Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter H. ELECTRICAL PLANNING
2.
ENERGY EFFICIENCY AND CUSTOMER-OWNED RESOURCES
16 TAC §§25.181 - 25.183
The Public Utility Commission of Texas (commission) proposes
amendments to §25.181, relating to the Energy Efficiency Goal; §25.182,
relating to the Energy Efficiency Grant Program; and §25.183, relating
to Reporting and Evaluation of Energy Efficiency Programs. Project Number
25610,
Rulemaking Proceeding to Amend the Rules in
Chapter 25, Subchapter H, Div. 2, Regarding Energy Efficiency and Customer-Owned
Resources
, is assigned to this proceeding.
The proposed amendments to §25.181 will incorporate policy decisions
made in commission orders in Project Number 22241,
Energy Efficiency Program Implementation Docket; PUC Proceeding to Implement
the Requirements of §25.181 relating to the Energy Efficiency Goal
.
In particular, the amendment now includes a definition for an affiliate and
the procedure for determining affiliate status. In addition, the proposed
amendments will allow utilities to acquire demand savings in a more cost-effective
manner by implementing load factor caps and allowing the use of load factors
to competitively select projects. The proposed amendments will also enhance
the overall quality of the energy efficiency program by giving utilities greater
control over the quality of contractors and encouraging greater participation
by small contractors. Because these amendments will increase the burden on
the utilities, the amendments will also allow the utilities to continue to
expend 10% of the budget on programs administration.
The proposed amendments to §25.182 and §25.183 are changes that
reflect the amendments to §25.181.
When commenting on specific subsections of the proposed amendments or in
responding to the preamble questions, parties are encouraged to describe "best
practice" examples of regulatory policies, and their rationale, that have
been proposed or implemented successfully in other states, if the parties
believe that Texas would benefit from application of the same policies. The
commission is only interested in receiving "leading edge" examples which are
specifically related and directly applicable to the Texas statute, rather
than broad citations to other state energy efficiency efforts.
Nieves López, Chief Policy Analyst, Policy Development Division,
has determined that for each year of the first five-year period the proposed
section is in effect there will be no fiscal implications for state or local
government as a result of enforcing or administering the section.
Ms. López has determined that for each year of the first five years
the proposed sections are in effect the public benefit anticipated as a result
of enforcing these sections will be a more efficient provision of energy efficiency
services and attaining the state's energy efficiency goal. There will be no
adverse economic effect on small businesses or micro-businesses as a result
of enforcing these sections. There is no anticipated economic cost to persons
who are required to comply with the sections as proposed.
Ms. López has also determined that for each year of the first five
years the proposed sections are in effect there should be no effect on a local
economy, and therefore no local employment impact statement is required under
Administrative Procedure Act §2001.022.
The commission staff will conduct a public hearing on this rulemaking under
Government Code §2001.029 in the Commissioners' Hearing Room, located
in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas
78701, on Thursday, July 18, 2002, starting at 10:00 a.m.
The commission seeks comments on the proposed amendments from interested
persons. Comments on the proposed amendments (16 copies) may be submitted
to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress
Avenue, P.O. Box 13326, Austin, Texas 78711-3326. The deadline for submission
of comments is July 15, 2002. Comments should be organized in a manner consistent
with the organization of the proposed rules. The commission invites specific
comments regarding the costs associated with, and benefits that will be gained
by, implementation of the proposed section. The commission will consider the
costs and benefits in deciding whether to adopt the section. All comments
should refer to Project Number 25610.
In addition to comments on specific subsections of the proposed rule, the
commission requests that parties specifically address the following issues:
1. The proposed amendment to §25.181(i)(3) is intended to increase
contractor participation and encourage participation by smaller contractors.
Is this an appropriate policy goal? If yes, is the proposed method the most
effective means to reach this goal?
2. Under §25.181(j)(2)(E), the programs may require a maximum load
factor, and allow utilities to rank proposals by load factor in order to more
cost-effectively and competitively acquire demand savings. Is this an appropriate
policy goal? If yes, is the proposed method the most effective means to reach
this goal?
3. The Texas Health and Safety Code, Title 5, Subtitle C, Chapter 386,
requires that new construction in Texas meet the International Energy Conservation
Code (IECC). The market transformation programs under §25.181(k) are
a means to encourage the new home construction market to comply with and exceed
the IECC. What should be the appropriate baseline for such a market transformation
program? If the baseline is based on market practice and the market practice
is below the IECC, should a utility be allowed to claim savings that are above
the baseline but below the IECC?
These amendments are proposed under the Public Utility Regulatory
Act (Vernon 1998 and Supplement 2002) (PURA) §14.002, which provides
the Public Utility Commission with the authority to make and enforce rules
reasonably required in the exercise of its powers and jurisdiction; and specifically,
PURA §39.905 which mandates that utilities achieve savings equivalent
to at least 10% of their annual growth in demand; and, Health and Safety Code,
Title 5, Subtitle C, Chapter 386, Subchapter E, Energy Efficiency Grant Program.
Cross Reference to Statutes: Health and Safety Code, Title 5, Subtitle
C, Chapter 386, Subchapter E; and Public Utility Regulatory Act §14.002
and §39.905.
§25.181.Energy Efficiency Goal.
(a)
Purpose. The purposes of this section are to ensure that:
(1)
electric utilities administer energy savings incentive
programs in a market-
neutral
[
(2) - (3)
(No change.)
(b)
(No change.)
(c)
Definitions. The following words and terms, when used in
this section shall have the following meanings unless the context clearly
indicates otherwise:
(1)
Affiliate--
(A)
a person who directly or indirectly owns or holds at least
5.0% of the voting securities of an energy efficiency service provider;
(B)
a person in a chain of successive ownership of at least
5.0% of the voting securities of an energy efficiency service provider;
(C)
a corporation that has at least 5.0% of its voting securities
owned or controlled, directly or indirectly, by an energy efficiency service
provider;
(D)
a corporation that has at least 5.0% of its voting securities
owned or controlled, directly or indirectly, by:
(i)
a person who directly or indirectly owns or controls at
least 5.0% of the voting securities of an energy efficiency service provider;
or
(ii)
a person in a chain of successive ownership of at least
5.0% of the voting securities of an energy efficiency service provider; or
(E)
a person who is an officer or director of an energy efficiency
service provider or of a corporation in a chain of successive ownership of
at least 5.0% of the voting securities of an energy efficiency service provider;
(F)
a person who actually exercises substantial influence or
control over the policies and actions of an energy efficiency service provider;
(G)
a person over which the energy efficiency service provider
exercises the control described in subparagraph (F) of this paragraph;
(H)
a person who exercises common control over an energy efficiency
service provider, where "exercising common control over an energy efficiency
service provider" means having the power, either directly or indirectly, to
direct or cause the direction of the management or policies of an energy efficiency
service provider, without regard to whether that power is established through
ownership or voting of securities or any other direct or indirect means; or
(I)
a person who, together with one or more persons with whom
the person is related by ownership, marriage or blood relationship, or by
action in concert, actually exercises substantial influence over the policies
and actions of an energy efficiency service provider even though neither person
may qualify as an affiliate individually.
(2)
[
(3)
[
(4)
[
(5)
[
(6)
[
(7)
[
(8)
[
(9)
[
(10)
[
(11)
[
(12)
[
(13)
[
(14)
[
(15)
[
(16)
[
(17)
[
(18)
[
(19)
[
(20)
[
(21)
[
(22)
[
(23)
[
(24)
[
(25)
[
(26)
[
(27)
[
(28)
[
(29)
[
[(29)
Transition period-The period from September
1, 1999, through December 31, 2001.]
(d)
Procedure for determining affiliate status.
(1)
The utility shall have the burden to investigate each energy
efficiency service provider that participates in a standard offer or market
transformation program to determine whether such energy efficiency service
provider is an affiliate of any other energy efficiency service provider that
has submitted a project;
(2)
In any proceeding to determine affiliate status, the utility
shall have the burden of proof;
(3)
Upon discovering evidence that an energy efficiency service
provider is affiliated with another energy efficiency service provider, the
utility shall notify such energy efficiency service providers in writing and
shall include evidence supporting the allegation with the notification; the
utility shall file this notification together with supporting evidence with
the commission. If the utility relies upon an affidavit to demonstrate the
existence of an affiliate relationship, the affidavit shall conform to Texas
Rules of Civil Procedure §166a(f) and all Texas cases construing this
rule;
(4)
Upon discovering evidence that an energy efficiency service
provider is affiliated with another energy efficiency service provider, any
party (complainant) may file such claim, together with supporting evidence,
with the commission. If the complainant relies upon an affidavit to demonstrate
the existence of an affiliate relationship, the affidavit shall conform to
Texas Rules of Civil Procedure §166a(f) and all Texas cases construing
this rule. A complainant shall notify the energy efficiency service provider
and utility in writing and will include all supporting evidence with the notification;
(5)
Upon receipt of a utility's or complainant's notification,
the energy efficiency service provider will timely respond to the utility's
or complainant's allegations and file such response, together with documentation
supporting the response, with the commission. If the energy efficiency service
providers rely upon an affidavit to contradict any of the utility's evidence,
the affidavit shall conform to Texas Rules of Civil Procedure §166a(f)
and all Texas cases construing the rule;
(6)
All filings submitted pursuant to paragraphs (3), (4),
and (5) of this subsection will be used as evidence by the commission to render
a decision on affiliate status.
(e)
[
(1)
Cost-effectiveness. An energy efficiency project is deemed
to be cost-effective if the cost of the project to the utility is less than
or equal to the benefits of the project. The cost of a project includes the
cost of incentives, the measurement and verification costs, and program administrative
costs. The benefits of the project include the value of the purchased electrical
energy saved, the value of the corresponding generating capacity requirements,
and associated reserves displaced or deferred by the project. The present
value of the project benefits shall be calculated over the projected life
of the measure, not to exceed ten years.
(2)
Avoided cost. Incentives shall be set as a percentage of
the avoided cost. The avoided cost shall be the estimated cost of a new gas
turbine.
(A)
Initially, the avoided cost of capacity savings shall be
set at $78.5/kW saved at the customer's meter.
(B)
Initially, the avoided cost energy savings shall be set
at 2.68 cents/kWh saved at the customer's meter.
(C)
The commission may adjust the cost effectiveness standard
prescribed in subparagraphs (A) and (B) of this paragraph by using an environmental
adder up to 20% for targeted projects conducted in an area that is not in
attainment for air emission that is subject to the regulations of the Texas
Natural Resource Conservation Commission. The environmental adder is available
only for targeted energy efficiency projects that [
(f)
[
(1)
Each year's historical demand growth data shall be adjusted
for weather fluctuations, using weather data for the most recent ten years.
The utility's growth in demand is based on the average growth in retail load
in the Texas portion of the utility's service area, measured at the utility's
annual system peak for the immediately preceding five years.
(2)
The goal for energy-efficiency savings for a year is calculated
by applying the percentage goal, prescribed in this subsection, to the average
rate of growth in demand, based on the average of the five preceding annual
growth rates. The baseline for calculating demand growth shall be reset each
year.
(3)
A utility may submit for commission approval
an alternative method to calculate its growth in demand, for good cause.
(4)
The utility, subject to commission approval,
may increase its energy efficiency goal for targeted projects conducted in
an area that is an affected county or a nonattainment area, as defined in §25.182
of this title (relating to the Energy Efficiency Grant Program).
(g)
[
(1)
Each electric utility shall submit energy efficiency plans
and reports to the commission in accordance with subsection
(h)
[
(2)
Incentive payments shall be made under either standard
offer contracts or market transformation contracts, or both, for kWs and kWhs
saved. The amount of the incentive payment may vary by customer class in order
to effectively reach all customer classes, including hard-to-reach customers.
Market transformation programs may offer other incentives or benefits as approved
by the commission.
(3)
Customer protection provisions shall be included in all
electric utilities' energy efficiency programs in accordance with subsection
(o)
[
(4)
All projects performed under a standard offer
program
[
(5)
The commission shall establish an implementation
project
[
(h)
[
(1)
Schedule. Each electric utility shall
by
[
[(A)
By April 1, 2000, file an energy efficiency
plan for the transition period and for the years 2002 through 2004, with the
utility's application for unbundled transmission and distribution rates. This
filing may be supplemented by June 1, 2000 to reflect the results of the energy
efficiency implementation docket, as described in subsection §25.181(m).]
[
[(C)
By no later than January 1, 2002, implement
standard offer programs or limited, targeted market transformation programs,
or both, as described in subsections (i) and (j) of this section.]
[(D)
Notwithstanding any other provision of
this section, 170 days prior to the expiration of the exemption set forth
in PURA §39.102(c), an electric utility that is subject to PURA §39.102(c)
shall file its energy efficiency plan as a part of the cost separation proceedings
package in accordance with §25.344 of this title (relating to cost separation
proceedings).]
(2)
Energy efficiency plan. Each electric utility's energy
efficiency plan shall describe how the utility intends to achieve the legislative
mandate and the requirements of this section. Beginning January 1, 2002, the
plan shall be on a calendar year cycle and shall project at least a four-year
period. The plan shall propose an annual budget sufficient to reach the 10%
legislative goal by January 1, 2004, and annually thereafter. Each electric
utility's energy efficiency plan shall include:
(A)
A projection of the utility's annual growth in demand based
on actual historical data calculated using the methodology and corresponding
energy and peak demand savings goal to be achieved under the plan, as defined
in subsection
(f)
[
(B)
A description of existing contract obligations and an explanation
of the extent to which these contracts will be used to meet the utility's
annual energy efficiency requirements. Only additional energy and peak demand
savings achieved as a result of projects installed after the effective date
of this section may count towards the amount of energy and peak demand savings
actually achieved on an annual basis.
(C)
An estimate of the energy and peak demand savings to be
obtained through each separate standard offer
program
[
(D)
The proposed design and plan for each of the utility's
standard offer
programs
[
(E)
A description of the customer classes targeted by the utility's
energy efficiency
programs
[
(F)
The [
(i)
100% for hard-to-reach customers.
(ii)
50% for other residential and small commercial customers.
(iii)
35% for large commercial and industrial customers.
(iv)
15% for load management programs.
(G)
The proposed annual budget required to implement the utility's
standard offer program, market transformation program, or both, broken out
by
program
[
(H)
Savings achieved through programs for hard-to-reach customers
shall be no less than 5.0% of the utility's total demand reduction goal.
(I)
Savings achieved through load management programs, including
interruptible rates, may not exceed 15% of the utility's total demand reduction
goal.
(J)
A discussion of the types of informational activities the
utility plans to use to encourage participation in standard offer
programs
[
(3)
Prior to the implementation of the energy efficiency program,
the commission shall:
(A)
Approve market transformation programs and standard offer
programs
[
[(B)
Maintain a list of qualified contractors]
(B)
[
[(4)
Energy efficiency plan for the transition
period. The energy efficiency plan for the transition period shall cover the
remainder of 2000 until December 31, 2001. The plan shall describe the utility's
goals for the transition period, and include the information required in paragraph
(2) of this subsection. The plan for the transition period shall be designed
to use any revenue in the utility's current rates to cover the expenses of
energy efficiency or DSM programs that were approved prior to the effective
date of this section.]
(4)
[
(A)
The utility's projected annual growth in demand calculated
using the methodology prescribed in subsection
(f)
[
(B)
The corresponding energy and peak demand savings goal for
the utility, as defined in subsection
(f)
[
(C)
The utility's actual annual growth in demand for the preceding
calendar year.
(D)
The most current information available comparing projected
savings to reported savings for each of the utility's standard offer
programs
[
(E)
The most current information available comparing reported
savings and verified achieved savings as verified by the independent M&V
expert for all
programs
[
(F)
The most current information available comparing the baseline
and milestones to be achieved under market transformation
programs
[
(G)
A statement of funds expended by the utility for incentive
payments, program administration
pursuant to subsection (i)(1) of this
section,
including inspections, and the independent M&V expert.
(H)
A statement of any funds that were committed but not spent
during the year, by project.
(I)
Any decreases by more than 10% in total program cost, with
an explanation for the decrease in cost.
(J)
Any remaining program funds that were not committed during
the year.
(K)
The most current information available of ongoing and completed
energy efficiency projects by customer class that includes:
(i)
Number of customers served by each project.
(ii)
Project expenditures.
(iii)
Verified energy and peak demand savings achieved by the
project, when available.
(L)
A description of proposed changes in the energy efficiency
plans.
(M)
Any other information prescribed by the commission.
(i)
[
(1)
Administrative costs include costs necessary for utility
conducted inspection and the independent M&V expert as required under
subsections
(l)
[
(A)
Conduct informational activities designed to explain the
standard offer
programs
[
[(B)
The utility shall inform energy efficiency
service providers that they may contact the commission for inclusion in the
list of energy efficiency service providers maintained by the commission and
made available to customers from the commission or the utility.]
(B)
[
(C)
[
(D)
[
(E)
Any other costs as necessary and justifiable
for successful program implementation.
(2)
A utility administering a standard offer program or a market
transformation program shall not be involved in directly providing customers
any energy efficiency services, including any technical assistance for the
selection of energy efficiency services or technologies,
unless the customer
is a large commercial customer and the activities are limited to the outreach
activities outlined in paragraph (1)(A) of this subsection, or
unless
a petition for waiver has been granted by the commission pursuant to §25.343
of this title.
(3)
The utility shall compensate energy efficiency service
providers for energy efficiency projects in accordance with the contract and
the requirements of this section. An individual energy efficiency service
provider and its affiliates may not receive more than 20% of the total incentive
payments available for a particular standard offer
program
[
(4)
The utility, in its energy efficiency plan
pursuant to subsection (h)(2) of this section, shall have a funding set-aside
in an amount appropriate to the utility's program budgets for hard-to-reach
or residential and small commercial customers for small projects. The commission
may adjust the allocation of the set-aside for individual utilities at any
time. Under this funding set-aside:
(A)
Incentive requests for the hard-to-reach,
residential and small commercial customer projects may not exceed 30 dwelling
units.
(B)
Incentive requests for multifamily projects
exceeding $10,000 shall require a signed affidavit of participation by the
project host.
(C)
A utility may petition the commission for waiver
of this limitation if the utility can demonstrate that the utility would not
be able to meet its annual energy savings goal under this limitation.
(5)
[
(A)
A project would achieve demand reduction by eliminating
an existing function, shutting down a facility, or operation, or would result
in building vacancies, or the re-location of existing operations to locations
outside of the facility or area served by the participating utility.
(B)
A measure would be installed even in the absence of the
energy efficiency service provider's proposed energy efficiency project. For
example, a project to install measures that have wide market penetration would
not be eligible.
(C)
A project results in negative environmental or health effects,
including effects that result from improper disposal of equipment and materials.
(D)
The project involves the installation of self-generation
or cogeneration equipment, except for renewable DSM technologies.
(6)
[
(7)
[
(A)
Funds approved in the utility's rates
for the purpose of the energy efficiency goal under PURA §39.905 shall
be used exclusively to acquire cost-effective energy efficiency savings, even
if such savings exceed the utility's energy efficiency goal.
(B)
Notwithstanding the costs approved in
the utility's cost of service rates, the utility must acquire cost-effective
energy efficiency savings equivalent to at least 10% of the utility's annual
growth in demand by January 1, 2004, and each year thereafter, by administering
programs consistent with this section.
(j)
[
(1)
Statewide standard offer
programs
[
(2)
A utility's standard offer program shall meet the following
requirements:
(A)
A standard offer
program
[
(B)
Each standard offer
program
[
(C)
Peak demand and energy savings for each project shall be
identified in the proposals the energy efficiency service providers submit
to the utility.
(D)
Standard offer
programs
[
(E)
Standard offer programs may require maximum
load factor criteria for project eligibility.
(i)
Load factors may be a criterion for competitive selection
of projects.
(ii)
Increasing load factors may be subject to a decreasing
incentive scale.
(F)
[
(G)
[
(H)
[
(I)
[
(J)
[
(K)
[
(L)
[
(i)
The energy efficiency service provider to file a complaint
against a utility.
(ii)
A customer to file a complaint against an energy efficiency
service provider. The utility may use customer complaints as a criterion for
disqualifying energy efficiency service providers from participating in the
program.
(M)
[
(N)
[
(i)
Evidence of good credit rating.
(ii)
List of references.
(iii)
All applicable licenses required under state law and
local building codes.
(iv)
Evidence of all building permits required by governing
jurisdictions.
(v)
Evidence of all necessary insurance.
(O)
A utility may use prior performance as
a criterion to limit or disqualify an energy efficiency service provider or
its affiliate from participating in the programs.
(k)
[
(1)
Competitive
[
(2)
A market transformation project shall identify:
(A)
Project goals.
(B)
Market barriers the project is designed to overcome.
(C)
Key intervention strategies for overcoming those barriers.
(D)
Estimated costs and projected energy and capacity savings.
(E)
A baseline study that is appropriate in time and geographic
region.
In establishing a baseline, the study shall consider the level
of regional implementation and enforcement of the International Energy Conservation
Code (IECC), when applicable. However, this consideration shall not preclude
establishment of a baseline below the IECC "prescriptive" component performance
compliance levels where such compliance is permitted by the IECC through alternative
building designs or alternative measures.
(F)
Project implementation timeline and milestones.
(G)
Method for measuring and verifying savings.
(H)
Period over which savings shall be considered to accrue,
including a date for final market transformation.
(I)
Each proposed project shall include a description of how
it will achieve the transition from extensive market intervention activities
toward a largely self-sustaining market.
(3)
The project must be cost-effective, under the standard
in subsection
(e)
[
(4)
The project must be designed to achieve energy or peak
demand savings, or both, and lasting changes in the way energy efficient goods
or services are distributed, purchased, installed, or used.
(l)
[
(1)
The energy efficiency service provider is responsible for
the measurement of energy and peak demand savings using the approved measurement
and verification protocol, and may utilize the services of an independent
third party for such purposes.
(2)
Commission approved deemed energy and peak demand savings
may substitute for the energy efficiency service provider's measurement and
verification where applicable.
(3)
Each customer shall sign a certification indicating that
the measures contracted for were installed before final payment is made to
the energy efficiency service provider.
(4)
An energy efficiency service provider may request a utility
inspection at its own expense in the event a customer refuses to sign the
measure installation certification.
(5)
For residential and small commercial customer projects
involving over 30 installations, a
[
(6)
Residential and small commercial customer
projects of less than 30 installations may be aggregated and a statistically
significant sample of the aggregate installations will be subject to on-site
inspection in accordance with the protocol set out for the projects. Inspection
shall occur within 30 days of notification of measure installation to ensure
that measures are installed and capable of performing their intended function.
The energy efficiency service provider shall not receive final compensation
until the customer documents work completion and the utility has conducted
its inspection on the sample of installations.
(A)
An energy efficiency service provider shall not be penalized
for the inspection failure rate of another energy efficiency service provider.
(B)
An energy efficiency service provider with unsatisfactory
inspection results shall be subject to further inspections.
(7)
[
(m)
[
(1)
The independent M&V expert shall be selected by the
commission by competitive solicitation.
(2)
The independent M&V expert shall be funded from the
utilities' program administration budgets.
(3)
The independent M&V expert shall perform:
(A)
A verification of energy efficiency service providers'
reported energy and peak demand savings, based on a statistically representative
sample of completed projects; [
(B)
A limited process evaluation
; and
(C)
Any other task the commission deems necessary.
(4)
By March 1,
2003
[
[(5)
The independent M&V expert shall
assist with the development of an oversight program for subsequent years.]
(n)
[
(1)
Development and review of statewide standard offer programs.
(2)
Identification, design, and review of market transformation
programs.
(3)
Determination of measures for which deemed savings are
appropriate and participation in the development of deemed savings estimates
for those measures.
(4)
Recommendation to the commission of one or more independent
M&V expert to conduct the audit in accordance with subsection
(m)
[
(5)
Review of and recommendations on the independent M&V
expert's [
(6)
Review of and recommendations on incentive payment levels
and the adequacy to induce the desired level of participation by the energy
efficiency service providers and customer classes.
(7)
Review of and recommendations on the utility annual energy
efficiency reports with respect to whether all customer classes have access
to energy efficiency programs.
(8)
Periodic reviews of the cost effectiveness methodology.
(9)
Development of information packets for potential residential
and commercial customers.
(10)
Other activities as requested by the commission.
(o)
[
(1)
Clear disclosure to the customer of the following:
(A)
The customer's right to a cooling-off period of three business
days, in which the contract may be canceled, if applicable under law.
(B)
The name, telephone number, and street address of the energy
services provider, the contractor, and written disclosure of all warranties.
(C)
The fact that incentives are made available to the energy
efficiency services provider through a ratepayer funded program, manufacturers
or other entities.
(D)
Notice of provisions that will be included in the customer's
contract as described in paragraph (3) of this subsection.
(2)
A form developed and approved by the commission may be
used to satisfy the requirements of paragraph (1) of this subsection
(3)
Contractual provisions to be included:
(A)
Information on work activities, completion dates, and the
terms and conditions that protect residential customers in the event of non-
performance by the energy efficiency service provider.
(B)
Written and oral disclosure of the financial arrangement
between the energy efficiency service provider and customer. This includes
an explanation of the: total customer payments, the total expected interest
charged, all possible penalties for non-payment, and whether the customer's
installment sales agreement may be sold.
(C)
Disclosure of contractor liability insurance to cover property
damage.
(D)
An [
(E)
Provisions prohibiting the waiver of consumer protection
statutes, performance warranties, false claims of energy savings and reductions
in energy costs.
(F)
Information on complaint procedures offered by the contractor,
or the utility, as required under subsection
(j)(2)(L)
[
(G)
Disclosure that the energy efficiency service provider
is not part of, or endorsed by the commission or the utility.
§25.182.Energy Efficiency Grant Program.
(a) - (b)
(No change.)
(c)
Definitions. The following words and terms, when used in
this section shall have the following meanings unless the context clearly
indicates otherwise:
(1) - (8)
(No change.)
(9)
Peak demand reduction - Peak demand reduction on the utility
system during the utility system's peak period
for the duration of at
least one hour
.
(10)
(No change.)
(11)
Peak period - Period during which a utility's system experiences
its maximum demand. For the purposes of this section, the peak period is May
1 through September 30
, during the hours between 1:00 p.m. and 7:00 p.m.,
excluding federal holidays
.
(12)
(No change.)
(d) - (e)
(No change.)
(f)
Use of approved program templates. All programs funded
through the energy efficiency grant program shall be program templates developed
pursuant to §25.181 of this title.
(1)
(No change.)
(2)
Cost effectiveness and avoided cost criteria shall be consistent
with §25.181
(e)
[
(3)
Incentive levels shall be consistent with program templates
and in accordance with §25.181
(h)
[
(4)
Inspection, measurement and verification requirements shall
be consistent with program templates and in accordance with §25.181
(l)
[
(5)
(No change.)
(g)
Grantee administration: The cost of administration may
not exceed 10% of the total program budget before January 1, 2003, and may
not exceed 5.0% of the total program budget thereafter. The commission reserves
the right to lower the allowable cost of administration in the application
guidelines.
(1)
Administrative costs include costs necessary for grantee
conducted inspections and the costs necessary to meet the following requirements:
(A)
(No change.)
(B)
Review and select proposals for energy efficiency projects
in accordance with the program template guidelines and applicable rules of
the standard offer contracts under §25.181
(j)
[
(C)
Inspect projects to verify that measures were installed
and are capable of performing their intended function, as required in §25.181
(l)
[
(D)
(No change.)
(2)
A grantee administering a grant under this program shall
not be involved in directly providing customers any energy efficiency services,
including any technical assistance for the selection of energy efficiency
services or technologies,
unless the customer is a large commercial customer
and the activities are limited to the outreach activities outlined in paragraph
(1)(A) of this subsection, or
unless a petition for waiver has been
granted by the commission pursuant to §25.343 of this title (relating
to Competitive Energy Services), to the extent that section is applicable
to a grantee.
(3) - (6)
(No change.)
(7)
The grantee shall compensate energy efficiency service
providers for energy efficiency projects in accordance with the applicable
rules of the standard offer contracts under §25.181
(j)
[
(8)
(No change.)
§25.183.Reporting and Evaluation of Energy Efficiency Programs.
(a) - (c)
(No change.)
(d)
Reporting. Each electric utility and grantee shall file
by April 1, of each program year an annual energy efficiency report. The annual
energy efficiency report shall include the information required under §25.181
(h)(4)
[
(1) - (5)
(No change.)
(e)
Evaluation.
(1)
(No change.)
(2)
Every two years, the commission, in cooperation with the
Energy Efficiency Implementation
Project
[
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on May 31, 2002.
TRD-200203379
Rhonda G. Dempsey
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: July 14, 2002
For further information, please call: (512) 936-7308
Chapter 401.
ADMINISTRATION OF STATE LOTTERY ACT
Subchapter A. PROCUREMENT
based
], non-discriminatory
manner, and do not provide competitive energy efficiency services, except
as permitted in §25.343 of this title (relating to Competitive Energy
Services);
(1)
] Calendar year--January 1 through
December 31.
(2)
] Competitive energy efficiency
services--Energy efficiency services that are defined as competitive under §25.341(6)
of this title (relating to Definitions).
(3)
] Deemed savings--A pre-determined,
validated estimate of energy and peak demand savings attributable to an energy
efficiency measure in a particular type of application that a utility may
use instead of energy and peak demand savings determined through measurement
and verification activities.
(4)
] Demand--The rate at which electric
energy is delivered to or by a system at a given instant, or averaged over
a designated period, usually expressed in kilowatts (kW) or megawatts (MW).
(5)
] Demand side management (DSM)--Activities
that affect the magnitude or timing of customer electrical usage, or both.
(6)
] Energy efficiency--Programs
that are aimed at reducing the rate at which electric energy is used by equipment
and processes. Reduction in the rate of energy used may be obtained by substituting
technically more advanced equipment to produce the same level of end-use services
with less electricity; adoption of technologies and processes that reduce
heat or other energy losses; or reorganization of processes to make use of
waste heat. Efficient use of energy by customer-owned end-use devices implies
that existing comfort levels, convenience, and productivity are maintained
or improved at a lower customer cost.
(7)
] Energy efficiency measures--Equipment,
materials, and practices that when installed and used at a customer site result
in a measurable and verifiable reduction in purchased electric energy consumption,
measured in kilowatt-hours (kWh), and peak demand, measured in kWs [
, or both
].
(8)
] Energy efficiency project--An
energy efficiency measure or combination of measures installed under a standard
offer contract or a market transformation contract that results in a reduction
in customers' electric energy consumption or peak demand, or both, and energy
costs.
(9)
] Energy efficiency service
provider--A person who installs energy efficiency measures or performs other
energy efficiency services. An energy efficiency service provider may be a
retail electric provider or
large commercial customer
, if the person
has executed a standard offer contract.
(10)
] Energy savings--A quantifiable
reduction in a customer's consumption of energy.
(11)
] Existing contracts--Energy
efficiency contracts in effect prior to September 1, 1999, that expire on
or after September 1, 1999.
(12)
] Growth in demand--The annual
increase in load, measured on the transmission system, in the Texas portion
of an electric utility's service area at time of peak demand, as measured
according to subsection
(f)
[
(e)
] of this section.
(13)
] Hard-to-reach customers--Customers
with an annual household income at or below 200% of the federal poverty guidelines.
(14)
] Incentive payment--Funding
that reduces the cost of installing energy efficiency measures, or provides
a service or benefit that would otherwise not be available to the end-use
customer for installing energy efficiency measures.
(15)
] Inspection--Onsite examination
of a project to verify that a measure has been installed and is capable of
performing its intended function.
(16)
] Large commercial customers--Retail
commercial
or industrial
customers with a demand that exceeds 100
kW. For the purpose of this subsection, a customer's load within a service
territory that is under common ownership shall be combined.
(17)
] Load control--Activities
that place the operation of electricity- consuming equipment located at an
electric user's site under the control or dispatch of an energy efficiency
service provider, an independent system operator, or other transmission organization.
(18)
] Load management--Load control
activities that result in a reduction in peak demand on an electric utility
system or a shifting of energy usage from a peak to an off-peak period.
(19)
] Market transformation program--Strategic
efforts to induce lasting structural or behavioral changes in the market that
result in increased adoption of energy efficient technologies, services, and
practices, as more fully described in subsection
(k)
[
(j)
]
of this section.
(20)
] Measurement and verification
(M&V)--Activities intended to determine the actual kWh and kW savings
resulting from energy efficiency projects as more fully described in subsections
(l)
[
(k)
] and
(m)
[
(l)
] of this section.
(21)
] Off-peak period--Period during
which the load on an electric utility system is not at or near its maximum
volume. For the purpose of this section, the off-peak period will be all hours
from October 1 through April 30.
(22)
] Peak demand--Electrical demand
at the time of highest annual demand on the utility's system, measured in
15 minute intervals.
(23)
] Peak demand reduction--
Peak
[
peak
] demand reduction on the utility system during
the utility system's peak period
for a duration of at least one hour
.
(24)
] Peak period--Period during
which a utility's system experiences its maximum demand. For the purposes
of this section, the peak period is from May 1 through September 30
,
during the hours between 1:00 p.m. and 7:00 p.m., excluding federal holidays
.
(25)
] Renewable demand side management
(DSM) technologies - Equipment that uses a renewable energy resource
(renewable resource)
, as defined in
§25.173(c)
[
§25.5
] of this title
(relating to Goal for Renewable Energy)
that, when installed at a customer site, reduces the customer's net
purchases of energy (kWh), electrical demand (kW), or both.
(26)
] Small commercial customers
- Retail commercial customers with a maximum demand that does not exceed 100
kW.
(27)
] Standard offer contract -
A contract between an energy efficiency service provider and a participating
utility specifying the standard payment based upon the amount of energy and
peak demand savings achieved through the installation of energy efficiency
measures at electric customer sites, the measurement and verification protocols,
and other terms and conditions, according to the program requirements. [
Multiple energy efficiency service providers may participate under a single
standard offer contract.
]For the purposes of this section, the targeted
weatherization programs under PURA §39.903 (relating to the System Benefit
Fund) to be administered by the Texas Department of Housing and Community
Affairs shall be considered a standard offer
program
[
contract
].
(28)
] Standard offer program -
A program under which a utility administers standard offer contracts between
the utility and energy efficiency service providers.
(d)
] Cost-effectiveness standard.
are designed to enhance
air quality or the reliability of electric service in the non- attainment
area, or both, or
]would not be implemented without the adder.
(e)
] Annual growth in demand and
energy efficiency goal. Electric utilities shall meet the minimum mandate
of 10% reduction in growth in demand through energy efficiency savings by
January 1, 2004. [
During the transition period, each utility will set
interim goals, consistent with approved funding, to provide a reasonable progression
toward the 10% goal to be achieved by January 1, 2004.
]Each utility
is required to meet, at a minimum, 5.0% of its growth in demand though energy
efficiency by January 1, 2003. Each utility's energy efficiency goal shall
be specified as a percent of its historical five-year average rate of growth
in demand, calculated as follows:
(f)
] Basic program elements. Electric
utilities shall administer energy efficiency programs designed to achieve
reductions in the customer's purchased energy consumption or demand, or both,
and lower energy costs through the implementation of standard offer programs
or limited, targeted market transformation programs.
(g)
] of this section.
(n)
] of this section.
contract
] shall be subject to inspections, measurement,
and verification in accordance with subsection
(l)
[
(k)
]
of this section. Energy and peak demand savings under market transformation
projects shall be verified in accordance with subsection
(k)
[
(j)
] of this section.
docket
], as described in subsection
(n)
[
(m)
] of this section, to address program design, implementation and
administration, and make recommendations to the commission.
(g)
] Energy efficiency plans.
:
]
(B)
]
[
By
] April 1, 2001, and annually
thereafter, file its updated energy efficiency plan and an annual energy efficiency
report as described in paragraph
(4)
[
(5)
] of this subsection.
(e)
](2) of this section.
contract
], market transformation
program
[
contract
], or
both.
contracts
] and market transformation
programs
[
contracts
], including measurement and verification
plans when appropriate. For statewide standard offer
programs
[
contracts
] or market transformation
programs
[
contracts
] previously approved by the commission, the
program
[
contract
] may simply be identified with a description of how it will
be implemented in the service territory of the utility.
Programs
[
Contracts
] not previously approved by the commission should be presented
in detail, including baseline studies, for review and approval.
contracts
], specifying the
size of the hard- to-reach, residential, small commercial, and large commercial
and industrial customer classes, and the methodology used for estimating the
size of each customer class.
proposed
] incentive levels for each customer
class shall be [
set as
] a percentage of the avoided cost set forth
in subsection
(e)
[
(d)
] of this section.
The incentive
levels for individual programs shall be set by each utility subject to the
incentive ceilings outlined below and other provisions of this section. Utilities
may adjust incentive levels for individual programs during the program year.
Until
[
Unless
] the commission adopts different ceilings for
incentive levels, incentive levels for standard offer
programs
[
contracts
] may not exceed:
contract
] for each customer class, including
hard-to- reach customers. The proposed budget should detail incentive payments,
utility administrative costs, including the independent M&V expert, and
the other administrative functions pursuant to subsection (i)(1) of this section,
and
the rationale and methodology used to estimate the proposed expenditures.
contracts
] or market transformation
programs
[
contracts
], including the manner in which utilities will use to post
notice of standard offer
programs
[
contracts
], market
transformation
programs
[
contracts
], and any other facts
that may be considered when evaluating a project.
contracts
].
(C)
] Review and approve measurement
and verification plans, including deemed savings in accordance with the standard
offer or market transformation
program
[
contract
] guidelines.
Projects that require installation-specific measurement and verification may
have a measurement and verification process approved by the utility. At the
utility's option, the measurement and verification process or deemed savings
may be submitted for pre-approval by the commission.
(5)
] Annual energy efficiency report.
The annual energy efficiency report shall provide information listed below:
(e)
]
of this section.
(e)
](2) of
this section, expressed in kWs and kWhs, for the current calendar year.
contracts
] and market transformation
programs
[
contracts
].
contracts
].
contracts
].
(h)
] Utility administration. Utilities
shall administer standard offer programs, market transformation programs,
or both, to meet the requirements of the energy efficiency goal in PURA §39.905.
The cost of administration may not exceed 10% of the total program costs [
until December 31, 2003, and may not exceed 5.0% of the total program costs
thereafter
].
(k)
] and
(m)
[
(l)
]
of this section, and the costs necessary to meet the following requirements:
contracts
] and market transformation
programs
[
contracts
] to energy efficiency service providers
and vendors.
(C)
] Review and select proposals
for energy efficiency projects in accordance with the guidelines of the standard
offer
programs
[
contracts
] under subsection
(j)
[
(i)
] of this section, and market transformation
programs
[
contracts
] under subsection
(k)
[
(j)
]
of this section.
(D)
] Inspect projects to verify
that measures under a standard offer contract were installed and capable of
performing their intended function, as required in subsection
(l)
[
(k)
] of this section, before final payment is made. Such inspections
shall comply with PURA §39.157 and §25.272 of this title (relating
to Code of Conduct for Electric Utilities and Their Affiliates).
(E)
] Review and approve energy efficiency
service providers' savings monitoring reports for both standard offer contracts
and market transformation contracts.
contract
]
, unless the program is not fully subscribed after 90
days
.
(4)
] Projects or measures under
either the standard offer or market transformation programs are not eligible
for incentive payments or compensation if:
(5)
] Cost recovery and unspent funds.
Funds for achieving the energy efficiency goal will be
included
[
placed
] in each utility's transmission and distribution rates [
effective January 1, 2002
]. Each utility shall track its energy efficiency
expenditures separately from other expenditures and report these in their
annual energy efficiency report. Funds not spent within a given year shall
be considered as a source of funding for the following year, and the commission
shall consider utilities' requests to roll over unspent funds on a case- by-case
basis in connection with the utilities' annual energy efficiency report filing
under subsection
(h)(4)
[
(g)(5)
] of this section.
(6)
] Each utility shall meet its
energy efficiency goal annually through the acquisition of cost-effective
energy
and demand savings, in accordance with this section
[
efficiency
]. A utility shall be deemed to have met its energy efficiency
goal
when
[
if
] the utility achieves a 10% reduction
in growth in demand calculated as prescribed in subsection (f) of this section
[
, or if it is an interim goal, the reduction designated in that
year in its demand growth through incentives for standard offer programs,
market transformation programs, or both
].
(i)
] Standard offer programs. A
utility's standard offer program shall be implemented through standard offer
contracts. The standard offer contract shall describe the terms and conditions
according to the requirements of this section for energy efficiency service
providers for the delivery of energy efficiency services. Standard offer contracts
will be available to any energy efficiency service provider that satisfies
the contract requirements within the commission approved
program
[
contract
] parameters.
contracts
] shall be developed [
as part of the standard offer program
]
and submitted to the commission for approval. Utilities may use the commission
approved statewide standard offer
programs
[
contracts
]
without further commission review. Other standard offer
programs
[
contracts
] will require commission review for approval.
contract
]
shall be developed to address each customer class. Specific different
programs
[
contracts
] may be developed to address hard-to-reach
customers. All customer classes must have access to an equitable share of
the incentive funds.
contract
]
will offer a standard incentive payment and specify a schedule of payments.
The incentive shall be set at a level sufficient to meet the goals of the
program and shall be consistent with the ceiling under subsection
(h)
[
(g)
] (2)(F) of this section, or any revised ceiling adopted
by the commission. The standard offer incentive payments may include both
payments for kW and kWh savings, as appropriate. Except for load management
projects, the incentive payment may vary by customer class, but not within
a customer class.
contracts
]
shall not limit eligibility to specific technologies, equipment, or fuels,
but shall be neutral with respect to such factors. Energy efficiency projects
may lead to switching from electricity to another energy source, provided
the energy efficiency project results in overall lower energy costs, lower
energy consumption, and the installation of high efficiency equipment. Switching
from gas to electricity is not allowable under the program.
(E)
] All projects must result in
a reduction in purchased energy consumption, or peak demand, or both, and
a reduction in energy costs for the end-use customer.
(F)
] Comprehensive projects incorporating
more than one energy efficiency measure shall be encouraged. Lighting measures
shall be limited to 65% of the savings of each project. When a project consists
of lighting measures only, compensation shall not exceed 65% of the ceiling
for that class under subsection
(h)
[
(g)
] (2)(F) of this
section.
(G)
] Projects shall result in consistent
and predictable energy and peak demand savings over a ten-year period.
(H)
] A utility shall not condition
the provision of any product, service, pricing benefit, or alternative terms
or conditions upon the purchase of any other good or service from the utility
or its competitive affiliate, except that only customers taking transmission
and distribution services from a utility can participate in its energy efficiency
programs.
(I)
] Projects shall disclose potential
adverse environmental or health effects associated with the energy efficiency
measures to be installed.
(J)
] Projects shall include the
procedures for measuring and reporting the energy and peak demand savings
from installed energy efficiency measures, consistent with the requirements
under subsection
(l)
[
(k)
] of this section.
(K)
] Standard offer
programs
[
contracts
] shall provide a complaint process that allows:
(L)
] Renewable DSM technologies
are allowed.
(M)
] A standard offer program shall
require contractors to provide the following:
(j)
] Market transformation programs.
Market transformation programs are strategic efforts, including, but not limited
to, incentives and education designed to reduce market barriers for energy
efficient technologies and practices.
Market transformation programs
must be designed to obtain energy savings and peak demand reductions beyond
savings that would be achieved through compliance with building codes and
equipment efficiency standards.
Utilities should cooperate in the creation
of regional or statewide
programs
[
contracts
], consider
statewide administration where appropriate, and where possible, leverage with
existing effective national programs that have the potential to save energy
in Texas. Statewide market transformation
programs
[
contracts
] shall be developed under the implementation
project
[
docket
] to address targeted customer classes, as described in subsection
(n)
[
(m)
] of this section. The
programs
[
contracts
] shall be filed for commission review and approval. Utilities may use
the statewide commission approved market transformation programs without further
commission review. All other market transformation
programs
[
contracts
] will require commission review for approval. Market transformation
programs
[
contracts
] shall be conducted through projects that
describe the terms and conditions as required under this section for the delivery
of energy efficiency services. Market transformation
programs
[
contracts
] must meet the following criteria:
Except for pilot projects implemented
during the transition period, competitive
] solicitation shall be the
preferred method for contract selection. Pilot projects may be developed by
an individual utility, a group of utilities, or an energy efficiency service
provider. A utility may request a waiver from the requirements of a competitive
solicitation for good cause.
(d)
] of this section.
(k)
] Inspection, measurement and
verification. Each standard offer
program
[
contract
]
shall include an industry accepted measurement and verification protocol approved
by the commission as part of the detailed energy efficiency plan that will
be used to measure and verify energy and peak demand savings to ensure that
the goals of this section are achieved.
A
] statistically significant
sample of installations [
for residential and small commercial customers
] will be subject to on-site inspection in accordance with the protocol
set out for the project. Inspection shall occur within 30 days of notification
of measure installation to ensure that measures are installed and capable
of performing their intended function. The energy efficiency service provider
shall not receive final compensation until the customer documents work completion
and the utility has conducted its inspection on the sample of installations.
(6)
] The sample size for on-site
inspections may decrease over time for a contractor under a particular contract
that has consistently yielded satisfactory inspection results.
(l)
] Independent measurement &
verification (M&V) expert. An independent M&vV expert shall be selected
to verify energy and peak demand savings, including deemed savings, reported
by energy efficiency service providers statewide for the calendar year 2002
, and periodically thereafter as determined by the commission
.
and
]
2004
], the independent
M&V expert shall report its
preliminary
conclusions to the
commission and make a recommendation whether the utilities' energy and peak
demand savings should be adjusted.
By March 2004, the independent M&V
expert shall provide its full report.
(m)
] Energy efficiency implementation
project
[
docket
]. The commission shall initiate an implementation
project
[
docket
] to make recommendations to the commission
for its consideration with regard to best practices in standard offer programs
and market transformation programs.
All orders approved by the commission
under Project Number 22241,
Energy Efficiency Program
Implementation Docket
, and that are consistent with this section shall
be transferred to the energy efficiency implementation project.
Material
submitted to the commission in this
project
[
docket
]
believed to contain proprietary or confidential information shall be identified
as such, and the commission may enter an appropriate protective order. The
following functions may be undertaken in the energy efficiency implementation
project
[
docket
]:
(l)
] of this section.
annual
] report with respect to whether utilities will
meet the minimum legislative goal by January 1, 2004, and annually thereafter.
(n)
] Customer protection. The customer
protection provisions under this section shall apply to residential and small
commercial customers only. Each energy efficiency service provider
who
provides energy efficiency services to the end-use utility customer
shall
provide:
all
] "All Bills Paid" affidavit be given
to the customer to protect against claims of subcontractors.
(i)(2)(K)
] of this section, and toll free numbers for the Office of Customer
Protection of the Public Utility Commission of Texas, and the Office of Attorney
General's Consumer Protection Hotline.
(d)
] of this title.
(g)
] (2)(F) of
this title.
(k)
] of this title.
(i)
]
of this title, and market transformation contracts under §25.181
(k)
[
(j)
] of this title.
(k)
] of this title, before final payment is made. Such
inspections shall comply with PURA §39.157 and §25.272 of this title
(relating to Code of Conduct for Electric Utilities and Their Affiliates)
or, to the extent applicable to a grantee, §25.275 of this title (relating
to the Code of Conduct for Municipally Owned Utilities and Electric Cooperatives
Engaged in Competitive Activities).
(i)
] of this title, and market transformation contracts under §25.181
(k)
[
(j)
] of this title, and the requirements of this section.
(g)(5)
] of this title and paragraphs (1)-
(5)
[
(4)
] of this subsection in a format prescribed by the commission.
Docket
] shall
evaluate the Energy Efficiency Grant Program under §25.182 of this title.
Part 9.
TEXAS LOTTERY COMMISSION