                                                A   .dll?f=templates&fn=main-                        A
                                                    h.htm&cp=uanjadmin
                                                    http://michie.lexisnexis.com/newjersey/lpext
                                                A   .dll?f=templates&fn=main-
                                                    h.htm&cp=uanjadmin
      2.3.1 Potential for cost-effective EE         A potential study considering technical,
      has been established through a                economic and market potential of electric
      potential study                               and gas efficiency was done by KEMA in
                                                Y   2004. Potential study's program                  Y
                                                    recommendations were referenced in
                                                    7/21/2006 Order in Docket EX04040276, p.
                                                    3.
                                                    http://www.bpu.state.nj.us/wwwroot/cleanEn
                                                    ergy/EX04040276_20060914.pdf
                                                    Potential studies are available at
                                                    http:njcleanenergy.com/html/5library/0_libra
                                                    ry_home.html
2.3   2.3.2 Established EE programs reach           Programs include both electric and gas
      all customer classes                          measures. Programs reach low-income,
                                                    residential, schools, local government,
                                                    commercial and industrial customers, and
                                                Y                                                    Y
                                                    include new construction as well as retrofits.
                                                    NJ CEP program change updates for 2008
                                                    can be found at the link below.

                                                    http://www.njcleanenergy.com/media/NJCE
                                                    P_Program_Ovrvw060106.pdf
                                                    NJ CEP program change updates for 2008.
                                                    http://www.njcleanenergy.com/main/public-
                                                    reports-and-library/home
      Funding requirements for long-term,            Funding for the alternative scenario
      cost-effective EE have been established       recommended in the Energy Master Plan is
                                                    discussed at page 57 of the EMP. The
                                                    EMP indicates that BPU staff will work with
                                                    the Rate Counsel, the utilities and other
                                                    stakeholders to identify the appropriate
                                                N   financial structure to provide cost recovery     N
                                                    of the utilities’ EE investments. Funding
2.4
                                                    sources include reallocation of CEP funds,
                                                    private investors, RGGI auction proceeds,
                                                    electric and gas rates and revenues from
                                                    participation in regional capacity markets.

                                                    Energy Master Plan, October 2008.
                                                    http://www.pewclimate.org/docUploads/NJ%
                                                    20EnergyMasterPlan%20Oct2008.pdf
      2.5.1 Quantitative MW and MWh                MWh, not MW. See Orders below. In
      savings goals have been established          addition, according to the BPU's most
      and are producing incremental                recent strategic plan, Goal C.3.3, by 2012,
      investment.                                  785,000 Megawatt hours per year and 6.06
                                                   billion cubic feet gas per year of energy
                                                   savings will be derived from measures
                                                   installed under the Clean Energy Program.
                                                   According to page 8 of the 2005 Annual
                                                   Report, this goal corresponds to meeting
                                                   "all future demand for energy beyond 2012
                                                   levels through increased energy efficiency."
                                                   NJ is working on two sets of savings goals –
                                                   one as part of the contracting with the CEP
                                               Y   and another that would apply to each            Y
                                                   electrical energy supplier. NJ established
                                                   new savings goals in the Energy Master
                                                   Plan that was issued in October 2008. The
                                                   alternative scenario recommended in the
                                                   EMP would yield annual electricity savings
                                                   of 20,000 GWh per year and annual heating
                                                   savings of 119 trillion Btus. NJ issued a
                                                   companion document to the EMP in
                                                   October 2008 that includes implementation
                                                   strategies. The strategies document
                                                   includes a discussion of how to meet the
                                                   statewide Energy Efficiency Performance
                                                   Goals.

                                                   http://www.state.nj.us/bpu/wwwroot/cleanEn
                                                   ergy/EX04040276_20041223.pdf; restated
                                               R   in 2006 Order                                   R
                                                   http://www.bpu.state.nj.us/wwwroot/cleanEn
                                                   ergy/EX04040276_20060914.pdf
                                                   Strategic Plan:
                                                   http://www.bpu.state.nj.us/tmp/NJBPUStrate
                                                   gicPlan.pdf; 2005 Annual Report:
                                                   http://www.njcleanenergy.com/support/script
                                                   s/document.php?id=10                  EMP
                                                   web site. http://nj.gov/emp/
                                               R   Energy Master Plan, October 2008.               R
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
                                                   Master Plan Implementation Strategies.
                                                   http://www.nj.gov/emp/docs/pdf/09121608.I
                                                   mpStrat.pdf

      2.5.2 Goals are established: (a)             The BPU conducted a comprehensive
      connection with IRP or other planning        efficiency resource analysis proceeding in
      process; (b) as part of an EEPS or           2004, resulting in quantitative savings goals
      similar system; (c) as part of program       for 2003-2008. To increase pressure on
      approval and budget-setting process;         program managers to decrease the cost of
      (d) other                                    savings, "x"% increase in funding over 2003
                                               c                                                   c
                                                   levels must result in "x+10"% higher
                                                   savings goals. The BPU is authorized to
                                                   adopt an electric and gas EEEPS with goals
                                                   as high as 20% savings by 2020 relative to
                                                   predicted consumption in 2020.
2.5
                                                   http://michie.lexisnexis.com/newjersey/lpext
                                               R   .dll?f=templates&fn=main-                       R
                                                   h.htm&cp=uanjadmin
2.5



      2.5.3 Energy Efficiency can be used to          In addition to goal in 2.5.1,above, the BPU
      fulfill requirements of an RPS or similar       Strategic Plan Goal A.3.4: "By December
      standard                                        2008, using a combination of energy
                                                      efficiency and load management, improve
                                                      the statewide electric load factor by 5
                                                  N
                                                      percent compared to the five year average
                                                      ending 2003." The BPU’s RPS rule is Title
                                                      14, Chapter 8, Subchapter 2. A link to a
                                                      DSIRE summary of the NJ RPS is listed
                                                      below.
                                                      Strategic Plan:
                                                      http://www.bpu.state.nj.us/tmp/NJBPUStrate
                                                      gicPlan.pdf; 2005 Annual Plan: Title 14,
                                                      Chapter 8, Subchapter 2.
                                                      http://www.michie.com/newjersey/lpext.dll?f
                                                  R   =templates&fn=main-h.htm&cp
                                                      DSIRE RPS Summary.
                                                      http://www.dsireusa.org/incentives/incentive
                                                      .cfm?Incentive_Code=NJ05R&re=1&ee=1


      2.5.4 Expected Capacity Savings                 74 MW saved from 2005 programs, See
      (Annual MW in 2006)                             page 3 in 2006 Clean energy Report to the
                                                      BPU. The Energy Master Plan issued in
                                                      October 2008 establishes a goal of
                                                      reducing peak demand for electricity by
                                                      5,700 MW by 2020. See EMP at pages 60-
                                                      67.

                                                      http://www.njcleanenergy.com/support/script
                                                      s/document.php?id=11                   Energy
                                                      Master Plan, October 2008.
                                                      http://www.pewclimate.org/docUploads/NJ%
                                                      20EnergyMasterPlan%20Oct2008.pdf
      2.5.5 Energy Savings (Annual MWh in             Goals are expected to increase from
      2006)                                           341,770 MWhs in 2005 to 575,568 MWhs in
                                                      2008. See p. 30 of 12/22/04 Order in
                                                      Docket EX04040276. NJ’s energy
                                                      efficiency goals, which are still under
                                                      development, include two elements: (a)
                                                      setting energy and demand goals for the
                                                      administrator of the NJ Clean Energy
                                                      Program (CEP) at 257 million kWh and 452
                                                      million billion Btu’s natural gas in 2007; and
                                                      (b) requiring each electricity
                                                      supplier/provider to meet efficiency goals.
                                                      http://www.state.nj.us/bpu/wwwroot/cleanEn
                                                      ergy/EX04040276_20041223.pdf
                                                      EMP web site. http://nj.gov/emp/
                                                  R   Energy Master Plan, October 2008.                R
                                                      http://www.pewclimate.org/docUploads/NJ%
                                                      20EnergyMasterPlan%20Oct2008.pdf

      2.6.1 A robust M&V process has been             In 2004 the BPU adopted program protocols
      established                                     to measure resource savings. NJ is
                                                      participating in the NEEP EM&V forum to
                                                      develop consistent M&V protocols for EE
                                                  Y   and DSM resources in the Northeast and
                                                      Mid-Atlantic region. The EM&V forum was
                                                      launched in July 2008. See link below to
                                                      NEEP EM&V forum.
                                                      http://www.state.nj.us/bpu/wwwroot/cleanEn
                                                      ergy/EO04080894_20041223.pdf
                                                      NEEP EM&V link.
                                                      http://www.neep.org/EMVinfo.html
      2.6.1.1   M&V is adequately funded




2.6
      2.6.1.2 Energy savings are used to                 Annual and life-cycle energy and capacity
      measure performance                                savings estimates are required elements of
                                                 Y
                                                         each DSM resource plan. See § 14:12-3.6.

                                                         http://michie.lexisnexis.com/newjersey/lpext
                                                 A       .dll?f=templates&fn=main-
                                                         h.htm&cp=uanjadmin
2.6   2.6.1.3 M&V is done according to a
      defined schedule


      2.6.1.4 M&V is conducted by an                     The utility funds a third party to verify
      independent party                                  installation and savings. The third party is
                                                 Y
                                                         selected by, and reports to, the BPU. See
                                                         NJAC § 14:12-3.6.
                                                         http://michie.lexisnexis.com/newjersey/lpext
                                                AC       .dll?f=templates&fn=main-
                                                         h.htm&cp=uanjadmin
      2.6.1.5 Review of M&V is done in a
      transparent process


      2.6.2 M&V is done using: (a) deemed                Actual meter readings are preferred, but
      savings; (b) actual savings; (c) other             other methods are used when necessary.
                                                b,c
                                                         See NJAC § 14:12-3.6.

                                                         http://michie.lexisnexis.com/newjersey/lpext
                                                         .dll?f=templates&fn=main-
                                                         h.htm&cp=uanjadmin
      2.7.1 EE delivery structure has been               In 2001-2003, the New Jersey Clean
      established                                        Energy program, funded by New Jersey's
                                                         SBC, was administered by utilities. A 2003
                                                         Order initiated the transfer of
                                                         implementation authority of the Program
                                                         from utilities to the Office of Clean Energy.
                                                         See 7/21/2006 Order in Docket
                                                         EX04040276, p. 3. The EE delivery
                                                         structure in NJ is continuing to evolve. As
                                                         discussed in the Energy Master Plan, NJ is
                                                         in the process or redesigning and
                                                 N       transitioning the state’s current EE              N
                                                         programs to be implemented by electric and
                                                         gas utilities. This is a central action item in
                                                         the EMP that is discussed at pages 55-58
                                                         of that document. BPU staff will oversee
                                                         the utility programs to ensure that they are
2.7                                                      performance-based and sufficiently
                                                         coordinated. The transition will begin in
                                                         2009 and utilities will develop their EE plan
                                                         as part of a planning effort that is described
                                                         at pages 75-81.

                                                         http://www.bpu.state.nj.us/wwwroot/cleanEn
                                                         ergy/EX04040276_20060914.pdf
                                                 R       Energy Master Plan, October 2008.                 R
                                                         http://www.pewclimate.org/docUploads/NJ%
                                                         20EnergyMasterPlan%20Oct2008.pdf
      2.7.2 Delivery is via: (a) utility                 See link below
      administration; (b) third-party
                                               a and c                                                     c
      administration; or (c) government
      agency
                                                         http://michie.lexisnexis.com/newjersey/lpext
                                                 A
                                                         .dll?f=templates&fn=main-

      Resource plans are regularly updated               NJ’s restructuring statute requires that
                                                         utilities perform “comprehensive resource
                                                         assessments” for EE and renewable energy
                                                         resources, which account for system needs
2.8                                                      and costs.
2.8
                                                   Electric Discount and Energy Competition
                                                   Act of 1999.
                                                   http://www.njcleanenergy.com/files/file/23_.
                                                   pdf
      2.9.1 Building Energy Codes for              2006 IIEC, with NJ specific modifications,
      residential buildings are in place and       mandatory statewide. Adopted 2/07. The
      regularly updated                            code change cycle is every three years
                                                   concurrent with the publication of new
                                                   editions of the model codes. See BCAP
                                                   and DSIRE summaries below for additional
                                                   details. Building codes are also a central
                                                   feature of alternative scenario
                                                   recommended in the Energy Master Plan.
                                               Y
                                                   The EMP urges the NJ Legislature to
                                                   authorize the development of statewide
                                                   building codes that would result in new
                                                   construction being at least 30% more
                                                   energy efficient than the current code by
                                                   July 2009 and develop a strategy to achieve
                                                   net zero carbon emitting buildings. (See
                                                   page 58 of EMP.)

                                                   BCAP Summary. http://bcap-
                                                   energy.org/node/84
                                                   DSIRE Summary.
                                                   http://www.dsireusa.org/incentives/incentive
                                                   .cfm?Incentive_Code=NJ13R&re=1&ee=1
                                                   Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf

      2.9.2 Building Energy Codes for              ASHRAE/IESNA 90.1-2004, with NJ-
2.9   commercial buildings are in place and        specific modifications, mandatory statewide.
      regularly updated                            Adopted 2/07. The code change cycle is
                                                   every three years concurrent with the
                                                   publication of new editions of the model
                                                   codes. See BCAP and DSIRE summaries
                                                   below for additional details. Building codes
                                                   are also a central feature of alternative
                                                   scenario recommended in the Energy
                                               Y   Master Plan. The EMP urges the NJ
                                                   Legislature to authorize the development of
                                                   statewide building codes that would result in
                                                   new construction being at least 30% more
                                                   energy efficient than the current code by
                                                   July 2009 and develop a strategy to achieve
                                                   net zero carbon emitting buildings. (See
                                                   page 58 of EMP.)


                                                   BCAP Summary. http://bcap-
                                                   energy.org/node/84
                                                   DSIRE Summary.
                                                   http://www.dsireusa.org/incentives/incentive
                                                   .cfm?Incentive_Code=NJ13R&re=1&ee=1
                                                   Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
        Appliance and Equipment Efficiency             Standards exist for a variety of commercial
        Standards are in place and regularly           applications (refrigeration, air conditioning,
        updated                                        etc.) and were last updated in 2005. See
                                                       NJSA 48:3-101. NJ’s appliance standards
                                                       are codified at sections 48:3-99 through
                                                       48:3-106. One of the action items in the
                                                  Y
                                                       Energy Master Plan is to work with the NJ
                                                       Legislature to set minimum energy
                                                       efficiency standards for new appliances and
                                                       other types of equipment currently not
                                                       covered by existing standards by 2009.
                                                       (See page 59 of EMP.)
                                                       EE standards statute, sections 48:3-99
                                                       through 48:3-106.
                                                       http://lis.njleg.state.nj.us/cgi-
 2.10
                                                       bin/om_isapi.dll?clientID=133566026&depth
                                                       =2&expandheadings=off&headingswithhits=
                                                       on&infobase=statutes.nfo&softpage=TOC_
                                                       Frame_Pg42
                                                       Energy Master Plan, October 2008.
                                                       http://www.pewclimate.org/docUploads/NJ%
                                                  S
                                                       20EnergyMasterPlan%20Oct2008.pdf
                                                       NJ DPU appliance standards rule.
                                                       http://www.michie.com/newjersey/lpext.dll?f
                                                       =templates&fn=main-h.htm&cp=
                                                       DSIRE summary.
                                                       http://www.dsireusa.org/incentives/incentive
                                                       .cfm?Incentive_Code=NJ12R&re=1&ee=1


        Energy efficiency is a high priority in        In January 2008, NJ enacted legislation
        state buildings and state funded               (S2146, codified at section 52:34-6.4))
        buildings as evidenced in capital              mandating the use of high performance
        planning and enabling performance              green building standards in new state
        contracts                                      construction. See DSIRE summary for
                                                  Y    additional details.

 2.11



                                                       DSIRE Summary.
                                                       http://www.dsireusa.org/incentives/incentive
                                                       .cfm?Incentive_Code=NJ16R&re=1&ee=1

Recommendation 3: Miscellaneous Policies
        3.1.1 Public education programs on EE          Education and outreach are also central
        are in place. (See Guide Tab for Y/N           features of alternative scenario
        criteria.)                                     recommended in the Energy Master Plan.
                                                       The EMP includes an action item that
                                                       recommends working with various
                                                       organizations to develop a best practices
                                                       manual, conducting various workshops and
                                                       consultations and creating partnerships with
                                                  Y-   various entities to help create public           Y-
                                                       awareness and educate the public about
                                                       EE. (See pages 59-60 of EMP.) NJ issued
                                                       a companion document to the EMP in
                                                       October 2008 that includes implementation
                                                       strategies. The strategies document
                                                       includes a discussion of education and
                                                       outreach strategies at pages 13-14.




  3.1
                                                          Energy Master Plan, October 2008.
                                                          http://www.pewclimate.org/docUploads/NJ%
                                                          20EnergyMasterPlan%20Oct2008.pdf
                                                          Master Plan Implementation Strategies.
                                                          http://www.nj.gov/emp/docs/pdf/09121608.I
                                                          mpStrat.pdf


  3.1    3.1.2 Process is in place, such as a             There are a variety of stakeholder and
         state or regional collaborative, to pursue       collaborative processes in place in NJ. For
         EE as a high-priority resource. (See             instance, a collaborative of stakeholders,
         Guide Tab for Y/N criteria.)                     the NJ Clean Energy Council, provides
                                                          input to the BPU on EE programs. Utilities
                                                          also work collaboratively together to
                                                          coordinate their efforts and ensure program
                                                      Y   consistency. As discussed in 1.1 above, NJ     Y
                                                          issued a draft Energy Master Plan (EMP) in
                                                          April 2008 and held a series or roundtable
                                                          discussions and hearings in June and July
                                                          2008 to discuss the draft EMP. Details
                                                          about the planning process can be found at
                                                          the link to the EMP web site below.


         Do not delete this row.                          EMP web site. http://nj.gov/emp/
         Do not delete this row.


         Do not delete this row.
         Do not delete this row.



         Do not delete this row.
         75% of state access to ENERGY STAR
         New Homes

                                                      Y
  3.2

         What proportion is due to regulated              NJ Natural Gas, PSEG, Jersey Central
         utility program? (who is sponsor)                Power and Light, South Jersey Gas
                                                          Company
         75% of state access to Home
                                                      Y
         Performance with ENERGY STAR?
         What proportion is ue to regulated utility       NJ Clean Energy Program (75% of
         program? (who is sponsor)                        population)



Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
         4.1.1 Cost recovery process exists               See 4.1.2 below. Law governing the NJ
                                                          SBC is codified at NJ Stat. section 48:3-60.
                                                          The SBC is assessed against all
                                                          jurisdictional investor-owned electric and
                                                          gas utilities. The BPU determines the
                                                          amount to be collected. In September
                                                      Y                                                  Y
                                                          2008, the BPU approved a 2009-2012
                                                          budget of $1.213 B with approximately 80%
                                                          ($950 M) devoted to EE programs and the
                                                          remaining 20% for renewable energy
                                                          programs.




  4.1
                                                        NJ Stat section 40:3-60.
                                                        http://lis.njleg.state.nj.us/cgi-
                                                        bin/om_isapi.dll?clientID=133566026&Dept
                                                        h=2&depth=2&expandheadings=on&headin
                                                    S   gswithhits=on&hitsperheading=on&infobase           S
                                                        =statutes.nfo&record={13C97}&softpage=D
                                                        oc_Frame_PG42

      4.1.2 Recovery occurs via: (a) rider;             SUMMARY: New Jersey’s system benefits
      (b) regular rate case; or (c) system              charge was established when the state
      benefits charge                                   restructured in 1999. Initial funding levels
                                                        were set at a level equal to then-current
                                                        DSM funding. However, the SBC was
                                                        intended to fund not only DSM programs,
                                                        but also for social and other programs that
4.1
                                                    c   had been granted prior approval by the             c
                                                        Board, including nuclear decommissioning
                                                        costs and gas plant remediation costs. The
                                                        SBC legislation specifies that the portion of
                                                        funds allocated to DSM programs should
                                                        increase as other obligations expire. See
                                                        NJSA 48:3-60.


                                                        http://lis.njleg.state.nj.us/cgibin/om_isapi.dll
                                                        ?clientID=19722999&Depth=2&depth=2&ex
                                                        pandheadings=on&headingswithhits=on&hit
                                                    S   sperheading=on&infobase=statutes.nfo&rec           S
                                                        ord={133E0}&softpage=Doc_Frame_PG42

      4.1.3 Funding is for multi-year periods           The most recent round of programs
                                                        included programs and budgets for 2006-
                                                        2008. See 7/21/2006 Order in Docket
                                                        EX04040276. As discussed in 4.1.1 above,
                                                        in September 2008, the BPU approved a
                                                    Y                                                      Y
                                                        2009-2012 budget of $1.213 B with
                                                        approximately 80% ($950 M) devoted to EE
                                                        programs and the remaining 20% for
                                                        renewable energy programs.

                                                        http://www.bpu.state.nj.us/wwwroot/cleanEn
                                                    R                                                      R
                                                        ergy/EX04040276_20060914.pdf
      A base energy efficiency spending level
      exists, with opportunity to justify higher
      level
4.2



      % of net (retail) utility revenue presently       percent varies by customer class
      used for energy efficiency [no unit = %;
      m/k = mils/kWh]

                                                        Funding levels for efficiency are increasing,
4.3                                                     and are expected to rise from $104 million
                                                        in 2005 to $133 million by 2008. See p. 29
                                                    R   of 12/22/04 Order in Docket EX04040276 at          R
                                                        http://www.state.nj.us/bpu/wwwroot/cleanEn
                                                        ergy/EX04040276_20041223.pdf

      Funds from carbon trading program                 New Jersey has signed on to RGGI, and
      support EE                                        100% auctions have been discussed in the
                                                        New Jersey Legislature. As discussed in
                                                        2.4 above, funding for the alternative
                                                    N   scenario recommended in the Energy                 N
                                                        Master Plan is discussed at page 57 of the
4.4                                                     EMP. One of the funding sources being
                                                        considered is RGGI auction proceeds.
  4.4

                                                        Energy Master Plan, October 2008.
                                                        http://www.pewclimate.org/docUploads/NJ%
                                                        20EnergyMasterPlan%20Oct2008.pdf

Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking prac
promote energy efficiency investments.
         5.1.1 Utility throughput incentive is          Partially, see 5.1.2 below. Decoupling is
         addressed and disincentives are                not in place or proposed. The Energy
         removed                                        Master Plan briefly discusses the
                                                        throughput incentive (at page 57) and notes
                                                        that legislation was passed in January 2008
                                                        that authorizes electric and gas utility rate
                                                        structures that can reduce or eliminate the
                                                        disincentive for utilities to pursue EE. The
                                                        EMP also discusses rate designs for gas
                                                        utilities that are intended to eliminate
                                                   Y    disincentives, but doesn’t specifically         Y
                                                        mention “decoupling.”




  5.1




                                                        Energy Master Plan, October 2008.
                                                        http://www.pewclimate.org/docUploads/NJ%
                                                        20EnergyMasterPlan%20Oct2008.pdf
         5.1.2 Method used is: (a) decoupling;          The BPU and its Office of Clean Energy
         (b) lost revenue recovery; or (c) non-         administer EE programs, with third party
         utility implementaion of EE               c    program managers. NJ formerly had lost          a,c
                                                        revenue recovery, but this has been
                                                        discarded as unnecessary.
                                                        BPU Dec. 22, 2004 Order.
                                                   R                                                    R

         5.2.1 Utility/shareholder EE incentives        Incentive processes are available, but not
         are provided                                   presently used. As part of NJ’s EERS,
                                                   Y-   contractors selected by the BPU have            Y-
                                                        performance goals and rewards built into
                                                        their contracts.
                                                        An overview of incentive options can be
                                                        found in New Jersey's Rules. See NJAC §
                                                        14:12-3.1.
                                                   A                                                    A
                                                        http://michie.lexisnexis.com/newjersey/lpext
                                                        .dll?f=templates&fn=main-
                                                        h.htm&cp=uanjadmin
                                                        Shared savings mechanisms may be
                                                        proposed by utilities in their DSM plans for
                                                        each program implemented. Mechanisms
                                                        will include a base level of return plus an
                                                        incentive (can be positive or negative)
                                                   A                                                    A
                                                        based on performance. See NJAC § 14:12-
                                                        3.4.http://michie.lexisnexis.com/newjersey/l
                                                        pext.dll?f=templates&fn=main-
                                                        h.htm&cp=uanjadmin
  5.2
                                                        Utilities may opt for "standard price offer"
                                                        incentives, in which they receive a price
                                                        equivalent to the standard offer for any
                                                        savings delivered via utility programs or
                                                   A    contracted out to third parties. See § 14:12-   A
                                                        3.5.http://michie.lexisnexis.com/newjersey/l
                                                        pext.dll?f=templates&fn=main-
                                                        h.htm&cp=uanjadmin
                                                   Utilities may also receive an incentive for
                                                   "incidental savings" of a commodity not
                                                   provided by the utility (e.g., natural gas or
                                                   water savings from programs administered
                                               A                                                      A
                                                   by an electric utility. See § 14:12-
                                                   3.3.http://michie.lexisnexis.com/newjersey/l
                                                   pext.dll?f=templates&fn=main-
                                                   h.htm&cp=uanjadmin
      5.2.2 Incentives exceed amount of lost
      revenues

      5.3.1 Impact on EE is a consideration        The Energy Master Plan includes an action
      when designing retail rates                  item that calls for a series of pilot programs
                                                   to test different technologies and rate
                                                   structure to determine the best way to
                                                   achieve peak demand reductions. (See
                                                   pages 65-66.)
5.3                                                Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
      5.3.2 Declining block rates and fixed
      variable rate designs have been
      eliminated

      5.4.1 Time sensitive rates in place          The Energy Master Plan includes a goal to
                                                   reduce peak demand for electricity by 5,700
                                                   MW by 2020. The report notes that “[b]y far
                                                   the most cost-effective way to preserve our
                                                   electricity reliability and lower capacity costs
                                                   is to reduce peak demand.” (Page 60.)
                                                   One of the action items for achieving this
                                                   goal is to involve electric utilities in
                                                   developing and implementing demand
                                                   response programs. The EMP specifically
                                               N
                                                   discusses real time pricing as an area to
                                                   pursue. (Page 63.) A second action item is
                                                   to target large C&I customers for reduction
                                                   in demand and implement time sensitive
                                                   rates. (Pages 63-64.) A third action item is
                                                   to pilot different technologies to provide real
                                                   time pricing for residential and small C&I
                                                   customers. (Pages 65-66.)


                                                   Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
      5.4.2 Usage sensitive rates in place         The Energy Master Plan refers in passing to
5.4                                                “inverted tariffs” at pages 65 and 66.
                                                   Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
      5.4.3 AMI deployment planned                 As discussed in 5.4.1, the Energy Master
                                                   Plan includes a variety of action items to
                                                   achieve peak demand reductions. One of
                                                   these action items is to pilot different
                                                   technologies including AMI. (See page 65.)
                                               N
                                                   NJ issued a companion document to the
                                                   EMP in October 2008 that includes
                                                   implementation strategies. The strategies
                                                   document includes a discussion of AMI at
                                                   page 21.
                                                   Energy Master Plan, October 2008.
                                                   http://www.pewclimate.org/docUploads/NJ%
                                                   20EnergyMasterPlan%20Oct2008.pdf
                                                   Master Plan Implementation Strategies.
                                                   http://www.nj.gov/emp/docs/pdf/09121608.I
                                                   mpStrat.pdf
         5.4.4 Other mechanisms exist (e.g., on-
         bill financing, benefit sharing)

State Fiscal Policy
         Sales Tax reduction or exemption for
  6.1    energy efficient products

         Investment Tax Credit for energy
  6.2    efficient investments

         State supported low cost financing for
         energy efficient investments: buildings
  6.3
         (x), equipment (y)

Distributed Generation Policies                          In NJ there are interconnection standards
         A statewide interconnection policy is in        for solar thermal electric, photovoltaic,
         place                                           landfill gas, wind, biomass, hydroelectric,
                                                         geothermal electric, anaerobic digestion,
                                                         tidal energy, wave energy, and fuel cells
                                                         using renewable fuels. Systems up to 2
                                                         MW are allowed to interconnect, and
                                                         simplified rules exist for systems up to
                                                         10kW. The standards were first established
  7.1                                               Y+   under N.J. Stat. § 48:3-87 and then later
                                                         clarified under N.J.A.C. 14:4-9. In
                                                         September 2007, an order issued in Docket
                                                         No. EO06100744 directed the Office of
                                                         Clean Energy (OCE) to develop modified
                                                         rules. The Board of Public Utilities (BPU)
                                                         proposed modifications to the NJ RPS to be
                                                         made by May 1, 2008 which removed the
                                                         requirement for solar facilities to be
                                                         Docket No. EOO6100744 can be found
                                                         here,
                                                         http://www.njcleanenergy.com/files/file/9-12-
                                                    R    07-8E.pdf




                                                    S    N.J. Stat. § 48:3-87 can be accessed from
  7.2
                                                         here,
                                                         http://www.dsireusa.org/documents/Incentiv
                                                         es/NJ11R.htm and N.J.A.C. 14:4-9 can be
                                                         found here,
                                                         http://www.dsireusa.org/documents/Incentiv
                                                         es/NJ11R2.htm

         A statewide exit fee policy is in place         New Jersey signed legislation in 1999, the
                                                         "Electric Discount and Energy Competition
                                                         Act," A 10/S 5, that allows utilities to impose
                                                         exit fees on DG operators in certain cases.
                                                         On-site generators that sell only to on-site
                                                    Y-
                                                         loads are exempt from exit fees. On-site
  7.3
                                                         generation will be subject to exit fees if the
                                                         kWh distributed from a utility have been
                                                         displaced in an amount equal to 92.5% of
                                                         the kWhscan be accessed from here,
                                                         A 10/S 5 distributed by the utility in 1999.
                                                         http://www.bpu.state.nj.us/wwwroot/energy/
                                                    S
                                                         Dereglaw.pdf
         A statewide standby rate policy is in           New Jersey does not have a statewide
                                                    N
         place                                           policy on standby rates




  7.4
                                                     Jersey Central Power & Lt Co - Rider STB -
                                                     standby service is primarily demand based
                                                     with very low energy charges. Billing
                                                     demand is based on maximum 15 minute
                                                U-
                                                     demand of month with a 12 month ratchet.
  7.4
                                                     Rate available at:
                                                     http://www.firstenergycorp.com/Residential_
                                                     and_Business/Customer_Choice/Tariff_Info
                                                     rmation/New_Jersey_Tariffs.html
                                                     Public Service Elec & Gas Co - CIEP
                                                     Standby - standby service is entirely energy
                                                U
                                                     based and is charged using real-time
                                                     pricing. Demand charges from the
        As part of resource planning process,        customer's regularan IRP process
                                                     NJ does not have tariff rate are still
        CHP is reviewed and incorporated        N    (electricity markets are deregulated in the
        where effective                              state).
  7.5




BPU     Board of Public Utilities
                 Natural Gas

NJ issued a draft Energy Master Plan (EMP) in April
2008 and held a series or roundtable discussions and
hearings in June and July 2008 to discuss the draft
EMP. Details about the planning process can be found
at the link to the EMP web site below. A final draft of
the EMP was issued in October 2008. NJ’s energy
efficiency goals, which are still under development,
include two elements: (a) setting energy and demand
goals for the administrator of the NJ Clean Energy
Program (CEP) at 257 million kWh and 452 million
billion Btu’s natural gas in 2007; and (b) requiring each
electricity supplier/provider to meet efficiency goals.
The Board of Public Utilities (BPU) is authorized to
adopt an electric and a gas energy efficiency standard,
with goals as high as 20% savings by 2020 relative to
predicted consumption in 2020.




EMP web site. http://nj.gov/emp/
Energy Master Plan, October 2008.
http://www.pewclimate.org/docUploads/NJ%20EnergyM
asterPlan%20Oct2008.pdf
e energy efficiency as a resource
"Net present value" test (difference between net present
value and net present costs). See NJAC § 14:12-3.2.




http://michie.lexisnexis.com/newjersey/lpext.dll?f=templ
ates&fn=main-h.htm&cp=uanjadmin




A potential study considering technical, economic and
market potential of electric and gas efficiency was done
by KEMA in 2004. Potential study's program
recommendations were referenced in 7/21/2006 Order
in Docket EX04040276, p. 3.


http://www.bpu.state.nj.us/wwwroot/cleanEnergy/EX040
40276_20060914.pdf
Potential studies are available at
http:njcleanenergy.com/html/5library/0_library_home.ht
ml
Programs include both electric and gas measures.
Programs reach low-income, residential, schools, local
government, commercial and industrial customers, and
include new construction as well as retrofits. NJ CEP
program change updates for 2008 can be found at the
link below.


http://www.njcleanenergy.com/media/NJCEP_Program_
Ovrvw060106.pdf                                   NJ
CEP program change updates for 2008.
http://www.njcleanenergy.com/main/public-reports-and-
library/home
Funding for the alternative scenario recommended in
the Energy Master Plan is discussed at page 57 of the
EMP. The EMP indicates that BPU staff will work with
the Rate Counsel, the utilities and other stakeholders to
identify the appropriate financial structure to provide
cost recovery of the utilities’ EE investments. Funding
sources include reallocation of CEP funds, private
investors, RGGI auction proceeds, electric and gas
rates and revenues from participation in regional
capacity markets.



Energy Master Plan, October 2008.
http://www.pewclimate.org/docUploads/NJ%20EnergyM
asterPlan%20Oct2008.pdf
MWh, not MW. See Orders below. In addition,
according to the BPU's most recent strategic plan, Goal
C.3.3, by 2012, 785,000 Megawatt hours per year and
6.06 billion cubic feet gas per year of energy savings
will be derived from measures installed under the Clean
Energy Program. According to page 8 of the 2005
Annual Report, this goal corresponds to meeting "all
future demand for energy beyond 2012 levels through
increased energy efficiency." NJ is working on two sets
of savings goals – one as part of the contracting with
the CEP and another that would apply to each electrical
energy supplier. NJ established new savings goals in
the Energy Master Plan that was issued in October
2008. The alternative scenario recommended in the
EMP would yield annual electricity savings of 20,000
GWh per year and annual heating savings of 119 trillion
Btus. NJ issued a companion document to the EMP in
October 2008 that includes implementation strategies.
The strategies document includes a discussion of how
to meet the statewide Energy Efficiency Performance
Goals.




http://www.state.nj.us/bpu/wwwroot/cleanEnergy/EX040
40276_20041223.pdf; restated in 2006 Order
http://www.bpu.state.nj.us/wwwroot/cleanEnergy/EX040
40276_20060914.pdf

Strategic Plan:
http://www.bpu.state.nj.us/tmp/NJBPUStrategicPlan.pdf;
2005 Annual Report:
http://www.njcleanenergy.com/support/scripts/document
.php?id=10                                     EMP
web site. http://nj.gov/emp/
Energy Master Plan, October 2008.
http://www.pewclimate.org/docUploads/NJ%20EnergyM
asterPlan%20Oct2008.pdf                       Master
Plan Implementation Strategies.
http://www.nj.gov/emp/docs/pdf/09121608.ImpStrat.pdf


The BPU conducted a comprehensive efficiency
resource analysis proceeding in 2004, resulting in
quantitative savings goals for 2003-2008. To increase
pressure on program managers to decrease the cost of
savings, "x"% increase in funding over 2003 levels must
result in "x+10"% higher savings goals. The BPU is
authorized to adopt an electric and gas EEEPS with
goals as high as 20% savings by 2020 relative to
predicted consumption in 2020.



http://michie.lexisnexis.com/newjersey/lpext.dll?f=templ
ates&fn=main-h.htm&cp=uanjadmin
Goals are expected to increase from 489,305
decatherms in 2005 to 824,028 decatherms in 2008.
See p. 30 of 12/22/04 Order in Docket EX04040276




http://www.state.nj.us/bpu/wwwroot/cleanEnergy/EX040
40276_20041223.pdf
In 2001-2003, the New Jersey Clean Energy program,
funded by New Jersey's SBC, was administered by
utilities. A 2003 Order initiated the transfer of
implementation authority of the Program from utilities to
the Office of Clean Energy. See 7/21/2006 Order in
Docket EX04040276, p. 3. The EE delivery structure in
NJ is continuing to evolve. As discussed in the Energy
Master Plan, NJ is in the process or redesigning and
transitioning the state’s current EE programs to be
implemented by electric and gas utilities. This is a
central action item in the EMP that is discussed at
pages 55-58 of that document. BPU staff will oversee
the utility programs to ensure that they are performance-
based and sufficiently coordinated. The transition will
begin in 2009 and utilities will develop their EE plan as
part of a planning effort that is described at pages 75-
81.




http://www.bpu.state.nj.us/wwwroot/cleanEnergy/EX040
40276_20060914.pdf        Energy Master Plan, October
2008.
http://www.pewclimate.org/docUploads/NJ%20EnergyM
asterPlan%20Oct2008.pdf




NJ’s restructuring statute requires that utilities perform
“comprehensive resource assessments” for EE and
renewable energy resources, which account for system
needs and costs.
Electric Discount and Energy Competition Act of 1999.
http://www.njcleanenergy.com/files/file/23_.pdf
Education and outreach are also central features of
alternative scenario recommended in the Energy Master
Plan. The EMP includes an action item that
recommends working with various organizations to
develop a best practices manual, conducting various
workshops and consultations and creating partnerships
with various entities to help create public awareness
and educate the public about EE. (See pages 59-60 of
EMP.) NJ issued a companion document to the EMP in
October 2008 that includes implementation strategies.
The strategies document includes a discussion of
education and outreach strategies at pages 13-14.
              Energy Master Plan, October 2008.
              http://www.pewclimate.org/docUploads/NJ%20EnergyM
              asterPlan%20Oct2008.pdf
              Master Plan Implementation Strategies.
              http://www.nj.gov/emp/docs/pdf/09121608.ImpStrat.pdf



              There are a variety of stakeholder and collaborative
              processes in place in NJ. For instance, a collaborative
              of stakeholders, the NJ Clean Energy Council, provides
              input to the BPU on EE programs. Utilities also work
              collaboratively together to coordinate their efforts and
              ensure program consistency. As discussed in 1.1
              above, NJ issued a draft Energy Master Plan (EMP) in
              April 2008 and held a series or roundtable discussions
              and hearings in June and July 2008 to discuss the draft
              EMP. Details about the planning process can be found
              at the link to the EMP web site below.




              EMP web site. http://nj.gov/emp/




energy efficiency where cost-effective.
              See 4.1.2 below. . Law governing the NJ SBC is
              codified at NJ Stat. section 48:3-60. The SBC is
              assessed against all jurisdictional investor-owned
              electric and gas utilities. The BPU determines the
              amount to be collected. In September 2008, the BPU
              approved a 2009-2012 budget of $1.213 B with
              approximately 80% ($950 M) devoted to EE programs
              and the remaining 20% for renewable energy programs.
NJ Stat section 40:3-60. http://lis.njleg.state.nj.us/cgi-
bin/om_isapi.dll?clientID=133566026&Depth=2&depth=
2&expandheadings=on&headingswithhits=on&hitsperhe
ading=on&infobase=statutes.nfo&record={13C97}&softp
age=Doc_Frame_PG42




SUMMARY: New Jersey’s system benefits charge was
established when the state restructured in 1999. Initial
funding levels were set at a level equal to then-current
DSM funding. However, the SBC was intended to fund
not only DSM programs, but also for social and other
programs that had been granted prior approval by the
Board, including nuclear decommissioning costs and
gas plant remediation costs. The SBC legislation
specifies that the portion of funds allocated to DSM
programs should increase as other obligations expire.
See NJSA 48:3-60.




http://lis.njleg.state.nj.us/cgibin/om_isapi.dll?clientID=19
722999&Depth=2&depth=2&expandheadings=on&headi
ngswithhits=on&hitsperheading=on&infobase=statutes.n
fo&record={133E0}&softpage=Doc_Frame_PG42



The most recent round of programs included programs
and budgets for 2006-2008. See 7/21/2006 Order in
Docket EX04040276. As discussed in 4.1.1 above, in
September 2008, the BPU approved a 2009-2012
budget of $1.213 B with approximately 80% ($950 M)
devoted to EE programs and the remaining 20% for
renewable energy programs.



http://www.bpu.state.nj.us/wwwroot/cleanEnergy/EX040
40276_20060914.pdf




percent varies by customer class




EE funds are split between gas and electric programs,
with about 2/3 for electric and 1/3 for gas.




New Jersey has signed on to RGGI, and 100% auctions
have been discussed in the New Jersey Legislature. As
discussed in 2.4 above, funding for the alternative
scenario recommended in the Energy Master Plan is
discussed at page 57 of the EMP. One of the funding
sources being considered is RGGI auction proceeds.
              Energy Master Plan, October 2008.
              http://www.pewclimate.org/docUploads/NJ%20EnergyM
              asterPlan%20Oct2008.pdf

effective energy efficiency and modify ratemaking practices to

              Two gas utilities, New Jersey Natural Gas and South
              Jersey Gas, are decoupled. A Conservation Incentive
              Program (CIP) was approved in 2006 to replace
              previous weather normalization adjustments. The
              companies will fund conservation programs, and
              recover gross-margin deficiencies, up to pre-determined
              levels, in the following year. The Energy Master Plan
              briefly discusses the throughput incentive (at page 57)
              and notes that legislation was passed in January 2008
              that authorizes electric and gas utility rate structures
              that can reduce or eliminate the disincentive for utilities
              to pursue EE. The EMP also discusses rate designs for
              gas utilities that are intended to eliminate disincentives,
              but doesn’t specifically mention “decoupling.” The EMP
              refers to the CIP as “a pilot program” and notes that
              “[t]he pilot program creates an incentive for the utilities
              to achieve sustainable reductions in natural gas
              consumption; success in that effort is rewarded by
              incentives that are shared between the utility and the
              customers.”

              Energy Master Plan, October 2008.
              http://www.pewclimate.org/docUploads/NJ%20EnergyM
              asterPlan%20Oct2008.pdf
              See 5.1.1 above.




              See Docket #s GR05121019 and GR05121020;
              http://www.bpu.state.nj.us/wwwroot/energy/GR0512101
              9_20061212.pdf.
              Incentive processes are available, but not presently
              used.



              An overview of incentive options can be found in New
              Jersey's Rules. See NJAC § 14:12-3.1.
              http://michie.lexisnexis.com/newjersey/lpext.dll?f=templ
              ates&fn=main-h.htm&cp=uanjadmin


              Shared savings mechanisms may be proposed by
              utilities in their DSM plans for each program
              implemented. Mechanisms will include a base level of
              return plus an incentive (can be positive or negative)
              based on performance. See NJAC § 14:12-
              3.4.http://michie.lexisnexis.com/newjersey/lpext.dll?f=te
              mplates&fn=main-h.htm&cp=uanjadmin



              Utilities may opt for "standard price offer" incentives, in
              which they receive a price equivalent to the standard
              offer for any savings delivered via utility programs or
              contracted out to third parties. See § 14:12-
              3.5.http://michie.lexisnexis.com/newjersey/lpext.dll?f=te
              mplates&fn=main-h.htm&cp=uanjadmin
Utilities may also receive an incentive for "incidental
savings" of a commodity not provided by the utility (e.g.,
natural gas or water savings from programs
administered by an electric utility. See § 14:12-
3.3.http://michie.lexisnexis.com/newjersey/lpext.dll?f=te
mplates&fn=main-h.htm&cp=uanjadmin
                                                                   NEW YORK
                                                                         Electric                                       Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority         On May 16, 2007, the NY PSC initiated a proceeding
         resource, equivalent or superior to         (Case 07-M-0548) to design an electric and natural gas
         supply resources                            Energy Efficiency Portfolio Standard (EEPS). The EEPS
                                                     will establish targets for energy efficiency, similar to the
                                                     existing Renewable Portfolio Standard, and other
                                                     programs, intended to reverse the pattern of increasing
                                                     energy use in New York. On June 23, 2008, the NY PSC
                                                     issued an Order establishing an EE program that seeks to
                                                     reduce electric usage 15% of projected levels by 2015.
                                                     Commenting on the Order, Chairman Brown noted "The
                                                     unprecedented energy efficincy program we are approving
                                                 Y   today will be critically important for the State's future      Y
                                                     energy policy. Without a doubt, energy efficiency is the
                                                     most cost-effective, and most immediate, way to reduce
                                                     the burdenorf rising energy and environmental costs on
                                                     residential and business customers." (See 06 18 08 press
  1.1                                                release.)




                                                     Link to Orders and other documents in Case 07-M-0548,
                                                     http://www.dps.state.ny.us/Case_07-M-0548.htm
                                                     06 18 08 Press Release.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                 R   b/599B3E42019C39298525746C00710FB1/$File/pr08072.              R
                                                     pdf?OpenElement



         1.2.1 EE is integrated into an active       The NY PSC opened a proceeding on electric resource
         IRP, portfolio management, or other         planning that will consider EE. See page 10 of December
         planning process                            24, 2007 Order in Cases 06-M-1017 and 07-E-1507 for
                                                     discussion of need to include the consideration of EE in
                                                     the resource planning process. On February 26, 2008,
                                                 N
                                                     the NY PSC issued an "Order Establishing Elecrtic Supply
                                                     Portfolio Standards, Goals and Reporting Requirements"
                                                     in Case 06-M-1017. No documents have been filed in
                                                     Case 06-M-1017 since June 20, 2008.

                                                     NY PSC Order in Cases 06-M-1017 and 07-E-1507 dated
                                                     December 24, 2007.
  1.2                                                http://documents.dps.state.ny.us/public/Common/ViewDoc
                                                     .aspx?DocRefId={C36427EB-CFDC-4E1C-B8D7-
                                                     617285CE43FD}                                     NY
                                                 R   PSC Order in Case 06-M-1017 dated February 26, 2008.
                                                     http://documents.dps.state.ny.us/public/Common/ViewDoc
                                                     .aspx?DocRefId={EDF7F9DD-D62D-4708-9325-
                                                     00522F9FC24A}


         1.2.2 Efficiency is procured as a           Procurement for efficiency could change, pending the
         resource for default service/standard   N   results of the long-range planning docket, See 1.2.1
         offer customers                             above.
        EE is an alternative to transmission        Although not based on a planning process, EE can be
        based on a long-term transparent IRP        used to solve T&D problems. SBC funding is available for
        or transmission system plan                 demand-side solutions to wires constraints. In addition,
                                                    DSM can compete with wires solutions in targeted
                                                    transmission constrained areas, under NYISO rules and
                                                    as part of the Reliability Needs Assessment process. See
                                                N   below for more information. The Commission has placed
                                                    a major emphasis on efficiency program evaluation by
                                                    dedicating 5% of the total efficiency budget with the
                                                    expressed desire increase the accuracy of impact
                                                    evaluations so that results of the efficiency programs'
                                                    savings be incorporated to a greater degree in regional
  1.3                                               reliablity studies.
                                                    $2 million (annually) of SBC funding has been allocated for
                                                    demand-side solutions to wires constraints. NYSERDA will
                                                    work with DPS, NYISO, and NYSRC to develop and
                                                R   implement a plan to use the $2 million. See p. 69 of the
                                                    SBCIII Operating Plan at
                                                    http://www.nyserda.org/publications/sbcOperatingPlan200
                                                    6.pdf.
                                                    Information about the NYISO process is available in the
                                                    NYISO FERC electric tariff, volume 1, Attachment Y.
                                                F   www.nyiso.com/public/webdocs/services/planning/ferc_for
                                                    m_715/part5/nyiso_com_planning_process_oatt_attach_y.
                                                    pdf
        1.4.1 EE is a biddable commodity

        1.4.2 Bids occur in the following
  1.4
        markets: (a) energy, (b) capacity, or
        (c) other

        State Implementation Plans (SIPs)
        include EE set-asides                       Y(SIP Call) NY has a 3% set-aside for EE/RE under Nox
                                                    SIP Call. P(CAIR) proposed CAIR rule includes a 10% set-
                                                    aside for EE/RE. In response to barriers identified in the
                                                Y
                                                    SIP Call set asides, the CAIR rule proposes modifying the
                                                    distribution process (selling the allowances and using the
  1.5
                                                    revenue to support EE/RE projects instead of distributing
                                                    them to EE/RE project developers).


                                                R
                                                    NOx SIP: http://www.epa.gov/cleanenergy/pdf/eere_rpt.pdf
                                                    CAIR: http://www.dec.state.ny.us/website/dar/air_regs.html
Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
        Efficiency commitment is in statute         Regulatory proceedings have been used to establish EE
                                                N
  2.1                                               policy.

        The TRC or Societal Cost Test is used       Two variations of the TRC test were used in 2006: The
        to evaluate EE programs                     Total Market Effects test and the Program Efficiency Cost
                                                    Test. See p. 15 (ES-7) of NYSERDA's 2006 Evaluation
                                                    and Status report. NYSERDA 2008 New York Energy
                                                    $mart Program Evaluation and Status Report discuss cost
                                                    effectiveness and programs beginning at page 20 (ES-8)
                                                    of the report. The report indicates that NYSERDA used
                                                    two different tests to calculate B/C ratios for programs in
                                                Y   2008: (1) the Total Resources Cost Test that divides the
                                                    present value of the benefits by the present value of total
                                                    resource costs and (2) the Program Administrator Cost
  2.2                                               Test that divides the present value of the benefits by the
                                                    present value of NYSERDA spending. In the
                                                    Commission's EEPS Proceeding the Total Resouce Cost
                                                    Test being is utilized with the inclusion of a carbon
                                                    emissons reduction adder as a distinct benefit.
2.2




                                                  2006 NYSERDA Evaluatiuon and Status Report.
                                                  http://www.nyserda.org/publications/SBC_Evaluation_Rep
                                                  ort_web.pdf
                                                  2008 NYSERDA Evaluation and Status Report.
                                                  http://www.nyserda.org/publications/SBC%20March%2020
                                                  09%20Annual%20Report.pdf
      2.3.1 Potential for cost-effective EE       A potential study was done for NYSERDA in 2003. In
      has been established through a              2008, the NY PSC commissioned an update to the 2003
      potential study                             study. In January 2008, the NY PSC approved the
                                                  expansion of EE programs for Orange and Rockland
                                              Y   Utilities in Case 06-E-1433. As part of its approval, the     Y
                                                  PSC authorized the use of $350,000 in deferrred funds to
                                                  complete the company's market potential study to develop
                                                  a demographic profile of customers and their EE potential.

                                                  2003 potential study.
                                                  http://www.nyserda.org/sep/EE&ERpotentialVolume1.pdf
                                                  Press release describing O&R EE program expansion.
                                                  http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                  b/5B9BC6C195723652852573D2006021E1/$File/pr08009.
                                                  pdf?OpenElement

      2.3.2 Established EE programs reach         See, for example, a description of programs in
      all customer classes                        NYSERDA's 2006 Evaluation Report. NYSERDA issues a
                                                  variety of documents that summarize the programs it
                                                  currently offerrs. These include the NYSERDA 2008 New
2.3                                               York Energy $mart Program Evaluation and Status Report,
                                              Y   NYSERDA's 3-year strategic outlook (2008-2011) entitled
                                                  "Toward a Sustainable Future," and a report entitled
                                                  "Energy in the Innovation Economy 2007-2008 Annual
                                                  Report" (see page 39). Collectively, these reports provide
                                                  a summary of the programs offered by NYSERDA.

                                                  2006 NYSERDA Evaluation Report is available at
                                                  http://www.nyserda.org/publications/SBC_Evaluation_Rep
                                                  ort_web.pdf
                                                  2008 NYSERDA Evaluation and Status Report.
                                                  http://www.nyserda.org/publications/SBC%20March%2020
                                                  09%20Annual%20Report.pdf
                                                  NYSERDA report Toward a Sustainable Energy Future.
                                                  http://www.nyserda.org/publications/Strategic%20Plan-
                                                  complete-web.pdf
                                                  NYSERDA report Energy in the in the Innovation Economy
                                                  2007-2008 Annual Report.
                                                  http://www.nyserda.org/publications/NYSERDA08report.pd
                                                  f
      Funding requirements for long-term,         While the requirements for all long-term cost-effecctive EE
      cost-effective EE have been                 haven't beren formally established, NYSERDA's 3-year
      established                                 strategic plan (2008-2011) includes 3-year funding
                                                  summaries for the various programs offered by
                                                  NYSERDA. The Commission has approved through mid
                                                  year 2011 Systems Benefit Charge Funding at a average
                                              N
                                                  annual rate of appoximately $ 170 Million. Additionally
                                                  within the EEPS proceeding frame the Commission has
2.4                                               approved new annual funding of approximately $ 184
                                                  Million for electric efficiency programs and over $ 91
                                                  Million in gas efficiency progams both through year end
                                                  2011.
                                                  NYSERDA 3-year strategic plan entitled "Toward a
                                                  Sustainable Energy Future."
                                                  http://www.nyserda.org/publications/Strategic%20Plan-
                                                  complete-web.pdf
      2.5.1 Quantitative MW and MWh                  In 2007, Governor Spitzer released a comprehensive
      savings goals have been established            energy plan for New York that called for reductions in
      and are producing incremental                  electricity use of 15% of projected usage by 2015. The
      investment.                                    target was expected to eliminate load growth and reduce
                                                     usage by 8% from then current levels. At the time, annual
                                                     goals were established on a program-by-program basis
                                                     only, but this could change as the new energy plan is
                                                     implemented. On June 23, 2008, the NY PSC issued an
                                                     Order in Case 07-M-0548 adopting an EEPS for NY (see
                                                     1.1 above). The EEPS incorporates the 15% by 2015 goal
                                                     established in the Governor's energy plan. The June 23
                                                     Order establishes efficiency targets to be achieved by
                                                     electric IOUs through 2011 and defers establishing targets
                                               Y                                                                  N
                                                     for gas EE programs pending further review. NYSERDA's
                                                     3-year strategic outlook (2008-2011) includes 3-year goals
                                                     for its offerings. As discussed in 5.2.1 below, on August
                                                     20, 2008, the NY PSC issued an Order in Case 07-M-0548
                                                     establishing an incentive prograqm for IOUs. See August
                                                     20, 2008 press release for details.




                                                     April 19, 2007 press release on energy plan and goals.
                                                     http://www.ny.gov/governor/press/0419071.html
                                                     June 23, 2008 Order in Case 07-M-0548.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                                     m0548_final.pdf?OpenElement
                                                     NYSERDA 3-year strategic plan entitled "Toward a
                                                     Sustainable Energy Future."
                                                     http://www.nyserda.org/publications/Strategic%20Plan-
                                               R
                                                     complete-web.pdf
                                                     August 20, 2008 press release.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     b/3A27B2AD93FEFE19852574AB00596C49/$File/pr0808
                                                     9.pdf?OpenElement




      2.5.2 Goals are established: (a)               As discussed in 1.1 and 2.5.1 above, the NY PSC adopted
      connection with IRP or other planning          an EEPS in 2008 in Case 07-M-0548. Estimated savings
      process; (b) as part of an EEPS or             goals for NYSERDA EE programs are set as part of
                                               b,c                                                           b,c
      similar system; (c) as part of program         program approval process.
      approval and budget-setting process;
      (d) other.
2.5                                                  Link to Orders and other documents in Case 07-M-0548,
                                                     http://www.dps.state.ny.us/Case_07-M-0548.htm
                                               R                                                                  R


      2.5.3 Energy Efficiency can be used            As discussed in 1.1 and 2.5.1 above, the NY PSC adopted
      to fulfill requirements of an RPS or           an EEPS in 2008 in Case 07-M-0548. On June 23, 2008,
      similar standard                               the NY DPS issued an Order Establishing Energy
                                                     Efficiency Portfolio Standard and Approving Programs.
                                               Y+                                                               Y+
                                                     Appendix 1 to the June 23rd Order includes interim targets
                                                     for EE savings. The EEPS goals are currently seperate
                                                     and distinct for the RPS goals.

                                                     Link to Orders and other documents in Case 07-M-0548,
                                                     http://www.dps.state.ny.us/Case_07-M-0548.htm
                                               R                                                                  R
      2.5.4 Expected Capacity Savings          NYSERDA issues annual reports summarizing the results
      (Annual MW in 2006)                      of the New York $mart Program that NYSERDA
                                               administers. The annual report for the year ending 12 31
                                               06 includes a discussion of program benefits (pages 14-15
                                               (ES-6 - ES-7)). This section includes a table that
                                               summarizes cumulative program benefits from installed
                                               measures (page 14 (ES-6)). The annual report for the
                                               year ending 12 31 08 includes a discussion of program
                                               benefits at pages 18-20 (ES-6 - ES 8) and a
                                               corresponding table summarizing cumulative program
                                               benefits for installed measures at page 19 (ES-7).
                                               2006 NYSERDA Evaluation Report is available at
                                               http://www.nyserda.org/publications/SBC_Evaluation_Rep
                                               ort_web.pdf
                                               2008 NYSERDA Evaluation and Status Report.
                                               http://www.nyserda.org/publications/SBC%20March%2020
                                               09%20Annual%20Report.pdf
      2.5.5 Energy Savings (Annual MWh         NYSERDA issues annual reports summarizzing the results
      in 2006)                                 of the New York $mart Program that NYSERDA
                                               administers. The annual report for the year ending 12 31
                                               06 includes a discussion of program benefits (pages 14-15
                                               (ES-6 - ES-7)). This section includes a table that
                                               summarizes cumulative program benefits from installed
                                               measures (page 14 (ES-6)). The annual report for the
                                               year ending 12 31 08 includes a discussion of program
                                               benefits at pages 18-20 (ES-6 - ES 8) and a
                                               corresponding table summarizing cumulative program
                                               benefits for installed measures at page 19 (ES-7).
                                               2006 NYSERDA Evaluation Report is available at
                                               http://www.nyserda.org/publications/SBC_Evaluation_Rep
                                               ort_web.pdf
                                               2008 NYSERDA Evaluation and Status Report.
                                               http://www.nyserda.org/publications/SBC%20March%2020
                                               09%20Annual%20Report.pdf
      2.6.1 A robust M&V process has           M&V activities are overseen by an Advisory Group,
      been established                         composed of stakeholders and independent from
                                               NYSERDA. The evaluation process itself was done in
                                               2005/2006 and recommendations have been made to
                                               continually improve the evaluation process. See p. 24 (ES-
                                               16) of NYSERDA's 2006 Evaluation and Status report.
                                               The corresponding section in the 2008 Evaluation and
                                               Status Report is at page 25 (ES-13) of the report. M&V is
                                               also discussed in NYSERDA's 3-year strategic outlook
                                           Y
                                               (2008-2011) at page 1.4. The NY PSC addressed M&V
                                               issues in its June 23, 2008 Order Establishing Energy
                                               Efficieny Portfolio Standard and Approving Programs in
                                               Case 07-M-0548. (See pages 37-38) A new Evaluation
                                               Advisory Group has been established by the Commission
                                               to provide recommendations on evaluation standards,
                                               measurement and reporting protocols and coordinate
                                               program evalaution work throughout NY.

                                               2006 NYSERDA Evaluation Report is available at
                                               http://www.nyserda.org/publications/SBC_Evaluation_Rep
                                               ort_web.pdf
                                               2008 NYSERDA Evaluation and Status Report.
                                               http://www.nyserda.org/publications/SBC%20March%2020
                                               09%20Annual%20Report.pdf
                                               NYSERDA 3-year strategic plan entitled "Toward a
                                           R
                                               Sustainable Energy Future."
                                               http://www.nyserda.org/publications/Strategic%20Plan-
                                               complete-web.pdf
                                               June 23, 2008 Order in Case 07-M-0548.
                                               http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                               b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                               m0548_final.pdf?OpenElement
      2.6.1.1   M&V is adequately funded       M&V activities used to receive 2% of SBC funds. The
2.6                                        Y   Commisson has increased EM&V funding to 5% of all
                                               efficiency program funding.
2.6


      2.6.1.2 Energy savings are used to             NYSERDA reports annually on each program's progress-
                                               Y
      measure performance                            to-date toward savings goals.

      2.6.1.3 M&V is done according to a
      defined schedule

      2.6.1.4 M&V is conducted by an                 M&V is conducted by an independent contractor selected
      independent party                              by the Advisory Group. See p. 14 (ES-2) of NYSERDA's
                                                     2008 Evaluation and Status report. EM&V is now being
                                               Y     conducted by both NYSERDA and the Utility program
                                                     administrators subject to program specific approved
                                                     evalution plans and with oversight by the NYS Department
                                                     of Public Service Staff.
                                                     2008 NYSERDA Evaluation and Status Report.
                                                     http://www.nyserda.org/publications/SBC%20March%2020
                                                     09%20Annual%20Report.pdf
      2.6.1.5 Review of M&V is done in a             An independent advisory group selects contractors to
      transparent process                            perform M&V. Evaluation is overseen by NYSERDA and
                                                     finalized by the Advisory Group before submission to the
                                                     PSC. See p. 14 (ES-2) of NYSERDA's 2008 Evaluation
                                               Y
                                                     and Status report. Current NYSERDA and the Utility
                                                     program administrators are required to submit monthly,
                                                     quarterly and annual energy savings reports consist with
                                                     approved measurement protocols.
                                                     2008 NYSERDA Evaluation and Status Report.
                                               R     http://www.nyserda.org/publications/SBC%20March%2020
                                                     09%20Annual%20Report.pdf
      2.6.2 M&V is done using: (a) deemed
      savings; (b) actual savings; (c) other


      2.7.1 EE delivery structure has been           NYSERDA, a public benefit corporation created by the
      established                                    state Legislature, administers programs. In 1998 the PSC
                                                     named the New York State Energy Research and
                                                     Development Authority as the third-party administrator of
                                                     SBC funds. Individual utilities contract with NYSERDA to
                                                     fulfill energy efficiency obligations. As discussed in 1.1
                                                     and 2.5.2 above, the NY PSC adopted an EEPS in 2008 in
                                                     Case 07-M-0548. By Order issued on June 23, 2008 in
                                               Y                                                                      Y
                                                     Case 07-M-0548, the PSC directed NY's electric and gas
                                                     IOUs to submit new EE programs for approval on an
                                                     expedited basis. Under the new paradigm, NYSERDA and
                                                     utility programs will coexist within each service territory as
2.7                                                  complimentary programs. The June 23rd Order includes a
                                                     detailed discussion of why the PSC decided to establish
                                                     IOUs as EE program administrators. (See pages 49-51)

                                                     June 23, 2008 Order in Case 07-M-0548.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                               R
                                                     b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                                     m0548_final.pdf?OpenElement
      2.7.2 Delivery is via: (a) utility             See 2.7.1 above
      administration; (b) third-party
                                               a,c                                                                    a
      administration; or (c) government
      agency

      Resource plans are regularly updated           As discussed in 1.2.1 above, the NY PSC is as a pending
                                                     docket in which it is considering long-range resource
                                                     planning (Case 06-M-1017). The most recent Order in
                                                     that proceeding was issued on February 26, 2008.
                                               N
                                                     Regional Reliability Planning is undertaken by the NYISO.
                                                     Energy Efficiency and RPS goals are established by the
2.8                                                  Commission and are reviewed and updated as appropiate.
  2.8

                                                          NY PSC Order in Case 06-M-1017 dated February 26,
                                                          2008.
                                                   R      http://documents.dps.state.ny.us/public/Common/ViewDoc
                                                          .aspx?DocRefId={EDF7F9DD-D62D-4708-9325-
                                                          00522F9FC24A}
        2.9.1 Building Energy Codes for                   State-developed code (ECCCNYS) is based on the 2004
        residential buildings are in place and            IECC with amendments is mandatory statewide; can use
        regularly updated                          Y/N    REScheck to show compliance. There is no set code
                                                          change cycle. See BCAP summary for additional details.

                                                          BCAP summary. http://bcap-energy.org/node/86
  2.9
        2.9.2 Building Energy Codes for                   State-developed code (ECCCNYS) is based on IECC
        commercial buildings are in place and             2003 and referencing ASHRAE 90.1-2004 is mandatory
        regularly updated                          Y/N    statewide; can use COMcheck to show compliance. There
                                                          is no set code change cycle. See BCAP summary for
                                                          additional details.
                                                          BCAP summary. http://bcap-energy.org/node/86
        Appliance and Equipment Efficiency                NY adopted a variety of appliance standards in the 1980's.
        Standards are in place and regularly              In 2005, the state legislature adopted the New York
        updated                                           Appliance and Energy Efficiency Standards Act which
                                                          originally covered 16 products and required NYSERDA to
                                                          implement standards for those products. As of July 2008,
                                                   Y      all but 3 of those products have been preempted by
                                                          federal standasrds. NY has not yet determined the
                                                          effective dates for 2 of the 3 products that are not
 2.10                                                     preempted. For additional information about NY's
                                                          appliance and equipment EE standards see the DSIRE
                                                          summary link below.
                                                          NY CLS Energy Article 16, section 102 et seq.
                                                          http://www.dsireusa.org/documents/Incentives/NY09R.htm
                                                          DSIRE summary of NY appliance and equipment EE
                                                   S
                                                          standards.
                                                          http://www.dsireusa.org/incentives/incentive.cfm?Incentive
                                                          _Code=NY09R&re=1&ee=1
        Energy efficiency is a high priority in            Executive Order No. 111 (June 10, 2001) requires all
        state buildings and state funded                  agencies and departments to reduce energy consumptrion
        buildings as evidenced in capital                 by 35% (relative to 1990 levels) in all buildings they own,
        planning and enabling performance                 lease or operate by 2010. On March 20, 2008, the
        contracts                                         Governor continued EO 111 via EO 1 and later accepted it
                                                   Y      via EO 9. By reoport issued in January 2009, NYSERDA
                                                          summarized the status of the implementation of EO 111.
                                                          New York statutes address lighting in state buildings and
                                                          performance contracting for state agencies. See Energy
                                                          Law Articles 8 and 9.
 2.11
                                                          Executive Order 111.
                                                          http://www.nyserda.org/programs/exorder111orig.asp
                                                          NYSERDA report on implementation of EO111.
                                                          http://www.nyserda.org/publications/Executive%20Order%
                                                  EO, S   20111%20SFY%2006-07.pdf
                                                          Statutes can be reached via navigation from
                                                          http://public.leginfo.state.ny.us/menugetf.cgi?COMMONQ
                                                          UERY=LAWS NYSERDA report on implementation of


Recommendation 3: Miscellaneous Policies
      3.1.1 Public education programs on           The Conservation Coordination Task Force was created in
      EE are in place. (See Guide Tab for          2006 in response to Chapter 59 of the Laws of 2006, Part
      Y/N criteria.)                               JJ. The Task Force was made up of representatives of
                                                   state agencies and authorities that have EE and DG
                                                   responsibilities. Among other things, the Task Force was
                                                   to assess the current level of coordination among state
                                                   entities and to make recommendations for improving such
                                                   coordination.The Task Force issued a report on January
                                                   30, 2007 in which it addressed EE marketing, public
                                               Y   education and outreach (see sections 3.3 and 4.3).
                                                   NYSERDA issued a 3-year strategic outlook (2008-2011)
                                                   in June 2008. Section 3 of that report describes
                                                   NYSERDA's communications, marketing and outreach
                                                   activities. As discussed in 1.1 and 2.5.1 above, the NY
                                                   PSC adopted an EEPS in 2008 in Case 07-M-0548. In its
                                                   June 23, 2008 Order in that proceeding, the PSC
                                                   addressed consumer outreach and educxation/marketing
                                                   issues. (See pages 42 and 43)

                                                   January 30, 2007 Task Force report.
                                                   http://www.nyserda.org/publications/CCTFREPORT-
                                                   complete.pdf
                                                   NYSERDA 3-year strategic plan entitled "Toward a
                                               R   Sustainable Energy Future."
                                                   http://www.nyserda.org/publications/Strategic%20Plan-
                                                   complete-web.pdf
                                                   Link to Orders and other documents in Case 07-M-0548,
                                                   http://www.dps.state.ny.us/Case_07-M-0548.htm
      3.1.2 Process is in place, such as a         NYSERDA's mission statement is included in its Energy in
      state or regional collaborative, to          the Innovation Economy 2007-2008 Annual Report. That
      pursue EE as a high-priority resource.       mission statement includes the following" "We place a
      (See Guide Tab for Y/N criteria.)            premuium on objective analysis, as well as collaboration,
3.1                                                reaching out to solicit multiple perspectives and share
                                                   information." As discussed in 3.1.1 above, the
                                                   Conservation Coordination Task Force was created to
                                                   consider issues relating to coordination of the state's EE
                                                   and DG activities. The January 30, 2007 Task Force
                                                   report provides a summary of collaboration within state
                                               Y   government regarding EE activities. NYSERDA issued a
                                                   3-year strategic outlook (2008-2011) in June 2008.
                                                   NYSERDA's collaborative activities are discussed at
                                                   pages 2.9 - 2.11 of the report. Appendix A of the report
                                                   lists government, business, professional, consumer, and
                                                   public interest organizations that NYSERDA regularly
                                                   partners with in pursuing mutual goals and objectives. As
                                                   a discrete element of the Commission's EEPS intiatives is
                                                   a seperate statewide Outreach & Education (O&R) has
                                                   been established to provide a coordinated and unified
                                                   approach.
      Do not delete this row.                      NYSERDA Energy in the Innovation Economy 2007-2008
                                                   Annual Report.
                                                   http://www.nyserda.org/publications/NYSERDA08report.pd
                                                   f
                                                   January 30, 2007 Task Force report.
                                                   http://www.nyserda.org/publications/CCTFREPORT-
                                                   complete.pdf
                                                   NYSERDA 3-year strategic plan entitled "Toward a
                                                   Sustainable Energy Future."
                                                   http://www.nyserda.org/publications/Strategic%20Plan-
                                                   complete-web.pdf
      Do not delete this row.
      Do not delete this row.
      Do not delete this row.
      Do not delete this row.
      75% of state access to ENERGY
                                               Y
      STAR New Homes
3.2
      What proportion is due to regulated          NYSERDA, LIPA
      utility program? (who is sponsor)
         75% of state access to Home
                                                 Y
         Performance with ENERGY STAR?
         What proportion is due to regulated         NUSERDA - SBC (75% of population)
         utility program? (who is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
         4.1.1 Cost recovery process exists          New York’s SBC was established by the PSC in 1997,
                                                     when the state restructured. In 1998, NYSERDA was
                                                     given responsibility for administering SBC funds. (See 2.7
                                                     a above.) Initially, SBC rates were established in rate
                                                     cases for individual utilities and set at levels approximate
                                                     to then-current spending levels for EE. A January 26, 2001
                                                     Order (Case 94-E-0952) increased and extended the SBC
                                                     (see page 26). In December 2005, the PSC extended the
                                                     SBC program for an additional five-year period (7/1/2006-
                                                     6/30/2011) with an annual funding level of $175 million
                                                     (Case 05-M-0090). The previous SBC funding level was
                                                 Y   approximately $150 million annually. See DSIRE
                                                     summary for additional details. As discussed in 1.1 and
                                                     2.5.1 above, the NY PSC established an EEPS in 2008.
                                                     In it's June 23, 2008 in Case 07-M-0548. the PSC directed
                                                     electric IOUs to start collecting additional SCB funds
                                                     totalling $172M annually beginning in October 2008. (Of
                                                     the addtional $172M, $85M was authorized to fund fast-
                                                     track NYSERDA programs and $87M was approved for
                                                     utility-administered programs that would be developed on
                                                     an expedited basis.) The SBC funding mechanicism has
                                                     been expanded to include EEPS funding for both gas and
                                                     electric efficiency programs with specific energy reduction
                                                     goals.
                                                     January 26, 2001 Order in Case 94-E-0952.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/Arti
                                                     clesByCategory/98254B5953E8F4AC85256DF10075626B
                                                     /$File/doc9157.pdf?OpenElement
                                                     December 14, 2005 Order n Case 05-M-0090.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     b/5375707FAF2225B2852570D600700767/$File/05m0090
                                                     _12_21_05.pdf?OpenElement
  4.1                                            R   DSIRE summary of NY SBC.
                                                     http://www.dsireusa.org/incentives/incentive.cfm?Incentive
                                                     _Code=NY07R&re=1&ee=1
                                                     June 23, 2008 Order in Case 07-M-0548.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                                     m0548_final.pdf?OpenElement




         4.1.2 Recovery occurs via: (a) rider;       See 4.1.1 above.
         (b) regular rate case; or (c) system    c
         benefits charge

         4.1.3 Funding is for multi-year             Current funding is for a 5-year period (2006-2011). See
         periods                                     the SBC III Operating Plan. As discussed in 4.1.1 above,
                                                 Y
                                                     an increase in the SBC was approved by the PSC in its
                                                     EPS proceeding.
                                                     SBC III Operating Plan.
                                                     http://www.nyserda.org/publications/sbcOperatingPlan200
                                                     6.pdf
                                                 R   June 23, 2008 Order in Case 07-M-0548.
                                                     http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                                     m0548_final.pdf?OpenElement
         A base energy efficiency spending
         level exists, with opportunity to justify
  4.2
         higher level

         % of net (retail) utility revenue                 Actual SBC rates vary by utility, but the statewide average
         presently used for energy efficiency              was about 1.7 m/kWh prior to the adoption of the EEPS in
         [no unit = %; m/k = mils/kWh]                     Case 07-M-0548. See Appendix 1 to the June 23rd Order
                                                           in Case 07-M-0548 for additional detail.
  4.3
                                                           June 23, 2008 Order in Case 07-M-0548.
                                                           http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/We
                                                     R
                                                           b/544F8DE178C8A15285257471005D41F6/$File/201_07
                                                           m0548_final.pdf?OpenElement
         Funds from carbon trading program                 New York has joined RGGI. NYSERDA's 3-year strategic
         support EE                                  Y     outlook (2008-2011) identifies $35M of funding coming
                                                           from RGGI and CAIR. ( See page 1.7)
                                                           Documents related to RGGI implementation are online at
                                                           http://www.dec.ny.gov/.
  4.4                                                      NYSERDA RGGI link.
                                                           http://www.nyserda.org/RGGI/default.asp
                                                           NYSERDA 3-year strategic plan entitled "Toward a
                                                           Sustainable Energy Future."
                                                           http://www.nyserda.org/publications/Strategic%20Plan-
                                                           complete-web.pdf
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking prac
State Fiscal Policy
         Sales Tax reduction or exemption for
  6.1    energy efficient products

         Investment Tax Credit for energy                  In 2000, NY enacted the Green Building Tax Credit for
         efficient investments                             businesses and personal income taxpayers and extended
                                                           the credit in 2005. See Article 1, section 19 of NY's Tax
                                                           Law. Article 4, Title 2, section 487-a of NY's Real Property
                                                     Y     Tax Law, the Energy Conservation Improvements Property
                                                           Tax Exemption, allows for an exemption from taxation of
                                                           conservation improvements to residential properties of
  6.2                                                      single-family to four-family households.

                                                           Article 1, section 19.
                                                           http://www.dsireusa.org/documents/Incentives/NY15F1.ht
                                                           m
                                                     S     Article 4, title 2, section 487-a.
                                                           http://www.dsireusa.org/documents/Incentives/NY27F.htm

         State supported low cost financing for            State-supported loans are available, both from SBC and
         energy efficient investments: buildings     x,y   non-SBC funds. See p. 33 of the SBC III Operating
  6.3    (x), equipment (y)                                Report.
                                                           http://www.nyserda.org/publications/sbcOperatingPlan200
                                                           6.pdf
Distributed Generation Policies
         A statewide interconnection policy is in          NY allows for DG up to 2 MW to connect to the grid. The
         place                                             Standard Interconnection Requirements (SIR) address
                                                     Y+    technical guidelines and application procedures. There are
  7.1                                                      simplified requirements for small systems that qualify for
                                                           net metering.
                                                           Standard interconnection requirements can be found here,
                                                     R
                                                           http://www.dps.state.ny.us/distgen.htm.
         A statewide net metering policy is in             NY has a net metering policy under NY Pub Ser § 66-j et
         place                                             seq. PV, wind, and biomass systems are allowed to net
                                                           meter. There are different size limits based on the system -
                                                           10 kW for solar; 25 kW for residential wind; 125 kW for
                                                           farm-based wind; and 400 kW for farm-based biogas. Net
                                                     Y
                                                           excess generation is credited monthly at the retail rate,
  7.2                                                      except for wind greater than 10 kW, which is credited
                                                           monthly at the avoided cost rate. At the end of an annual
                                                           period any excess is reconciled at the avoided cost rate.

                                                           NY Pub Ser § 66-j et seq can be accessed here,
                                                     S
                                                           http://www.dsireusa.org/documents/Incentives/NY05R1.ht
                                                           m
      A statewide exit fee policy is in place        Niagara Mohawk is the only NY utility the PSC allows to
                                                     charge exit fees. See Niagara Mohawk Power Corporation,
                                                Y-
7.3                                                  P.S.C. Tariff No. 207 Electricity, section 52 (Leaves Nos.
                                                     71 - Z13 through 71 - Z15).

      A statewide standby rate policy is in          The New York PSC has required that the investor-owned
      place                                          utilities in New York modify their standby rates to make
                                                     them more reflective of actual costs. Sites that were
                                                Y
                                                     installed prior to May 31, 2006 have the option of switching
                                                     immediately to the new standby rates or having them
                                                     phased in over a period of eight years.

                                                     Consolidated Edison - Service Classification 14-RA (retail
                                                     access rate) - standby service is provided to customers
                                                     that enter into a contract for a specific amount of standby
                                                U    capacity. Billing is based on a monthly customer charge
7.4                                                  with actual usage billed on an entirely demand based
                                                     basis. The billing demand is the average of the two highest
                                                     15 minute demand periods of the month. Rate available
                                                     at: http://www.coned.com/rates/ra-sched.asp

                                                     Niagara Mohawk - Service Classification 7 - standby rate
                                                     is entirely demand based, with the demand being the
                                                     maximum instantaneous demand of the month with a 12
                                                U-   month ratchet. Renewable generation is exempt from the
                                                     standby rate. Rate available at:
                                                     http://www.nationalgridus.com/niagaramohawk/business/ra
                                                     tes/5_other.asp
      As part of resource planning process,          Long-range resource planning is under consideration by
      CHP is reviewed and incorporated               the Commission in Case 07-E-1507. In July 2008, the
      where effective                                Commission decided to adjorn Phase III efforts, which
                                                N
                                                     require the completion of a long range electricity
                                                     infrastructure plan and planning process, until the State
                                                     Energy Plan can be completed in 2009.
                                                     Information regarding items currently being considered for
                                                     Case 07-E-1507 can be accessed at,
7.5
                                                R    http://documents.dps.state.ny.us/public/MatterManagemen
                                                     t/CaseMaster.aspx?MatterCaseNo=07-E-
                                                     1507&submit=Search+for+Case%2FMatter+Number
                                                     Consolidated Edison has an overview of their energy plan
                                                U
                                                     available. EE is highlighted.
                                                       http://www.coned.com/energyny/Default.asp
                                                U    Niagara Mohawk
               Natural Gas

On May 16, 2007, the NY PSC initiated a
proceeding (Case 07-M-0548) to design an
electric and natural gas Energy Efficiency
Portfolio Standard (EEPS). The EEPS will
establish targets for energy efficiency, similar
to the existing Renewable Portfolio Standard,
and other programs, intended to reverse the
pattern of increasing energy use in New York.
On June 23, 2008, the NY PSC issued an
Order establishing an EE program that seeks
to reduce electric usage 15% of projected
levels by 2015. Commenting on the Order,
Chairman Brown noted "The unprecedented
energy efficincy program we are approving
today will be critically important for the
State's future energy policy. Without a doubt,
energy efficiency is the most cost-effective,
and most immediate, way to reduce the
burdenorf rising energy and environmental
costs on residential and business
customers." (See 06 18 08 press release.)


Link to Orders and other documents in Case
07-M-0548,
http://www.dps.state.ny.us/Case_07-M-
0548.htm                                 06
18 08 Press Release.
http://www3.dps.state.ny.us/pscweb/WebFile
Room.nsf/Web/599B3E42019C39298525746
C00710FB1/$File/pr08072.pdf?OpenElement
y efficiency as a resource
A natural gas efficiency potential study was
prepared for NYSERDA in March 2006.




Executive summary of March 2006 gas
potential study.
http://www.dps.state.ny.us/ConEdisonExecuti
veSummary.pdf



EE programs funded by gas surcharges are
administered under six separate interim
programs established in utility-specific cases.
For example, see summary of Con Ed gas
programs on NYSERDA web site.. On
September 17, 2008, the NY PSC adopted
an interim gas efficiency plan for National
Grid in Case 08-G-0609.



NYSERDA summary of gas programs offered
by Con Ed.
http://www.nyserda.org/programs/Commercial
_Industrial/commercialgas.asp
September 17, 2009 press release about
National Grid's interim gas EE program
approved by NY PSC.
http://www3.dps.state.ny.us/pscweb/WebFile
Room.nsf/Web/0A34E5467BB29ABE852574
C70055FAE9/$File/pr08099.pdf?OpenEleme
nt
In 2007, Governor Spitzer released a
comprehensive energy plan for New York that
called for reductions in electricity use of 15%
of projected usage by 2015. The target was
expected to eliminate load growth and reduce
usage by 8% from then current levels. At the
time, annual goals were established on a
program-by-program basis only, but this
could change as the new energy plan is
implemented. On June 23, 2008, the NY
PSC issued an Order in Case 07-M-0548
adopting an EEPS for NY (see 1.1 above).
The EEPS incorporates the 15% by 2015
goal established in the Governor's energy
plan. The June 23 Order establishes
efficiency targets to be achieved by electric
IOUs through 2011 and defers establishing
targets for gas EE programs pending further
review. NYSERDA's 3-year strategic outlook
(2008-2011) includes 3-year goals for its
offerings. As discussed in 5.2.1 below, on
August 20, 2008, the NY PSC issued an
Order in Case 07-M-0548 establishing an
incentive prograqm for IOUs. See August 20,
2008 press release for details.

April 19, 2007 press release on energy plan
and goals.
http://www.ny.gov/governor/press/0419071.ht
ml
June 23, 2008 Order in Case 07-M-0548.
http://www3.dps.state.ny.us/pscweb/WebFile
Room.nsf/Web/544F8DE178C8A1528525747
1005D41F6/$File/201_07m0548_final.pdf?Op
enElement
NYSERDA 3-year strategic plan entitled
"Toward a Sustainable Energy Future."
http://www.nyserda.org/publications/Strategic
%20Plan-complete-web.pdf
August 20, 2008 press release.
http://www3.dps.state.ny.us/pscweb/WebFile
Room.nsf/Web/3A27B2AD93FEFE19852574
AB00596C49/$File/pr08089.pdf?OpenEleme
nt
As discussed in 1.1 and 2.5.1 above, the NY
PSC adopted an EEPS in 2008 in Case 07-M-
0548. Estimated savings goals for
NYSERDA EE programs are set as part of
program approval process.

Link to Orders and other documents in Case
07-M-0548,
http://www.dps.state.ny.us/Case_07-M-
0548.htm
As discussed in 1.1 and 2.5.1 above, the NY
PSC adopted an EEPS in 2008 in Case 07-M-
0548. On June 23, 2008, the NY DPS issued
an Order Establishing Energy Efficiency
Portfolio Standard and Approving Programs.
Appendix 1 to the June 23rd Order includes
interim targets for EE savings.

Link to Orders and other documents in Case
07-M-0548,
http://www.dps.state.ny.us/Case_07-M-
0548.htm
As discussed in 2.3.2 above, EE programs
funded by gas surcharges are administered
under six separate interim programs
established in utility-specific cases.
Currently, in addtion to NYSERDA, all major
gas and electric utilities in NY under the
Commission's jursidiction are deliverying
energy efficiency programs.




See 2.7.1 above
efficiency where cost-effective.
e energy efficiency and modify ratemaking practices
                                                          PENNSYLVANIA
                                                                              Electric                          Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority resource,        According to a RAP interview with the PA
         equivalent or superior to supply resources            PUC, "operation of a cost effective
                                                               alternative to energy supply shall be
                                                               afforded rate treatment at least on a par
                                                               with any other supply option." Act 129,
                                                               passed in 2008 requires electric distribution
                                                               companies with at least 100,000 customers
                                                               to adopt and implement energy efficiency
                                                               and conservation plans to reduce energy
                                                               use. Each company must reduce overall
                                                               demand for electricity use by 1% by 5/31/11
                                                               (as compared with the company's expected
                                                           Y
                                                               load as forecast by the PUC for 6/1/09
                                                               through 5/31/10, with provisions made for
                                                               weather and extraordinary loads), and by
                                                               3% by 5/31/13 (compared to the same
  1.1                                                          measure). In addition, peak load must be
                                                               reduced by 4.5% by 5/31/13. Utilities are
                                                               subject to penalties if the targets are not
                                                               met, and the PUC is enabled to take
                                                               conservation programs away from utilities
                                                               that fail to meet the goals.


                                                               See RAP IRP survey at
                                                               http://www.raponline.org/showpdf.asp?PDF
                                                               _URL=%22Pubs/IRPsurvey/IRPPA.pdf%22
                                                               ; Act 129:
                                                          S, R
                                                               http://www.legis.state.pa.us/cfdocs/legis/PN
                                                               /Public/btCheck.cfm?txtType=HTM&sessYr
                                                               =2007&sessInd=0&billBody=H&billTyp=B&b
                                                               illNbr=2200&pn=4526
         1.2.1 EE is integrated into an active IRP or
                                                           N
         Portfolio Management process.

         1.2.2 Efficiency is procured as a resource for
         default service/standard offer customers              The use of demand side resources is under
                                                               investigation in Docket No. M-00061984
                                                               (Order entered October 11, 2006). Provider
                                                               of Last Resort (POLR) rules proposed in
                                                               Docket L-0004010169 will include
                                                               provisions for DSM cost recovery, if DSM is
                                                               required in Docket No. M-00061984. In
                                                               6/07, the Demand-Side Working Group filed
                                                           N   a report and recommendations in Docket M-
                                                               00061984; the PUC held a public hearing in
                                                               11/08 on alternative energy resources, EE
                                                               and conservation, and demand-side
  1.2
                                                               response programs to gather additional
                                                               information before acting on the Working
                                                               Group's recommendations. Follow-up PUC
                                                               proceedings to Act 129, passed in 2008,
                                                               will address default service provider
                                                               responsibilities.
                                                               See: Investigation of Conservation, Energy
                                                               Efficiency Activities, and Demand Side
                                                               Response by Energy Utilities and
                                                               Ratemaking Mechanisms to Promote Such
                                                               Efforts , Docket No. M-00061984 (Order
                                                           R
                                                               entered October 11, 2006). See p. 18 of
                                                               the 2/8/07 Order in Docket No. L-00040169,
                                                               available online at
                                                               http://www.puc.state.pa.us/electric/electric_l
                                                               ast_resort.aspx
         EE is an alternative to transmission based on a
         long-term transparent IRP or transmission         N
  1.3
         system plan

         1.4.1 EE is a biddable commodity

                                                               PJM conducts a regional planning process
                                                               for 13 states, including PA, and DC. PJM
                                                               uses its Reliability Pricing Model (RPM) to
                                                               procure capacity on a multi-year forward
                                                               basis through an auction mechanism. In
                                                               March 2008, several parties asked FERC
                                                               to review the reasonableness of the RPM
                                                               process. On June 30, 2008, PJM filed a
                                                               responsive report. On September 19,
                                                               2008, FERC issued an Order addressing
                                                           N   the report and supporting creation of a
                                                               stakeholder process to address pending
                                                               RPM issues. On December 12, 2008,
                                                               PJM filed a report with FERC
                                                               summarizing results of the stakeholder
  1.4                                                          process, proposing changes to the RPM,
                                                               including allowing energy efficiency to
                                                               participate in the RPM in Docket Nos.
                                                               ER05-1410-000, EL05-148-000. Also on
                                                               December 12, 2008, PJM filed
                                                               corresponding tariff revisions for effect on
                                                               March 27, 2009 in Docket No. ER09-412-
                                                               000.
                                                               PJM Report filed 12 12 08
                                                               http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                               ocument_id=13672172
                                                           R   PJM tariff filing to implement proposed
                                                               changes to RPM filed 12 12 08
                                                               http://elibrary.ferc.gov/idmws/File_list.asp?d
                                                               ocument_id=13672185
         1.4.2 Bids occur in the following markets: (a)
                                                           b
         energy, (b) capacity, or (c) other

         State Implementation Plans (SIPs) include EE          Proposed CAIR rules may include an EE
                                                           N
   1.5   set-asides                                            set-aside.

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
Recommendation 3: Miscellaneous Policies
         3.1.1 Public education programs on EE are in
                                                           N                                                    N
         place. (See Guide Tab for Y/N criteria.)

         3.1.2 Process is in place, such as a state or         A DSR working group exists (Docket M-
         regional collaborative, to pursue EE as a high-       00061984).
                                                           Y
         priority resource. (See Guide Tab for Y/N
  3.1    criteria.)
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         75% of state access to ENERGY STAR New
                                                           Y
         Homes
  3.2
         What proportion is due to regulated utility
         program? (who is sponsor)
         75% of state access to Home Performance with
                                                           N
         ENERGY STAR?
         What proportion is due to regulated utility
         program? (who is sponsor)
Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify
State Fiscal Policy
Distributed Generation Policies
         A statewide interconnection policy is in place
                                                               The PA PUC adopted interconnection
                                                               standards for net-metered systems and
                                                               other forms of DG in 2006 under 52 Pa.
                                                               Code Chapter 75, Subchapter C. There are
                                                               4 levels of interconnection for systems up
                                                               to 2 MW in capacity. There is a $100
                                                               application fee for Level 1 (small under 10
                                                               kw systems) review; level 2-4 reviews vary
                                                          Y+
                                                               depending on the size and impact on the
                                                               distribution system. IEEE 1547 and UL
   7.1                                                         1741 technical standards are used in
                                                               evaluating interconnection requests. An
                                                               external disconnect is required, which the
                                                               customer must pay for, but customers don't
                                                               have to carry liability insurance. There are
                                                               set timeframes for application approval and
                                                               for a response to other requirements.
                                                               52 Pa. Code Chapter 75, Subchapter C
                                                               adopting interconnection standards can be
                                                          A    found here,
                                                               http://www.puc.state.pa.us/telecom/pdf/IA_
                                                               Proposed_Modifications.pdf.
         A statewide net metering policy is in place           PA has a recently revised net metering
                                                               policy under 52 Pa. Code Chapter 75,
                                                               Subchapter B. A number of technologies
                                                               are eligible - PV, solar, wind, hydro,
                                                               geothermal biomass, fuel cells, chp,
                                                               municipal solid waste, waste coal, coal-
                                                               mine methane, other types of DG and
                                                               demand-side management technologies.
                                                               Net metering is available to IOU customers
                                                          Y+
                                                               and capacity limits vary based on customer
                                                               class - residential: 50 kW; non-residential: 3
   7.2
                                                               MW; customers with systems that are part
                                                               of microgrids or are available for
                                                               emergency use: 5 MW. NEG is credited to
                                                               a customer's next bill at the retail rate; the
                                                               PUC is set to address treatment of NEG at
                                                               the end of an annual period.

                                                               52 Pa. Code Chapter 75, Subchapter B can
                                                               be found here,
                                                          A
                                                               http://www.dsireusa.org/documents/Incentiv
                                                               es/PA03Rb.htm
         A statewide exit fee policy is in place               Pennsylvania statute 66 Pa. C.S. § 2808
                                                               allows utilities to assess an exit fee on a
                                                          Y-
                                                               DG customer for the loss of load to the
                                                               utility system.
   7.3
                                                               66 Pa. C.S. § 2808 can be accessed from
                                                               here,
                                                          S
                                                               http://www.pacode.com/secure/data/052/ch
                                                               apter54/chap54toc.html.
         A statewide standby rate policy is in place           Pennsylvania does not have a statewide
                                                          N
                                                               policy on standby rates
                                                               PECO Energy Co - Auxiliary Service Rider -
                                                               standby service is provided when a
                                                               customer contracts with the utility for a
                                                               specified amount of demand capacity.
                                                               Standby demand charges are based on
                                                          U
                                                               contract demand and actual energy use.
                                                               Rate available at:
                                                               http://www.exeloncorp.com/ourcompanies/p
                                                               eco/pecobiz/energy_rates/our_rates_and_p
                                                               rices.htm

   7.4
7.4                                                       PPL Electric Utilities Corp - Rate 6A -
                                                          Standby service is provided to QFs under
                                                          rate 6A with non-QFs receiving a less
                                                          beneficial rate. A reservation fee is
                                                          charged for each month that standby power
                                                          is not used (based on contract demand)
                                                      U   and when standby power is used the rate is
                                                          balanced between demand and energy
                                                          charges. Billing demand is based on the
                                                          maximum 15 minute demand with no
                                                          ratchet. Rate available at:
                                                          http://www.pplelectric.com/NR/rdonlyres/08
                                                          B5FE9A-29B1-4804-9E5E-
                                                          16AFD4414EC2/0/master_r8.pdf
      As part of resource planning process, CHP is        PA Code Title 52, Chapter 57, requires
      reviewed and incorporated where effective           electric distribution companies to submit an
                                                          Annual Resource Planning Report (ARPR).
                                                          The ARPR process does not require
                                                          assessment of CHP. Act 129 passed at the
                                                      N
                                                          end of 2008 requires each of the 7 major
                                                          elec distribution co's to adopt a plan to
                                                          reduce energy demand and consumption
                                                          within its service territory.
7.5
                                                          http://www.pacode.com/secure/data/052/ch
                                                          apter57/subchapLtoc.html and
                                                     A, S
                                                          http://www.puc.state.pa.us/electric/Act_129
                                                          _info.aspx
Natural Gas
e energy efficiency as a resource




energy efficiency where cost-effective.
effective energy efficiency and modify
                                                                          VIRGINIA
                                                                              Electric                                Natural Gas
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority
         resource, equivalent or superior to supply
         resources                                          In 2006, Virginia adopted an energy plan which
                                                            includes a list of energy objectives and a policy
                                                            statement (sections 67-100 through 67-101).
                                                            This policy does not identify EE as a resource.
                                                            However, the third enactment clause of the
                                                            energy plan discusses the importance of EE.
                                                        N
                                                            On September 1, 2008, the Virginia State
                                                            Corporation Commission (SCC) filed an annual
                                                            report with the Legislature regarding the SCC’s
                                                            implementation of The Virginia Electric Utility
  1.1                                                       Regulation Act. The September 1st report
                                                            discusses the third enactment clause and the
                                                            SCC’s actions to reduce consumption at pages
                                                            15 and 16 of the September 1st report.
                                                            Virginia Energy Plan policy statement.
                                                            http://leg1.state.va.us/cgi-
                                                            bin/legp504.exe?000+cod+TOC6700000000100
                                                            0000000000                                    SCC
                                                        S   report regarding implementation of The Virginia
                                                            Electric Utility Regulation Act dated September
                                                            1, 2008.
                                                            http://www.scc.virginia.gov/comm/reports/2008_
                                                            ceur.pdf
         1.2.1 EE is integrated into an active IRP or      Virginia enacted an IRP statute for electric
         Portfolio Management process.                     utilities in 2008. (sections 56-597 through 56-
                                                           599) Section 56-599 requires the SCC to order
                                                           each jurisdictional electric utility to file and initial
                                                           IRP by September 1, 2009 and updated plans
                                                           every two years thereafter. Consistent with
                                                           section 56-599, the SCC issued an Order in PUE-
                                                           2008-00099 on November 12, 2008 proposing
                                                           IRP guidelines and requiring jurisdictional
                                                           electric utilities to submit IRPs by September 1,
                                                           2009. By Order issued on December 23, 2008,
                                                        Y- the SCC adopted guidelines for developing IRPs Y-
                                                           in Case No. PUE-2008-00099. These guidelines
                                                           were appended to an SCC Order issued on
                                                           December 23, 2008 in Case No. PUE-2008-
                                                           00099. On September 1, 2008, the SCC filed an
                                                           annual report with the Legislature regarding the
                                                           SCC’s implementation of The Virginia Electric
                                                           Utility Regulation Act. The September 1st report
                                                           discusses the SCC’s actions regarding the newly
                                                           enacted IRP requirements (see page 13).




  1.2
                                                               Electric IRP statute. http://leg1.state.va.us/cgi-
                                                               bin/legp504.exe?000+cod+TOC5600000002400
  1.2
                                                               0000000000

                                                           November 12, 2008 SCC Order in Case No.
                                                           PUE-2008-00099.
                                                           http://docket.scc.state.va.us/CyberDocs/Librarie
                                                           s/Default_Library/Common/frameviewdsp.asp?d
                                                           oc=84770&lib=CASEWEBP%5FLIB&mimetype=
                                                           application%2Fpdf&rendition=native
                                                           December 23, 2008 SCC Order in Case No.
                                                       S,R PUE-2008-00099.                                           A
                                                           http://docket.scc.state.va.us/CyberDocs/Librarie
                                                           s/Default_Library/Common/frameviewdsp.asp?d
                                                           oc=85656&lib=CASEWEBP%5FLIB&mimetype=
                                                           application%2Fpdf&rendition=native
                                                           SCC report regarding implementation of The
                                                           Virginia Electric Utility Regulation Act dated
                                                           September 1, 2008.
                                                           http://www.scc.virginia.gov/comm/reports/2008_
                                                           ceur.pdf


        1.2.2 Efficiency is procured as a resource
        for default service/standard offer customers


        EE is an alternative to transmission based
        on a long-term transparent IRP or
  1.3
        transmission system plan

        1.4.1 EE is a biddable commodity

                                                               PJM conducts a regional planning process for 13
                                                               states, including VA, and DC. PJM uses its
                                                               Reliability Pricing Model (RPM) to procure capacity
                                                               on a multi-year forward basis through an auction
                                                               mechanism. In March 2008, several parties asked
                                                               FERC to review the reasonableness of the RPM
                                                               process. On June 30, 2008, PJM filed a responsive
                                                               report. On September 19, 2008, FERC issued an
                                                               Order addressing the report and supporting
                                                               creation of a stakeholder process to address
                                                               pending RPM issues. On December 12, 2008, PJM
                                                               filed a report with FERC summarizing results of the
                                                               stakeholder process, proposing changes to the
  1.4                                                          RPM, including allowing energy efficiency to
                                                               participate in the RPM in Docket Nos. ER05-1410-
                                                               000, EL05-148-000. Also on December 12, 2008,
                                                               PJM filed corresponding tariff revisions for effect
                                                       N       on March 27, 2009 in Docket No. ER09-412-000.
                                                               PJM Report filed 12 12 08
                                                               http://elibrary.ferc.gov/idmws/File_list.asp?docu
                                                               ment_id=13672172
                                                               PJM tariff filing to implement proposed changes
                                                               to RPM filed 12 12 08
                                                               http://elibrary.ferc.gov/idmws/File_list.asp?docu
                                                       R       ment_id=13672185
        1.4.2 Bids occur in the following markets:
        (a) energy, (b) capacity, or (c) other


        State Implementation Plans (SIPs) include              Virginia has established a 1% set-aside for
                                                           Y
  1.5   EE set-asides                                          EE/RE under its CAIR regulations

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource
      Efficiency commitment is in statute           As noted in 1.1 above, in 2006, Virginia adopted
                                                    an energy plan which includes a list of energy
                                                    objectives and a policy statement (sections 67-
                                                    100 through 67-101). This policy does not
                                                    identify EE as a resource. In 2007, Virginia
                                                    adopted electricity restructuring legislation (SB
                                                    1416 enacted as Chapter 933). The third
                                                    enactment clause of Chapter 933 expressed the
                                                    goal of reducing electricity consumption by 10%
                                                    (from 2006 levels) by 2022. On June 8, 2007,
                                                    the SCC opened Case No. PUE-2007-00049 to
                                                    consider the implications and workability of the
                                                    10% reduction goal. (See pages 1-2 of the June
                                                 Y- 8th Order for a discussion of the third enacting
                                                    clause of Chapter 933 and pages 3-6 of the
                                                    June 8th Order for a discussion of the process to
                                                    be followed in PUE-2007-00049.) On November
                                                    16, 2007, the SCC Staff issued a report based
                                                    on the recommendations of several working
                                                    groups in PUE-2007-00049 stating that the 10%
2.1                                                 electricity consumption reduction set forth in
                                                    Chapter 933 is attainable. The November 16th
                                                    report was issued in 5 parts. On September 1,
                                                    2008, the SCC filed an annual report with the
                                                    Legislature regarding the SCC’s implementation
                                                    of The Virginia Electric Utility Regulation Act.
                                                    The September 1st report discusses the third
                                                    enactment clause and thePUE-2007-00049.
                                                    Order Opening Case No. SCC’s actions to
                                                    http://docket.scc.state.va.us/CyberDocs/Librarie
                                                    s/Default_Library/Common/frameviewdsp.asp?d
                                                    oc=70362&lib=CASEWEBP%5FLIB&mimetype=
                                                    application%2Fpdf&rendition=native
                                                    Staff report regarding the 10% reduction goal,
                                                    dated November 16, 2007 and in five parts.
                                                 R
                                                    http://docket.scc.virginia.gov/vaprod/main.asp
                                                    SCC report regarding implementation of The
                                                    Virginia Electric Utility Regulation Act dated
                                                    September 1, 2008.
                                                    http://www.scc.virginia.gov/comm/reports/2008_
                                                    ceur.pdf

                                                    All five major tests are required. See 20VAC5-
                                                    304-20. In the Virginia Energy Plan issued on
                                                    July 10, 2007, the Virginia Department of Mines,
                                                    Minerals and Energy, Energy Division, made
                                                    recommendations about a variety of things
                                                    including cost-effectiveness tests. That report
                                                    recommended that conservation activities
                                                    should be evaluated using the mix of tests set
                                                    forth in 20VAC5-304-20 and concluded “No one
                                                    single tool should be used solely as a go-no-go
                                                    decision mechanism. “( See page 9 of Executive
                                                 Y- Summary.)                                           Y-




2.2



      The TRC or Societal Cost Test is used to
      evaluate EE programs
2.2




                                                          20 VAC5-304-20 is online at
                                                          http://leg1.state.va.us/cgi-
                                                          bin/legp504.exe?000+reg+20VAC5-304-20
                                                          July 7, 2007 Virginia Energy Plan. .
                                                          http://www.dmme.virginia.gov/vaenergyplan.sht
                                                      R   ml                                                  S,R




      2.3.1 Potential for cost-effective EE has           EE potential was discussed in the Virginia
      been established through a potential study          Energy Plan that was issued on July 10, 2007.
                                                          (See Chapter 3, pages 63-66.) The discussion
                                                          summarizes the results of an ACEEE study and
                                                          potential studies that have been conducted in
                                                          other states and extrapolates from the results of
                                                          recent studies done in Connecticut, Georgia,
                                                          North Carolina and Vermont.
                                                      N                                                       N




                                                          July 7, 2007 Virginia Energy Plan.
                                                          http://www.dmme.virginia.gov/vaenergyplan.sht
                                                          ml
      2.3.2 Established EE programs reach all             EE programs were discussed in the Virginia
      customer classes                                    Energy Plan that was issued on July 10, 2007.
                                                          The Plan included several recommendations
                                                          including one that urged Virginia utilities to
2.3                                                       consider sponsoring EE and conservation
                                                          programs for all customer classes and income
                                                          levels. (See Executive Summary, page 9.) On
                                                          January 17, 2008, the SCC approved nine pilot
                                                          projects for Dominion Virginia Power (DVP) in
                                                      N   Case No. PUE-2007-00089. The nine programs          N
                                                          are summarized at page 1 of the January 17th
                                                          Order. As part of its approval of the pilots, the
                                                          SCC required DVP to file quarterly reports. DVP
                                                          filed quarterly reports on July 1, 2008 and
                                                          October 1, 2008.




                                                          July 7, 2007 Virginia Energy Plan.
                                                          http://www.dmme.virginia.gov/vaenergyplan.sht
                                                          ml
                                                          January 17, 2008 Order in PUE-2007-00089.
                                                          http://docket.scc.state.va.us/CyberDocs/Librarie
                                                      R,U s/Default_Library/Common/frameviewdsp.asp?d S,R
                                                          oc=76945&lib=CASEWEBP%5FLIB&mimetype=
                                                          application%2Fpdf&rendition=native
                                                          DVP quarterly reports on Pilots.
                                                          http://docket.scc.virginia.gov/vaprod/main.asp

      Funding requirements for all long-term, cost-
      effective EE have been established
                                                      N                                                       N
2.4
      2.5.1 Quantitative MW and MWh savings              2007 statute has established a goal of reducing
      goals have been established and are                2022 electricity usage by 10% of the amount of
      producing incremental investment.                  electric energy consumed by retail customers in
                                                         2006. An implementation plan is in development.
                                                         See § 56-594 (D)(3)


                                                     N




                                                         The re-regulation statute is available at
                                                         http://leg1.state.va.us/cgi-
                                                         bin/legp504.exe?071+ful+HB3068ER2.




                                                     S




      2.5.2 Goals are established: (a)                  Initial savings goals were established
      connection with IRP or other planning             legislatively. (See 2.5.1 above.) As discussed
      process; (b) as part of an EEPS or similar        in 1.2.1 above, Virginia enacted an IRP statute
      system; (c) as part of program approval and       for electric utilities in 2008. (sections 56-597
      budget-setting process; (d) other                 through 56-599) Section 56-599 requires the
                                                        SCC to order each jurisdictional electric utility to
                                                        file and initial IRP by September 1, 2009 and
                                                        updated plans every two years thereafter.
                                                        Consistent with section 56-599, the SCC
                                                        adopted guidelines for developing IRPs in Case
                                                    (a) No. PUE-2008-00099. These guidelines were
                                                        appended to an SCC Order issued on December
                                                        23, 2008 in Case No. PUE-2008-00099. On
2.5                                                     September 1, 2008, the SCC filed an annual
                                                        report with the Legislature regarding the SCC’s
                                                        implementation of The Virginia Electric Utility
                                                        Regulation Act. The September 1st report
                                                        discusses the SCC’s actions regarding the newly
                                                        enacted IRP requirements (see page 13).


                                                        Electric IRP statute. http://leg1.state.va.us/cgi-
                                                        bin/legp504.exe?000+cod+TOC5600000002400
                                                        0000000000
                                                        December 23, 2008 SCC Order in Case No.
                                                        PUE-2008-00099.
                                                        http://docket.scc.state.va.us/CyberDocs/Librarie
                                                        s/Default_Library/Common/frameviewdsp.asp?d
                                                        oc=85656&lib=CASEWEBP%5FLIB&mimetype=
                                                    S,R
                                                        application%2Fpdf&rendition=native
                                                        SCC report regarding implementation of The
                                                        Virginia Electric Utility Regulation Act dated
                                                        September 1, 2008.
                                                        http://www.scc.virginia.gov/comm/reports/2008_
                                                        ceur.pdf
      2.5.3 Energy Efficiency can be used to           Virginia’s RPS statute is codified at section 56-
      fulfill requirements of an RPS or similar        585.2. On September 1, 2008, the SCC filed an
      standard                                         annual report with the Legislature regarding the
                                                   N   SCC’s implementation of The Virginia Electric
                                                       Utility Regulation Act. The September 1st report
                                                       discusses RPS issues at page 14 of the
                                                       September 1st report.
                                                       Section 56-585.2. http://leg1.state.va.us/cgi-
                                                       bin/legp504.exe?000+cod+56-585.2
                                                       SCC report regarding implementation of The
                                                       Virginia Electric Utility Regulation Act dated
                                                   S
                                                       September 1, 2008.
                                                       http://www.scc.virginia.gov/comm/reports/2008_
                                                       ceur.pdf

      2.5.4 Expected Capacity Savings (Annual
      MW in 2006)

      2.5.5 Energy Savings (Annual MWh in
      2006)

      2.6.1 A robust M&V process has been              M&V was briefly discussed in the Virginia Energy
      established                                      Plan that was issued on July 10, 2007. The Plan
                                                       included several recommendations including one
                                                       that urged Virginia utilities to consider
                                                       sponsoring EE and conservation programs.
                                                       Within this recommendation, the report stated
                                                       that “Energy conservation and demand control
                                                       activities should be evaluated for effectiveness
                                                       through use of measurement and verification
                                                       protocols. Programs not meeting planned
                                                   N   results should be reevaluated to determine if
                                                       they should be modified or ended.” (See
                                                       Executive Summary, page 10.) On January 17,
                                                       2008, the SCC approved nine pilot projects for
                                                       Dominion Virginia Power (DVP) in Case No.
                                                       PUE-2007-00089. M&V is discussed at page 5
                                                       of the January 17th Order. As part of its
                                                       approval of the pilots, the SCC required DVP to
                                                       file quarterly reports. DVP filed quarterly reports
                                                       on July 1, 2008 and October 1, 2008.

                                                      July 7, 2007 Virginia Energy Plan.
                                                      http://www.dmme.virginia.gov/vaenergyplan.sht
                                                      ml
                                                      Section 56-596. http://leg1.state.va.us/cgi-
                                                      bin/legp504.exe?000+cod+56-596
2.6                                                   January 17, 2008 Order in PUE-2007-00089.
                                                  S,R http://docket.scc.state.va.us/CyberDocs/Librarie
                                                      s/Default_Library/Common/frameviewdsp.asp?d
                                                      oc=76945&lib=CASEWEBP%5FLIB&mimetype=
                                                      application%2Fpdf&rendition=native
                                                      DVP quarterly reports on Pilots.
                                                      http://docket.scc.virginia.gov/vaprod/main.asp

      2.6.1.1   M&V is adequately funded

      2.6.1.2 Energy savings are used to
      measure performance

      2.6.1.3 M&V is done according to a
      defined schedule

      2.6.1.4 M&V is conducted by an
      independent party

      2.6.1.5 Review of M&V is done in a
      transparent process
      2.6.2 M&V is done using: (a) deemed
      savings; (b) actual savings; (c) other




      2.7.1 EE delivery structure has been             Currently, DSM is done by utilities. The 2007 re-
      established                                      regulation statute requires the Commission to
                                                       address EE delivery structure in a report to the
                                                       legislature. See § 56-594 (D)(3).
                                                 N                                                             N




                                                       The re-regulation statute is available at
                                                       http://leg1.state.va.us/cgi-
                                                       bin/legp504.exe?071+ful+HB3068ER2.

2.7
                                                 S                                                             S,R




      2.7.2 Delivery is via: (a) utility
      administration; (b) third-party            (a)                                                           (a)
      administration; or (c) government agency




      Resource plans are regularly updated             As discussed in 1.2.1 above, Virginia enacted an
                                                       IRP statute for electric utilities in 2008. (sections
                                                       56-597 through 56-599) Section 56-599 requires
                                                       the SCC to order each jurisdictional electric
                                                       utility to file and initial IRP by September 1, 2009
                                                       and updated plans every two years thereafter.
                                                       Consistent with section 56-599, the SCC issued
                                                       an Order in PUE-2008-00099 on November 12,
                                                       2008 proposing IRP guidelines and requiring
                                                       jurisdictional electric utilities to submit IRPs by
                                                       September 1, 2009. By Order issued on
                                                 Y     December 23, 2008, the SCC adopted
                                                       guidelines for developing IRPs in Case No. PUE-
                                                       2008-00099. These guidelines were appended
                                                       to an SCC Order issued on December 23, 2008
                                                       in Case No. PUE-2008-0009. On September 1,
                                                       2008, the SCC filed an annual report with the
                                                       Legislature regarding the SCC’s implementation
                                                       of The Virginia Electric Utility Regulation Act.
                                                       The September 1st report discusses the SCC’s
                                                       actions regarding the newly enacted IRP
                                                       requirements (see page 13).

2.8
  2.8
                                                             Electric IRP statute. http://leg1.state.va.us/cgi-
                                                             bin/legp504.exe?000+cod+TOC5600000002400
                                                             0000000000

                                                            November 12, 2008 SCC Order in Case No.
                                                            PUE-2008-00099.
                                                            http://docket.scc.state.va.us/CyberDocs/Librarie
                                                            s/Default_Library/Common/frameviewdsp.asp?d
                                                            oc=84770&lib=CASEWEBP%5FLIB&mimetype=
                                                            application%2Fpdf&rendition=native
                                                            December 23, 2008 SCC Order in Case No.
                                                        S,R PUE-2008-00099.                                       A
                                                            http://docket.scc.state.va.us/CyberDocs/Librarie
                                                            s/Default_Library/Common/frameviewdsp.asp?d
                                                            oc=85656&lib=CASEWEBP%5FLIB&mimetype=
                                                            application%2Fpdf&rendition=native
                                                            SCC report regarding implementation of The
                                                            Virginia Electric Utility Regulation Act dated
                                                            September 1, 2008.
                                                            http://www.scc.virginia.gov/comm/reports/2008_
                                                            ceur.pdf


        2.9.1 Building Energy Codes for                      2006 IECC mandatory statewide; enforcement is
        residential buildings are in place and               the responsibility of the local government’s
        regularly updated                                    building inspections department. REScheck can
                                                             be used to show compliance. There is a three
                                                         Y   year review cycle concurrent with the
                                                             publications of new editions of the model codes.
                                                             The most recent update took effect on May 1,
                                                             2008. See BCAP link below for details.
                                                             BCAP discussion of Virginia building codes.
                                                             http://bcap-energy.org/node/101
  2.9   2.9.2 Building Energy Codes for                      2006 IECC mandatory statewide; enforcement is
        commercial buildings are in place and                the responsibility of the local government’s
        regularly updated                                    building inspections department. COMcheck
                                                             can be used to show compliance. There is a
                                                         Y   three year review cycle concurrent with the
                                                             publications of new editions of the model codes.
                                                             The most recent update took effect on May 1,
                                                             2008. See BCAP link below for details.

                                                             BCAP discussion of Virginia building codes.
                                                             http://bcap-energy.org/node/101
        Appliance and Equipment Efficiency
        Standards are in place and regularly             N
 2.10
        updated
        Energy efficiency is a high priority in state
        buildings and state funded buildings as
        evidenced in capital planning and enabling
        performance contracts
 2.11



Recommendation 3: Miscellaneous Policies
         3.1.1 Public education programs on EE are          In the Virginia Energy Plan issued on July 10,
         in place. (See Guide Tab for Y/N criteria.)        2007, the Virginia Department of Mines,
                                                            Minerals and Energy, Energy Division, made
                                                            recommendations about a variety of things
                                                            including EE education. ( See pages 10-11 of
                                                            Executive Summary.) In 2008, section 56-592
                                                            was amended to require the SCC to develop an
                                                        N                                                      N
                                                            electric energy consumer education program
                                                            and report its finding to the Legislature. The
                                                            SCC submitted the required report on December
                                                            17, 2008. The December 17th report
                                                            recommends that a 5-year education program
                                                            be initiated by July 1, 2009.

                                                            July 7, 2007 Virginia Energy Plan. .
                                                            http://www.dmme.virginia.gov/vaenergyplan.sht
                                                            ml
                                                            Section 56-592. http://leg1.state.va.us/cgi-
  3.1
                                                            bin/legp504.exe?000+cod+56-592
                                                        S
                                                            December 17, 2008 SCC Report on Consumer
                                                            Education.
                                                            http://www.scc.virginia.gov/comm/reports/vasens
                                                            e_ed.pdf

         3.1.2 Process is in place, such as a state
         or regional collaborative, to pursue EE as a
                                                        N
         high-priority resource. (See Guide Tab for
         Y/N criteria.)
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         75% of state access to ENERGY STAR
                                                        Y
         New Homes
  3.2    What proportion is due to regulated utility        Dominion Virginia Power, Rappahannock
         program? (who is sponsor)                          Electric Cooperative
         75% of state access to Home Performance
         with ENERGY STAR?                              N

         What proportion is due to regulated utility
         program? (who is sponsor)


Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective.
         4.1.1 Cost recovery process exists                 On January 17, 2008, the SCC approved nine
                                                            pilot programs for Dominion Virginia Power
                                                            (DVP) in Case No. PUE-2007-00089. Because
                                                            the DVP programs are in the pilot phase, DVP
                                                            has not yet filed a funding mechanism for the
                                                            programs. . DVP anticipates filing a DSM
                                                        N                                                      Y-
                                                            portfolio in early 2009 that will include a cost
                                                            recovery plan. As part of its approval of the
                                                            pilots, the SCC required DVP to file quarterly
                                                            reports. DVP filed quarterly reports on July 1,
                                                            2008 and October 1, 2008.




  4.1
                                                                January 17, 2008 Order in PUE-2007-00089.
                                                                http://docket.scc.state.va.us/CyberDocs/Librarie
                                                                s/Default_Library/Common/frameviewdsp.asp?d
                                                                oc=76945&lib=CASEWEBP%5FLIB&mimetype=
                                                                application%2Fpdf&rendition=native
  4.1
                                                            R,U DVP quarterly reports on Pilots.                 S,R
                                                                http://docket.scc.virginia.gov/vaprod/main.asp




         4.1.2 Recovery occurs via: (a) rider; (b)               The adoption of an SBC will be investigated and
         regular rate case; or (c) system benefits               addressed by the SCC in a report to the
         charge                                                  legislature on strategies for meeting DSM goals
                                                             N                                                       (a)
                                                                 required by 2007 re-regulation legislation. See §
                                                                 56-594 (D)(3). See 4.1.1 for more recent
                                                                 developments.
                                                                 The re-regulation statute is available at
                                                             S   http://leg1.state.va.us/cgi-
                                                                 bin/legp504.exe?071+ful+HB3068ER2.
         4.1.3 Funding is for multi-year periods             N

         A base energy efficiency spending level
  4.2    exists, with opportunity to justify higher level
         % of net (retail) utility revenue presently
  4.3
         Funds from carbon trading program support
  4.4
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking
         5.1.1 Utility throughput incentive is                   The 2007 re-regulation statute allows the
         addressed and disincentives are removed                 Commission to approve a wide variety of
                                                                 performance-based regulation mechanisms,
                                                                 provided they meet certain statutory obligations.
                                                                 See § 56-235.6.




                                                             N                                                       Y-




  5.1
                                                                 The re-regulation statute is available at
                                                                 http://leg1.state.va.us/cgi-
                                                                 bin/legp504.exe?071+ful+HB3068ER2.




                                                             S                                                       S,R




         5.1.2 Method used is: (a) decoupling; (b)
         lost revenue recovery; or (c) non-utility                                                                   (a)
         implementaion of EE
      5.2.1 Utility/shareholder EE incentives are      The 2007 re-regulation statute allows utilities to
      provided                                         request incentives by petitioning the
                                                       Commission for a rate adjustment clause to
                                                       cover the cost of incentives. See Viriginia
                                                       Statutes § 56-585.1(A)(5)b In the Virginia
                                                    Y- Energy Plan issued on July 10, 2007, the                Y-
                                                       Virginia Department of Mines, Minerals and
                                                       Energy, Energy Division, made
                                                       recommendations about a variety of things
                                                       including EE incentives for utilities. ( See pages
5.2                                                    9-10 of Executive Summary.)
                                                       Section 56-585.1. http://leg1.state.va.us/cgi-
                                                       bin/legp504.exe?000+cod+56-585.1
                                                       July 7, 2007 Virginia Energy Plan. .
                                                    S                                                          S
                                                       http://www.dmme.virginia.gov/vaenergyplan.sht
                                                       ml

      5.2.2 Incentives exceed amount of lost
      revenues

      5.3.1 Impact on EE is a consideration
      when designing retail rates

5.3   5.3.2 Declining block rates and fixed
      variable rate designs have been eliminated


      5.4.1 Time sensitive rates in place                Real-time pricing systems will be addressed in
                                                         the SCC's Report to the Legislature on an
                                                         implementation plan to meet legislatively-
                                                         determined savings goals by 2022. See Section
                                                         2.7 above. The annual reporting requirement is
                                                         codified at 56-596 B. The SCC filed its 2008
                                                         report on September 1, 2008. Time sensitive
                                                         rates are discussed briefly at pages 15 and 16 of
                                                     N   the report. On January 17, 2008, the SCC
                                                         approved nine pilot projects for Dominion
                                                         Virginia Power (DVP) in Case No. PUE-2007-
                                                         00089. Four of the nine pilots relate to demand
                                                         response and load management. As part of its
                                                         approval of the pilots, the SCC required DVP to
                                                         file quarterly reports. DVP filed quarterly reports
                                                         on July 1, 2008 and October 1, 2008.

                                                        Section 56-596. http://leg1.state.va.us/cgi-
                                                        bin/legp504.exe?000+cod+56-596
                                                        January 17, 2008 Order in PUE-2007-00089.
                                                        http://docket.scc.state.va.us/CyberDocs/Librarie
                                                        s/Default_Library/Common/frameviewdsp.asp?d
                                                        oc=76945&lib=CASEWEBP%5FLIB&mimetype=
                                                        application%2Fpdf&rendition=native
                                                    S,U DVP quarterly reports on Pilots.
                                                        http://docket.scc.virginia.gov/vaprod/main.asp
                                                        SCC Report on Implementing the Virginia
                                                        Electric Utility Regulation Act dated September
                                                        1, 2008.
                                                        http://www.scc.virginia.gov/comm/reports/2008_
                                                        ceur.pdf

5.4   5.4.2 Usage sensitive rates in place
  5.4
         5.4.3 AMI deployment planned                       As discussed in 5.4.1 above, the SCC filed
                                                            report to the Legislature on September 1, 2008
                                                            that addressed, among other things, time
                                                            sensitive rates. Time sensitive rates are
                                                            discussed briefly at pages 15 and 16 of the
                                                            report. On January 17, 2008, the SCC approved
                                                         Y- nine pilot projects for Dominion Virginia Power
                                                            (DVP) in Case No. PUE-2007-00089. Four of
                                                            the nine pilots relate to demand response and
                                                            load management. One of the pilots includes
                                                            programmable thermostats with AMI and critical
                                                            peak pricing. This pilot is scheduled to run
                                                            through May 2009.
                                                            Section 56-596. http://leg1.state.va.us/cgi-
                                                            bin/legp504.exe?000+cod+56-596
                                                            SCC Report on Implementing the Virginia
                                                            Electric Utility Regulation Act dated September
                                                            1, 2008.
                                                            http://www.scc.virginia.gov/comm/reports/2008_
                                                            ceur.pdf
                                                        S,R January 17, 2008 Order in PUE-2007-00089.
                                                            http://docket.scc.state.va.us/CyberDocs/Librarie
                                                            s/Default_Library/Common/frameviewdsp.asp?d
                                                            oc=76945&lib=CASEWEBP%5FLIB&mimetype=
                                                            application%2Fpdf&rendition=native
                                                            DVP quarterly reports on Pilots.
                                                            http://docket.scc.virginia.gov/vaprod/main.asp

         5.4.4 Other mechanisms exist (e.g., on-bill
         financing, benefit sharing)

State Fiscal Policy
         Sales Tax reduction or exemption for                 Virginia allows a four-day sales tax exemption on
         energy efficient products                       Y certain Energy Star products. See DSIRE link
                                                              below for summary of exemption.
  6.1
                                                              DSIRE summary of sales tax exemption.
                                                              http://www.dsireusa.org/incentives/incentive.cfm
                                                              ?Incentive_Code=VA17F&re=1&ee=1
         Investment Tax Credit for energy efficient
  6.2    investments

         State supported low cost financing for         x,y   A lease program is available for improvements
         energy efficient investments: buildings (x),         in state-owned buildings.
  6.3
         equipment (y)
                                                              http://www.mme.state.va.us/de/energy_programs.html#Anchor-VELP
Distributed Generation Policies
      A statewide interconnection policy is in         In 2008 Virginia was considering new statewide
      place                                            interconnection standards, which were
                                                       promulgated pursuant to § 56-578 of the Virginia
                                                       Electric Restructuring Act. The new standards
                                                       would allow for the interconnection of systems
                                                       up to 20 MW in size. There would be 3 levels of
                                                       interconnection - level 1 for systems up to 500
                                                       kW, level 2 for systems greater than 500 kW but
                                                       less than 2 MW, and level 3 for systems larger
                                                       than 2 MW but no larger than 20 MW. A draft
                                                       interconnection agreement is available under the
                                                       proposed regulations. Set timeframes for
                                                    Y- application approval, fees, and other details are
                                                       outlined in the proposed standards. Virginia
                                                       already has existing simplified interconnection
7.1                                                    standards for systems that are eligible for net
                                                       metering. These standards were enacted with
                                                       Va. Code § 56-578 and then later with 20 VAC 5-
                                                       315-40. However, these standards only apply to
                                                       PV, wind, and hydroelectric applications. The
                                                       system size limits are 10kW for residential and
                                                       500 kW for non-residential systems. Virginia
                                                       expanded net metering with the passage of HB
                                                       1541 in April 2006. All renewable energy
                                                       systems that generate electricity are now
                                                       allowed to§ 56-578 can be accessed here,
                                                       Va. Code net meter.
                                                       http://www.dsireusa.org/documents/Incentives/V
                                                       A06R.htm and 20 VAC 5-315-40 can be found
                                                     S
                                                       here,
                                                       http://www.dsireusa.org/documents/Incentives/V
                                                       A06Rb.pdf
      A statewide net metering policy is in place      VA's net metering laws were established with Va.
                                                       Code § 56-594, then 20 VAC 5-315, and then
                                                       several recent bills - HB 2708 of 2006, SB 1416
                                                       of 2006 and HB 1541 of 2007. Net-metering
                                                       applies to residential systems up to 10 KW in
                                                       capacity and non-residential customers up to
                                                       500 kW in capacity. Net-metering has been
                                                       extended to all systems using renewable energy -
                                                    Y+ sunlight, wind, falling water, sustainable
                                                       biomass, energy from waste, waste motion, tides
7.2                                                    and geothermal power. Net metering is available
                                                       to IOU and electric cooperative customers. NEG
                                                       is credited to the following month at the utility's
                                                       retail rate. NEG remaining at the end of a 12-
                                                       month period can be also be credited to the
                                                       following month.
                                                       Va. Code § 56-594 can be found here,
                                                       http://www.dsireusa.org/documents/Incentives/V
                                                    S
                                                       A02R.htm, and then 20 VAC 5-315 is located
                                                       here,
      A statewide exit fee policy is in place          SB 1416, passed in 2007 governs exit fees and
                                                       http://www.dsireusa.org/documents/Incentives/V
                                                    Y+ other utility policies. There are no exit fees for
                                                       DG in the state.
7.3
                                                        SB 1416, can be accessed from here,
                                                    S   http://leg1.state.va.us/cgi-
                                                        bin/legp504.exe?071+ful+CHAP0933
      A statewide standby rate policy is in place       Virginia does not have a statewide policy on
                                                    N
                                                        standby rates

                                                        Virginia Electric & Power Co - Schedule 8 -
                                                        standby rate is primarily demand based with a
                                                        very high standby supply charge and low energy
                                                    U - charges. Billing demand is based on the higher
                                                        of the maximum demand of the month or 75% of
                                                        the contract demand. Rate available at:
                                                        https://www.dom.com/customer/vabus_bundled.j
7.4                                                     sp
7.4
                                                      Appalachian Power Co - Schedule SBS -
                                                      standby rate is primarily demand based, with
                                                      actual demand charges being very high and
                                                      determined based on the level of contracted
                                                      service reliability. Billing demand is based on
                                                  U
                                                      the maximum integrated demand of the month
                                                      with no ratchet. Rate available at:
                                                      https://www.appalachianpower.com/CustomerSe
                                                      rvice/RatesAndTariffs/LegalTariffFilings/Virginia.
                                                      aspx
      As part of resource planning process, CHP       In November 2008, the State Corporation
      is reviewed and incorporated where              Commission (SCC) adopted guidelines requiring
      effective                                       state IOUs to develop Integrated Resource
                                                  N   Plans (IRP). Case # PUE-2008-00099 contains
                                                      the IRP requirements. IRPs must be filed by
                                                      Sept 1, 2009, CHP is not mentioned.
7.5
                                                      http://www.scc.virginia.gov/newsrel/e_irp_08.pdf
                                                  R
               Natural Gas




Standards for the IRP process for gas utilities in
Virginia, and the SCC rationale for adopting
these standards, can be found at 20VAC5-3006-
10. These standards have been in place since
1994.
              Standards for the IRP process for gas utilities.
              http://leg1.state.va.us/cgi-
              bin/legp504.exe?000+reg+20VAC5-306




ve energy efficiency as a resource
“Cost effective conservation and energy
efficiency program” for LDCs is defined in
section 56-600 of the Code as a program
approved by the SCC after the SCC applies “the
Total Resource Cost Test, the Societal Test, the
Program Administrator Test, the Rate Impact
Measure Test, and any other test the
Commission reasonably deems appropriate.”
Section 56-602 E directs the SCC to require
LDCs operating under an approved
conservation and ratemaking efficiency plan to
file annual reports demonstrating the cost-
effectiveness of their EE programs. Virginia
Natural Gas was the first LDC to file for approval
for an EE and conservation plan under sections
56-600 et seq. That plan was addressed by the
SCC in Case No. PUE-2008-00060. The Order
approving the VNG plan was issued on
December 23, 2008. The SCC’s cost-
effectiveness analysis of the VNG plan is
discussed at pages 11-13 of the December 23rd
Order.
Section 56-600. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-600
Section 56-602. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-602
December 23, 2008 Order in Case No. PUE-
2008-00060.
http://docket.scc.state.va.us/CyberDocs/Librarie
s/Default_Library/Common/frameviewdsp.asp?d
oc=85652&lib=CASEWEBP%5FLIB&mimetype=
application%2Fpdf&rendition=native

EE potential was discussed in the Virginia
Energy Plan that was issued on July 10, 2007.
(See Chapter 3, pages 67-69.) The discussion
summarizes the results of an ACEEE study and
potential studies that have been conducted in
other states and extrapolates from the results of
recent studies done in Utah, New Mexico, New
Jersey, Oregon and Washington, Georgia,
Wisconsin and the Midwest.




July 7, 2007 Virginia Energy Plan.
http://www.dmme.virginia.gov/vaenergyplan.sht
ml
Section 56-602 A of the Code governs EE
programs for LDCs and specifically provides
that such programs will not apply to large
commercial or large industrial customers.
Virginia Natural Gas was the first LDC to file for
approval for an EE and conservation plan under
sections 56-600 et seq. That plan was
addressed by the SCC in Case No. PUE-2008-
00060. The Order approving the VNG plan was
issued on December 23, 2008. The plan that
was ultimately approved includes programs for
residential customers only. (See December
23rd Order at pages 15-16.)




Section 56-600. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-600
Section 56-602. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-602
December 23, 2008 Order in Case No. PUE-
2008-00060.
http://docket.scc.state.va.us/CyberDocs/Librarie
s/Default_Library/Common/frameviewdsp.asp?d
oc=85652&lib=CASEWEBP%5FLIB&mimetype=
application%2Fpdf&rendition=native
Gas EE programs in Virginia are administered
by LDCs subject to oversight by the SCC.
Section 56-602 A of the Code governs EE
programs for LDCs. Virginia Natural Gas was
the first LDC to file for approval for an EE and
conservation plan under sections 56-600 et seq.
That plan was addressed by the SCC in Case
No. PUE-2008-00060. The Order approving
the VNG plan was issued on December 23,
2008.
Section 56-600. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-600
Section 56-602. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-602
December 23, 2008 Order in Case No. PUE-
2008-00060.
http://docket.scc.state.va.us/CyberDocs/Librarie
s/Default_Library/Common/frameviewdsp.asp?d
oc=85652&lib=CASEWEBP%5FLIB&mimetype=
application%2Fpdf&rendition=native




Standards for the IRP process for gas utilities in
Virginia, and the SCC rationale for adopting
these standards, can be found at 20VAC5-3006-
10. These standards have been in place since
1994.
Standards for the IRP process for gas utilities.
http://leg1.state.va.us/cgi-
bin/legp504.exe?000+reg+20VAC5-306
r energy efficiency where cost-effective.
               The statutory requirements regarding
               conservation and energy efficiency plans for
               LDCs are codified at 56-600 et seq. Virginia
               Natural Gas was the first LDC to file for approval
               for an EE and conservation plan under sections
               56-600 et seq. That plan was addressed by the
               SCC in Case No. PUE-2008-00060. The Order
               approving the VNG plan was issued on
               December 23, 2008. The approved plan
               provides for cost recovery through a rider.
              Section 56-600. http://leg1.state.va.us/cgi-
              bin/legp504.exe?000+cod+56-600
              Section 56-602. http://leg1.state.va.us/cgi-
              bin/legp504.exe?000+cod+56-602
              December 23, 2008 Order in Case No. PUE-
              2008-00060.
              http://docket.scc.state.va.us/CyberDocs/Librarie
              s/Default_Library/Common/frameviewdsp.asp?d
              oc=85652&lib=CASEWEBP%5FLIB&mimetype=
              application%2Fpdf&rendition=native

              See 4.1.1 above.




-effective energy efficiency and modify ratemaking
              The 2007 re-regulation statute allows the
              Commission to approve a wide variety of
              performance-based regulation mechanisms,
              provided they meet certain statutory obligations.
              The statutory requirements regarding
              conservation and ratemaking efficiency plans for
              LDCs are codified at 56-600 et seq. Section 56-
              602 A authorizes an LDC to file a conservation
              and ratemaking efficiency plan and requires that
              such plans include, among other things, a
              decoupling mechanism. Virginia Natural Gas
              was the first LDC to file for approval for an EE
              and conservation plan under sections 56-600 et
              seq. That plan was addressed by the SCC in
              Case No. PUE-2008-00060. The Order
              approving the VNG plan was issued on
              December 23, 2008. The approved plan
              includes a decoupling mechanism that provides
              for a sales adjustment to customers’ monthly
              bills.
              The re-regulation statute is available at
              http://leg1.state.va.us/cgi-
              bin/legp504.exe?071+ful+HB3068ER2. Section
              56-600. http://leg1.state.va.us/cgi-
              bin/legp504.exe?000+cod+56-600
              Section 56-602. http://leg1.state.va.us/cgi-
              bin/legp504.exe?000+cod+56-602
              December 23, 2008 Order in Case No. PUE-
              2008-00060.
              http://docket.scc.state.va.us/CyberDocs/Librarie
              s/Default_Library/Common/frameviewdsp.asp?d
              oc=85652&lib=CASEWEBP%5FLIB&mimetype=
              application%2Fpdf&rendition=native
The statutory requirements regarding
conservation and ratemaking efficiency plans for
LDCs are codified at 56-600 et seq. Section 56-
601 A.3 authorizes the SCC to reward LDCs for
exceeding EE goals that are established in
approved plans. Section 56-601 B.2 authorizes
the SCC to provide incentives to LDCs to
promote EE.



Section 56-601. http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+56-601
_programs.html#Anchor-VELP
                                                      WEST VIRGINIA (as of 12/31/08)
                                                                             Electric
Recommendation 1: Recognize energy efficiency as a high priority energy resource.
         EE is established as a high priority resource,
         equivalent or superior to supply resources       N
  1.1


         1.2.1 EE is integrated into an active IRP or         In a 4/24/08 Order, the Commission required
         Portfolio Management process.                        that a DSM/EE Task Force meet to
                                                              determine whether Appalachian Power
                                                          N   Company should more aggressively seek
                                                              energy savings from EE measures. The
                                                              task force was continuing to meet as of the

  1.2
                                                              end of06-0033-E-CN, Order 4/24/08:
                                                              Case 2008.
                                                              http://www.psc.state.wv.us/scripts/WebDock
                                                          R
                                                              et/ViewDocument.cfm?CaseActivityID=2381
                                                              85&NotType='WebDocket'
         1.2.2 Efficiency is procured as a resource
         for default service/standard offer customers


         EE is an alternative to transmission based
         on a long-term transparent IRP or                    According to ACEEE, the Commission
         transmission system plan                             ordered the Trans-Allegheny Interstate Line
                                                              Company, as part of a settlement related to
                                                              the construction of a transmission line, to
                                                              contribute $2.5 million over 5 years to the
                                                          N
  1.3                                                         Governor's Office of Economic Opportunity
                                                              to expand current EE programs in the
                                                              counties traversed by the company, and to
                                                              contribute $2.5 million over 5 years to the
                                                              state, designated to fund low-income energy
                                                              assistance programs.
        1.4.1 EE is a biddable commodity                     PJM conducts a regional planning process
                                                             for 13 states, including WV, and DC. PJM
                                                             uses its Reliability Pricing Model (RPM) to
                                                             procure capacity on a multi-year forward
                                                             basis through an auction mechanism. In
                                                             March 2008, several parties asked FERC to
                                                             review the reasonableness of the RPM
                                                             process. On June 30, 2008, PJM filed a
                                                             responsive report. On September 19, 2008,
                                                             FERC issued an Order addressing the report
                                                             and supporting creation of a stakeholder
                                                             process to address pending RPM issues. On
                                                             December 12, 2008, PJM filed a report with
                                                             FERC summarizing results of the stakeholder
                                                             process, proposing changes to the RPM,
  1.4
                                                             including allowing energy efficiency to
                                                             participate in the RPM in Docket Nos. ER05-
                                                             1410-000, EL05-148-000. Also on December
                                                             12, 2008, PJM filed corresponding tariff
                                                     N       revisions for effect on March 27, 2009 in
                                                             Docket No. ER09-412-000.
                                                             PJM Report filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?do
                                                             cument_id=13672172
                                                             PJM tariff filing to implement proposed
                                                             changes to RPM filed 12 12 08
                                                             http://elibrary.ferc.gov/idmws/File_list.asp?do
                                                     R       cument_id=13672185
        1.4.2 Bids occur in the following markets:
        (a) energy, (b) capacity, or (c) other


        State Implementation Plans (SIPs) include
  1.5   EE set-asides

Recommendation 2: Make a strong, long-term commitment to implement cost-effective energy efficiency
        Efficiency commitment is in statute              N
  2.1

        The TRC or Societal Cost Test is used to
        evaluate EE programs
  2.2


        2.3.1 Potential for cost-effective EE has
        been established through a potential study       N


  2.3   2.3.2 Established EE programs reach all
        customer classes                                 N
      Funding requirements for all long-term, cost-
      effective EE have been established
                                                       N
2.4


      2.5.1 Quantitative MW and MWh savings
      goals have been established and are
                                                       N
      producing incremental investment.


      2.5.2 Goals are established: (a) connection
      with IRP or other planning process; (b) as
      part of an EEPS or similar system; (c) as
      part of program approval and budget-setting
      process; (d) other
2.5
      2.5.3 Energy Efficiency can be used to fulfill
      requirements of an RPS or similar standard       N


      2.5.4 Expected Capacity Savings (Annual
      MW in 2006)

      2.5.5 Energy Savings (Annual MWh in
      2006)

      2.6.1 A robust M&V process has been
      established                                      N


      2.6.1.1   M&V is adequately funded

      2.6.1.2 Energy savings are used to
      measure performance

      2.6.1.3 M&V is done according to a
      defined schedule
2.6
      2.6.1.4 M&V is conducted by an
      independent party

      2.6.1.5 Review of M&V is done in a
      transparent process

      2.6.2 M&V is done using: (a) deemed
      savings; (b) actual savings; (c) other
       2.7.1 EE delivery structure has been                  EE delivery structure has not been
       established                                           established formally, and EE efforts are
                                                             done at the initiative of the utilities. Very little
                                                             EE activity takes place in WV by utilities. In
                                                             a 4/24/08 Order, the Commission required
                                                         N   that a DSM/EE Task Force meet to
                                                             determine whether Appalachian Power
                                                             Company should more aggressively seek
                                                             energy savings from EE measures. The
2.7                                                          task force was continuing to meet as of the
                                                             end of 2008.
                                                             Case 06-0033-E-CN, Order 4/24/08:
                                                             http://www.psc.state.wv.us/scripts/WebDock
                                                             et/ViewDocument.cfm?CaseActivityID=2381
       2.7.2 Delivery is via: (a) utility
       administration; (b) third-party administration;
       or (c) government agency


       Resource plans are regularly updated
                                                         N
2.8

       2.9.1 Building Energy Codes for residential           2003 IECC, 2003 IRC with exceptions are
       buildings are in place and regularly updated          voluntary statewide. There is no regular
                                                         Y   schedule for updating codes, and the most
                                                             recent update was effective 5/15/06.
                                                             http://www.bcap-
                                                             energy.org/state_status.php?state_ab=WV
2.9
       2.9.2 Building Energy Codes for                       2003 IECC is voluntary statewide. There is
       commercial buildings are in place and             Y   no regular schedule for updating codes, and
       regularly updated                                     the most recent update was effective
                                                             5/15/06.
                                                             http://www.bcap-
                                                             energy.org/state_status.php?state_ab=WV

       Appliance and Equipment Efficiency
       Standards are in place and regularly              N
2.10
       updated
       Energy efficiency is a high priority in state        In the Governor's 2008 State of the State
       buildings and state funded buildings as              address, he noted that in 2005 the State
       evidenced in capital planning and enabling           Capitol Complex enetered into an energy
       performance contracts                                conservation and savings contract that
                                                            guarantees the Complex will reduce its
                                                            energy consumption by at least 5%. In
                                                         Y- addition, he called for state agencies to
                                                            reduce consumption by 10% that year. WV
2.11
                                                            enacted legislation in 2008 that enables
                                                            counties and municipalities to enter into
                                                            performance-based contacts with energy
                                                            conservation service providers.
  2.11




                                                            Governor's 2008 State of State address:
                                                            http://www.wvgov.org/SoS2008/ManchinSO
                                                            S010908.pdf; HB 4028 (2008):
                                                            http://www.legis.state.wv.us/Bill_Text_HTML/
Recommendation 3: Miscellaneous Policies
         3.1.1 Public education programs on EE are
         in place. (See Guide Tab for Y/N criteria.)    N




         3.1.2 Process is in place, such as a state         In a 4/24/08 Order, the Commission required
         or regional collaborative, to pursue EE as a       that a DSM/EE Task Force meet to
         high-priority resource. (See Guide Tab for         determine whether Appalachian Power
         Y/N criteria.)                                     Company should more aggressively seek
                                                            energy savings from EE measures. The
                                                        Y   task force was continuing to meet as of the
                                                            end of 2008. The participants consisted of
   3.1                                                      the utility, state govt representatives, and
                                                            others from business, environmental groups,
                                                            low-income groups, etc.

         Do not delete this row.                            Case 06-0033-E-CN, Order 4/24/08:
                                                            http://www.psc.state.wv.us/scripts/WebDock
                                                            et/ViewDocument.cfm?CaseActivityID=2381
         Do not delete this row.                            85&NotType='WebDocket'
         Do not delete this row.
         Do not delete this row.
         Do not delete this row.
         75% of state access to ENERGY STAR New
                                                        Y
         Homes
   3.2
         What proportion is due to regulated utility
         program? (who is sponsor)
         75% of state access to Home Performance
         with ENERGY STAR?                              N

         What proportion is ue to regulated utility
         program? (who is sponsor)


Recommendation 4: Promote sufficient, timely, and stable program funding to deliver energy efficiency w
         4.1.1 Cost recovery process exists                Some expenses associated with
                                                        Y- conservation programs (e.g. audits) may be
                                                           recovered in rates.
                                                           See W.V.A.C. Title 150, Series 3, 4.15.
                                                        A Section 4.15 is downloadable from
                                                           http://www.wvsos.com/csr/verify.asp?TitleSe
   4.1
         4.1.2 Recovery occurs via: (a) rider; (b)
         regular rate case; or (c) system benefits
         charge

         4.1.3 Funding is for multi-year periods        N
   4.1




         A base energy efficiency spending level             N
   4.2
         exists, with opportunity to justify higher level
         % of net (retail) utility revenue presently
   4.3
         Funds from carbon trading program support
   4.4
Recommendation 5: Modify policies to align utility incentives with the delivery of cost-effective energy effi
         5.1.1 Utility throughput incentive is
                                                             N
         addressed and disincentives are removed

   5.1   5.1.2 Method used is: (a) decoupling; (b)
         lost revenue recovery; or (c) non-utility
         implementaion of EE

         5.2.1 Utility/shareholder EE incentives are
                                                             N
         provided
   5.2
         5.2.2 Incentives exceed amount of lost
         revenues

         5.3.1 Impact on EE is a consideration when
         designing retail rates

   5.3   5.3.2 Declining block rates and fixed
         variable rate designs have been eliminated          N


         5.4.1 Time sensitive rates in place

         5.4.2 Usage sensitive rates in place

         5.4.3 AMI deployment planned                           In 2007, the Commission declined to adopt
                                                                the PURPA standard related to time-based
                                                                metering and communications. Instead, it
                                                                adopted the reccomendations of the parties
                                                                to the proceeding which stated that electric
                                                            Y/C utilities should explore making smart
                                                                metering available as an option for all tariff
   5.4                                                          classes in their next rate case. Allegheny
                                                                Power currently offers advanced meters to
                                                                its commercial customers.

                                                                 Docket 06-708-E-GI, 1/26/07 Order,
                                                                 adopting 10/3/06 consensus agreement:
                                                                 http://www.psc.state.wv.us/scripts/WebDock
                                                                 et/ViewDocument.cfm?CaseActivityID=2019
                                                                 37&NotType='WebDocket'
         5.4.4 Other mechanisms exist (e.g., on-bill
         financing, benefit sharing)

State Fiscal Policy
         Sales Tax reduction or exemption for energy
   6.1   efficient products

         Investment Tax Credit for energy efficient
   6.2   investments

         State supported low cost financing for
         energy efficient investments: buildings (x),
   6.3
         equipment (y)

Distributed Generation Policies
         A statewide interconnection policy is in place       The WV PSC has approved consensus
                                                              filings related to statewide interconnection
                                                              and net metering standards - Case No. 06-
                                                              0708-E-GI. The PSC has not started a
                                                              formal rulemaking process on these filings,
                                                              however the tariffs are in effect. There are
                                                              two levels of interconnection - level one is for
                                                              systems up to 10 kVa and level 2 is for
                                                          N   systems between 10 kVA and 2 MVa. There
                                                              are set timeframes for utility approval. Small
                                                              facilities must comply with IEEE 1547
                                                              interconnection standards. There are
                                                              standard forms for both interconnection
                                                              levels, the application fee is $30 for level 1
   7.1                                                        and $50 plus $1/kW for level 2. Level 2
                                                              systems must have an external disconnect.

                                                              The PSC Order, Case No. 06-0708-E-GI can
                                                              be accessed from here,
                                                          R
                                                              http://www.dsireusa.org/documents/Incentive
                                                              s/WV03Rb.pdf
                                                              Appalachian Power Co, IOU - a subsidiary of
                                                          U   AEP has incorporated the consensus
                                                              interconnection provisions into their tariff.
                                                              Monongahela Power Co, IOU - a subsidiary
                                                              of Allegheny Power has incorporated the
                                                          U
                                                              consensus interconnection provisions into
                                                              their tariff.
      A statewide net metering policy is in place       WV has a net metering policy under
                                                        consensus filings approved in 2006 - West
                                                        Virginia PSC Order, Case No. 06-0708-E-GI.
                                                        Residential and commercial systems up to
                                                        25 kW using the following fuels/technologies
                                                        will be eligible - PV, wind, biomass, landfill
                                                        gas, hydropower or fuel cells. NEG will be
                                                    Y
                                                        carried over to a customer's next bill for up
                                                        to 12 months as a KWh credit at the utility's
7.2
                                                        retail rate. The WV PSC is planning on
                                                        adopting new rules and regulations for net
                                                        metering and interconnection through a
                                                        formal rulemaking process.

                                                        Case No. 06-0708-E-GI can be accessed
                                                        from here,
                                                    R
                                                        http://www.dsireusa.org/documents/Incentive
                                                        s/WV03Rb.pdf
      A statewide exit fee policy is in place           There is no statewide policy on exit fees in
                                                    N
7.3                                                     WV.

      A statewide standby rate policy is in place       West Virginia does not have a statewide
                                                    N
                                                        policy on standby rates

                                                        Appalachian Power Co - Schedule
                                                        Cogen/SPP - standby service is provided to
                                                        QFs that are 100 kW or under. For sites
                                                        larger than 100 kW an individual contract
                                                        must be established with the utility to define
                                                        the standby service rates. Sites below 100
                                                        kW recieve a balanced rate with moderate
                                                    U
                                                        demand and energy charges. Billing
                                                        demand is based on the higher of the
                                                        maximum 15 minute demand of the month
                                                        or 60% of the maximum established in the
7.4
                                                        previous 11 months. Rate available at:
                                                        https://www.appalachianpower.com/Custom
                                                        erService/RatesAndTariffs/LegalTariffFilings/
                                                        WV.aspx

                                                        Monongahela Power Co - Schedule AGS -
                                                        standby service is provided to QFs and is a
                                                        balanced rate with moderate demand and
                                                        energy charges. Billing demand is based on
                                                    U
                                                        the higher of the maximum 15 minute
                                                        demand of the month or 65% of the standby
                                                        contract demand. Rate available at:
                                                        http://www.alleghenypower.com/Tariffs/WV/
                                                        Wvmontariffs/wvmontariff.asp
      As part of resource planning process, CHP          WV does not have a formal IRP process.
      is reviewed and incorporated where effective       The state does have a demand side
                                                         management/energy efficiency task force,
                                                     N
                                                         which has been considering energy
                                                         efficiency requirements for Appalachian
                                                         Power in Case 06-0033-E-CN.
7.5                                                      http://www.psc.state.wv.us/scripts/WebDock
                                                         et/ViewDocument.cfm?CaseActivityID=2381
                                                         85&NotType='WebDocket'
2/31/08)
               Natural Gas
urce.

           N




           N
effective energy efficiency as a resource
             N




deliver energy efficiency where cost-effective.
cost-effective energy efficiency and modify ratemaking

				
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